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Potential pandemic. Investors dont seem to care. U. S. Markets close out the best quarter since 1998 with the s p 500 up 20 . Gold is trading near 1800. Shery lets get you started with a quick check of the markets. We are seeing u. S. Futures opening under a little bit of pressure at the moment, down 2 10 of 1 . This as we just mentioned, u. S. Stocks finishing the best quarter in more than two decades. We are talking about a 20 increase in the last three months. We have the s p 500 seeing the best two days in about three weeks. All 11 sectors finished up. The dow underperformed a little bit compared to other major indices. A plunge in boeing. Terminating their purchases of all remaining jets on order. Take a look at what oil is doing. We have seen it gain ground. It is continuing to rise near 40 a barrel. It just posted its best quarter in nearly 30 years, bouncing back from that historic price crash. Really climbing from negative territory in april. Haidi yeah, it really is the historic clawback to gains for the Second Quarter that we are seeing play out really across assets globally. Lets take a look at asia. New zealand trading a little bit lower this morning, about a quarter of 1 . Chicago nikkei features looking firm by 1 10 of 1 . In tokyo, in sydney, given up on gains a little bit at this point. The aussie dollar going from strength to strength. Are seeingwhere we ahead of some Property Data numbers as well as continuing to watch these tensions when it comes to china and hong kong. Take a look at where gold is sitting. Down to tens of 1 after we had 0 wasest quarter, or 180 the price we saw for the First Time Since 2011. This is as we have low Interest Rates as well as investors scrambled to havens like gold to limit the economic fallout as virus cases continue to climb and as we continue to watch the geopolitical tensions regarding hong kong and china. Shery lets start in hong kong. Marking 23 years of chinese rule with president xi jinping signing a landmark in zero security law since legislation promises secret trials and life imprisonment for some cases of state subversion and terrorism. It is expected to prompt retaliation from the u. S. Joining us now is republican senator pat toomey of pennsylvania, coauthor of the bipartisan hong kong autonomy act. Thank you for joining us this evening. First of all, now that we have the full text of this law from beijing, what is your reaction . Sen. Toomey this is very disturbing. I think this statute by design is intended to take away or beijing to continue to undermine and really trample the freedoms of the people hong kong have enjoyed for seve so many years. That the Chinese Communist party continu promise to continue. It is a very disturbing development. Shery the u. S. Commerce department is starting to revoke the special trading status for hong kong. How far will the u. S. Response go . Sen. Toomey well, it is hard to say. Part of it will depend on how china response to it. There is broad bipartisan concern about behavior of the government in beijing. We are seeing that manifested in a variety of legislation and reaction from the administration. So, its a very serious matter. Senator, there has been some criticism or analysis that the moves that were announced by wilbur ross yesterday were really more symbolic. That if you really wanted an impactful sanctions, you would have to be targeting exports to china, not just hong kong, affecting the import status as well. In terms of how far it could go, could there be further and i guess more significant moves . Look, one ofyeah, the challenges in dealing with this full situation is that i would certainly prefer that any measures taken by the United States in response to mainland chinas crackdown on read him in hong kong, that our response will make life worse for hong kongers, that would not be the objective. That is why my legislation why introduce with chris van hollen, the republican senator from maryland, it would impose sanctions on the bad actors in beijing rather than imposed a burden on the people of hong kong. I think that is a better approach. To some degree, it is inevitable that we will have to reorient our trade with hong kong to the extent that hong kong really no longer enjoys the autonomy to justify that special treatment in the first place. This is all part of why i thought it was necessary to focus specific sanctions on the specific bad actors. Haidi we are also hearing theres a bipartisan bill that is being launched by congress that addresses potentially providing Refugee Status to individuals that are at risk of persecution under this new National Security law in hong kong. Is that something you are supportive of . Would you potentially look to extend Refugee Status and welcome prodemocracy protesters that are not potentially targeted under this bill . Sen. Toomey i would support moving in that direction. I think theres a variety of ways we can do it. We could do it by granting a broader classification for Refugee Status that the people of hong kong would more easily qualified. I would be open to considering a separate visa track altogether. I for one, for starters, i think the United States would benefit enormously from an influx of hong kong residents. I lived in hong kong for a year. I have a tremendous affection and respect for the people of hong kong. But, i also see it as a very important safety valve, a release valve for the people of hong kong if the persecution gets so bad. Obviously, the people of hong kong would like to stay in their home. But if it becomes so intolerable, sure, the United States should be welcome choice. Shery what are the chances the president would agree to that and sign that into law given we are seeing more visa restrictions and so forth for foreigners in the u. S. . Sen. Toomey you are right, we have seen a movement in the other direction in a very general matter. When policies pertain specifically to china, then it is a different set of circumstances. Im not sure what the president things about this, but i would not be surprised to find broad bipartisan interest in doing something to provide this safe haven. Shery something we have seen for the hong kong metonymy act. Your legislation that passed the senate, it would penalize banks doing business with officials that are involved with that security law. The best chance for passage seems to be in the house and getting to president trumps desk would be to put it in the defense bill. How confident are you that you would be able to do that and are you expecting any pushback from the administration . Sen. Toomey there are two tracks we can pursue to get this legislation actually signed into law. We have already passed this in the senate and there is a companion piece of legislation in the house so it is not farfetched to see the house passed this legislation intended separately for the president. As you point out, theres a parallel track we are pursuing which is to get into the National Defense authorization bill which is on the floor right now. Probably gets wrapped up in july. Im cautiously optimistic that includedlation will be in the National Defense authorization bill. We had extensive conversations. We have worked with the administration, especially the folks in the treasury department. Im cautiously optimistic. I think we will get this done one way or another. Shery the administration requested changes to the bill. Does that make the stance against china weaker . How does that impact the final outcome . Sen. Toomey the administration mostly was requesting technical changes to ensure that implementation can proceed smoothly. It was not an effort to water down legislation. We also have the fcc today officially designating the likes of why way an huawei and zte as a National Security threat. How significant is this move and what further move could we see in the tech space as we continue to seek these tensions between china and the u. S. , china and other developed nations in the tech universe . The toomey well, technical industry space is not my area of expertise, so i you can imagine better than i can. What i can tell you is this is a reflection of very serious concerns that china is increasingly seen as an adversary, not even just a competitor, but an adversary and one against whom we have to take precaution. We have to protect our own security. So, this is a fairly dramatic powerful ands it symbolic step as well. I think it speaks to this growing distrust for the regime in beijing. Isdi there is no doubt this a great strategic battle of our time so how does that then played into november and what prospects there are for the trade one for the trade deal because the president has to strike a fine balance in terms of his playbook ongoing tough on china, but also maintaining a relationship that allows the trade aspect to go ahead. Sen. Toomey yeah, as you point out, this is a very complex and very important relationship that we are trying to manage. Dent for no real prece having the rise of a new great power that is adversarial in an important way and with whom our economy is so closely linked, so intertwined. It is a challenge. My preference would be there would be a sufficient change in the behavior on the part of the Chinese Government that we can continue very extensive economic interaction because i think that benefits the people of both countries. Not everyone on our side agrees with that view. But that is my view. My view is that the Chinese Government, however, has to mend some of this. We have to see an end to the threat of the intellectual property that we own, technology transfer. Even some of the attempts to project power in the western pacific are very disturbing and what their implications are. It is very complex. I hope that trade and arrangements between our countries can continue but in the context of addressing some of these problematic challenges. All ofjust finally, these geopolitical tensions come at a time when the world is really suffering and dealing with his ongoing pandemic. You have been very vocal on wanting to get on with the reopening of the economy. How do you feel now that we are seeing this resurgence of virus cases in some states . Sen. Toomey i think we should be very careful to look at what we are actually seeing. There are some states that tend to be in the south and southwest, border states where there has been increases in the number of cases. Even there, it is often very localized. So far, they are very few places, maybe arizona might have some cities, but for the most part, our Hospital Systems are not seriously threatened at this point. Some of these places never really had a first wave and now they are going through it. ,n my state of pennsylvania this always was a disease of the elderly and people not particularly healthy. 68 of all fatalities in my state of pennsylvania were inside nursing homes. Providingwas not sufficient protections for the vulnerable and going too far in quarantine healthy people. Fortunately, that period seems to be mostly behind us in my state and other states throughout the northeast. And the rest of the country, i think people just need to be careful. Go about their business, resume to work but do so keeping a physical distance, wearing a face mask, the personal hygiene we all know about. Those steps really matter and as long as they are being followed, i think states will be ok. Time, but at the same controversial with the masks being mandated across parts of the u. S. You said the Hospital Systems are not being threatened but in houston, icu beds are at full capacity. Where do we see places that are reassessing their reopening and clamp down again. Does that change your view that another round of fiscal stimulus may be needed . Sen. Toomey im still not convinced that is at all clear. Keep in mind what we have already done. We have directly appropriated about 3 trillion and we authorized the Federal Reserve to complement that with lending of about another 3 trillion. 6 trillion in a matter of a couple of months. Annual 30 of americas total economic output. It is a staggering number. Most of it is actually not even out the door. It has not gotten to the intended recipient yet. It is too soon to know whether we really need yet another round. We dont really understand where the needs might be if there are still ongoing needs. I do think we need to go on with a safe and careful reopening and we know how to do that. The vast majority of the country is doing that successfully. Finally, i would point out there is no free here. All of this is coming from somewhere. Either we are sucking it out of the private sector by borrowing it or we are going to create it. Neither of those are options that have a positive associated with them. Haidi senator, really appreciate your time with us. That was republican senator pat toomey joining us. Thank you so much. Still ahead, top Infectious Disease expert Anthony Fauci warning that new u. S. Infections could rise to 100,000 cases a day. The eu extending a travel ban for americans. Officials in victoria reimposing lockdowns and several hotspots in melbourne. It could last through the end of july. Details ahead. This is bloomberg. Shery the global virus infection tally continues to rise with several u. S. States pausing reopening and new york composing curves on some visitors. Emily wilkins has the latest from washington. Emily, what are federal and state leaders doing to prevent the spread of the virus here . Today, Anthony Fauci talk to a group of lawmakers about whats going on with the virus, what we can expect. We are seeing a number of states respond to the rising cases. Arizona is closing bars. In kansas, the governor has ordered residents to wear masks. There is some pushback against this. Texas tried to take some steps to lock down certain public spaces including bars and now the state is being sued by local tavern owners. It is interesting to see how this will play out in the next couple of months. What are the meantime, we seeing from other countries where rates are finally getting down and how they are reacting when it comes to these travel restrictions . Today,the European Union they gave a number of countries a green light that they can start traveling in and out of european china was on the list, canada was on the list. The u. S. Was not on the list. It will be reviewed by the eu every two weeks but it is based on the proportional number of cases in the country compared to the eu and now we are seeing the cases in the u. S. Continue to increase. We are seeing cases in the European Union declined to the u. S. Has a long way to go to meet that metric to be able to travel to the European Union again. Haidi Emily Wilkins there in washington. Coming up next, tim mcdonald warns that virus surges can flatten the vshaped recovery. Hes telling us where he is putting money in the next quarter. This is bloomberg. Haidi the fed chair has stressed to Congress Keeping the coronavirus and check is vital as the u. S. Economy rebounds from the sharpest contraction on record. Our next guest agrees. Andays a surge in cases measures required could hit the recovery. Jim Mcdonald Joins us. It seems a long time ago we were talking about the vshaped recovery. Have the markets priced in this sort of stopstart uncertainty when it comes to the trajectory of the virus and how that impacts reopening and the return of Economic Activity and productivity . Jim the only pricing in of that has happened in june when the market has gone more sideways. Most of the gains in the Second Quarter did occur in april and may. I still think that the markets got some optimism we will see more of the vshaped recovery. We do think there is the risk of some modest disappointment as the economic effect of some of the reversals of the opening up in big states like texas, florida, arizona and california to some extent will affect activity. Haidi talk to me about your allocation strategy going into the next quarter and the second half. So much of this is driven by expectations that the central bank is here to stay. With valuations being at the levels we are seeing, where do you see opportunity . Jim what weve done in the last couple of months in the wake of the ute rebound in valuations which has been very much underpinned by the central bank support that you know is we now see u. S. Stocks hit 23 times for earnings. Even to 2021, they are around 20 times. A lot of the good news is priced in. We have reduced exposure to u. S. Equities into real estate. We put some of it into safer areas like Investment Grade bonds, cash, with the potential to reallocate them into the stock market if we get a better opportunity in the next six to 12 months. Then, we also put money into highyield bonds. They are clearly a beneficiary of the feds buying program. The percentage of bonds trading at default levels 70 or less has reduced meaningfully in the last couple of months. We think there will be lower defaults Going Forward and it will be no worse than the 5 or 6 range which looks attractive with the u. S. Treasury at 0. 6 . Shery what about those stayathome sectors that have really benefit from the initial outbreak . This chart on the bloomberg shows we had a huge rally, climbing the most in the Second Quarter. They seem to have stalled a little bit. Allocation,a sector there are two groups we like. One does touch on what you are referring to. Communication services which includes the internet companies. That is an area we think will do well over the next 12 months, especially if we get more concerned about the impact of the virus. The second is a more defensive bet which is the Health Care Sector that has a very good valuation, very good longterm demographic. Tends to be an area people go when they want a little bit of safety. Those of the two groups that look the best over the next year. They when it comes to equity market or even the bond market, how do you feel about going outside the United States . We have seen when it comes to em stocks, we have seen the best quarter since 2009 not to mention bonds have seen a big advance in ems. Jim we are neutral to u. S. , we are slightly underweight and developed xus. Primarily think about europe and japan, it has had a much better experience in keeping the virus suppressed. Theres a chance they will start to perform better. Em, we think, it is the most vulnerable to the virus. It has the least developed health care systems. For got the most compressed populations, most Multigenerational Families living together. There at the most risk in a risk off environment. We have a relatively large underweight on equities. Shery Northern Trust chief investment tread adjust jim mcdonald joining us from chicago with the latest on the u. S. And bond markets. Take a look at what markets are doing at the moment because we are seeing u. S. Futures under a little bit of pressure right now, but as we mentioned, after coming off the best quarter in more than two decades. We have some positive vika data, Consumer Confidence posting its biggest increase since 2011. That helped propel u. S. Stocks. At the moment, we are seeing kiwi Stocks Holding steady. This as we had already seen kiwi stocks up almost 20 last quarter. There has been a huge rally after the initial outbreak of the coronavirus pandemic. Coming up, hong kong marks 23 years since the handover with new laws that impose secret trials and life sentences for attacking beijing and the communist party. This is bloomberg. We have breaking news. One of wall streets oldest data and analytics providers is set to price ipo shares at 22 each. Billionld raise 1. 72 in an upsized dbo. We are just getting that breaking news crossing now. Until we get more details, lets get back to our top story today. Hong kong is marking 23 years of rule from china. Says it is deeply concerned about the new security legislation while the u. S. Is promising strong action. Hong kongs usual rallies have been banned this year. Some activists say they will be defying that order. Some local politicians proclaimed that they would paralyze hong kong while others campaigned for foreign governments to interfere in hong kongs affairs or even impose sanctions on hong kong. No Central Government could turn a blind eye to such a threat to sovereignty and National Security. For more, lets bring our chief north asia correspondent stephen engles. We finally are able to see the text of the security law. Stephen extraordinary, isnt it . We are at the edge of the hong kong harbor. A few minutes ago, we heard a bit of the march of the volunteers, the Chinese National anthem being played at the pla garrison at the water front. , we areonvention center going to get the chief executive carrie lam doing a flag raising as they mark the anniversary of the 1997 handover. Thats the backstory to what is the overriding issue here in hong kong. Thats the imposition effective today of that National Security law which was passed unanimously yesterday by the stay in a the National Peoples congress in beijing and signed by presidency himself. Whats concerning to a lot of people here in hong kong is that the full text, the full draft of the national law, which only came out in bits and pieces over the last week or two, the full text came out at 11 00 p. M. Last night for all of us here in hong kong to fully digest. Essentially, came into effect one hour later. Someone say that this contravenes the rights that people here in hong kong have enjoyed for 23 years under the basic law, in particular, article 18 says, justifies beijings move. They can add such laws if they pertain to National Defense and National Security. However, theres a caveat in there that they must consult the Hong Kong Basic Law Committee as well as the hong kong government. Including thes, cabinet members ive spoken to over the last couple weeks including the financial alletary and others, indications are that hong kong officials did not get fully briefed on the extent and breadth of this National Security law. Does that contravene even article 18 of the basic law . Before we get into more analysis, lets break down, for those of you just waking up, what this law will entail. An opposition lawmaker says it is worse than they feared. It allows for life sentences on the four main issues. Subversion of state power, including attacking hong kongs government offices, secession, terrorism, including serious disruptions of transportation networks. There was an occupied movement at the airport last year as well as disruptions of the subway system. Also, collusion with Foreign Forces is among those main issues that could face life imprisonment. They have ruled out the death sentence. , thepc chairman legislature in hong kong, china, says this will punish extremely few while protecting the majority. Thats the narrative thats been going on from hong kong officials and chinese officials. This is a good thing for hong kong. It will bring stability to hong kong. There are a lot of people in society, including the Business Society as long as well as the human rights field, that say this is a crushing defeat for freedom. Activists have been swift in the reaction. What has been the reaction inside the city . Well, we are still all digesting. They came out at 11 00 at night. Not everybody was up all night going through this thing. They are now dust just digesting it. Three of the heads of the prodemocracy party have quit. They have disbanded the party. The thinking is that the leaders do not want to implicate the other members of the party. There will be lots of followup from this. We will figure out how many people will turn out today and march as promised. July 1 is a traditional date on the calendar ever since the protests in 2003 where half a Million People turned out in opposition to article 23. That was the local legislatures above link to the antisecession and security law but the government has not passed. There could be marches today. The local police have banned the march. It will be a contentious day. Maybe not. Our chief north asia correspondent will be watching all of the action from the city. Broad new powers over hong kong, coming up. We will speak to the Hong Kong Deputy to chinas National Peoples congress and Legislative Council member. An hour later, hong kong Legislative Council member joins us as well. Barkley says it remains committed to hong kong as a Financial Center despite the recent turmoil. Exclusively that he wont be taking sides on the security bill. The whole geopolitical situation is very complicated all around the world. We are a global bank. Our footprint in asia is very important to us. We have a very good team in hong kong and singapore. We are the largest broker in the tokyo stock exchange. We are really focused on the main Financial Centers around the world. Hsbc, the hong kong and shanghai banking separation, have made a decision about hong kong. I want you to make new this morning, how was barclays going to protect to the people of hong kong given this new effort by beijing to limit their security, to limit their Business Opportunities . What will be your stance on hong kong . Im not going to get involved in the politics of that. Clearly, we support all of our colleague and clients across asia and in china and in hong kong. Very difficult political situation. We have not made a statement. We are not going to make a statement. We are a major british bank. We need to be very cognizant of whats going on in the u. K. And the positions taken by the u. K. Government. We will not a get involved in the politics. When you look at the difference of this crisis, a Health Crisis turning into an economic one, how different is it from 2008 . This is not banks needing to be buildup. This is different. The banks were the catalyst for the economic crisis of 2008. The banks had to be built out. The regulatory response was to make you say, lets rely less on Bank Balance Sheet to respond to economic growth. Lets push towards the Capital Markets, relying on debt being placed in Insurance Companies and mutual funds. What weve seen on one level is they got it right. Less ond economy relies Bank Balance Sheets than they did 10 years ago. In this economic crisis, the banks have stood up better. Really, what is taking the burden is the Capital Market. The Capital Market responded effectively to extraordinary monetary easing by the central banks. By one calculation, 20 of the euro bond market right now is held by the European Central bank. Thats an extraordinary move by a central bank, by corporate debt to support the Capital Markets. A more it has been efficient financial response to the economic crisis than what we saw 10 years ago. Theeve talked about exposure of some of the banks to wirecard. What was your exposure in this . Participation in the Holding Companies involving credit facility. Clearly a very manageable number for us. We also have, we do business with wirecard accounts in the u. K. A lot of fintech companys rely on those accounts. A lot of consumers rely on those accounts. Theres a concerted effort between wirecard, between the government, between the bank to manage this in the most beneficial way. Challengepose a real to some parts of the Financial Technology industry. The banks are highly regulated. They are safe. There are some things like e wallets which will get new attention. What we are seeing as a bank, we are seeing our deposit base grow. As people get worried, they go back to the safe hands of banks. That was the barclays ceo. Lets get to the first word headlines this hour. U. S. Stocks close the first half with their best quarterly performance in 22 years with investors cheering optimistic igo data. The s p 500 extended that secondquarter volley to 20 . Consumer confidence posted its biggest increase since 2011. The nasdaq soared more than 30 in the last three months. The eu top exit negotiator is rejecting the uks most recent proposal, accusing london of trying to keep Single Market benefits after the final split. The proposal could create a significant risk of the u. K. Avoiding regulation altogether. Saudi arabia is slashing oil exports to multiyear lows under the opec plan to boost prices. Shipments fell to 5. 7 Million Barrels a day, the lowest since bloomberg began tracking three years ago. Thats down from more than 6 Million Barrels a day or a day. The estranged brother of singapores Prime Minister says he wont run for office next week, removing a potential obstacle as the party looks to retain power. The party ruled singapore since independence in 1965. Campaigning is underway. Coming up next, officials in victoria imposing lockdown across several suburbs that will last until the end of july. Details ahead. This is bloomberg. Parts of australias secondlargest city will be locked down for four weeks after a spike in coronavirus cases. How did this fresh outbreak happen in melbourne . What are the moves we are trying to see to contain it . This was due to lapses in the Hotel Quarantine program as it was being run in victoria. The security guards at the hotels were contracting it and passing it on to hotel staff. It was getting out into the community from there. It was getting out as well. On tuesday, there were 64 cases. That was down from the 75 that was seen on monday. It was two straight weeks of doubledigit increases in things looked like they might be getting out of hand. Hotels will be escorting quarantined people outside for exercise and walks. That procedure wasnt allowed in quarantine in new south wales. We did not have a problem here. That procedure has now stopped in victoria. Theres been an inquiry order. International flights are being diverted to other cities. 10 postcodes have been locked down. People can go out for medical care and exercise. Also to go to work. Children can go to school. We shall see how effective these lockdown measures will be. How has the fresh outbreak in melbourne affected plans to reopen states for Domestic Travel . The rules vary from state to state. Each state is responsible for deciding who comes in and who doesnt. Take a look at queensland. They are looking to reopen to everyone except victoria. You have to sign a declaration and potentially be in quarantine for 14 days run expense. In south australia, anyone can go there unless you are from victoria or new south wales. That might be lifted later this month. It does very from state to state. Its a tangle of restrictions right now. Paul allen in sydney. One medical expert told us more about the target for reducing Coronavirus Infections before reopenings can accelerate. Pekosz spoke to princely makua. The virus is always going to be with us here. Some of the efforts to drop down the number of cases by these Public Health interventions, the purpose is to get the cases down to a level that can be managed with testing and Contact Tracing. Its clear from whats happening across the south that many of the u. S. States did not get to a low enough noble of cases for the transition to relying on Contact Tracing and testing as a way to keep the virus down. , case numbersmost have to get down to lower levels so that other methods can be put in place that allow for the economy to open up but also keep the virus cases down. We talk about a manageable level of cases. What is a manageable level . The number of places that have an icu . How do you measure it . You need to make sure that you have hospital Surge Capacity , meaning you have numbers of open beds so that you can handle cases coming through. Another important measure is to only have around 5 of the total amount of tests that you are administering come up positive for covid19. Thats a cdc guideline. There is flexibility there in terms of what number you want to reach. If you get to that level, that tells you theres a low enough number of cases that a good Contact Tracing mechanism can be put in place keep those numbers down. Ura virologist. You do a lot of research on your own. You are looking at how viral proteins target some of the factors come of factors come the cells. What have you learned . The virus is very interesting in terms of the way it attracts with cells. It is able to cause a wide spectrum of disease. Part of that is that the virus can shortcircuit certain ways your body response to infection. It can allow other immune responses to ramp up uncontrollably. A key area of research is trying to understand why some people fall towards the more severe case of having their immune systems being ramped up, where as other people can control the virus quite well with mild symptoms. If we could understand that, that could inform treatment measures we can put in place for those of your cases of covid19. Was Andrew Pekosz and the John Hopkins School of Public Health is supported by michael bloomberg. China, weons with tell you what the Prime Minister has planned. This is bloomberg. Lets get a quick check of the latest business flash headlines. A Property Developer has raised more than 5 billion by selling a portfolio of distressed real estate assets. Another asset sale by a chinese listed developer following a 10 billion clear out three years ago. Their 50 stake has been picked up by seven investors. Properties caused by the coronavirus. Will write down up to 50 billion in the Second Quarter, given a glimpse of how badly the virus downturn has had big oil. The impairment is the largest and the headline merger in 2005 and shows how widely its business has been affected by the pandemic area they lost money from pumping oil along with shipments of everything from lng petrochemicals. Airbus is to cut 15,000 jobs worldwide as part of the most extensive restructuring in its history. The playmaker will cut 10,000 positions from its main bases in germany and france. Thats 11 of total headcount. Plane output will be 40 lower for the next two years because of the coronavirus. Tensions with china are driving australia to overhaul its Defense Strategy and increase spending by more than one third. Our managing editor for australia and new zealand joins us now. What is Scott Morrison planning to announce later on . Good morning. Scott morrison is set to give a keynote speech later on today. The government will spend 270 billion australian dollars in defense capability of the next decade. Billion fromm 195 the nations previous strategic overhaul in 2016. The spending will include a purchase of agm 158, longrange antiship missiles from the u. S. Make maybe. That will triple the range of its maritime strike capability. Is australia focusing more on its immediate border right now . What is the reasoning behind that . This announcement does market shift in Strategic Focus since the 2016 defense white paper. That document had an eye on australia joining missions around the world for what it called the rulesbased order. Think aerial support for the u. S. Coalition in syria and iraq, for instance. This pivots back to its own backyard. The northeast indian ocean, southeast asia, pop in new guinea. Australia will remain prepared to make military contributions outside of our immediate reason region. Certainly, chinas increased activity in the region, not just in the South China Sea but across the south pacific, very hard to ignore that. There has not been too much love lost between him and beijing in recent months. Will that affect the situation . It would be hard to see that it will go down well in beijing. China remains australias partner. Rading relations between the nations have been increasingly fraught. Since 2018. Deterioratee to when australia Led International calls for an inquiry into the origins of the covid19 pandemic. How much is australia spending on information and cyber technology, given the recent hacking of a government database . There was an accident yesterday on that. It is stepping up spending. I dont have the details in front of me. It is concerned that it has seen a sustained increase in those attacks over several months now. It has not named the source of those attacks. It said it is likely a statebased actor. That typically points the finger at north korea, russia, china, all of which have those. Apabilities and track records australia has been very careful not to name names in this issue. Bloombergs managing editor for us trillion and new zealand. Coming up, we get more Market Analysis with emily weiss. Cite urijahoined by ride. Thats next. Plenty more ahead on daybreak asia. This is bloomberg. Very good morning. We are counting you down to asias major market opens. Welcome to daybreak asia. Our top stories this hour. Secret trials and life in prison. A security law in hong kong that threaten severe punishment for those with tax the communist party. The coronavirus marches on with a warning that the u. S. Could see 100,000 extra cases a day

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