Debts are about 700,000. The Trump Administration dabs up its attack on chinese tech. Mike pompeo wants to cut ties well beyond just a campaign against tiktok. Alert on start with an the bloomberg. South korea announcing its surplus widening to 6. 88 billion. This is a recovery from the 2 billion level we saw in the previous month and recovery after logging a deficit in april. When it comes to the trade surplus, widening to 5. 867 billion. We have seen south korean exports slump, slowing in july. We are seeing an economic recovery in china and demand for semiconductors. Lets turn to Sophie Kamaruddin in hong kong for a check of the markets. What should we be watching out for in south korea today . Sophie we have more data coming out. Tourism revenue falling for a fifth consecutive month so the focus will be on the consumer sector. Of o have the likes reporting earnings. Consumer sentiment has rebounded for a third month in south korea and online spending will continue to be key as the Bloomberg Intelligence forecasts offline sales growth will be capped over the next 18 months. The shift in spending patterns is also at play in japan. Today, we are watching for results from nintendo and square enix on strong global game sales. Square enix shares have soared from record to record and topped analyst average price targets on that picture. Over in sydney, watching the iron ore space, tracking data reported to record exports from australia in july, which could sell the rally and push iron ore futures above 110. Broadly speaking, we are seeing green across the board for futures but we could be looking at tepid gains after asian stocks notched a midweek advance for the midweek valley. Software makes a standout and beijing pledges support. With that, lets jump into the terminal to check on the offshore yuan as the rhetoric heats up. We have the currency staying near a five month high but fundamentals and technical aligning to potentially see the currency crash at smart high and possibly push beyond 685, which it achieved on january 20 before the wuhan lockdown. Shery u. S. Futures at into the futures we saw in the regular session. The s p 500 finished with interest sent of a record amid encouraging news on the vaccine front and speculation u. S. Lawmakers are making progress on the relief package. Our next guest says markets may be getting ahead of themselves and pricing in too much good news. Jp morgan Asset Management scary craig joins us now and for our viewers, lets turn to this gtv chart on the bloomberg. We do think about the prospects of a softness in the economy and what that could mean for the earnings outlook. I do not expect market to drop by 10 . I should be clear on that. I think any softness will be creating a buying opportunity, worrying about how high the market is going more recently. Haidi how much risk are you assigning to u. S. China tensions, australianchina tensions going into november and beyond given that this is going hard on china, which seems to be a widespread issue that will likely last beyond this administration. Does that sort of change your view on the chinese growth story or chinese equities at all . Not really. China has been going through the multiyear crisis to something that will be higher quality. It is being disrupted by the trade futures. It will continue with a focus on more sustainable outlook for growth in the recent quarter for the chinese economy and the markets over the long run. A lot of the rhetoric you have seen between the u. S. And china most recently has been just that. Its been rhetoric, focused on individuals. Also, companies. Its focused on things that do not affect the wider economy to a large extent. It falls back to that titfortat trade and tariff escalation that had negative Economic Impacts on both economies. This is something that will not largely affect the market broadly and the economy more broadly. It does become something that will be widely felt. The focus around technology and s is notspecific something that will be systemic in the near term and seems like a lot of posturing. After the u. S. Election, i think it is clear to say that a lot of the rhetoric coming out is to do with human rights, so that persists. It is just that it might be more forthcoming in a diplomatic manner. Haidi what is not rhetorical is the impact of the lockdown in victoria and downward revisions to guidance to the earnings season. You of course are in melbourne at the moment. What are you kind of anticipating or bracing for in terms of the impacts and where do you find opportunity in the Australian Market given that it is not exactly a cheap market. Cheap no, it is not a market. The biggest thing to look for when it comes to australia is the earnings season coming through will be focused on dividends and what can happen to dividends and payout ratios. It has eased pressures around the banks that continue to pay out dividends. What is happening in victoria with the lockdown will take time to come through. Like what they were proving in terms of hours worked and the underemployment ratios set to improve. Looking at exactly what businesses will close and how it will be. [no audio] there. Kerry craig j. P. Morgan Asset Management mobile market strategist. We are getting an alert coming through the bloomberg. Set to set up its First Data Center in ireland. Tiktok saying the data center will be operational and when it is operational, user data will be stored in this new location, located in ireland to create hundreds of new jobs as well as making a point that this is to safeguard and strengthen the protection of tiktok user data. Expecting that data center in ireland to be open and operational by early 2022. As ireland beefed up its state of privacy laws as of last year. Coming up, President Trump claims a virus vaccine is close while his top disease but says a 50 effective vaccine would still be a worthwhile endeavor. Details, next. Mike pompeo wants u. S. Companies to cut ties with chinese tech firms. Analysis from d. C. Is also ahead. This is bloomberg. Karina you are watching daybreak asia. The u. S. Government is pushing debt to new extremes to cope with a budget deficit not seen since the country mobilize for world war ii. The treasury is expanding plans for borrowing in the coming months, aiming to sell a record 112 billion of securities next week. The sale exceeds most expectations, but wall street appetite seems strong and the fed will take 80 billion a month. The Trump Administrations warning there will be no deal on a virus relief plan if a mills package is not hammered out by the end of this week. The white house and leading democrats say they are continuing to make progress but Senior Administration Officials Say it will come to nothing if agreement does not come in the next couple of days. Some republicans put the chances of an accord at 5050. Indonesia will spend heavily to support a fragile recovery after the economys first retraction in more than two decades. The finance minister says it will top 100 billion dollars through december as the government seeks to support growth. The economy contracted more than 5 in the Second Quarter. Its worst performance since 1999. Pentagon is contradicting the white house over the massive lotion in beirut. President trump said it appeared to be a bomb but mark esper now says it may have been an accident. Thatast 135 people died in blast with authorities blaming a store of Ammonium Nitrate that was seized from a cargo ship. They suggest a fire started by welders may have been to blame. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Haidi. Karina, while some firms are racing to develop the vaccine, several of them have been snapping up deals with governments to be the first in line to get the drug once it comes out. Johnson johnson has forged a 1 billion pact to supply the u. S. With its experimental drug. For more, lets cross over to our health care reporter, Michelle Cortez. We heard from Anthony Fauci a little bit earlier when we had that conversation with him, just talking about the parameters of what a vaccine could potentially look like in terms of the efficacy, in terms of how often you would need to give it in terms of how widespread it could be administered. So lets just take a listen, first. Dr. Fauci i hope it is going to be more than 70, but even if it to 60 . Effective vaccine is totally valueadded if you complement it with Public Health measures. So many unknowns, michelle, and at the same time, we are starting to get a framework around what pricing looks like. Michelle you are absolutely right, haidi. It is interesting that this information is coming out incrementally now. Johnson johnson set the floor. They will be pricing their vaccine at about 10 a dose. We are seeing from moderna, they have not yet signed any major deals for hundreds of millions of doses but they have done some smaller deals and a few million, and they are pricing bears at at 32 to theirs 37 a dose. He seems to be warning americans and people across the world that this is not going to be a vaccine that makes this virus go away. If you get this vaccine, it does not mean you are safe, you will be able to go out and drink in bars, interact with everybody in the world. Itis saying he is hoping is 70 effective but even if it only protects half of the people who get it, you will consider that a win. Shery we have he will consider it a win. Shery we have talking about u. S. Efforts to supply vaccines. Millions of doses going to the investing 18are million in the scottish vaccine manufacturing plant. Japan nearing an agreement to secure a vaccine from astrazeneca, according to the nikkei newspaper. How much of a risk is there that advanced economies will hog all of these supplies and there will be a huge gap with emerging economies that are suffering right now . Michelle absolutely, that is a major concern. We had bill gates on Bloomberg Television just today talking about this exact issue, that the concern is that if we do not get this virus under control in emerging markets, then no one will be safe, as we just discussed. The vaccine will not be a cure. It will not be a magic bullet that protects everyone. If we still get the virus coming from developing countries, then everyone is going to be at risk, and of course, those countries that are already the most vulnerable are going to be the hardest hit, and those people are going to need some protection as well, so there are efforts underway to make sure is vaccine and some kind of safeguards for the emerging economies. As far as how it is going to happen, the vaccines need to be kept very cool that it will be challenging. Shery kerry craig in minneapolis Michelle Cortez in minneapolis paid we spoke to the assistant professor of emergency medicine at john. Lauren sauer told us about the risk of reopening economies without a covid19 vaccine. Lauren we have seen a lot of countries in europe get it right. We were hopeful in australia, but we are seeing some rollback of their restrictions because they had a new outbreak. You know, spain and france and germany were severely affected early. They are now, after their rollbacks, reporting increases. Across the globe, we are seeing that until we have some other form of response like a medical countermeasure, vaccine, really good therapeutic, we are going to have to rollback those restrictions a bit. Three imposing restrictions restrictions . Ing how do citizens live their lives without taking too many risks . Lauren that communication piece is key and it is so hard. The thing we have to work really hard to do is communicate the importance of why we are taking these measures, so the restrictions are not punitive. They are not meant to harm people or groups. They are really to protect everyone, and there is a lot of work being done in the Community Engagement piece around why the restrictions are so important, why the mass wearing is so important. You can see in the u. S. Where mass wearing has become so politically divisive one really, what we need is to come together as a community to protect each other and also to protect the vulnerable groups that either cannot wear masks or may be impacted by the virus because they have to go and live their lives in a different way. So that peace around communication is absolutely critical. It involves Public Health messaging. It involves working with the most affected communities to understand how they receive messages and the best way possible. The problem is, sometimes, we have conflicting messages. In your eyes, do you need to wear a mask inside or also outside . If we reopen schools in the u. S. , like we have in certain countries in europe, do kids still need to social distance . What is the parameter . Lauren messaging has been inconsistent. Part of that is because we are learning, along with everyone else, about this virus and how to manage it, and how it is impacting our lives. We are starting to understand a bit more about how the virus is transmitted. The mask wearing is primarily focused around how the air handling is and how dense of a population you are in. If you are in a crowded environment even outside, youre probably going to want to wear a mask, but the schools, we are still learning so much about how kids interact, how kids transmit viruses to each other, how they bring it home, how teachers are infected. The more we learn, the more we can implement safe and effective measures, but even with the schools, it all relies on reducing that Community Transmission to keep kids safe and make a space where they can go back and that may mean closing bars, restaurants, things like that. The key is that the message may change but it has to be founded in science and evidence and that is what we are trying to put a word. Lauren sauer. Bloomberg is supported by the founder of bloomberg out the bloomberg philanthropys peer coming up next, Mike Pompeo Bloomberg philanthropy. And how mike pompeo that may affect u. S. China relations. This is bloomberg. Shery mike pompeo is pushing a socalled Clean Network initiative, which broadens the u. S. Drive away from Chinese Technology on all levels. Lets get more from markets coanchor Tom Mackenzie in beijing. This is not just about dropping tiktok. It is basically a comprehensive decoupling in technology between worlds two largest economies. What implications does this have . Tom i think you hit the nail on the head. What he is spelling out, the u. S. Secretary of state, is a much broader push against Chinese Technology companies. Hardware companies and huawei is something the u. S. Will be focused on for at least a couple of years and then you have the Software Companies like tiktok. Much more broadly, wechat. He is saying apps and undersea cables and Cloud Computing services are all a National Security risk. Take a listen to what the secretary of state had to say. We want to see on trusted chinese apps removed from u. S. App stores. President trump announced pending action on tiktok, and for good reason with Parent Companies based in china, apps not to mention tools for ccp content censorship. As you say, that u. S. Secretary of state dont seem to be painting a picture of a bifurcation in terms of the internet and Tech Companies. He does not want western Tech Companies, for example, supplying apps to Companies Like huawei, which he accuses of human rights abuses. He says he wants companies to stop using Cloud Services for baidu, tencent, alibaba, and undersea cabling built out by Companies Like huawei. That is a concern for him. This is about data. The u. S. Says Data Security and National Security concerns. It seems like mike pompeo and his team are trying to broaden out a coalition with other allies across the world so we will see how this plays out. Haidi this high level planned state visit to taiwan, have we seen reaction from beijing . Tom understandably, or i should say, unsurprisingly, beijing has come out pretty angrily. The news that in fact one of the most Senior Administration officials in many decades will be visiting that island so they said it was an interference in chinese affairs. There was also a warning and state media that if the u. S. Goes further down this line, it ofld result in some kind military response from the chinese side. That was in the state media. From the foreign minister here, pushing back against the Clean Network team that mike pompeo has been pushing. U. S. Is simplye not qualified to push for a Clean Network. He said that they are dirty all over and points to wiretapping from the u. S. A pushback from the foreign minister against this Clean Network coalition pushed by the u. S. Tom mackenzie in beijing. Coming up next, congress racing to beat a dead line for a stimulus deal. This is bloomberg. What happens when a wireless carrier puts its customers in charge . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Karina you are watching daybreak asia. Topal covid19 deaths have 700,000. The u. S. Remains in focus. California had its second deadliest day. Florida top. 5 million cases. New york city is setting up checkpoints to ensure quarantine rules. Tension continues between the white house and its medical experts. Anthony fauci says u. S. Testing must improve while President Trump insists procedures are the best anywhere. Closer tos cases 20,000 people having died. Of Record Number infections this week. Those numbers are expected to rise in the coming days. Daily cases are rising beyond 1000, peeking later this month. The city of melbourne has been in lockdown for four weeks. In other news, facebook has removed a post from President Trump for violating its policy on coronavirus this information. The post included an interview he did with fox news in which he claimed children are virtually immune from covid19. He was attempting to back up his support for schools to reopen and says the virus has no impact on young people. The video is still up on the president started feed. The two contenders for the u. S. Election artemis facetoface Party Conventions amid fears of the virus. President trump plans to give his nomination acceptance from the white house, which could violate laws banning political activity and government buildings. Joe biden will skip the democrat gathering in milwaukee and will get his speech from his home state of delaware. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Haidi. White house negotiators say they are no closer to agreeing with democrats on the size, scope of this latest stimulus package. This as President Trump says he he is ready to take steps of his own. Our Global Economics and policy editor, Kathleen Hays. More breaking news on the stimulus talks. How far apart . Kathleen they are as far apart as they were yesterday or the day before it seems, haidi. They cannot agree on anything, just about, to move forward, to get to the middle. 1 trillion. Democrats want 3. 5 trillion. President trump at a press conference tonight says he is still looking at payroll taxes as a way to help american workers, and he said he cannot go along with the democrats ardent desire to give more money to states that are cashstrapped, that will have to start laying off workers. Economists say that if they do not get some help from the federal government, its interesting that mark meadows, the white house chief of staff in an interview on cnn, said that President Trump is going to own, putting the moratorium back on evictions, extending unemployment. You know theres been talk that trump would even support 600 a week, things that republicans ardently do not want. If there is no agreement reached by friday. That is two days from now so the pressure is really on. What else is really important to let you know . Schumer, for example, President Trump speaking at the press conference tonight. He did say his goals are to protect the vulnerable, avoid stringent lockdowns. Mitch mcconnell said also earlier today that republicans themselves are internally divided. You know, republicans in the senate versus republicans in the white house and so on. Chuck schumer leading democrat in the senate so cc Forward Momentum but he says the white house has further to go. They have to make more compromises. Finally, very important, Mitch Mcconnell looking at the friday date when the august recess starts has already said no, they will keep the senate will be in session next week. Put is enough pressure to the two sides on the same side. I have never been on a jury about when people get sequestered, they often come to a decision. Maybe this will be equivalent. A be they will get it together. Some republicans are saying this will be settled for weeks. Shery not surprising given the record spending. Treasury bond auctions setting records. What can we expect . Kathleen when you speak of records, 100 12 billion in the treasurys quarterly refunding, they sell 30 year bonds every three months. In the Second Quarter, when the pandemic was starting to hit hard, they put the pedal to the metal when it comes to selling bonds. 112 billion per 20 billion more. That is an alltime record. They are going to increase the number of longterm bonds they sell. They are going to sell sevenyear to 30 year bonds. This was widely expected. I think it is also important just to put this in context because the u. S. Budget deficit has to be funded. That is why they are selling bonds. That is where they are something more bonds. The deficit is approaching 100 gdp in terms of the ratio. It has not been near that high since world war ii when it peaked at 106 , shery. A lot of bonds to sell. Like a lotit seems of global investors, even with the deficit growing, even with the dollar having weakened, still want to buy u. S. Treasuries. Shery Kathleen Hays with the latest. Kathleen joins us again in the next hour with a big interview. Our guest is an internationally renowned economist who held senior positions in the japanese mastery of finance and the imf p or that conversation at 8 40 am if you are watching in hong kong. Western union is maintaining its decision to forgo fullyear guidance as it plans for cost cuts amid the pandemic. We spoke earlier to the ceo. Customers ving 75 countries. We want to reach out to them. Lot todigital media a communicate with them. I travel also, essential travel. As we go to the countries where we believe that the environment is more safe. I am currently in europe. I traveled commercially to europe. You know, we are taking care. We are looking around. We really have a home team taking care of our people. That is the most important thing for us. One of the things ceos are wrestling with is pandemic fatigue. It is getting hard to work from home. How is the morel situation at your company and how do you keep it up morale situation at your company and how do you keep it up . I was talking to another ceo yesterday. Rale issues. E mo people like to be together. We are connecting. We like to discuss in the meeting room. We like to discuss with each other, with our team members. Have been quite good talking to our people. Definitely using the electronic channels. And we are used to being in different areas as a company. Differentrom 10 countries. They are in different parts of the world. We are not only in one meeting room. Kind ofa different communication. It makes it very protective. We start the meetings. We also covered other parts of the world. I think it is challenging. Longer hours. Have the luxury that between Conference Calls and thatlunch with them, gives me more energy to focus on my afternoon meetings. Globalizing was d even before deglobalizing even before covid19. How do you grow a crossborder transfer business if theres less immigration and trade . Atif hikmet if you look the longer term, i dont think the world is d globalizing de globalizing. It istion different. It is not owned by governments and corporations anymore. Is enjoyed by people who are connected all the time. Look at our business. There are 270 Million People living abroad, 200 70 Million People globally are migrants. About 10 years ago, it was 90 Million People living abroad. In the last 10 years, another 100 Million People. Another country to look for better opportunities to support their loved ones. To support the economys home. 700 billion every week. This is larger than the foreign direct investment. We can connect in that complex environment together. Western union ceo hikmet ersek speaking to Erik Schatzker earlier. Betting on 5g and new premium smartphones to lift sales ahead of apple. The prospects of that happening. This is bloomberg. Shery we are less than 20 minutes away from the opens of trade. Lets turn to Sophie Kamaruddin in hong kong for a check of how we are setting up. Sophie we are seeing a mixed picture when it comes to the futures, trading action so far this morning. Nikkei futures opening to the downside. Imo nice this morning adding about. 1 so it could be tepid moves in the thursday session. In the currency space, the aussie topping 72 as dollar selling continues pushing the aussie to a 2019 high with rising commodity prices. Also a boon for the commodity currency. Silver futures extending gains. Now about 27, outpacing the rise we have seen in gold. 35. A sees earnings and focus today include toyota. The carmaker could report an operating loss on virusinduced output suspensions and sharp sales declines during the fiscal First Quarter plus a stronger yen is a drag. Continued decline of domestic revenue as shoppers held back on nonessential spending. Growing online sales may help soften the blow. We got earnings from cookout, ao,ting estimate cac meeting estimates. The korean internet giant is capitalizing on the surge we have seen with a listing of gains. Isping into the terminal, it up more than 140 this year, among the best performers on the kospi Services Index which is helping to leave yeartodate gains for the kospi benchmark along with medical supplies to help the kospi climb to an october 2018 high. Haidi. Samsung testing consumer willingness to buy highpriced gadgets during the worst economic downturn since the great depression. In its first ritual launch event, samsung set out its premium Android Device lineup for the rest of the year, including the latest galaxy note smartphone. Lets get some analysis from the Senior Research manager. What are your expectations as to samsung can pivot to doing this virtually and convincing consumers they need these crazy gadgets in an environment with economic uncertainty, when consumers cannot get into stores to look at these new devices . Samsungs some unveiled some interesting devices last night. 5g fore talking about the future. I think the challenge for them remains that, at this point, in time, people are not really willing to spend a lot of money on smart phones, and for something that is new and different from what they have seen in the past, i have not experienced so much. They would like the touch and feel of it. It has been difficult at this point with all the safe distancing guidance and everything, so even though we see some of these devices in Stores Across the world, you know, this whole physical experience or lack of it is going to be a challenge for samsung. Lineupin terms of the that they unveiled, how many, i guess, apple fans are they likely to with their new products . They released their products ahead of apple. How many people will be hanging out for later in the year to get the new apple devices . Probably a few more iphonesfore the new launch. They might be delayed by a few weeks. Samsung launched a couple of devices. Question here is that when someone buys an iphone, they think i should probably buy the air pots, too. If i am going to get a tablet, maybe i should get an ipad. For samsung, the bigger concern is from the iphone user base switched to samsung but how many dorent samsung owners they buy into the whole ecosystem . Shery on that train of thought, will they be able to take advantage of the few weeks that apple will delay their iphone release . So they get a, bigger window in this case, but unfortunately, this is also at a time where the global recession is going on. Some a Different Countries at second and third base coming in. Think it would need a lot more effort. I think what will work for samsung now, you know, i think what is interesting is that this was collaboration with microsoft and positioning it as a productivity device but also talking about photography. They will not look at note as just a business focused device but as a device which caters to all of these different categories. I think their partnership with microsoft and so many announcements that they made be able to mirror your phone, having those notetaking apps which are quite essential now with this coexistence of work and play. I think that is where the focus will be and they will try to leverage and take advantage during these next two weeks. Shery what about taking advantage of huaweis challenges as the chinese giant faces more scrutiny worldwide . Huawei, well, in the latest reports, we also have to remember that they are doing pretty well mostly because of what has been how they have been going in the china market. I would also say that, you know, havehas his gained they sustained much longer than i would have suspect the global suspected in the Global Markets as well. Other players can leverage. That is another, i would say, probably an advantage or opportunity for samsung to take advantage of Thomas Speciale at the higher end advantage of, especially at the higher end. , greatkiranjeet kaur having you with us, Senior Research manager with idc in singapore with her thoughts on samsung. Or analysis ahead on its new devices with the securities Korea Technology analyst, who joins us later. Up next, instagram is launching justne of tictoc tiktok a week after Mark Zuckerberg defended its copycat strategies to lawmakers and we will have the details. This is bloomberg. Haidi lets get you a quick check of the latest business flash headlines. Profit fell for a Second Quarter as provisions for bad loans rose. Lending incomes slid. 1. 25ncomes declined 22 to billion singaporean dollars. They are racing for more loan defaults amid the virus fueled economic slump. Dbs is facing a squeeze in lending profit ability. Financebas is hosting deals while it reviews business involvement in the emea. The french bank is one of the largest lenders of Commodity Traders but suffered heavy losses from exposure to Companies Including gp global and the kospi dealer. It was once the world against lender. Wells fargo is extending its work from home program until at least the start of october, saying it does not know when it will return to traditional operations. Wall street banks have generally avoided discussing when they aim to be back in the office as the coronavirus continues to spread across the u. S. Said staff would work remotely through september 7. Shery facebook owned instagram is launching a new product called reels where people edit 15 second clips of videos alongside music. If that sounds familiar, that is because it is, just like tiktok. Sarah frier in san francisco. App,you tried using this how similar is it to tiktok, and it will be a bit more successful than their latest attempt . Sarah it is almost exactly the same as tiktok, and the way it works is same clips of videos you overlay with music. Try to edit them and make it funny or put a green screen on, just like on tiktok. This is going to be a better chance for facebook to take on tiktok, not just because of the political turmoil around tiktok right now in the u. S. , but also because they are putting it within instagram, so they will be able to tap into the existing Instagram Network to get this to more people. It is interesting because with any kind of late adopter copycat, if you will, tiktok has been the pandemic darling. It has so many users already. The political overweight, the justt to ban tiktok abandoning ship and potentially going over to the Instagram App which is probably more secure and safer from the political point of view . Sarah already, we have seen a lot of creators tell their followers to switch over to follow them on instagram instead. Facebook and instagram are already benefiting from this shift. Option,that the reels so far, i have seen creators use it, funny enough, copying over there same tiktok. Their same tiktok. You can see the tiktok branding on their posts. Im not sure its increasing peoples affinity, but as an alternative, people are concerned that tiktok will get banned. To have a copycat is at least something. Shery if we see microsoft buying tiktoks u. S. Operations, how will that work out . Sarah i think that will be a long road. There are a lot of discussions still to come on price. There are a lot of problems Microsoft Might discover with the deal. The u. S. Has to think about the fact that this could become a geopolitical mess. Before we really know what it will mean for facebook, the uncertainty is benefiting them more than anything. They have called out facebook for the similarities but they did not invent this format either, right . Actually been popularized by vine, which was an apt owned by twitter for a while and twitter actually shut it down before tiktok came to providence in the United States, which seems like a big strategic misstep. To be wondering how they feel about that. Sarah frier from Bloomberg Technology in san francisco. Coming up next on daybreak asia , perspective on centralbank meetings. Nomuras representative will be joining us shortly. Has held senior positions in the Japanese Ministry of finance and at the International Monetary fund. We talk about the impact of the pandemic on Japanese Monetary policy and the economic rebound. Lots more to come on daybreak asia as we get into the start of trading in sydney, seoul, and tokyo. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. From number bus good evening from bloombergs global headquarters. Welcome to daybreak asia. Hour, the s pthis 500 near the alltime high. Singapore has the world possible to stock. The coronavirus hands california its second most of the day yet. Tensions rise over u. S. Testing. Is hurtingc performance at global bank. Fears that the virus triggered bad loan default. Lets get straight to the Market Action with sophie. Are we saying much action seeing much action . We are seeing some tepid moves at the start of trading in japan. Off. 3 . I is there is little changed at mid 105 levels. Limited. May be we are seeing these for the cost of 610 1 . Onwill be keeping an eye. 6 . We are seeing these for the cost of 6 . For theashing currencies to break. That has been in place since 2018. This checking on the open in sydney. The asx 200 gained ground, back above 600 points. We are seeing yields rise. We do have a 10 year yield hovering around 55 basis points. The dollar remaining under pressure after falling for a seventh session. Holding gains just above 2000. Similar futures have topped 27. They lets get more on trading themes we are watching. It was a busy earnings day in the u. S. What were some of the Key Takeaways . What are we expecting in trading today in asia . Date ito this liked this day and earnings. Just because of the Global Trends of the current economy. Businesses associated with services and shopping did better than expected. Anything associated with actually going out is did very poorly. Wey are calling this the recovery. Are all companies that performed better than expected. Live nation concerts did very badly with a 431 million loss. It was even bigger than what analysts expected. Theseestion is how much businesses are on the wrong side of the stayathome economy, how they transfer themselves and how quickly. The other Big Questions is what a softer Global Economy starts to reap in Consumer Spending power. It was interesting to see the smount of warnings about future getting hit. That is an interesting one to watch. Politicians in the u. S. Still deciding about that next stimulus package. We continue to see golda just barreling ahead. What are the risks if you look at a technical correction at this point . As aalways see it framed discussion over future inflation. Gold is supposed to be the traditional inflation. If you think inflation is going to be going up because governments are unveiling this massive stimulus and Central Banks are unloading liquidity, gold should that if it. To me, the bigger thing to look at or the more important thing to look at is what is going on with yield. We saw gold pickup. What is happening is people are thinking about the opportunity cost. This is not a difficult decision. You can either park it in the treasury. You can park it in something shiny, something substantial. That is what is going on there. That means the real yields are going through key west here. Going everields lower, that does not seem like a real risk. We will see the dollar holding. The correlation between the greenback and asian stocks is looking pretty negative. What does that mean implications wise for asian investors . This is something that has been going on for a while. Whenever we see a tightening of the u. S. Financial conditions which would include a stronger u. S. Dollar tend to be very bad for the rest of the world. So much of global trade and so much of emerging market economies are issuing dollar liabilities. When we get a weaker dollar, that tends to be a good thing. Conversely, we have the stronger dollar, that tends to be a bad thing. Wringing oure been hands about what the weaker dollar means for the world. For emerging asia, it can be some kind of support. I think jeffries was talking about how this would be, they were very supporting supportive of emerging markets in asia. Thank you for those key themes that we will be looking at. The bigalso be watching banks. Concealable banks have been taking a hit. We will get a breakdown of that slew of earnings that are out today. Next, we will talk about asias recovery. She sees the r. B. I. Following thailand. This is bloomberg. Euro washing daybreak asia. I am karina mitchell. The pentagon is contradicting the white house about the massive explosion in beirut. President trump said it was a bomb but the defense secretary said it might have been and exited. An accident. Inquiries suggest a fire started by welders may be to blame. Pushing government is death to new extremes to cope with a budget deficit not seen since the company mobilized. The treasury is expanding plans for borrowing in the coming months, aiming to sell a record hundred 12 billion of securities next week. Appetites seem strong and the fed will take about 80 billion a month. The Trump Administration is warning they will be no deal on a virus release plan if a stimulus package is not hammered out by the end of this week. The white house and leading democrats say they are continuing to make progress. The Senior Administration Officials Say it will come to nothing. Some republicans put the chances of that happening at 5050. Coronavirus cases in australia are edging closer to 20,000 with 247 people having died. The state of victoria reported a Record Number of infections. Daily cases are seen rising beyond 1000, peeking later this month. Day, onews, 24 hours a air with bloomberg and quicktake. This is bloomberg. Shery it has been a busy few days for ecodata. We have secondquarter gdp data from the philippines. It is too close to call. It is really too close to call. The consensus expectation is they could cut the rate. It will be a hold on the reverse repo. Dilemma isthe main it reaches the upper threshold. There has been some uptick in activity. Possible, the base case it will have the guidance when inflation comes down. Slump in the economy, what are you expecting on the inflation front . . Ill they keep in the range this is most likely a transitory. For september, october, our inflation should start dipping down. We do think there will be more cuts. How difficult is the balancing act given the recent surge we have seen in inflation . It is challenging. Because the fiscal space is quite limited. The economy entered the covid shock with a very weak banking balance sheet. It is quite challenging. We will have to face this dilemma. They have done a pretty good job. They have been very preemptive in easing. There has been a lot of easing. A lot has been done. It does make prudent sense for them to see how the economy responds. This is the transitory phase. This is really going to be a headwind for a very long timeframe. Sticking into the holding pattern. Are they running out of conventional options . Out of are running conventional and initial. Ammunition. That is the key challenge. The Economic Outlook is quite challenging still. There are challenges in terms of currency appreciation. For the bot. Room the policy support would need to policies and financial and credit policies. Super quickly, the philippines are called falling into technical recession. That is correct. The philippines had one of the most stringent lockdowns in asia. We think the cutie the numbers are going to disappoint. We are expecting 15 . The virus cases are not under control. Factors mean ar sluggish one. We appreciate your time. She is the chief economist for india and asia. We will get more on the japan Economic Outlook ahead. Guest served on the prime Ministers Council on economic and fiscal policy. He will join us later this hour. While the outbreak has been waiting on global economies, the dr. At a vaccine with a 50 effectiveness rate could help Public Health if combined with other medication. He told david westin that there a vaccine developer in the sense of truly putting us it behind us, the classical history of viruses, particularly respiratory viruses are such that if they are going to be something that is as capable as this virus is, ultimately, if you want to put the nail in the coffin of an outbreak, youll need a vaccine. However, there are many things that we can do from a Public Health standpoint that can more globallyy control this as well as to mystically. They are not particularly, getting things. They are things that we keep talking about. Five or six fundamental principles. Masks like wearing universally indoor and outdoor, keeping six feet at least distance. Avoiding crowded places. Outdoor is always better than indoors. Clearcut, fundamental awareness of the need to wash as yous frequently possibly can and stay away from places like bars where you congregate in crowded places. If we universally do that, one of the problems we have in this country is that the understanding of the seriousness varies as a pandemic depending upon what Demographic Group youre in. I have never seen an infection. Not like this. When you go from 40 of the people that have no symptoms at all, very heavily weighted the appealg people toward young people. Is effective in a vaccine . What if we get a vaccine that is 50 effective or it is effective for three months or six months. Then what do we do . Lets talk about the percent effectiveness or efficacy and then durability. They are separate, one at a time. I hope it is going to be more than 70. Even if it is 50 or 60, 50 or 60 effective is totally value added if you complement it with Public Health measures. If you look at measles, measles is an amazing vaccine. In effect, the only thing you need to do with measles is vaccinate people. The high degree of efficacy that ofes an amazing degree immunity to the population, if you have a vaccine for a disease in which you can do Public Health measures to mitigate against the spread, you put those two things together and i would love to have an 80 or 90 effective. If we get 50 or 60 effective, i will feel good about that. With regards to durability, that is a different story. No question about it. If you get a vaccine, you will have several months protection to get you through the season. You get more of that, all the better. If it turns out you need to boost someone, that is ok as well. We can give a booster shot the way we give booster shots for other vaccines. Matter, who isal ahead in this race . It depends on what you mean. There is no one that is ahead in efficacy. To prove in the pudding is that threeed to do large phase Clinical Trials to determine efficacy and to confirm safety. Dr. Anthony fauci. Up next, a Second Straight Quarter of profit declines for southeast asia. We will get you the details on the secondquarter earnings next, this is bloomberg. Singapores big banks posted second a Second Straight Quarter of declines. For more United Overseas Bank earnings, we are joined by Bloomberg Intelligence Senior Analyst for Asian Financial outlook. Where there any surprises for you and the result . Were there any surprises in the results . Lets start with the positives. I think investment gains were solid. That is good. The provision side is largely played out as expected. They could have a guidance of 35,000,000,000 dollars. Frontloadd them to those provisions. The one negative surprise was from the margin front. Almost 30 basis points with the full year. I think they may be coming from the deposit side. They did say 1. 6 is where they could bottom out last quarter. I am waiting to hear. Are we likely to see further diversions from the different banks . It will contracted to its lowest levels in a decade. Bodesterms of how this for the results . I think dbs is strong. This will be positive for tomorrow. They have done, better in the Second Quarter. They see contraction with a leg. Deals may not have risen much. Might reward frontloaded provisions to strengthen that. Dont miss our exclusive guest whowith our joins us at 11 30. If youre watching in hong kong, half past one in sydney. Alert on the bloomberg. We are hearing from the Washington Post that twitter is banning President Trump from tweeting until he removes a post that violates its conditions. Right now we are hearing that twitter will be handing president from tweeting until he removes that post coming from the Washington Post. More details as we get them. President trump has seen lots of ticism as well as criticism for misinformation in the website. Next, our conversation with the krach. Ry of state, keith this is bloomberg. This is daybreak asia. Top 600,000,h of florida has 500 thousand cases, new york city is checking up is setting up checkpoints to make sure quarantines are abided by. Meanwhile, tension continuing between the white house and its medical experts, dr. Anthony fauci singh testing must improve all President Trump insists procedures are the best anywhere. I hope it is going to be more than 70, but even it is if it effectivea 60 vaccine is valueadded if you complement it with Public Health measures. Haidi facebook has removed a post from President Trump for violating their policy on coronavirus misinformation. The post included an interview with fox news in which he claimed children are virtually immune from covid19. Hisas attempting to back up support for schools reopening and said the virus has no impact on young people. The video is still up on the president s twitter feed. Indonesia will spend heavily to support a fragile recovery after the first economic recovery contraction in more than two decades. The Prime Minister says outlays will top 100 billion through december, as the government seeks to support growth. Thanconomy contracted more 5 , the worst performance since 1999. Amazon has slightly trimmed its stake in a Company Worth billions of dollars. He sold more than 900,000 shares, jeff hayes owes, having doubled that earlier this year. Under 190worth just billion dollars, according to bloomberg. Year. Has risen 73 this shery and on that story you mentioned with the facebook post, we are getting more detail on twitter banding President Trump from tweeting until he removes that covid clip. A twitter spokesman has said the twitter in violation of rules on covid19 misinformation in the account owner will be required to remove the tweet before they can tweet again. This would be President Trumps tweet of a video clip from a fox news interview in which he says children are almost immune from covid19. He has already seen repercussions on facebook, not twitter ban think the president from tweeting until he removes that covid 19 clip. Chinese fight against technology is going beyond tictoc. Secretary of state mike pompeo has urged u. S. Companies to bar chinese apps room their app stores and join the governments socalled Clean Network initiative. Ofpeos undersecretary upstate for Economic Growth spoke to our chief washington correspondent, kevin cirilli. Are seeing alignment around the Clean Network. That was the expansion secretary pompeo announced today. It is freedom versus authoritarianism. And what you saw with the expansion of the Clean Network is the launch of a new effort to ppcp america safe from the ,urveillance state reciprocally, all the propaganda can go out but none can come in. So if you look at those five new lines of effort, the first one is an effort to ensure chinese telecoms dont provide International Services between the u. S. And foreign destinations. The second is the clean store. The goal of the clean store is to remove an trusted p. R. C. Apps from u. S. App stores. Trumpve heard president discussed impending action on tictoc, for good reason. Economicom an perspective, we live in a global a world where the Silicon Valley is increasingly doing business with asia and also europe, so how does the indicted state balance the national how does the United States balance the Security Risk and technological advancement. Is a number of considerations. Whatirst is, and this is we say to all ceos, and that is Corporate Responsibility and National Security. That is important. The other thing you are looking at with regard to the ccp in key apps,ome of our they wont let them into china. That is what i mean by the great, oneway china firewall. Putting reciprocity and transparency to practice. That is really what it is. Talk to Tech Companies on a daily basis. I spent 30 years being a ceo. And has been needed for some time. Concerned about what beijings response might be to the action taken today . Keith we have all experienced bullies in some form or another. And when you confront a bully, it backs down, and it really backs down if you have friends by your side. Do thatsecretary pompeo with the u. K. When they first said we are going to reconsider that huawei decision, you saw beijing, the pulling theh cbc 100 billion infrastructure, and secretary pompeo said, we stand with our allies, we stand with the u. K. , we will stand up against the china bully. That is the way it is. By the way, that is the 800pound elephant in the room, with all these nations at all these companies is the chinese doctrine of seduction with money and reinforced with retaliation. The world is tired of it. U. S. Undersecretary of state for Economic Growth keith rach with our washington correspondent kevin cirilli. Bank of japan defends its Monetary Policy. We have a Columbia University professor weighing in on that as well as his views on japans physical response to the pandemic. This is bloomberg. The massive monetary and fiscal response to the covid19 pandemic has prompted questions about Central Bank Independence. Bojs governor defended that independence at her roundtable at a roundtable with former fed chair janet yellen. I dont think this would make the Central Bank Less independent. Leading our discussion is Takatoshi Ito, professor of international and Public Affairs at columbia univeristy, which sponsored that event. He joins us from tokyo along with our own Kathleen Hays. Wonderful to have you with us. We appreciate your time. To gauge, monitoring that conversation, what was the feel you got from the boj views of theo his independence of the boj and also how closely independent closely Central Banks after work with their counterparts in this unprecedented era. Fessor ito the governor defended the Central Bank Independence strongly, saying he is adhering to mandates has two , andved a target of 2 Fiscal Authority does whatever Fiscal Authority is given the mandate that it is given. And it goes to the singular observers ord critics say that is maybe fiscal and it is a modern monetary theory example. No, it isor says purely a coincidence, that all authorities try to achieve their own perspectives. And that does not to say that they, that the boj is losing independence. When is mmt, mmt by any other name . The mmt argues that the central bank is subject to the Fiscal Authoritys and they will buy whatever the amounts that the Fiscal Authority issues. But i think there is a real boj or thethat central bank has its own mandate set in the documents, and its independence written by law. Do risk their own mandates and calculations. As we have to say that we, outsiders, that may be it is whatvationally equivalent, mmt allocates and what boj does, what the central bank does. I think the real test comes when the central bank achieves an inflation target and the inflation rate goes beyond the target, and the central bank wants to tighten, then what happens . Whennk the real test comes the Current Crisis over there, stagnation, is over. So we dont see it until 2022, Something Like that. Interesting thing about what the governor said was, after his prepared remarks, and i would like to tell everybody, they want to see more of this interesting conversation Monetary Policy minds, they can find it on the website. But he went out of his way to say, we will do whatever it takes. Whatever it takes, has that not already been done . Is that boilerplate language the governor uses . Will or does he have something more up his sleeve or does he have something more up his sleeve . Eight is part of the central banker it is part of the central bankers language, as most famously put by mario draghi. But i think the governor was that there are more and he ishe toolbox, willing to take it. Of course, he didnt elaborate what they are, but there are tools and he is prepared to use them if it is needed. Kathleen is he too upbeat in his forecast . For example, he sees a bit of inflation this year, slightly positive next year and more positive the following year, stronger economy the second half. He said there is uncertainty around the outlook, but is that talking it up . Do you think that kind of growth is possible right now . Professor ito i am sure those forecasts or projections are based on assumptions. Importanture the assumption is that there will wave. A serious second and that there will be Vaccines Available by next year. Those unset assumptions are assumptions unsaid are important, and i am sure there are plenty of skeptics on those assumptions. They kathleens point is, have already been doing whatever it takes, pushing over the limits of conventional Monetary Policy. When you get a pandemic like this and potentially will have uncertainty over major events like the tokyo olympics, what does that due to to the inflationary mindset, given it took so long for japan to get out of inflation . Visit set them back further . Does it set them back even further . Professor ito it is certainly heartbreaking to see the tokyo games postponed by a year, and even cures event and even event is in doubt if the pandemic continues like this until next year. Again, there are assumptions that we will get over this pandemic soon, by developing vaccines and medical treatments. So admitted, maybe the governors prediction, it is not only boj, it is other Central Banks as well, projecting recovery. There are recoveries projected optimistic on the side of the wide range of uncertainty. Kathleen it seemed like former fed chair janet yellen was fairly bold in her comments today, when she said she thinks in september, when the fed does its policy review, they are going to move to average inflation targeting. Later, she said she doesnt have inside info, but we assume she does. And you were her macro student years ago, when you were in college. Was that a deliberate thing she said . And how important is that . Professor ito i would say she has a very good, educated guess. And she was saying that this review at the Federal Reserve suggestions,e conclusions, in september, and thinks that ashe 2 inflation target will be explicitly mentioned, which means they will be overshooting thend 2 after undershooting of 2 , so on average, it becomes 2 . That is an important, educated guess. Been might add that it has explicitly mentioned at boj by when hernor in 2016, was allowed zn overshoot allowed an overshooting commitment, although that was not carried very widely in the media. Haidi professor Takatoshi Ito from Columbia University, thank you. We appreciate your time. I have details on the do shery we have shery we have details on the twitter ban of President Trump. At which a Spokesman Says President Trumps own account is not banned from tweeting. It is the campaign account, team rulestweeted and violated on covid misinformation and Team Trump Must remove it before tweeting again. We are talking about a video clip from a fox news interview in which he said children are almost immune from covid19. Again, a correction on the Washington Post report saying twitter blocked the Trump Campaign account on that clip. Plenty more to come. This is bloomberg. We will get a quick check of the latest business flash headlines. Phone, the premium android lineup for the rest of the year at its first launch event since it lost its crown as the worlds top smartphone while totop smartphone maker huawei. First is to set up its European Data centers debate rages over the chinese apps use of personal data and potential sale to microsoft. The data center will be in ireland at a cost of half 1 billion. Says thek parent country continues to build in data protection. Instagram is watching a clone of its chinese owned tiktok competitor after Mark Zuckerberg defended facebooks copycat strategy on capitol hill. Let users edit short video clips just like tiktok, it will be launched in 50 companies in an attempt to challenge its rival. Its first attempt last year was shut down after failing to win an audience. Tencent is said to be in talks to merge with chinas top streaming platform. It is a 3. 5 billion arena. It is aiming to be the largest shareholder of the final entity. A deal would create a streaming giant with 300 million users and a combined market value of 10 billion. The worlds hottest stock is a singapore based gaming and ecommerce company. Limited has become the worlds bestperforming high cap stock, stoking debate over wall street if it is an internet giant or tech bubble destined to burst. Our senior tech reporter has the story in singapore. What a fascinating take on this stock, that has really been overlooked. What is the verdict . Tech a reflection of the bubble or can it become the next alibaba . Hello, yes. That is exactly why we spoke with a lot of investors, to really understand why they like the stock so much. Arst, they think this is company that has exceeded expectations. The company had to keep keynesses two businesses, mobile gaming and commerce. When they went public in 2017, it was not clear they would succeed. The gaming brand was primarily a gaming publisher. Now they have transformed themselves into a gaming developer. Their first selfmade game became a huge global success. With money they generate from that business, they started investing heavily in ecommerce. What is interesting is that they have narrowed the gap with larger competitors across southeast asia, and became a top player at the end of last year. It is impressive, since alibabas unit was first regional ecommerce let form in alibabaon, into which had invested about 4 billion. Still, some investors we spoke to like they see and think this is a mini tencent in the making. Are still aey moneylosing brand, what are the prospects of profitability . Olim not great, because they are now starting to invest heavily in Digital Financial businesses, a bit like how they begin to build ecommerce three years ago. It requires a lot of investment in focus while continuing to build ecommerce, and trying to come up with the next blockbuster game. All this will require a lot of investment. But investors and shareholders who track the company closely have told me they think that they are the team, led by this by the founder and ceo, and the team is very good at allocating capital. And they are prudent. So even though they are losing money at the moment, this is a necessary investment for the future. Yoolim lee in singapore, that is it for daybreak asia, as we go to the start of trading in china and hong kong. Tom it is 9 00 in beijing and shanghai. I am Tom Mackenzie. David i am david ingles. We are counting down to the open of trade in the chinese mainland and on hong kong. Top stories this morning, the stimulus debate is deadlocked with the white house saying talks with democrats are getting nowhere. President trump indicates he may take action alone. Tom