The virus infections now pushed 8 million globally. Haveoutbreaks in the u. S. Some states weighing whether to pause reopening. Shery lets get you started with a quick check of the markets. We are seeing u. S. Futures up 2 10 of 1 . It was a very volatile trading session. We had a boost after the fed pledged to follow through with the Corporate Bond purchase, but then again, we had concerns over a second wave of the pandemic. Not to mention the white house now ending an Unemployment Bonus Program on july 31. We have the s p 500 gained 8 10 of 1 . At one point, they lost as much as 2. 5 . It was a really volatile session. Financials and staples led to gains, after dropping last week by the most since march. Take a look at how the dollar is doing now. We have seen the dollar underperforming against all g10 peers and weakening to session lows after the Federal Reserve made the announcement. Right now, we are seeing more pressure on the bloomberg dollar index. The 10 year yield at 72 basis points. Wti at the moment is under pressure, down 4 10 of 1 below the 37 a barrel level. Oil has rebounded in the new york session after dropping to less than 35 a barrel. Bp warning the pandemic could hurt longterm energy demand. Haidi yeah, watching the Energy Sector in particular when it comes to trading in sydney this morning. The Asian Session looks like it will follow the pretty volatile session. Futures sitting in the green at the moment. New zealand trading up by 1 . Consumer confidence numbers showing that perhaps the impact of the covid lockdown was not quite as bad as expected. A pretty welcome signal going into the release of First Quarter gdp numbers for new zealand on thursday. Howei futures, heres we are sitting. Just operational steps. That is the controlled framework expected from the boj today. Sydney futures, 2. 5 in the green. We are looking at a gain of about 2. 7 . Aussie stock sing to the lowest in about three weeks as of the monday session. Aussie dollar along with the q. Week, two of the opera formers in the g10 space where we did see the dollar falling against all of those g10 currencies. Still under the . 70 ceiling. Lets get more from the boost of the fed after it said it will be buying individual Corporate Bonds amid the virus pandemic. Traders are waiting to see of the bank of japan will double down on the emergency Lending Program and support Small Businesses. Our Global Economics and policy editor Kathleen Hays is here. The fed announced the program weeks ago. What is different now . Kathleen certainly the program itself was launched as a big deal. For the fed to buy Corporate Bonds, they have never done this in the past. They launched the secondary market Corporate Credit facility. It has been a big help to the bond market already. Now what they are going to do is they will start buying individual Corporate Bonds. They have been purchasing Corporate Bonds etfs. They purchased 4. 5 billion of those out of a budget of 250 billion. They have barely got started. Theyre also going to be using a new twist for them a diversified index of u. S. Corporate bonds. It was created specifically for the smccf. Heres what they said when they were talking about this. This index is made up of all bonds in the secondary market issued by u. S. Companies that satisfy the facilitys minimum rating, maximum maturity and other criteria. This will complement the facilitys current purchases. Remember, this is one of nine emergency Lending Programs announced a starting midmarch after they made their emergency rate cut. Boeing has been a big beneficiary. Messedd markets were so ste up and boeing was trying to get financing, wondering how they can do it. As soon as this program was announced, condition started improving. Corporate bond yields came down. Financing costs lower. It made a big difference just by being announced. Now the fact they are starting on june 16 to start buying individual bonds issued by specific corporations really adds to the strength it has. Startedsaid it will get on the macys Lending Program. There will be three different boston offices where they can put in the application. Not talk about yield curve control for now. Moving on these emergency programs. We have heard people questioning what else can they gain from this facility that has not already been achieved. It is all about Small Businesses and the bank of japan helping them out. Kathleen the bank of japan has done a lot in advance of the virus. Think about the versatile bank to move to a negative rate. Purchases buttf it will not really pull the policy levers today. They will take one big step in their pandemic fight. Lets take a look at a chart because what are they trying to do . Limit job losses. Heres why. Look at this chart. You can just see how the contraction that they said was the worst contraction on record, if the Second Quarter is negative, that will be three straight quarters so they have a lot of work to do to keep things on track. Our Bloomberg Economics team has been told, they will not change any of the special Lending Programs yet. A lot of the comments are looking to double the new Lending Facility to businesses from ¥30 trillion to y60 trillion. The press reporting they would expand this program to ¥100 trillion. The government has also just come with a record budget record of ¥31. 9 trillion, another supplemental budget. This is something that is seen that can enhance that, reinforce the effort. Bloomberg economics say they dont have to boost the Corporate Bond buying because the limits are way higher. It will be interesting to see what governor kuroda says at the press conference. Is you looking past the Second Quarter dip. Give people a sense of what more they might do. For now, it looks like sitting tight. Although they may boost the emergency program. Editorbloomberg policy Kathleen Hays. More perspective on that decision coming up with Columbia University professor. He has helped many Senior Finance positions in the japanese government. We will hear from moodys analytics economics as well. We have breaking news on the bloomberg. We are getting more details on a white house executive order that is focused on Police Recruitment and retention. This coming at a time where we continue to see nationwide protests against Police Brutality and racism. The executive order will seek to track use of force complaints, services,nd create according to officials in the administration. Basically trying to adopt more stringent use of policies in the police force, not to mention prevent bad cops from being higher in another department. More of the fed boost as equities swing into the green as we discussed the outlook. New Virus Outbreaks in the u. S. Have some states considering whether to pause the reopening. This is bloomberg. Haidi you are watching daybreak australia. A check of the first word headlines. Rising coronavirus cases across the u. S. Mean some states are considering causing plans to reopen. Globally, the past few weeks have seen 100,000 new infections each day with a vast majority in the americas, Southeast Asia as well as beijing. That means that every day, there are more new cases than the first two months of the pandemic eightbal infections near million. For the first 100,000 cases to be reported in two months. For the past two weeks, more than 100,000 cases have been reported almost every single day. The coronavirus has triggered a record fall in employment in singapore. Total job losses fell by 25,600. A significant drop in foreign employment. About 19,000 jobs were lost in march but that has been revised higher. The minister of manpower says labor Market Conditions are likely to worsen. Will keep thes Capital Region under loose restrictions as virus cases rise. A general quarantine until the end of the month. Rules are being reimposed in the city. 90e philippines reported 4 new cases, bringing the total to 26,000. Government will pay into debt for the largest economy since world war ii. This would take total borrowing. The cabinet is excited to agree on the extra budget on wednesday before they move for approval. The fed ignited equity markets after its move to begin buying Corporate Bonds. Some of our earlier guests told us what to expect next. It tend to happen in three phases. Our retracement higher was more significant and quicker than and many of us expected. The markets have clearly been buoyed by this massive amount of fiscal and monetary stimulus. If you added up in the u. S. , it is over 40 of gdp. And markets are going to be looking for more. The size and the pace of fed Balance Sheet expansion is something that will put under equity markets. Volatility could be back in these markets until we start to see cases start to compress again. Shery anna han is tracking the ups and downs of the market, and she joins us now. Always great having you with us. The fed seems to be sticking to the zero interest rate, not to mention expanding asset purchases. Bloomberg intelligence is focusing on one sector of the market. This chart on the bloomberg showing that from 2008 to 2014, when the Balance Sheet begin, we saw the russell 2000 surging 150 . Small caps outperforming the s p 500 by more than 40 percentage points. What are you watching in this new environment of Monetary Policy in the u. S. . Anna thanks. We did see the fed announced the extra art of the Corporate Bond purchasing and when you tie that in with how that affects small caps versus large caps, think a bit of a risk picture. Small caps of the bigger risk, more value store a play. When you have the fed back in the credit market and providing credit liquidity, it really lowers equity volatility and spurs more of a risk seeking appetite than the investor. That could be why you saw that small cap performance back in 20082014, and why you saw today as well. Shery is that i sector you will continue to invest in . Is that a sector you like or have we seen the outperformance run its course . Anna something we have been debating recently because just last week, we asked investors to pause a bit on their investment in smallcap and higher risk groups. We upgraded that a couple weeks ago, but just last week, we were looking at it and it looked to have a little bit of over. We asked investors to take a breather and instead focus very carefully on the particular volatile equity prices over the next two to four weeks. Haidi how much of it is a concern that you see this playing out where you do need to see the fed coming in with a positive surprise for the markets to rally again . It was never truer than what we saw on the session overnight. Anna you bring up a good point. Will the fed need to give the good news for the equity market to continue to rally . Well, besides the fed, some of the catalysts we are looking at are, one, Bank Stress Test results. Two, secondquarter earnings. We think those two could be other sources of further information to help bring more clarity to the market. If that helps investors quantify where we stand on the recovery, that might also be a positive boost. Haidi is the Market Pricing in, do you think, the severity a potential second wave infections around the world . Anna its certainly become more and more of a possibility. You saw last week, there was a lot of headlines about certain cities cases increasing and that has weighed on equity markets. But you saw today with the equities generally in the green across the board, it seems like a full recording teen of the u. S. Is still not a big priced impossibility. We have to watch nationally and on the smaller scale as well, but at least across the country, we are not seeing a spike again. Shery not to mention Political Risk when it comes to things underpriced that the moment. Anna absolutely. The Political Risks for us still feel underpriced and it is understandable because they have a lot going on. But if you have to consider which candidate and the economic platform and how they might handle this ongoing recession, because we know this recession will not be over just this year. We have to consider the impact. Shery we have seen economic fundamentals not really be as strong as the markets are at the moment. With continued exploding u. S. Budget deficit, not to mention the trade deficit, growth in the u. S. Economy slowing, what will that do to the strength of the u. S. Dollar . And how will that affect the market . Anna right now, it seems the deficit and the ballooning size of it is a little bit take into the backseat. It looks like the priority has been lets get our economy going again. How that ties in with the dollar , right now the dollar has been correlated with the risk on, risk off so shuai should going globally situation going globally. As coronavirus cases are going up or down, as the worldviews it has more risky or less risky, the dollar seems to relax. How that ties with the u. S. Deficit right now, not too much work there. It seems like the focus is on coronavirus still. Haidi how much would you be putting aside when it comes to cash, given the extreme dislocations, the volatility we are seeing, and the lack of clarity particulates above eco and corporate guidance . Anna cash is an interesting question. Because you have some investors Still Holding a bunch on the sidelines, but for us, we feel like this market is playable. When we were down at 2300, that was a time we asked investors to get in. We had a great runup since. Up nearly 35 from those march lows but thats because we have more clarity and we have more of our questions answered. That is not to say we have a full picture but as we get more and more certainty, there are places in the market to play. Really appreciate your time with us as always. Wells fargos securities equity strategist. We will be hearing from arianna financial services. Coming up, these new up rates in the u. S. Have some states pondering whether to pause the reopening. We have the details next. This is bloomberg. Haidi some u. S. States considering whether to put reopening on hold amid fears of a second wave of coronavirus. President trumps top Economic Advisor says recent spikes are small bumps that the nation is equipped to handle. Near some nowhere kind of second wave. They believe that we have a lot more experience with this. We have a lot better equipment to deal with this and we can send teams in to these particular places and calm things down and get the numbers back down. Our Bloomberg Health care reporter joins us. Just a few days ago we heard from Steven Mnuchin saying they cannot shut down the economy even if there is a second way for is what we are seeing out of more than 20 states at the moment considered a second wave by Health Care Professionals . Emma thank you so much for having me. I think whats important to note is that we are seeing cases increasing in a group of about 20 states. In general, cases are increasing, but overall levels are low. It is less concerning than what we are seeing in a Smaller Select Group of states in the u. S. , where places like texas, arizona, florida, in which cases are rising and the levels are less low. That is kind of sparking some concerns about an emerging second wave in the u. S. Now its early days, but of course, the main concern here is cases will rise at a rate that will also see accompanying hospitalizations rise and overwhelm health care systems. Health experts are saying this is something we have to take seriously even though it is an early indicator. Shery there has been a lot of hopes on malaria drugs touted by President Trump to help with the virus pandemic, but it seems now they are being considered too dangerous by the fda. Emma yeah, absolutely. That was definitely big news in the United States today. We saw some news around the fda and this drug, this malaria drug. It does sort of Say Something interesting about how quickly things are moving around hope of getting a new medication for the new coronavirus and whether we were moving too quickly, not looking at the evidence. Making decisions faster than we should. Haidi in terms of the kind of, i dont want to say false hope, but the exuberant help we are seeing in regards of a quicker than expected arrival of a vaccine, either concerns these hopes are getting too high with regard to efficacy once we actually do get a vaccine . Emma you know, i think this a lot of hope that we can develop vaccines for this coronavirus faster than we have ever developed vaccines before and theres reasons to be hopeful. Weve seen Companies Work faster than they ever have in order to advance vaccines, but ultimately, the process of developing new therapeutics is a really long timeline. Its notoriously long. It could take a decade to develop a new drug in the United States. Vaccines are also a long timeline because these are products that have to be used by healthy people. Healthy people get inoculated and so it is very important to test these in really large groups of people and ensure they are safe and they work. Out,u were pointing theres a lot of hope but whether the timeline is going to be as fast as people are hoping remains to be seen. Shery thank you for that. Our Bloomberg Health care reporter. More perspective on the u. S. Outbreak ahead. A doctor says a doctor will face what he calls the consequences of its insufficient action. He joins us in the next hour. A quick check of the latest business flash headlines. United airlines aims to raise about 5 billion to help offset the coronavirus by borrowing against its frequent flyer program. It says goldman sachs, Morgan Stanley and barclays will provide the financing with the deal expected to close in july. United plans to sell more than 2 billion of junk bonds last month. The new arrangement would be secured by mileage plus loyalty plan. American is said to be looking to raise money from a junkbond offering. It is working with citigroup with collateral that would include airports. U. S. Carriers including delta, southwest and jetblue have tapped investors to boost funds as the virus hammers demand for travel. American has already receive almost 6 billion in federal payroll support. Coming up, china may be warming to the prospect of another four years of a trump presidency. We will look at why some say beijing may prefer that to a Biden Administration. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. You are watching daybreak australia. The European Union is taking on chinas global trade ambitions with an unprecedented tariff decision to counter some cities to mainland exporters. For the first time ever, the eu is tackling alleged market distorting. It involves imports to the sickle market of glass fibers. Two exporters of such goods are units of companies ultimately based in china. The eu and u. K. Seem a step closer to a brexit deal with brussels more confident Boris Johnson will compromise. The Prime Minister saying the chances of a deal are very good. A Virtual Summit was held in which sources on both sides injected new momentum into deadlocked negotiations. The two sides are hinting they may soften the position. In the u. S. , President Trump is reiterating his threat to pull u. S. Forces out of germany unless berlin raises spending on its own defense, calling germany delinquent. He says germany owes nato billions and they have to pay. Slashow threatening to u. S. Numbers by half. Iran is being warned to allow inspectors into its Nuclear Sites amid rising concern of undeclared atomic material. The iaea says it has taken its request to the highest level with agreement of cooperation. The issue relates to activity in the early years of this century before the 2015 nuclear record was signed. Iran says they have no legal right to inspect. Israels being told unilateral annexation of unoccupied land in the west bank naming the loss of eu Research Grants and other funding. Israel have received more than 1 billion for the eu Program Since 2014 but being warned future payments may be without. Annexation of some jewish settlements in Palestinian Land is set to begin next month. Global news 24 hours a day, powered by more than 2700 journalists and analysts. Im karina mitchell. This is bloomberg. Haidi . Haidi thank you. President trump claims china would like nothing more than to see joe biden when the president ial election. Some officials are telling bloomberg they would actually prefer former years up trump. Tom mackenzie joins us with more. Why would beijing want no change in the white house given the relationship of the past four years . Tom it is a valid question because the last four years, you have seen trump spending much of his time beijing blaming beijing from everything from trade imbalances to covid19. The reason most of these officials we have been speaking to cited a belief that another four years of trump would result in a further breakdown of americas postwar alliance network. Theres a view that trump has done a pretty spectacular job of alienating allies like the europeans in terms of the u. S. Stance on germany and nato is another example of that breakdown in relations. There is a sense in beijing that ultimately that continue to break over another four years would benefit beijing and would outweigh any damage to china from continued trade disputes and geopolitical uncertainty. There is a wide view from the officials we have been speaking to that u. S. China tensions will rise regardless of whos in the white house. The realize opposition to china has now got bipartisan support and american views have only hardened since the pandemic. Biden is seen by a number of these officials as a traditional democrat, someone who would work to rebuild those alliances, americas alliances and multilateral relationships and dial down trade frictions with blocs like the eu, canada and mexico. And that could impose a bigger challenge to china in the longerterm. Shery a really interesting view coming from china because we have seen President Trump try to portray joe biden as being weak on china so what are the expectations when it comes to the former Vice President s china policy . Tom there is some validity in the fact that joe biden for a long time did back disengagement strategy with china, but that was a strategy that had broad support in washington and beyond up until the last four years or so. That has changed radically. Since and during the primaries, the democratic primaries, biden adopted a much harsher tone when it came to china. He described xi jinping as a thug. He talked about the bravery of democracy demonstrators in hong kong. He accused china of predatory trade practices. And called it unconscionable. Officials have come up and said biden may open up some areas of cooperation that trump would not. On areas like climate change, they could see the u. S. Reopening the paris climate deal. They could work, china and u. S. , on wto reform. But also potentially the Transpacific Partnership that was axed by President Trump. There are some areas that the Biden Administration could work on china that could potentially be fruitful. Longerterm, there is this view that relations will get worse from here. Theyre very concerned that officials will get caught flatfooted again. They were caught left lit it in 2016. They were assuming Hillary Clinton would win. They have been reaching out to their u. S. Counterparts and u. S. Contacts to try to get a gauge of who is most likely to win the november because they want to make sure who was prepared for whoever it is, biden or trump. Shery it was not only china that was unprepared for a trump presidency. Tom mackenzie in beijing. Asserts more control over hong kong and it is a human rights issue. Says expectassador sanctions and more swift action on china. This belongs in the u. N. Space for peace and security for hong kong. The recent actions of the Chinese Communist party and general secretary xi have given us absolutely no other choice. The fact they have broken their treaty obligations. This is an issue that i am going ,o continue to shine a light on to continue to force into the u. N. Space because this belongs in the Security Council. The president is very serious. He will be taking action. We will obviously be only , oning sanctions on china the people that are in direct or directly responsible for any actions against the citizens of hong kong. What sort of actions could you see in the united nations, especially when you cannot officially raise it up a Security Council given beijings opposition . Amb. Craft i think it is my response ability as the president to put forth his actions. They will be swift actions, they will be felt, which will that increase the dialogue within the Security Council. It is an issue that i am trying to incorporate into different dialogues i am having with ambassadors. Whether it is during the council to bring this up again with human rights issues with china. Any area i can bring this up within the Security Council to continue to raise the importance and the relevance of the fact we care about the people of hong kong, we care about their plight. The fact they have been a bastion of freedom. They are free enterprise. This is something that is very serious when china, the comets party embraces the treaty peter they have a treaty with the british. We want to make sure they uphold the treaty. Shery but u. K. Has been vocal on this issue but we have seen other u. S. Allies be vocal and try to investigate the origins of the coronavirus pandemic and being retaliated against by beijing. How much support do have among other members to bring this issue to the forefront . Amb. Craft the issue of hong kong, obviously being a human rights issue, the council cares deeply about human rights. There may be to were three actors that do not, but that does not stop us from doing the right thing. When it comes to human rights, theres no better president than donald trump who protects the rights of other people. We have likeminded allies within the Security Council. We speak frequently. During the covid pandemic, weve all had to be more cognizant of speaking on the phone and speaking virtually outside of our meetings. Thats what we have been doing. To let anygoing light between raising issues with hong kong within the security counsel and other venues i have the opportunity to do so. The u. S. At was ambassador to the u. N. Kelly craft. Coming up next, businesses say it is back to the office. Jp morgan the latest to open its sales floors. Telling us what that return will look like. This is bloomberg. Haidi questions remain when it comes to workers and employers alike as companies try to get people back into the office amid the Virus Outbreak. Jp morgan claims to have more traders next week as new york exits the total lockout. Singapore is set to ease restrictions and resume most activities by friday. Lets discuss with salesforce head of strategy for asia dan baldwin. We have seen pretty different approaches depending which company you are talking about. Obviously tech focus Silicon Valley companies saying people can work from home indefinitely. There are businesses that are pretty keen to get people back to offices. What kind of conversations are you having with your clients around this . Dan firstly, thank you for having me today. Our thoughts go out to those who have been impacted by the health and economic crisis. Aboutesforce, we think this prices in three stages. The first stage is what we call crisis response. That was the first 90 days of the crisis and in involves making sure our operations are stable and people a work from home productively. The second stage which we start of it into is the reopening state of reopening the workplace. The final stage is a return to growth based on the next normal. At each stage, organizations including salesforce a working on the health and safety of their employees. Navigate themers not giv crisis. For salesforce, as we head into the reopening phase, what we have been doing is providing our customers with exciting new capability called work. Com. This brings together powerful technology. A network of partners and experts around health, and specifically allowing organizations to put employees and Businesses Health and safety first. It includes being able to conduct an Employee Wellness assessment. Being able to manage employees in different shifts and have them enter the workplace in different shifts. Contact tracing functionality so if any of the employees do get sick, we can trace who they have come in contact with. Emergency response give ability in case we have an operate in the workplace and we need to notify employees. As well as grants and volunteer management. This give ability is designed to help organizations around the world get back to reopening the workplace and a safe as possible approach. Haidi even in terms of salesforce, you shut down your offices in a lot of different places in march. About 50,000 employees at salesforce. Given that so many parts of the u. S. As well as globally are dealing with the potential severity of second wave infections, how does that muddy the waters when it comes to a coherent strategy to reopening . Dan when we left our offices, it was like turning off a light switch. When we go back to the office, it will be like turning on a dimmer switch because the reality is for many of us, this is actually our first pandemic. Many of us are still learning. We can however look at countries in asia where they have already lived through a number of Virus Outbreaks over the years. I think the reality unfortunately is there is not a onesizefitsall strategy. Every business is different. The plan we have in place allows us to be more flexible while maintaining this f is approach a possible the safest approach possible for our employees. They understood what their new Workplace Experiences going to be like. We answered any questions they might have. We share resources, visuals and images around what the workplace is going to look like. And make sure everyone is comfortable and on the same page. Weve also started to stream our employees into multiple shifts because what this does is it minimizes the risk to any particular shift of infection. Every employee is provided a shift arrival time and the days of the week they are allowed to be in the office that helps us to manage floor capacities and avoid bottlenecks in the elevator. We ask them to complete a Daily Wellness check in through work. Com where we ask employees a series of questions to ensure they are healthy. Temperature checks throughout the day will be the new normal. I think the reality is while not everyone will be comfortable to return to the office. We have given our employees the option to continue to work from home through the end of the year and we will continue to monitor this and adjust as required. Shery you are allowing employees to work remotely until the end of the year. What about after that . Will there be some employees that can work from home that will be staying home . Dan absolutely. This is going to be a new normal. We are not going back to the old ways of working and it is important to do that. 69 of australians expect the pandemic to permanently change the nature of work. Half of companies employees are working from home. 66 say they are more productive now than they were precovid19 pandemic. We dont have a crystal ball, but you can imagine the people that have flex ability to work from home, maybe even for the first time, will want to maintain that. And disrepute a workforce like we have at salesforce that have the tools to work anywhere can become the norm. For those that do return to the office, they should expect a number of changes as we have talked about, the layout, the procedures. How we are going to maintain social distancing. We think many employees may choose to wear masks inside the office itself. Hasy salesforce really employees globally. As you look to the reopening of different countries, you have reopened some offices in china, hong kong and south korea. Are there particular regions management is more concerned about a second wave hitting and they are preparing more for those regions . Dan i dont think so. I think at salesforce, we are virusesictors of progressing around the world. But i think the reality is we are going to enter an environment where we are going to have to coexist with the virus when we returned to the office. That is an important element to understand. We have to find a way to coexist with the virus when we returned to work. We will have to accommodate for situation when and if it employee test positive for covid19. I think we can look for some of the countries in asia that have been through pandemics like this in the past and really get best practices from them in terms of how to deal with it. At salesforce, our number one focus is the health and safety of our employees, customers and the community. Shery thank you so much for your time today, salesforce head of strategy in asia. We will have more on the Virus Outbreak on wednesday. The greek Prime Minister will join Francine Lacqua for an exclusive conversation to contain the countrys containment strategy for economic growth. That is 9 p. M. Hong kong time. Lets see how things are shaping up for the asian market. Soph . Sophie after a threeday drop for asian stocks, investors getting the green light after the fed backstop the corporate debt to keep it lit. Kiwi stocks adding 1 . Nikki futures turning higher, while the yen is little changed ahead of the big boj decision. S p gaining ground. Treasury futures just edging marginally lower after cash bonds ended a choppy monday session little changed with the recent flooding fading. Taking a look at the positioning as of the week of june 9 when it comes to treasury futures. Theish, going net long for First Time Since december 2017, while going shorter everywhere else along the curve. Signs that the rally in treasuries will continue. Also this morning, want to check in on the offshore yuan, hovering below 7. 07. Keeping steady and well below levels reached during the wuhan lockdown in january or the global selloff back in march. Relative calm as the assessment of the outbreak and continued policy support expected for the chinese economy, indicating constraints towards production given the weak demand. Haidi . Haidi Sophie Kamaruddin there. Coming up, hertz certainly to be wiped out even as it continues with its improbable shares sell. We will have the latest development on that incredible story next. This is bloomberg. Shery hertz is warning potential investors will need a miracle to avoid a wiped out after a Bankruptcy Court allowed the company to sell stocks to raise funds. 37 Stock Plunged as much as and remains well above where it was trading when the company filed for chapter 11. Lets bring in david welsh. An incredible story of risktaking in the market right now. Tell us whats going on and if we are going to see this reality check for investors finally. David i think we will. We saw some of it today with the shares plummeting so much. This stock got well above five dollars, five times its bankruptcy day price. We figured, hey, sell shares is a much cheaper way to pay off their debts or some of their debts while they are in bankruptcy. But really, i just dont see how anyone buying those shares are going to get any kind of payout. Too many dominoes would have to fall for them to get any money out of this. Sale is one oft the kind of, i guess, positive parts to this story. But as we have been talking about, so many things need to fall in place for a miracle essentially for the sheer buyers. David thats right. ,t the end of the First Quarter they had more than 20 billion in debt and 1 billion in cash and they will still burning cash. Their bonds alone are 2. 3 billion underwater. That is not even count the bank debt or the securities that are collateralized by all the cars they rent out. They can sell down a lot of their cars and they have filed to do that but that money is supposed to go to the bondholders that have the securities. The banks were first in line to get any of this money. And then you have the Unsecured Creditors after that. All of that has to happen, they all have to get paid close to full. Hertz emergesming from bankruptcy, they will issue new shares that will go to the creditors as well. They have to shore up the lost investment in the first place. After all of that, if theres anything left over, the equity holders who by these shares would have a stake in the company. That is a long reach as far as i can see to getting it. And we have seen quite a bit of evidence, a lot of retail shareholders have seen this stock going up and are trying to make some bucks day trading. We will see if they want to buy more shares with issuing comes out. Haidi david welch, the latest installment on that incredible story with hertz. Lets get to a quick check of the latest business flash headlines. Jaguar land rover has seen the beginnings of a rebound. A 630 million loss in the quarter through march, but sales rose more than 4 from the year earlier in may. Jaguar land rover is also reporting improved demand in the u. S. And europe, although it still intends to cut around 1000 staff. Down to make the biggest in its business since the deepwater horizon disaster as it hits longterm demand and a shift towards clean energy. The British Energy giant has cut its estimate for gas and oil prices in the coming decades, between 20 and 30 . Coming up in the next hour, the outlook on the markets. With us from boston in a few minutes to talk about the market implications. Plus, we will assess whether the u. S. Is equipped to handle another virus wave. Access help international is with us later. Plenty more ahead on daybreak asia. This is bloomberg. Haidi very good morning. I am haidi stroudwatts in sydney. We are counting down to is this major market opens. Asias major market opens. Shery the fed moves to buy Corporate Bonds. The news lifted wall street and futures are higher in tokyo, sydney, and hong kong. Local coronavirus cases passed 8 million with infections rising in china and the americas. Some u. S. States may
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