Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

U. S. Took preemptive action in terms of export controls for the city. Yvonne the one thing the chief executive has said is u. S. Sanctions will not scare us. That is the latest response from carrie lam. Given what weve heard from the u. S. Recently when sanctioned chinese officials over the security law, and also now as you mentioned, paring back trading benefits that hong kong has enjoyed with the u. S. As well. The market seems to be overshadowed by better data. Pretty early when it comes to pmi data in china that came out at the top of the hour. It seems like at this point its really about the fundamentals more than the politics that is driving this rebound we are seeing in risk assets today. Look at the asiapacific benchmark, up 1 . Set for the best quarter since 2009. Still, asian stocks have not really recouped most of the losses we saw in the First Quarter, but certainly u. S. Futures pointing positive as well. The hang seng still up 194 points despite what we have been hearing in the last 24 hours. The csi 300 also up about three quarters of 1 . Its stronghas reared head again when it comes to the strength we have seen. Right now we are seeing a little bit of strength in the offshore renminbi. The hong kong dollar unchanged at 7. 75. We are looking at the volatility for the offshore remember the neminbi. The route seems to be continuing again. Lets look the board and what we are watching out for when it comes to markets that have just open. We have jakarta coming online, really joining the rally. We have seen nifty futures also pointing positively. Dollaryen, a risk on move where we see the dollar coming off the end, one of 7. 72 right now. The u. S. Tenyear at 63 basis points. Yields close to reaching alltime lows in the second half, and treasuries on track for the best first half since 1995. Lets get to our top story. Hong kongs future looks more precarious after china reportedly passed new security laws and was revoked special trading status. Commerce secretary wilbur ross says chinas tightening grip on the city undermines its traditional economy. This comes amid reports that chinas top lawmaking body has approved a Controversial National security law for the city, something that triggered the reaction from washington. Lets bring in our senior counselor. He was also the former chairman of the American Chamber of commerce in hong kong as well. Always great to have you. How are you digesting the news weve had the last 24 hours . Mark it is not exactly surprising. It has been something thats been expected and that has been reflected in the markets as well. Really knowi dont exactly what the impact will be viewed expect that will happen over time will be. I expect that will happen over time. How the particulars are enforced or applied. The latest move from the u. S. , this seems to be the most aggressive move we have seen yet somed. C. , revoking preferential treatment hong kong has had when it comes to Sensitive Information and restricting tech overall. What do you think is at stake and what does it mean for hong kongs future as a customs entity as well as an International Trading hub . Mark you know, it depends again on how this is applied. You have heard of the topline approach and we are not sure how that will work out. Certainly the perception it gives and the indications is that it will not have an adverse effect on hong kong because a lot of it is confidence and credibility. , yourhat begins to weaken status begins to weaken. I think the impact on hong kong people and businesses to an extent, too. Tom does that suggest the companies you advise are taking a wait and see approach or are they already looking at contingencies . Mark it is mixed. Everyone looks at contingency plans all the time, but it is mixed. It is a finite group of companies but most are going to stay the course for now. Partly because if we look around the region, where is a better place to be based than hong kong . Even at this point. Until we find out what the actual impact is, at the moment many are holding in place. There are a few on the verge of areng already, but those for complex reasons, not just what has happened the past few weeks. Tom do you have any sense of how concerns the financial industry is about this bill that has worked through the senate and will go through the house and probably be signed off by President Trump the next few u. S. S that will section firms and other Financial Firms if they do dealings with chinese officials linked to the security law . Is there any sense of how the financial industry is responding to that . Obviously it would have to make them uneasy and you have to know the details. Clearly it is important not only for Financial Markets but other companies. The rule of law and those need to be maintained. Financial services is an advantage hong kong has over other places. Otherst china, but many locations in the region. How does the Hong Kong Government respond now . Doesnt need to take some time ofaction and some type action and serious action for the world to take it seriously as an International Finance hub or does it run the risk of if they do any action, lets say challenge this to the wto, it runs the risk of them aligning with china against the u. S. Mark that could happen, of course. I think what has to happen is communication. There doesnt seem to be much communication anywhere. That is internally and externally at this point. No one seems to be talking, they are talking past each other. Issues. E a lot of im afraid we will not move forward unless that starts to happen. I hope there is feeling on all sides that this has to occur, but im afraid i dont see much prospect of that in the shortterm for some of the reasons you just were describing. Yvonne how much of this do you think i know a lot of this is speculation how much of this do you think is Campaign Rhetoric from the trump camp . What can we decipher, what is the noise, and could escalate further . Mark part of it is that, and part of it is there are things going on. It is clearly top of mind. There are certainly some people advising the president strongly about the u. S. Relationship with. Hina how widely that is shared across the u. S. Is unclear. Companies areof waiting for the next four or five months to see how this sorts out, and if things change, no matter what happens in november, if these things change and calm down after that. It is hard to say. But looking at alternatives, it is hard to choose. Lets make sure we get you back on the show once we have those details. Thank you very much, mark michelson. Lets get the first word news with Karina Mitchell in new york. Karina Industrial Production in japan declined again in may even as a state of emergency was listed indicating the severity of the Pandemic Impact on manufacturing. Factory output fell almost 8. 5 from april, a fourth monthly slide and something that hasnt happened since 2012. A separate report shows japans Monthly Employment rate is at its highest level in three years. Meanwhile, singapores nineday Election Campaign kicks off today with candidate nominations. One of the big questions, whether the Prime Ministers estranged brother will run for the opposition. This 62yearold younger brother joined the Progress Singapore Party last week in a bid to challenge the ruling power ruling party, in power since independence. This isnt generally raising and alec for the Global Economy based on retail sales. The agency still sees world gdp falling by 4. 6 this year, with dropping by nearly 6 . Fitch is raising its outlook for china, seeing gdp rising 1. 2 of its earlier forecast of a 7 10 rise. India is ramping up tensions with china, banning a range of apps on National Security grounds. And others tiktok platforms from alibaba, baidu and tencent. India says its because of unauthorized storage of user data. This follows a border standoff that left dozens of soldiers dead or injured in recent days. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Yvonne thank you. Still ahead, a closer look at the chinese economy. We have the pmi numbers beating across the board when it comes to manufacturing, nonmanufacturing and subindices. We will talk through the numbers. And of course, hong kongs Economic Future looking increasingly at risk. Tom also, as advertisers had for the exits, facebook defends its policies on hate speech. We hear from the companys vp for Public Affairs and britains former deputy Prime Minister. This is bloomberg. Tom back to our top stories this morning, the u. S. Is revoking some trade benefits to hong kong, making it harder to export technology to the city. This comes amid reports of chinas top legislative body has approved the new National Security bills for hong kong. Lets discuss the implications on the fx markets with a ubs Wealth Management executive director and macro strategist. Thank you for joining us. Will this bring further pressure to bear on the hong kong dollar or will it remain relatively resilient given the reserves . Good morning and thank you for having me. I think regards to the hong kong dollar, we still maintain a view implication in the Interest Rates market so there is a potential for high volatility occasionally with pressure. Maybe on a broader basis, the tensions between the u. S. And china is also creating other opportunities in the asian currencies base. Dollar see nyhe cny is directly input a by the situation over there. Forhat note, we are looking a pretty stable trading arrangement for investors looking for any opportunity to basically be trading around 77. 2 an investor might want to take advantage of the volatility. Is dollar cnhit and more accurate age of trade tension, and 7. 2 is by the end of the second half . I think when we look at what , a lot of it is a reflection of the u. S. China relations, and the elections. Always andcus should rightfully be on china and the impact on the chinese currency. Ahead of the elections, given a broad majority of the American Public actually has an unfavorable view of china, you are likely to get the dollar cnh at seven or above in the elections itself to the dollar cnh trading closer to the lower part of the rigid and we think 7. 2 would be the range we would be looking at the next few months. If you want to have an opportunity, a strategy, for example even on the option basis , you could even consider selling options and just have the range. That could have one way to play what is going on here. Yvonne you mentioned what we have been seeing in hong kong. Interest rates are falling here. Thanks to the intervention, weve seen the spread between hibor and libor narrow of it. Can the carry trade still live on or is it losing its luster . Hiboryou mentioned, the has been pretty stable. I think again, the main driver for globally, lower rates for hong kong in the region, the dollar liquidity has been extremely calm. The libor has been slightly below 30 basis points. The dominant driver anchoring a lot of asia including hong kong, as long as you dont get a dollar funding squeeze, hibor should be unable to go that far. Theres a lot of interest to benefit in terms of placing hong kong deposits at a higher rate. Would be the case but we believe actually it is likely to narrow. Hibor beingn around sustainably at a premium to libor will not sustain on a perpetual basis. Hibor andking at libor to be closing. The end of the first half and i am sure you yourself are looking to look past the tumultuous six months weve seen in the fx market. What weve seen is more of the investor kind of haven demand for the dollar of late. I am wondering, how selective do you have to be in betting against the dollar now . And now we are near the zero Interest Rate world, do you have to focus more on the fundamentals to look at the winners and losers moving forward . I think that is precisely the case, where being selective is probably going to be the focus for the second half of this year. You would have also noticed that the dollar has weakened pretty substantially ever since the big liquidity squeeze we had in march. Proactivethe feds approach to providing liquidity, the dollar is beginning on a bond basis but the recent strength in the dollar is probably a curse because adele has been weakening sharply week before the latest balance. From here i think investors would be more discerning. Currencies group of that could be interesting over the next six months is currencies in the region. I think thats probably a bit more assured of a trade, especially in terms of how resolute the fed has been and the fact that it will stay lower rates for a substantial period of time. Yvonne we will leave it there, but thank you. I just want to bring up some lines from the japanese chief cabinet secretary, speaking about this National Security law that has just been passed by the National Standing committee in beijing. He says the passing of this Hong Kong Security law is regrettable. Not at stage two set a date for a xi jinping japan visit for now. We have plenty more ahead. This is bloomberg. Lets get your latest business flash headlines. Uber has made an offer to buy postmates as it looks to consolidate its business beyond ridehailing. This is according to the New York Times that doesnt reveal the terms of any offer. Ubers core operations have suffered because of coronavirus and they recently lost out to europes just eat in a race to buy grubhub. Postmates is not profitable but demand has been booming. Money is trying to raise for its ipo and will begin taking orders later today. About 3 billion shares will be put the market. Start in the bank will trading on the Hong Kong Exchange july 6. Boeing shares soared in new york after a u. S. Regulator allowed test flights to begin four is craft. Ed 737 max air it could still be months before the planes can pick carry passengers again. The 737 max fleet was grounded 16 month ago after two crashes killed 346 people in indonesia and ethiopian. Above 1000 after elon musk suggested the Company Might be able to avoid a Second Quarter loss. He wrote to staff saying breaking even looks tight and urging them to go all out and in a producing cars. Its market cap is on course to rival toyota. Couldis right, tesla qualify for inclusion in the s p 500 index. Lets check in on the markets. Newskong rushing off the brushing off the news the security law has been passed in beijing. And of course, moves by the u. S. To restrict exports of technology to the city as well. Hong kong brushing off those concerns at the moment. The hsi is up. The mainland digesting the data in terms of pmi, broadly more positive than forecast, so it should be noted that Smaller Companies remain under pressure. The oil glut is still a concern. Wti still below 30 a barrel. Copper is looking at its best quarter since 2010. The dollar is on track for its worst month this year. Because of the 10 year yield, youre looking at 0. 63. Yvonne next, we talk more about the pmi data out of china. And economist joins us to discuss what the outlook will be, and we will consider the threats to hong kongs trading status. This is bloomberg. Erg. I am Karina Mitchell with the first word headlines. Several states in the u. S. Are now reimposing virus restrictions as infections a surge. New jersey is halting plans for Indoor Dining and new york may do the same thing. Florida reported a jump in its already double digit infection rate. Tokyo seeing a rise in cases while iran reached record fatalities and austria with the highest infection rate since may. The who says the worst is yet to come. Two dangeroushas combinations. Fast, it is contagious be the second, it is a killer. Divisions. Oit divisions between us. Karina india is to ease virus fractions restrictions. They will provide more flight and Train Services. International flights will be allowed in a face return with schools and colleges remaining closed until the end of next month. India has more than half a million virus cases with a million virus cases with 16,000 deaths reported. The Philippine Central Bank says there is no need for a rate cut at this time as it watches previous moves filter through the economy. The governor says he is unlikely to act in the foreseeable future. The bsp lowered its key rate by half a point last week, bringing the reduction so far this year to 175 basis points. Iran has issued an arrest warrant for President Trump and 35 other people for the killing of a top general and genuine in january. The suspects include political and military officials from the u. S. And other countries over the assassination of a some solemani. Trumps name is the prime suspect. Iran is requesting a socalled red notice from interpol. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Back to you. Marketstaking a look at right now, we are seeing a brisk on session a risk on session this Tuesday Morning as we wrap up the first half of the year. At this point we are seeing asian stocks on course for the best quarter since 2009. Still not making up for the losses in the First Quarter but 1 higher on the benchmark today. U. S. Futures also a little higher. Nifty futures also in singapore up about two thirds of 1 . U. S. 10 year yield is still one of the best bets you have made if you were long the u. S. Tenyear for the first half, at 63 basis points right now and inching close to the march alltime lows for yields we previously saw. Were also watching chinese and hong kong markets. Seems to be more focused on the better data we have seen, the pmi numbers out of china, more so than what we for the last 24 hours with the hong kong National Security law being passed in beijing as well as the u. S. Revoking some of those trading benefits from hong kong as well when we heard from wilbur ross. We are seeing the hang seng up close to 20 for thousand 500. The shanghai composite up about four tens of 1 . Card fort the report the first half of 2020, and you halves, the First Quarter versus the Second Quarter, and this basically one out. Won out. Gold and u. S. Treasuries in particular a big winners. Stocks are back but still down about 10 when it comes to asian stocks, and commodities still under quite a bit of pressure as we wrap up the second half the first half, i should say. Lets get back to our top story. As we look at chinas top legislative body having approved a landmark National Security law for hong kong, although speaking shortly after the news, the hong kong chief executive said she could not confirm that. It brings more uncertainty as the city faces the deepest recession on record after the protests and coronavirus pandemic. Ets get more with iris pang we have the National Security law passed in beijing, we have reaction from the u. S. Over paring back some of the trading benefits hong kong with has with the u. S. What is at stake with the economy and will it hurt hong kong more than china . , if you ready what the u. S. Said, they will impose [indiscernible] issue on how they define the technology. Hong kong is not a manufacturing economy. So they use u. S. Technology products, not manufacture. Affect similar to the mainland. Is not related to the hong kong economy. The mostct that critical one is the equipment that we use. In businesses. For example, meeting room equipment. Would that be sensitive . I dont know. For me it is not sensitive may the u. S. Things that is sensitive. Kongat case, Hong Companies and individuals might have to spend some money to find a substitute in europe. And to set up again the meeting room. But that is not the end of the world. Yvonne not the end of the world. But by restricting the Sensitive Technology from the u. S. , does that in a way hurt hong kong when it comes to universities that need these types of technologies to thrive, to build the Innovation Hub that hung that hong kong has been trying to strive for . And could these export bans affect the chinese tech race with u. S. . Iris for example, you mentioned hong kong universities and we also have r d. That could affect some of the innovative projects. But that doesnt mean they cant find a substitute in the rest of the world. And on the mainland, actually if this to hong kong to hurt the mainland, it is very difficult. Hong kong does not do advanced technology, even in services. That means applications. It is very difficult to use hong kong to hurt the mainland. Tom which is sectors in hong kong get hit if the u. S. Strips hong kong of these exceptions . Tariffs, that are will be trade. Kongu look at trade, hong it is a small percentage on both sides to both sides. When there is a tariff, it doesnt mean all of the trade will disappear, it just means the trade becomes more expensive. 3 maybe you can assume that of trade will disappear, but as isaid, the overall amount 200something million, so it is very small. Tom i want to get your reaction to the pmi data we got out today. Topline better than forecast, but digging into the data, Small Companies are under pressure and employment remains a concern. What is your reaction . Iris true. What i observed is the same as yours. Coming below 50. The new expect orders are still below 50. Manufacturers are using inventories to substitute output. They dont really want to produce extra than the orders. They are not building up inventory. Are notns manufacturers very optimistic on the outlook. They are very cautious. On manufacturing, i will say that half of the production is for domestic and the other half is for exporters. If you look at the export part, the second wave of covid in u. S. And europe will continue to therefore china manufacturers. We are not particular optimistic even though this data is really good. Yvonne can you make an assumption for the Second Quarter that we can still see a negative growth rate for china and could they avoid a recession in china . A negativeexpecting and some response in q4, but the overall growth 1. 5 , and20 will be i am actually considering whether i should downgrade because of the covid infections on the western side of the world that could dampen manufacturing in china. Tom hmm. A bit of a negative outlook. Thank you for your analysis. Now, the less governor of hong kong under british rule says beijings imposition of a security law in the city will be intolerable for the people and eventually for business as well he told our Stephen Engle that most activities the law will target are already illegal but not in a way that is acceptable to the mainland government. Is not a question of it being passed, it will be imposed on hong kong. One of the many breaches of the joint declaration and basic law. This is it ineffective trying to eliminate one country, two systems. It is in breach of almost anything you want to point at, whether the covenant on civil rights, or the agreement that hong kong should have a high degree of autonomy. Thisxtraordinary thing is demonstrates what i am saying, in the last day or two, the chief executive, while saying how much she is in favor of it, has not even seen it. It is absolutely crazy and designed to ensure that the hong kong freedoms, the at tommy we have regarded as being the as beingwe regarded , the chinese will now run hong kong whatever way they want. It is bad news for hong kong. If this was a football game, its another example of why the Chinese Communist regime should get a red card. Stephen you see this an opportunity for china to basically establish a secret police and hong kong . Thats what they are doing. Theyve said they will establish a National Security office in hong kong. It will not be run by the st. Vincent depaul society. It will be run by Chinese Security agents. What they will want to do is target anybody who disagrees. We dont know because they havent told us, they havent told people in hong kong, even other have posters all around hong kong saying its a great love for hong kong, we dont know the details. We just have leaks. Pursue enable them to people retrospectively for things theyve done . How will it define things like extradition and subversion . Contacts with how will it deal with contacts with outside bodies . Stephen these National Security provisions are outlined in the basic law, which has not been implement it as constitutionally required by the legislative council. For 23 years they have failed to do that. The beijing Authorities Say because they did not pass on their own article 23, we had to do it ourselves. You buy that argument . Not remotely. Most of the things they talk about are already illegal under hong kong law. You can go through the crimes ordinance, go to other pieces of legislation. They touch on treason and sedition and so on. Those things are already made illegal. But they are not made illegal in the way that china wants because china wants to be able to define those things in a way that is running counter to most views around the world on human rights and human rights law. There is no shortage of law on public order in hong kong. Comeat was the case, how all of those 10,000 people have been arrested for demonstrating, many of them peacefully over the last you months . Hong kong has those laws. What china wants is the sort of law that would be unacceptable to people in hong kong because it would take away some of their basic freedoms. Thats what the argument is about, not whether there should be National Security law. Yvonne that was the former hong kong governor speaking to Stephen Engle. Some lines crossing from local media. Ming powell reporting that china is to holder press briefing on the security law is to hold a press briefing on the security law this tuesday and they will publish it in the government gazettes. This could perhaps be the first time see the full language and text of the National Security legislation. We did have early reporting that said the Law Committee will be meeting later today immediately after this was passed, to discuss the insertion into the basic law. Perhaps we will get more detail later this afternoon. We have a and continuation of the rhetorical but also the cheerio titfortat between the u. S. And china but also the material titfortat between the u. S. And china. Mike pompeo saying china must honor the promises they made and the chineseing threat of visas for u. S. Officials. Mike am passing the Chinese Communist party cracking down a hong kong has because the u. S. To retool its relationship with the territory and the communist party should take response ability for its own choices. Mike pompeo, the secretary of state in the u. S. Responding there. Next, singapores Election Campaign officially kicked off today with a family few in focus. Details on that, next. This is bloomberg. Welcome back. Singapores Election Campaign officially kicks off today with candidate nominations. Our senior asian economy reporter is on the line. The ruling party is expected to remain in power, no surprise there. Why is this election noteworthy . Michelle in nine days of campaigning, which kicks off today, the most intriguing part today is finding out if the current Prime Ministers brother will run with the opposition. He has been threatening to do so in the name of ending a super majority by the Peoples Action Party to get more Diverse Voices and parliament, he says. That is energizing a dissatisfaction with the ruling parties crisis response. E is a fractured Opposition Party in a country that has had a ruling party holding onto leadership in all of existence since 1965, but there are questions around whether they have done enough in crisis response, whether the stimulus has been effective and whether it is getting to the right places, the right people, and enough or too much or the right amount. Yvonne yeah, talk about a sibling rivalry. What do we know about the likely next Prime Minister . Michelle that would be the deputy Prime Minister currently. He is also finance minister. He is a career Civil Servant and politician. We have seen a lot of his career and he has a lot of establishment and institutional banking. First leader of singapore called him the best secretary he ever had. But theres some question about whether he is softspoken and maybe not assertive enough at this time in needing bold leadership. Activeers point to his listening skills, and him being a steady hand and a hard worker. Famously, when he woke up from a, after a stroke in a Cabinet Meeting, he asked whether or not there was a Cabinet Meeting that day. All sorts of anecdotes to show how dedicated he is to the leadership, so we will see. Yvonne a lot to look ahead to before july 10, which is when singapore goes to vote. Our senior asia economy reporter joining us from singapore. Coming up, advertisers practice social media distancing, putting facebook revenues at risk. We hear from the companys vp for Public Affairs. This is bloomberg. Is feeling thek effects of billions of dollars in lost value as companies are pulling ads from the social network over content policies, namely whether facebook removes all hate speech. Caroline hyde spoke to the Vice President for Global Affairs and communications. Comesi think with success responsibility and with success comes accountability. I think it is right that facebook, given it is a private company in many ways, we provide a platform on which so much societal and public and political debate lays out. The is especially true in highly polarized, fraud environment in which these debates are playing out in the u. S. In an election year. We are acutely aware that this is a time of great sensitivity. U. S. , emotions after the killing of george floyd. We are constantly scouring platforms to make sure there is legitimate public debate. Some say things others dont want to hear but we believe in public expression and we believe that within certain limits. Im certainly not complaining that there should be a particular focus on facebook because we do play an Important Role in public debates. To pointthing i want we willrly enough, is not illuminate all hate speech. Hateful people eliminate all hate speech. Hateful people say hateful things to each others, since the dawn of time. It is used by a minority of people to utter hateful things. It is our job to go after that content but i dont want anyone to imagine we can rid the world of hateful speech because that is part of the human condition. Our job is to make sure it is minimized as much as we can minimize it, but i dont want to pretend we can illuminate it altogether. Caroline what about the criticize him that some think this particular inflammatory content in some way leads to more eyeballs and a bigger bottom line and a greater revenue for facebook . Is there is a worry and how do you tackle that criticism that this generates revenue for you . Nick lets be clear, we do not profit from hate. We have no incentive to have hate on our platform. We dont like it. Crucially, users do not like it. We know this from surveys we conduct with users. They dont like to see hateful, inflammatory content on their newsfeed and of course advertisers dont like it either. It isnt about whether you are for or against hate, everybody is against hate. It is what you do about it. We dont benefit from hate, we benefit from positive human connection. Tom that was facebooks Vice President for Global Affairs and communications. Looking at the markets, hong kong rushing off concerns around the security law and the u. S. Response. Up eight tents, of 1 on the back of positive pmi data suggesting the recovery continues in kind. The nikkei up almost 2 despite concerns about industrial output falling further in may than expected. Futures in the u. S. Up almost to tents of 1 . It ended in the green yesterday off of more positive housing data. The dollar is essentially flat on the dollar index, a bit of strength in terms of the offshore yuan. Yield,s your 10 year 0. 63. Onnne we are focusing better data, we have the u. S. Jobs report on thursday as well, given a shortened holiday week in the u. S. We have lots more coming up. This is bloomberg. It is almost 11 00 a. M. In singapore and hong kong. I am haslinda amin. Welcome to Bloomberg Markets asia. I am yvonne man. Hong kongs future looks more uncertain. Theeportedly approves security law. The u. S. Revokes its special trading status. Stakesa several u. S. Scale back states scale back economic reopening. The World Health Organization says the worst of the pandemic is yet to come. Yvonne investors prefer to focus on other news. Factory data confirmed the recovery and hong kong stocks join asias rise. Markets are set for their best quarter since 2009. Haslinda gust off the monday blues. Tuesday is shaping up to be a better day. Asia tracking both gains in the u. S. Overnight, set to pose its best quarter since 2009. Rebound,been a speedy trumping concerns over the rise in virus cases. The who saying the worst is yet to come. The msci index up by 1 . Futures pointing to a pretty muted gain. Extraordinary of uncertainty even as the economy bounces back from its deepest contraction in decades. Index, upe csi 300. 8 . The hang seng index up by as much. Higher,hmarks trading brushing off geopolitical concerns. The Hong Kong Exchange hitting a record high of three to two. China lawmakers have passed a Hong Kong Security law, according to reports earlier. The u. S. Preempted the move, revoking hong kongs special status. No more preferential treatment, including export license exceptions. Chinas june pmi coming in better than expected, expanding for a fourth month. We had a tweet here. Adding to the development here. Joshua wong announcing he is quitting the group he founded in 2016 because of the National Security law and also because of the steep penalties associated with it. He says he will continue in his own personal capacity. That is the latest development in that space. Flip the page and take a look at where we are in terms of the other markets in asia. The asx climbing 1. 3 . Set for the biggest quarterly 2000 nine,ll since rebounding 15 since the march lows. Its worst quarter ever. The kospi jumping 1. 5 . The impact of trading below the 10 day moving average. Jakarta composite index. We heard more from the government that the bank is closed buying billions of dollars of sovereign bonds at zero interest. That is perhaps to help the Government Fund the virus. Yvonne. Itnne taking a look at when comes to currencies, we are watching more of the dollar. Pretty much flat here today, seeing some crossing in the chinese renminbi. The hong kong dollar has been on the stronger and. Really just shrugging off the political turmoil we have seen in the last 24 hours. You are seeing havens being a retreat here. 107. 77 at the moment. Taking a look at what we are watching, looks as though we are continuing the rebound in the Second Quarter even for the nifty, up. 6 for nifty futures. This years worstperforming currency in asia, it is finally catching up to the em recovery. Barclays, social bank, you have foreign influence coming in, the oil price collapse, and this will nudge the rupee higher according to those. We are watching that all through india. That was the last close. Also just want to mention a little bit more about hong kongs future. This is the top story here today. We are learning about the National Security law that has been passed by the legislative body in china. The future in hong kong looking more precarious. Halting some of the cities trade benefits. We just learned that we could be hearing, according to some local reports, the full text of this law. They will have a press conference to highlight the language of the National Security law today. Thats bring in our team that has been watching all of this. Karen lee with the latest. Lets start with what we know so far about the National Security law. Carrie lam called her weekly briefings minutes after the top legislative body it was reported to have an attempt to curve it. Hong kongs longtime reputation. A lot of people wondering what this means, whether they will be able to stay, and we are seeing multiple outlooks in hong kong, reporting the news. Not heard anything from china directly yet. The South China Morning Post is reporting that publish details of the law this afternoon. That will mark the first time it will be fully disclosed to the public. We should have a lot more information. Acknowledge that residents had many concerns even though she has been a staunch defender of the law. She said it was inappropriate. Haslinda what do we know about wilbur rosss move . Ross and the u. S. Commerce department, making a big announcement yesterday. The Central Trading privileges from the mainland. The security alarm raises concerns about the transfer for technology. Regulations allowing special treatment to hong kong. We are going to be watching to see what the u. S. Says now, especially details for what exactly looking ahead of course to tomorrow, the hand over day, the celebrations here in the city tomorrow, how will the approval of this law affect protests . Karen tomorrow is the anniversary of hong kongs hand over to china in 1997, a day marked by mass protests. Last year, we saw a march with people on the streets. And collusion with foreign forces. The anniversary. The main anniversary has been denied approval. It is making a lastminute appeal. Will see whether it gets approved or not. It is unlikely to. We will see if that stops people from coming out or if they voice their concerns over what is happening. The china government editor in hong kong. Lets get the first word headlines with Karina Mitchell in new york. Karina a lot going on. Several states are reimposing various restrictions as infections surge. New york may do the same thing. Florida reported a jump in its already double digit infection rate. Casesis seeing a rise in while iran reached record fatalities and austria as its highest death level in midmay. The worst is yet to come. Virus has two dangerous combinations. One is it is fast. It is contagious. The second, it is a killer. Exploit divisions. Divisions between us. New data from china confirm the slow but steady recovery continues. June manufacturing pmi a common at 50. 9, higher than forecast, and 3 10 stronger than in may. Nonmanufacturing pmi rose, well ahead of projections. The data indicated chinas despite localized spikes in infections. Fitch is gently raising its outlook for the Global Economy based on monthly increases in retail sales in the u. S. , the u. K. , and western europe. The agency sees world gdp falling by 4. 6 this year with u. S. Growth dropping 6 . The fitch is raising its outlook for china. Gdp rising 1. 2 from its earlier forecast of a 7 10 rise. India is ramping up tensions with china. The band includes a Popular Video live form, tictoc, and others from alibaba, baidu, and tencent. New delhi says it is acting because of unauthorized storage of user data in foreign servers. The move follows the standoff that left dozens of indian and chinese soldiers dead or injured in recent days. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Yvonne, those are the headlines. Some lines crossing through from the dow jones, reporting about uber and a possible acquisition for postmates. The food delivery app. Now, they are saying this and deal could be valued at around 2. 6 billion dollars according to the dow jones. The deal could be announced next week if not sooner, and postmates has also been planning a possible ipo they say in the summer. This of course after uber had the failed attempt at acquiring a grubhub less than a month ago. They are doubling down into the food delivery business. Still ahead this hour, we will speak to they are stern to find we will speak to our guests. With the manerview from the Progressive Lawyers Group. Haslinda we get the market outlook. How the news about hong kong could affect its status as a Financial Hub. This is bloomberg. Haslinda reports from beijing say chinas top legislative body has approved a landmark National Security law for hong kong. Lets skies potential Market Impact with the asia cio. Good to have you with us. Your initial thoughts on this. This was more symbolic than significant . The naturalt is longterm evolution. We should have picked it. There is currently some sense of acceleration for further withintion of hong kong the china parameter and the whole context. It raised questions of uncertainties as to how the new system will work, but it is not all on the negative side. They all saw hong kong as a Financial Hub being reinforced. To do financial activities, and so, there are pluses and minuses. The question will be to be able to optimize the positioning and there should be no question left. There should be a constructive debate. This is a longterm trend, well defined we have to adapt and to see the certainties and this whole context. In the past few weeks and past few months, it has been news for hong kong as a Financial Hub, looking at the pace of ipos taking place in hong kong currently. It is quite positive. The china unicorns in the future will probably look for a listing in hong kong rather than the u. S. Msci, the repatriation of singapore to hong kong. It is alsostion, but room for opportunities, so it is calling for very active management. Might the risks be . Could it be in the hong kong dollar peg . Could it be seen as a manipulated currency . That would be probably, you ifw, a real deterioration the currency was to stop the hong kong dollar, the key topic for the main subject. If the hong kong dollar was currency,anipulated that would definitely be a further step that would again potentially be forced to accelerate a slow move, a natural move. That would not be actually good news in the shortterm. This is not the best Case Scenario right now. We believe that there should be so muchual consensus, toluse to accelerate that sort of disruption. Yes, indeed, we have to be mindful. And clear. Proven attack. Theres a lot of words which were exchanged, particularly from the u. S. Side, but they are limited. Terms of action and true acts so far, they have not been that meaningful. The hong kong dollar is a very important benchmark to watch. Missed the hang seng has out on this rebound of risk assets globally in the Second Quarter, given the political turmoil we are seeing right now. Does it change in any way where we are going to deploy money in the second half . David no, we would not. We truly believe that it is all about the domestic benchmarks and the region of development. The global tension, the trade tension, it is the longterm story. Are seeing very positive development politically in china. This is where we know from an investment point of view with the equity side, this is where we should be focusing. This is where we find the best quality and best ability these demand. Ed on medical we have a local credit market in china. There has been no stress. We have been over rate overweight china. It is probably the way to go. Going to change over that trend. Dataed to watch the local and the latest pmi was quite rational in that sense for china. For all of our viewers and bloomberg subscribers as well, we want to talk about your outlook for the second half. What we have seen in the first half is that havens were the clear winners gold and treasuries outperformed. Stocks have come out in the Second Quarter. Commodities are down in the dumps as well. You think this will continue . Which assets do you think will outperform . David on the equity side, some pockets will continue to do quite ok. Shanghai in particular. At the end of the day, they are finding out which segments are back to precoronavirus levels. Therena in particular, are segments which are coming up with numbers which are again quite supportive. As i said, from a liquidity point of view, there is limited trends right now. Segments where there is high quality. Theres also political names. Materials, for instance. Even in the auto space, which has been so unloved for years, actually, in the dealing space in particular, we start to see numbers which are up year on year, and when you look globally , you have countries like korea, taiwan, china, where the Earnings Growth for this year is going to be higher than last year. Virus or not virus, first wave, second wave. Those Companies Continue to be able to extract more profit and goals, so on a relative basis, they deserve a premium and this is where we should see more flow going into it. As we mentioned, we are very much positioned in gold already. Some soalso to secure we are looking for quality carry. Next to that, some pockets like ,hina, korea, taiwan, europe they are interesting from an equity point of view for the second half. , thank youavid gaud so much for your insights today. Coming up on the show, the World Health Organization says we have not seen the worst of the virus pandemic that even as the death toll topped. 5 million. You will have the latest. This is bloomberg. Haslinda the director general of the World Health Organization has warned the worst of the coronavirus pandemic is yet to come and he blames the lack of global solidarity. Lets get to selina wang in beijing. What are the latest covid developments in asia, specifically china, which has put a county on lockdown again . China over the weekend, put 400,000 residents of the northern hubei provinces and sheen county under lockdown after a dozen cases were reported, all associated with the banking outbreak. This shows that this surgeons of cases in the capital is proving difficult to stamp out even though officials have said it is largely contained. It has been sealed off, evoking memories of the wuhan style lockdown and only one person can go out for daily necessities per household and vehicles cannot enter. Only those with special passes can leave. It is about 140 kilometers from beijing, but the lockdown we are seeing there is far more severe than what we have seen in the capital here itself where the number of cases has grown to more than 300 since cases were first attempted in early june. Here in beijing, schools are closed. Transportation is limited, but people can leave beijing if they have a negative coronavirus test. Meantime, in indonesia, it is really struggling to contain a new surge in cases it for more than a month, soldiers and police have been trying to enforce social distancing rules cases have more than doubled to more than 55,000 since then. Indonesia did not impose a nationwide lockdown like many of its neighbors and have begun easing restrictions. Given the spike in infections, this may prompt businesses to delay the reopening. Gilead says it will charge u. S. Hospitals roughly 3100 for most patients who need this five day cobit treatment. Is that expected covid treatment. Is that expected . Selina it is higher than some patient groups had been pushing for but it is close to a level some drug pricing watchdogs said would be acceptable based on what they expect the benefit to be. There are hundreds of treatments and vaccines. Gileads drug is one of the first widely used drugs in early may. It received an emergency use authorization from u. S. Regulators after a trial found that the recovery by four days in hospitalized patients. Gileads pricing is consequential because it sets a precedent for how much future covid treatments may cost. The price which comes out to 520 per vial would apply to patients in the u. S. But it plans to charge a lower price, 2300 40 for a five day regimen, for direct government purchases by the u. S. Or other developed countries. And some advocates say that this price is way too high. Consumer rights for a Public Citizen say it should cost just one dollar a day based on calculations that it made based on manufacturing at scale by generic drug makers. We see all these emerging markets struggling with this virus, struggling to afford Something Like that. Selina wang joining us from beijing with the latest. Business flash headlines. Uber made an offer to buy postmates as it looks to consolidate its business beyond ridehailing. According to the dow jones, a deal is worth 2. 6 billion. The cooperations have suffered because of the coronavirus. It recently lost out to europes just eat in a race to buy grubhub. Demand has been booming. To raiseank is seeking just sort of 1. 9 billion at its Hong Kong Ipo and will begin taking orders later today. Around 3 billion shares will be put to market at a price range they will 475 start trading on the Hong Kong Exchange on july 6. We are going to check on the situation with the top story today with the National Peoples Congress Passing that National Security legislation. You can see the market seems to be continuing to fire away and shrug off the Political Risk in the city with these shares up 222 points on the hang seng right now, up close to 1 right now. We get to the hong kong barrister coming up on the implications as we wait for the press conference later on today to get little more detail on this legislation. This is bloomberg. Haslinda nomination day in the lion city. We are in the middle of the trading day. The stock market, we are in positive territory. Up by 1. 2 , in line with the rest of the region. Of course, campaigning ahead of the july 10 vote will likely be pretty heated. We have the ruling Party Manifesto hailing its ability to steer the country through the virus crisis. Osition parties say issues how they handle it, whether they handle it well or not. We will have more on that july 10. For now, the first word headlines. As thengs future leading finance and business hub is in new doubt, revoking the citys special status. Wilbur ross says chinas decision to impose security loss threaten u. S. Technology and undermine hong kongs economy. The city has enjoyed preferential treatment under the one country, two systems but washington says that is no longer valid. We will not be deterred by such actions. Measuresry will take to counter that. Chinas top lawmaking body is reported to have approved new security legislation for hong kong. In a move that prompted washington incision, beijing is ramping up tension with the u. S. , saying it will impose visa restrictions for american individuals deemed to be interfering in affairs. It is a reaction to a bill putting sanctions on chinese officials. In japanl production declined again in may even as the state emergency was lifted, indicating the severity of the pandemics impact on manufacturing. Factory output fell almost 8. 5 percent from april, a fourth monthly slide, something that has not happened since 2012. A separate report shows japans Unemployment Rate is at its highest level in three years. Further ease virus restrictions even as infections continue to search bang. The government is to permit more domestic flights and Train Services while night curfews will be lifted from wednesday. International flights will be allowed in a phased return by schools and colleges which will remain closed until the end of next month. India has more than. 5 billion virus cases. 16,000 deaths. Lets talk a little bit more about hong kong now and bring our next guest, who was a practicing barrister in hong kong, a Founding Member of the Progressive Lawyers Group. It was established by a group of hong kong lawyers five years ago and it has been at the forefront of the Democratic Movement in the city. Championing human rights and the rule of law. Thank you so much for joining us. I am sure you will be combing through this legislation like a hawk once it does come out, once we get more detail. What questions do you want answered . What sort of clarity do you want to reassure the Financial Community of hong kongs autonomy and rule of law . The strange thing is the law has apparently passed but no one in hong kong has even seen the law. Has notrie lam herself seen the law. Its a very strange situation. The most important aspect one would want to see is the definition of the offenses. Of course, these are National Security concepts. Every country has them, as beijing keeps saying. The key difference is how they are defined. In most countries, especially democratic countries, which is defined narrowly so they protect rights and do not go farther than they are needed. They are defined very widely, leading to very big interpretations and possible abuse of uses. The key question now is how far will it go . Unfortunately, it is likely going to veer towards the mainland style, very vague and broad, rather than the narrowly circumscribed way we see in democratic countries. Going to impact a strong group of people. Based on your interpretation, do you expect beijing will use this law with restraint or could they intervene more broadly and actively to target businesses here in the city as well . Think initially, they will try and send a strong signal to activists, journalists, human rights lawyers, those sorts of people seen as problematic. These laws being used in the mainland. Businesses probably will not be targeted initially but i think the great theory is that it is a weapon now that once on unsheathed, it could be used in the future. We have seen some examples in the mainland. When there was a stock market crash in the mainland, international Financial Firms were blamed for that, and again, using the language of foreign force, foreign interference. Some executives of these hedge funds were detained in the mainland under these security notions, and of course, we also see foreign businessmen being detained in china, such as in canada. Being charged and detained under these National Security concepts. They probably will not be directly targeted at the beginning but the fear is that once it is a weapon, it could be used at any point to counter anything that displeases beijing. Would you say that hong kong would be a more risky place to do business given that the Hong Kong Security laws will apply to foreigners with no exception . That is what we have heard. Certainly risky. We have the whole process. The drafting of the law is done entirely in beijing. As for the enforcement of the law, what we know is that mainland security agents may be stationed in hong kong. We have seen on the mainland that these security agents are both very powerful and prone to abusing that power. Also, the interpretation of that law is completely in the hands of beijing. Certainly for any foreign multinationals and their personnel who is coming here to do business, it will be significantly more risky both in terms of their physical safety, are they going to be subject to hostage diplomacy . But also in terms of their assets here. Will the assets be searched and seized . And also in terms of information, their data. Should they placed the data centers here when the authorities can use the excuse of National Security in order to search and seize such information . Haslinda time and time again, we have heard from the Chinese Government officials in hong kong that lawabiding citizens do not need to worry. The legitimate interest freedoms of the hong kong people are fully protected. To what extent do you buy into that or not at all . Wilson i think you have to see the actions, which speak louder than the words. Of course in the mainland, they also guarantee rights and freedoms, so article 30 five of the chinese constitution guarantees freedom of speech and all sorts of freedoms. When you see how these actions, how they actually act, we see that these laws are used against peaceful activists such as Nobel Prize Winner used against human rights lawyers, journalists, so when they say these will only be targeted at a small group of criminals, theres very little credence that can be given to that, given how they are used on the mainland. We know that mainland is the one who is drafting the law in might even assume direct jurisdiction over some of these cases. Those on the other side will say that National Security issues are beyond the jurisdiction of hong kong authorities and that they say it is warranted that they have to set up two different types of safeguards. A local commission and mainland agency. How will you respond to that . Wilson first in terms of whether it is a national issue, it is written very clearly in the basic law, in article 23, that hong kong is supposed to enact, on its own, and those are the very words used, on its own, such National Security legislation. The basic law was drafted not by the british, but by a committee that was handpicked by beijing. Even then, it was acknowledging that this was an area that hong kong should deal with it on its own. Are seeing that completely be overturned. And also in terms of whether this is really to combat , of coursecurity they have used the protests as the pretext for introducing these laws, but when it comes down to it, these are localized protests. Local protests with some three violence. It is difficult to see at which stage they challenged the National Security. It is difficult to see anyway the protesters could ever overthrow the Chinese Government. So it is difficult to see that what is really being done here is really National Security in the sense that we have to protect the integrity of the peoples republic of china. Haslinda we have already yvonne we have already seen some businesses in support of this law. Is there really that big of a concern here of the merging of mainland and hong kong Legal Systems . What are some of the challenges that you actually see . Wilson what is interesting is that all the businesses who go on record our records supporting the law and that pressure has emplaced on these companies such as hsbc and standard chartered. Who areots of people not willing to go on the record have been expressing concerns, so we see the ft reporting hedge funds, thinking about hong kong. Better pressure to selfcentered. The concern is the unpredictability of it all. What really makes hong kong thrive in the past is the predictability, which you have here. You have a commonlaw legal system. We know putting much how it works. We can draw from british examples, australian examples, and you have a fair idea of how it works and fair confidence that you have an even Playing Field in place of any government overreach. You can challenge government stations in an effective manner. I think the fear will now be that that will be eroded and essentially will become much more similar to the mainland, where you do not have this predictability. The enforcement of the law is much more arbitrary. Essentially, if you are challenging the government, you will not really have an even Playing Field and it will be very difficult to combat any government or regulatory overreach. Had hong wilson, we wong say het joshua is quitting the group he founded in 2016 because of the National Security law and the likely steep penalties associated with it. What do you make of the move . How would china view him quitting the party now . I cannot predict how china will react to him, but what i can say is that this exemplifies the Chilling Effect that such a law has so in the past few weeks, even before the law has passed, even before anyone has seen the draft, we have already seen civil right Civil Society groups disbanding in some cases or refusing to talk to international ngos, refusing to talk to international media, and now, we have probably the most internationally prominent activist, joshua wong, quitting his own party before the law even comes into effect, so i think we are seeing the Chilling Effect and this will be Even Stronger once the law passes because the fear is that no one really knows how the law will be enforced and when you have that unpredictability, then everyone will err on the side of great caution and silence themselves for fear of breaching any invisible redlines. , thank youson leung so much, barrister and Progressive Lawyers Group cofounder, joining us in hong kong. I want to bring you some live pictures happening not far from where our studios are at the moment, outside the Central Government office. We do see a rally. We are seeing a pro china rally of people waving those chinese flags in support. There goes our pictures. Support of this National Security legislation. We will continue to bring the latest there. We are expecting we could be seeing some more details of this legislation now that it has been passed in beijing. The feud between new delhi and beijing moves from the high mountains to mobile phones. Dozens of chinese apps banned in india, including tictoc. This is bloomberg. Yvonne india has banned 59 apps developed in china as tensions began after a border clash rippled through the consumer world. Tictoc and wechat are among the apps being blocked for allegedly threatening indias security and sovereignty as well as the privacy of its citizens. Bloombergsre from representative. Wideband these apps in particular why ban these apps in particular . People in china have been clashing over disputed territory for decades and this came to a when ametime in mid june skirmish lead to 20 indian soldiers being killed. Been pressure on india for an economic reevaluation for it on social media, theres been calls for boycotting china made goods and banning apps saying that these could cause Security Breaches and public disorder. The band that came off line was pretty widespread and included the apps of some of chinas Largest Technology Companies Including tictoc, which is the most Popular Video streaming app in the country. Tencent,s alibaba baidu. The point is to hit china where it hurts. Haslinda why is india so important to these companies and how big of an impact will the band hav ban have . Saritha india is one of the worlds all of the Worlds Largest technologies on a piece of this market. Appse range of chinese ranging from gaming, youth content, music streaming, and online retailers is significant because some of these apps are the most popular in categories in india. Billions over. 5 Internet Users, adding millions of users each month and hundreds of millions of these are firsttime users who come online , and they are doing so via chinese smartphones and using chinese apps as sort of a gateway to the internet, so for these companies, it is going to affect their transfer Global Expansion because india, with its huge Internet User base, is significant for every global company. It has over 200 million tictoc users. India is its biggest market. Everywhere. Have faced scrutiny elsewhere, but this is what comes. You mentioned those numbers, which are quite remarkable. I am guessing a lot of people already have these apps on their phones, so how will this be implemented then . Saritha that is what everyone is watching and waiting to see what the government will do in terms of banning because a lot of these apps reside on smartphones downloaded by users so the Indian Government has a few options i guess, either block their servers, block google play, and the Android Store and apple store. These apps were downloads. It cannot be easy, but these are some of the options that the government is left with. Saritha rai in bangalore. Lets get a check on the Indian Markets as they join the rest of asia. It is a riskon day in this part of the world. This nzx up. 6 . Steel among the biggest gainers. Straight monthd of inflows, a possible sign of renewed faith. 4. 6 billion dollars into indian stocks this year. The highest in the region. This nzx up. 6 . The nifty up by as much. The Nifty Bank Index higher by almost 1 . We are keeping a watch. People with knowledge of the matter saying they have submitted a bid. It includes the likes of softbank. The enterprise made an offer with the backing of the u. K. Government. Still to come on the show, singapores Election Campaign officially kicks. Family feud in focus area details, next. This is bloomberg. Yvonne want to bring you some lines crossing in hong kong. This is the hong kongs only member of the standing committee. He has confirmed chinese lawmakers have passed the National Security legislation, confirming what we have seen from local media here. We are expecting perhaps we could be seeing some sort of press briefing later on to at least highlight some more details of what we have learned so far of this legislation so that is the latest from that. And the lion city, we had to the polls next week, campaigning over the next nine days, expected to be pretty heated. Thats get more with Juliette Saly lets get more with Juliette Saly. Why is this campaign generating so much heat . Words, family feud. We are awaiting to see if the Prime Minister is estranged will compete for a seat in the election after last week. The 62yearold announced he has joined the opposition Progress Singapore Party and this is in a bid to challenge his older brothers action party. They have not lost an election since independence in 1965 but the sibling rivalry is a bit of a kick in the face. Singapores first premier. He posted on facebook yesterday that singaporeans should vote for change. Future and for our our childrens future and not for glories. The next nine days of campaigning really likely to be quite heated. Itsruling tap highlighting ability to steer singapore through the virus while the opposition is focusing on some of these issues that hit right to the wallets of voters such as the retrenchment insurance. Thene has he said election should not be about him or his family but about singapores future at a critical juncture. Yvonne it is looking a little bit more like a family affair. This election coming as singapore is starting to open up the economy after the Circuit Breaker period. What sort of budgetary pressure is the government facing . Juliette singapores economy has already registered the deepest quarter on quarter contraction in around 10 years. Due to the Circuit Breaker, which saw virtually all but essential businesses shut down. Now that we are seeing the economy open up somewhat, there is still a lot of pressure. The government has forecast that singapore could post its worst downturn this year since independence so there are some expectations thats cutting measures. Yesterday, we heard from the defense minister announcing a cutback in military spending for what he said would be the foreseeable future until we see signs the singaporean economy is recovering from the impact of the pandemic. The government handling of the pandemic has received widespread praise but also some criticism, including from the Prime Ministers brother. We heard from the trade and energy minister, defending the efforts, including conducting widespread testing, particularly at dawn and the government announce economic stimulus efforts to try and counter the effect on the economy so all of these issues of course at the forefront over the next nine days of campaigning. Juliette saly joining us from singapore with what is going to be a pretty heated nine days leading up to this election time want to recap some of the lines we have seen from hong kong just in the last 24 hours. The breaking news has been quite swift here. We just learned from the hong kong member of the National Peoples of the standing committee, confirming the National Security legislation has been passed in beijing after they wrapped up three day meeting in the capital. Now, it looks like we could be hearing some details soon. Perhaps the first time that people could actually learn a little bit more. The language of this legislation, you heard from carrie lam. She did not say she wanted to comment on the security legislation at this point, but she did talk about reaction to the u. S. Sanctions that we have seen on china recently, saying that basically, this meddling is not ok, but basically, we heard from joshua wong, putting the party ahead of this legislation, too. Carrie lam did say that hong kong would not be scared by the threat of those sanctions. The National Security law, expected to take effect by wednesday. They have returned to china in a day marked by mass protests so that is something to watch out for as well, so a big day for hong kong. Right now, the hang seng index up by. 8 . Brushing off all the concerns, geopolitically in the city and elsewhere in the world. That is it from Bloomberg Markets asia. Bloomberg daybreak asia middle east, is next. Keep it here with us. This is bloomberg. The best tv experience just got better because now you can watch all your favorite hulu shows and movies on xfinity. Youre only a voice command away from Award Winning shows like the handmaids tale, to new hits like little fires everywhere. And fx originals you can only watch on hulu. Thats just the beginning of what you can experience with hulu on xfinity. Tv made simple, easy, awesome. Yousef this is bloomberg daybreak middle east. Our top stories this morning. China approves a landmark National Security law for hong kong. Will vote the sea special trading status. States several american have an economic reopening. The World Health Organization says the worst of the pandemic is yet to come. Manus the council of ministers approves