Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

You can see individual markets and you can see how we are seeing most of these north asian performers here. Hong kong is up about. 6 . We just heard from carrie lam who said the social distancing measures may be on for a while in the city. Jakarta coming on pretty strong. We are counting down to that rba Rate Decision and the budget announcement. Super tuesday in australia. We take a look at the yield curve as well. That will be the story here. A massive steepening overnight. Take a look at the two and the 10. As well as the 30 year. That yield reached the highest since june as we continue to price in this blue sweep. Powell the fed chair jay speaking later on. We will watch the aussie 10 year. 89 business points for the aussie tenure. The dollar also selling off on expectations of more fiscal stimulus. You do have the aussie as well. That has been gaining ahead of that dual announcement coming through. Heading closer to 6. 7. Haslinda we want to show off u. S. Live pictures. Mike pompeo is making a visit in japan. He will be meeting the Japanese Foreign minister at a lunch. The is the first meeting in asian pack region four in the specific democracies. The moves come as tensions link between india and china as well. Mike pompeo is there on your screen. He will meet his counterpart from three other democratic countries. He is trying to keep of the pressure on china. The virus crisis is what rocking washington. Pompeo in japan. There you have it. Thise can they continue united front against china when beijing is in conflict with three out of four of those countries . Australia . India . You see out of this group, pompeo is clearly not wearing a mask at this meeting. Revamping some of these concerns we are seeing with President Trump being back in the white house as he was in the hospital for three days after contracting the coronavirus. Shortompeos trip cut because of that portico state of Affairs Going on in d. C. Right now. Political state of affairs in deceiving. Covid19 is spreading across the u. S. In rural areas. This is raising concerns right here in new york. In 34 states, the seven day average is higher than a month ago. Although they have fallen in california and florida. The centers for Disease Control is offering its guidance, saying that the virus can spread through the air. The Australian Government will lay out a massive Spending Program later to revive the economy and generate jobs for the thousands laid off during the pandemic. The treasury, josh brandenberg is inspected to announce is to meals package. The shortfall would be the equivalent of more than 11 of gdp. The pentup demand is overflowing in china with almost half a billion people traveling domestically in the first four days of golden week. That is almost 80 of last years total. Hotel prices are up. Ridehailing apps crashed. Tickets for the great hall sold out in another sign of chinas recovery. The travel industry in the rest of the road is expected to move more than lose more than a trillion dollars this year. Will news, 24 hours a day. Powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Haslinda President Trump is back in the white house after hospital treatment for covid19. He appeared on the balcony after the short trip on marine one from the Walter Reed Medical Center. He removed his mask for the cameras. The white house says he will continue to get roundtheclock care. He posted a video to twitter. He told americans to get back to work. Dont let it dominate, dont let it take over your lives. Dont let that happen. Youre the greatest country in the world. We are going back to work. We will be out front. Lets bring in our editor for more. What was notable about President Trumps return to the white house . What do we know about his condition and treatment for covid19 . Had at was notable is he bit of a show of defiance toward both the virus and Public Health measures to combat the spread. In terms of leaving the hospital in a very photo op kind of way, getting back on the helicopter there. And then also, as you know, removing his protective mask on the balcony, the balcony of the white house and then he did not appear to put the mask back on before going back into the residence. In this video, this dont let it dominate your video, saying that a world leader would not know what to do. I knew there was a risk, i knew there was a danger. Maybe i am immune. He told people to vaccines are coming momentarily. He seems to be wanting to say that even though i have had this, im putting it behind me. But it is unclear what stage he is in of this virus. He has been receiving extraordinary medical care unavailable to most people including three powerful medicines. He is obviously going back to the white house thinking that he is feeling better but his doctor long heis unclear how will be staying there for. Before returning to normal. Is feelingg that he better and the treatment is working. We will see what the next steps are. His very own physicians essay not out of the was just yet but the president does enjoy a good optics. We saw that with the motorcade yesterday, reading fans today. That fist pump weeding out the golden doors of walter reed. Are we expected to see any changes in the president s messaging around the virus now . I dont think so. If this is the messaging as he was still in the hospital, being very much dont worry about this, if you get it, you will be fine, that seems to be the message. More defiant than anything else. I dont think we are going to be seeing any real changes there. He seems to want to try to move on and have the country move on. Talking about going back to normal, opening up. He told aides he wants to get back on the campaign trail when he can. Haslinda what do we know . Are we hearing from the president a devout what he intends to do Going Forward . His Campaign Communications manager says the president intends to be ready to debate. He did not say specifically what the existing schedule whether the existing schedule would be maintained. There are supposed to be two more televised debates with joe biden on october 15 and october 22. The first one less than two weeks after President Trump tested positive for the virus. Biden said that he would meet President Trump in a second debate if the Scientists Say it is safe. We will have to see about the debate. President trump is saying he wants to go forward with them. He wants to start campaigning as soon as he can. It would be clearly he isrdinary given that still out there on the campaign trail. He is telling them that he wants to do that. He can. This is our Senior International editor with the latest on trumps condition. Still ahead, after days of tension, india and germany are holding talk about their travel agreement. This was in the middle of this. Next, the head of African Research gives us his strategy to deal with the current market uncertainty. This is bloomberg. Here is the latest business flash headlines. They are having a get together in a deal worth 16 billion aussie dollars. Northern will by its smaller through a share offer. Bloomberg calculations value 5. 20 per share. The new copy will become one of the roast top 10 gold matters. Cisco systems has been told to pay 1. 9 billion after losing a that itse after claims security features from a Smaller Company were used. Developed a Protection System that was later integrated into ciscos own network. Cisco says they will appear appeal the ruling. Apple gears up to launch its own new audio product. The items disappeared from apple s online store last month. Retail outlets have been asked to remove the products from shelves in recent days. Shares fell by as much as 7 in extended trade. Asian stocks are trading higher over optimism over President Trumps health. Doctors say that he is not out of the woods yet. Chair jay powell will speak later. The latest amused talks have little sign of a deal being close. Lets bring in Jim Mccafferty to talk us through all of these things right now. It seemed like the markets right a bit ofeeing overpricing. We are looking into the potential election odds of a blue suite. Is this sort of rally justified . Etiquette depends. Jim i think it depends if you are an International Equity investor or a domestic investor. If your International Equity, i think that asia is the future. Than theo far cheaper u. S. Equity market, both japan and china are trading at discounts. For that reason, we would be positioned in asia. Yvonne even if we see a Biden Victory, what parts of the market could benefit the most . I think a Biden Victory probably means tax increases on u. S. Corporate. That puts some pressure on multiples in the u. S. That means that the u. S. Gets more expensive. Offset to any standby a fiscal stimulus but a contented view right now the fiscal stimulus will not be the typical one that the u. S. And mr. Risch and would go off of. That would be to put money into housing, into this time around, it appears to be a green fiscal stimulus. More investment into wind power. More investment into battery plants, that type of thing. From that perspective, i think there will be companies who will benefit from this. The traditional infrastructure, positive things is almost irrelevant. Yvonne we have the u. S. Vice president ial debate this week. Are you looking at a closer than you would have anticipated given recent developments . Is it of greater significance for the market . Jim i work in the aipac markets. Context, we have to look at what investors are doing. Right now, the u. S. Is by far the biggest equity market globally. More than 50 around the world. Rootingre an investor for any outcome for the u. S. President ial election, you still have about four more weeks of uncertainty. In the situation where youre wanting to have more stability, i think the money will move toward asia. I think what we can say for the u. S. Is that a Trump Victory will mean more of the same. That means domestic policy will be implemented. There will be a continuation of china bashing. That is nothing new. From a democratic point of view, investors will think about screwing their relationships with china. The Political Risk will grow down go down. I think if you take a holistic view which many investors have to right now, asia is by far more attractive than the u. S. Yvonne but asia still faces the risk of rising virus cases. We are seeing that in indonesia, in india, in malaysia. How much benefit has been priced into the market . Jim the key thing is when youre looking at asia, you have to define what is asia. The benchmark that most Global Investors years, they use this to determine where the b countries are. From that perspective, you take Global Markets across the world and across the u. S. , we have japan and china. We take asianpacific, the markets there are asia, australia, taiwan, japan. Countries like indonesia and india are almost irrelevant in the big indices. When you look at the geography and the population, there are situations where the coronavirus appears to be struggling. India and indonesia are good examples. But if you look at where the money is and where investors are putting their money, the big countries that dominate the index appeared to have the virus under control. Not only do they have the virus under control but the countries have characterized these markets as having better balance sheets. Sustain better growth. Able to sustain better growth. Yvonne a massive move up in the yields in the long and. Does that continued to go from fits to start. Of there is quite a lot stocks in developed market asia. That is really japan and hong kong. There has been a lack of investor interest for many years. Very strong balance treats balance sheets. One thing that was happening with japan that is quite interesting is you had warren infett take 7 billion bet japan. That is quite material. A 5 stake in these companies angled andery disparate business activities. I think that might signal his confidence that there might be some corporate activity in these japanese names. We found that the entities were bought out here. I think the demented corporate activity could maybe get into an item in japan. This allows historic value traps to be turned into exciting opportunities. Yvonne yvonne thank you to Jim Mccafferty from hong kong. The u. S. Aims to keep more pressure on hong kong. We look at how the socalled quad is flexing his muscles in asia. This is bloomberg. Yvonne mike pompeo meets with his counterpart from japan in india and tokyo today. They are building the Quad Initiative to counter chinas influence on the region. Stephen engle is following the events and joins us from hong kong. Speaking with his counterpart, tell us the timing of all of all this. Why now when the white house is already battling a coronavirus outbreak in the final of the election is just four weeks away . Is a valid question. Why now . I guess they want to show a united front of the key main democracies in the asiapacific. As a counterweight rather than counter directly. China ing influence of the region. ,his is more big democracies japan, india, australia in addition to the United States. He has already canceled part of his trip, considered nonessential even the crisis at the white house. He is not going to south korea. The quad meeting all day, today. That is important. Three of those four members have really direct attention with china right now. The United States, we all know what is happening between china and the United States but australia has the diplomatic rally going on. This is the backing of the independent investigation into the overages of the coronavirus. China clearly in the crosshairs there. We all know that india has a resurgent border clash in the himalayan region. I guess that is the main emphasis of this meeting now. It is to get india further into the fold of the quad. India has long protected its nonaligned status. Not necessarily in any regional grouping. It plays both sides but to get india into the United States in the pacific strategy would be a victory for the United States. It is a show of unity to china. How does china view the quad . Steve they are not happy with the quad. This is something that has been bandied about for a while. Ainzo abe brought this up while ago. China has been opposed to it. About a month or so ago, the Reform Ministry says said it is designed to form exclusive cliques and stoke a new cold war. The Foreign Ministry was out with a more tempered statement, saying we hope the relevant countries can think of the regional countriess common interests and contribute to regional peace, stability and Development Rather than doing the opposite. Beway, mike pompeo will leaving tokyo later tonight after a full day of meetings. He will go back to the United States. We are also hearing that he will be back in this region sometime later this month. Perhaps to add mongolia and south korea to the itinerary. It is interesting timing that they are pushing this medic effort so close to the election. Japan as well to with the new Prime Minister there hosting his first major diplomatic session. Yvonne that was Stephen Engle there. This check in on the markets. Asia, it is risk on. Gaining. 6 right there. We had risk appetite. Futures pointing to a flat open. We were rising at least 1. 7 . These were the biggest scanners. The dollar was flat. Crude also inching lower right now. We have the nikkei to 25 up by. 4 . Up by four. 4 . The budget is 158 billion to support job support. Have 10 currently at 76. 34. Holding talks over the status of the travel bubble, more on that next, this is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. It is 10 29 a. M. In hong kong and shanghai. 10 29 p. M. At bloomberg level headquarters in new york. President trump has returned to the white house, removing his mask for the cameras after leaving Walter Reed Medical Center he was treated for covid19. In a tweet earlier he told markets not to for the virus and said quote i feel better than i did 20 years ago. The president will now be monitored at the white house by medical staff in full protective gear. He says he is keen to turn returned to the campaign trail. Malaysiasinister of income quarantine after coming into contact with the minister who tested positive for covid19. He will spend two weeks in isolation although he says his recent test of come back negative. Monday malaysia log is highest daily search since the outbreak began. The government is imposing lockdowns in parts of the country. The world secondbiggest cinema chain, cineworld, is closing its u. S. And u. K. Movie theaters amid a resurgent virus and winter blockbusters pushed back to next year. All536 theaters in the u. S. And 127 in britain will close temporarily affecting as many as 45,000 jobs. Shares drop by as much as 50 in london. No time at has been given front reopening. The Indian Government has appointed three external members to the army at Rate Committee after an onyx planed the lake that postpone a policy meeting last week. An unexplained delay that postpone a polity policy meeting last week. Rates by115cut basis points this year and pumped billions into the financial system. Former korean trade minister looks to be a step closer to leading the wto after European Union governments offered support. The race for succession is in its final months and the eu says he and the former nigerian finance minister. She ando announce the former nigerian finance minister. Global news 24 hours a day on air and at quicktake by bloomberg. Powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. A look at markets now, a day for risk as we see stocks edging higher here. Session highs and it comes to asian equities, u. S. Futures as well. Positive. The u. S. Pointing positive and the u. S. Dollar selling off as well helping. Bonds also selling off with the treasury selloff we saw overnight as well. You look at the rest of the markets and youre seeing out performers in taiwan, jakarta, gains of more than 1 . Points, seng up 228 tech shares at butter shares leading the charge, and they. 5 . Higher by the aussie market catching up with what we saw overnight with treasuries. 89 basis points as get closer to the rba decision and the budget announcement five hours after that. Finally we are watching currencies, the owsley holding under 72 u. S. Cents and the dollar yen. The offshore rmb, 18 month highs for this pair. Brett also steady after the biggest daily gain we thought since may overnight. Brent. Mergerioned the gold between Saracen Mineral Holdings and northern star, those are outperformance, 10 higher for sarsen minerals, fmi see as well shrugging the losses from yesterday on the concern the u. S. Is placing export instructions on suppliers. And automakers like Great Wall Motors surging today 7 in hong kong. India and germany will hold talks today on how to resume passenger flights between the india reviewed lufthansas october schedule. We will get the state of the avian industry now. For the aviation industry. Where are you in these negotiations . Are you willing to come to a compromise . Or are you still pushing for 20 weekly funds . Flights . It is good that we have these talks. Talks as we speak today trying to find a new flight regime between the two markets which facilitates the next phase of the restart between the two markets and more traffic again. We were operating under a provisional regime, travel bubble, and this needed to be revisited. So i am hopeful that you governments will agree on the new flat regime between the two markets. Probably this week or even as early as today. Give us a sense, what would be acceptable to lufthansa. Some of the flights to and from tonight, an important route. Correct. We were hoping to serve all four destinations again that we were serving in india by october, 23 flights per week. We think we need to serve all the markets and lets see what the governments negotiate. If they come up with a compromise are not, we will have to see on that one but we are hoping to serve all four cities again and connect germany with india. Difficultiesow the of maintaining these types of travel bubbles when you have Different Countries with different infection rates. Do you think these travel arrangements between country to country are sustainable . Or are they more of a wish list . I think we just need something, basis to work with. So we are happy and hopeful that more markets like the ones you and germany are talking about, introducing travel bubbles until we have the pandemic under control in a way. So there are a lot of talks going on with also other asiapacific markets, a lot of governments that are now discussing, how can we facilitate . Canif this is ongoing, how we facilitate especially essential travel, Business Travel, visiting friends and relatives, emergency travel. We believe these travel bubbles are the right way ford to have are the right way forward to reinstate a flight regime between markets in a controlled manner. You mentioned youre talking to asian governments. Are you exploring travel bubbles here in the region at the moment . Absolutely. We are lobbying role together with industry partners, the hospitality of a travel, mobility, everyone affected. Alsoe uniting together with the business communities, chamber of commerce in the various markets and lobbying the government and Health Authorities to enable travel to facilitate reproduction of meaningful flight schedules. So essential trouble can happen again. Startr also seeking to the frankfurtnew york route up and running. Can you provide details on that . We have been serving new york all along, since spring. So we have services there almost on a daily basis. Also together with our joint venture partner, united. What we are now looking at is, can we test passengers predeparture . And with Rapid Testing . There are no methods in place for you can do Rapid Testing predeparture. They be again upon arrival, and ensure to have the 40s that people who are insured to Health Authorities that people who are flying are covid free upon the destination. This is something we are going to try out. In october we are going to test this and get facts and data around this. Also we are trying to establish this also in the asiapacific market. So we are in discussions with the government of singapore together with our alliance partner, singapore airlines, we are lobbying the same to be tested in japan and other markets in the asiapacific. So hopefully, this is the way forward to unlock the quarantine situation which is preventing from any meaningful travel Going Forward. What kind ofs, demand are you anticipating from these longhaul flights . Wearable demand come from . That is a very interesting question. Where will demand come from . But we saw in europe as we open markets people right off the bat were traveling again and were looking forward to go and enjoy themselves again, connect with other cultures, meeting people, friends and relatives. So it is Leisure Travel at the moment because people are also tired of working from home. In many cases they want to get out of their city, out of their neighborhood. So we were encouraged to see what happened the summer. 40 , tod up capacity to precovered levels. Flights were filling up very nicely. So we are optimistic once we have these travel bubbles in place, there will be a good amount of people coming back, wanting to travel again. And with it also, Business Travel will come back as well. Because there are some meetings that need to happen in person that cannot be replaced by the of conferencing. What we hear from the Business Community. We have done surveys as well. The latest survey a looked at was in singapore. The Business Community there, we surveyed 90 International Business companies and they all said they need to go back to travel. How much and how soon will they buy these tickets of course nobody knows at the moment. But everyone is intending to get back to traveling in some way or the other. To talk more about the on the spot coronavirus tests are about to launch or at least past thank you markets test in key markets. A passenger could test negative the day they board. We are not sure whether these tests could show if they have been exposed or if they develop symptoms in within two weeks after they take it. To what extent can that actually restore confidence among international flyers, and be a substitute for quarantine measures . What we want to try to achieve is ensure the authorities that traveling on an airplane is safe, in the sense that we will not transport people that are covid infectious per se. So when we test them predeparture, a few days before, maybe shortly to before departure. Then we have the hygiene measures in place which are quite extraordinary, around the trouble journey. If you think of the distancing at the airport, the safe measures within an airplane, the air filters, cleaning the air from the virus or any other bacteria. So we want to ensure that people understand, and the authorities understand, that when someone arrives at the destination the likelihood is very, very high from what we have seen the data shows it is 99 sure that there is a covid free flight on arrival. Then there are again tests when you arrive, rapid test possibilities. Then you have the hygiene and safe measures within a country as well. So we think, to be honest, there nothing more safe than traveling on an airplane, if you thing about it. When you compare also to a train ride, bus ride or any other transportation. So we think we are in a good position. Will up slowly risk free, 100 . We do not think life is like that. There will always be minimal risk. But we think we come as close as possible to zero risk when we apply these measures. It is still a challenging environment, for the airline industry, and list onto list lufthansa announced job codes. We lufthansa announced. Airlineseen other announce. Job cuts. This is unprecedented. The entire travel industry, all our partners, crew ships are hotels because we know that people want to travel again. We saw in europe people want to get on the road, so we are hoping we can end this as soon as possible with safe measures around flying, like Rapid Testing. We think testing is way forward. Hopefully this will enable travel again and then we can safeguard jobs in the industry again all around. Lyft anza Group Lufthansa group vp, thank you for an sides. Still to come for your insights. Super tuesday in australia, what to expect from the ba from the rba and with revival budget will include. This is bloomberg. With the government said to announced a Spending Program to boost the economy in australia. To clear the way for fiscal action. Economicsto our editor. Alexandra we are not expecting too much from the rba what are we looking for in terms of guidance today . Economists expect no change to the rba cash rate or the yield curve target but this is still alive meeting. We had several economists expecting a move particularly after the governors Statement Last month where he laid out the option for additional stimulus but in the same space we also had at the emphasis that the rba move in september could increase the size of its Lending Facility poor banks. But letting facility for banks. This should be viewed as a substantial Monetary Policy. Southeast asia and australia. And the government budget expected to see a large increase in funds directed toward the recovery. We expect rba to hold onto these other policy options today. Keep rates and yield curves unchanged until a later date. This could come next month when the rba updates this forecast. Expected in the lowering of the cash rate, yield curve target down to 10 basis points but the rba has pointed toward purchasing bonds further out on the yield curve extending its current focus from the three are part of the curve. Looks like we will have to wait for another month to see this. We will be looking for any indication to the rba thinking. Big day for australia. Budget will come out later. Plans for large Spending Programs to help the economy. What we know . What do we know . Five hours after the rba decision the government will release its budget we expect the treasurer to the out Spending Programs to help this recession hit economy, Infrastructure Spending, spending to get young people back into work and purchasing homes and potentially fast tracking tax cuts we expect to see a large increase in the fiscal deficit and economists expect 11 of gdp from 4. 3 currently in a huge increase in the government borrowing program. We will be seeing fiscal Monetary Policy working in tandem into 2021 to support australias economic recovery. Editor alexander baroda in sydney. Still to come, antidepressant president s ntt tells us his plans for docomo after its 40 billion buyout. This is bloomberg. Ntt panese Telecom Giant 40 billion deal to buy out bids docomo could pave the way for the Prime Ministers goal to lower phone tariffs. The tender, the biggest in japans history has sparked of flurry of and expectations. Antidepressant tells us his plans for the carrier. President the ntt tells us his plans for the care. Carrier. However we can, we are going 2. 0, onlyis less than for 1. 9 we are going to and also we have securitization or sales of assets, it is very easy to achieve those type of payback. To haveery confident debt payback. So also everything 4. 3 trillion yes buyer theo bridge loan, that is the reason why, to avoid the dilution. So [indiscernible] shareholder [indiscernible] and also keep the dividend. High confident situation. Can you tell me how much there is political pressure on you to make this move because we know that lowering mobile fees is a core policy platform for the new Prime Minister . Yes. This plan is, we started from initiativeis perfectly dont related to pressure or other requirement from the government charge actions. It means our [indiscernible] we cant reduce price of mobile. , we canr docomo reduce price of mobile, however, not directly related to things. How do you plan to conduct fundraising because we know that indicated loans, we have heards loans will be extended. So hows the fundraising going to be structured . Bridge loan utilizing several financial companies. That loan will change to a longterm fund, of course including a floating fund and also either we are going to use a securitization of some asset, also we have a lot of real estate assets that will be also for securitization or chance will type of be easy to return. And also keep the several , thatons longterm debt is under control of our financial situation. Sawadasan, we are focused here may or focus for overseas expansion . Plans to double your overseas operative margin to 7 over four years . Exactly. That is our target, for fiscal year 2023. Profit ratio. That is not changed. We will extend, so that is on the way in the moment. We will facilitate this in the moment. The ntt president and ceo joining us. The latest asian cash business flash headlines. Air asia stopping all operations at its unit in japan, move intended to save cash as carries around the world pilfer help. In the around the world appear appeal for help. Future may depend on a majority holder, in india taught to group has agreed to provide emergency funding. Alibaba, a votto cash lifeline as of endemic hammers thats airport business. To freeze says it is planning a Capital Increase of seven or 6 million u. S. Dollars in alibabas participation sent shares flying. The cultural form a joint venture in china. Market has slumped and hers are trying at their lowest in a decade. The Chinese Company that won the race to build the train station of melbourne, beat local bids for that 2. 3 billion our contract. The age newspaper says its parent has been linked to forced labor among chinas uighur community. The train project is 18 months behind schedule. In asia it is rest on day. A risk on day. As trump left the hospital. Also believing the seamless package will come sooner rather than the later the steeles package will come sooner rather than later. U. S. Futures fluctuating. Nifty pointing to a higher open and dollar index flat now. The dollar falling the most in a month, as risk sentiment improving. The kospi up. 6 , rising a fifth day, led by samsung. Koreas inflation picking up our fourth month as food prices jump. Plenty more to come, keep it here with us. This is bloomberg. Are you frustrated with your weight and health . 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In singapore and hong kong. Welcome to Bloomberg Markets asia here are the top stories. President trump is back in the white house after hospital treatment for covid19, removing his mask to pose on the balcony. He will have roundtheclock care with lidded physical interaction. Limited fiscal interaction. Outustralia prepares to lay a virus tim list budget to revive the economy. Air asia as among losers as covid19 devastates demand or travel, said to have cut funding to its idiot joint venture with is Indian Center of cut funding to its indian joint venture. Good news from trump as he leaves hospital for the white house, also optimism about the stimulus package that it may get done earlier than anticipated. 5 . Sci index higher by futures higher open. The dollar index flat. In focus we have australia. Fluctuating for the rba decision. The rba said to stand pat at their. 2 . The budget would like to see Infrastructure Spending to help ease unemployment in the country. It seems the top will be opened, taps will be economists expecting at least 12 of gdp for the deficit. Taipei the outperform her today, hang seng up. Three pricing of election odds in favor of biden blue sweep seems to be what has been driving this now. You see people driving stocks buying stocks and selling bonds and selling down the dollar as well. Look at the board when it comes to that yield curve steepening in focus when it comes to treasuries. Oz rate 10 year yield up six basis points. Getting closer to 90 basis asnts prayer aussie 10year we get closer to super tuesday. Focus,sie dollar a key if we see a signal from the rba that perhaps november is going to be live. Then perhaps we get see a bed for the aussie dollar here today. Lets a bid for the aussie dollar her today. First word news. Covid19 cases spreading across the u. S. And rural areas in smaller cities, raising concern in york. And 34 states the 70 averages higher than a month ago the seven day averages higher than one month ago. They have fallen in california. Cdc is altering guided saying the virus can spread to the air at more than six feet or two meters. The Australian Government will lay out a massive Spending Program to revive the economy and generate jobs for thousands laid off the credit mars pandemic. In the coronavirus pandemic. The treasure is expected to billion dollars when he delivers that delayed budget in canberra, the shortfall will be equivalent to more than 11 of gdp. The us aims to keep up pressure on china. Secretary of state mike, pao meeting with counterparts from solidarity ina, the face of beijings widening ambition. Quad is ans the attempt to form an exclusive click. Appointed government three members to the arbat rates committee rbi right committee. There placed Rate Committee. There will join other officials. For byut rates basis1 points this year and pumped blades into the financial system15. 115 basistes by points this year. Dissident pointed a late to ablation site that said the Prime Minister laundered money, they insist that accusations are false. Late wants damages and an injunction presenting preventing the blogger from disseminating about 1mdb. Global news 24 hours a day on air and at quicktake by bloomberg. Powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. President trump is back in the white house after hospital treatment for cover 19. Covid19. He appeared on the balcony and removed his mask as a post for cameras. The white house says will continue to get roundtheclock care with access to the president limited. To twitterd a video on arrival rallying americas to get americans you back to work. Dont let it take over your lives, dollar that happen, where the greatest, we are going back, back to her, we are going to be out front back to work, we are going to be out front. Lets bring in our Senior Editor for more. Derek, we talked about the optics and how they are important for President Trump to show strike now. What is next to show strength now. What is next for trumps Recovery Plan . That is right and i thought that video was interesting. A longsident had for time said he wanted to run on the economy, this idea of you may not like this guy style by asserting like his results. The covid setbacks have heard that. That. Ing to have hurt he is trying to get everybody that you want to go live not life as normal and there are risks associated with that, but it is better to go ahead and cower andrmal then to not spend. And he is now sort of the of body meant of his own message the embodiment of his own message. The plan going for for the president is one that is a certain amount of caution. You mention, white house staff will be minted in their direct and physical access to the president. Limited. If they meet with him they have to wear personal protective equipment so there will be some amount of restrictions there. This president does intend to take part in the next president ial debates, coming up and awake. In one week. The president is edging to get back on the campaign trail as soon as his able to do so. There, have the president ial debate happening 10 days from here. A lack of clarity on whether that will happen . Yes, there is some rest. Risk. As much as the Trump Campaign has said he plans to be at the debate, the Body Campaign come out with a statement that set they are prepared to have the debate as long as it is medically safe to do so. That gives them a certain amount of hedge their. There. The Biting Campaign and democrats in general have madeno secret the Biden Campaign has made no secret they are not happy with the amount of information that has come out from the Trump Campaign. There were not happy with what the Truck Campaign set about testing walking into that the truck Campaign Said about testing walking into the first debate. There will be an additional call for safety procedures. What youll see for the Vice President ial debate this week, and neither mike pence nor Kamala Harris have tested positive for the virus, even so they will be spaced further apart, seated now 12 feet or so from each other, and there may be a plexiglas divider between them. So theres going to be increased safety protocols no matter what happens. And we saw that wall street journal nbc paul after the first president ial debate poll after the first president ial debate were biden had a much wider laid over trump after what looked to be a disastrous event for President Trump. What could he do from now until november 3 to make up for the numbers . Look, i think one of the things i would note, and you mentioned it, at the top of the hour, is the connection between the markets and where these holes are. Are. If you are watching in asia and your use to elections where the person with the most votes wins. In the u. S. Is a compilation of data elections. Atpo swing look state polls. U. S. Hose not familiar with politics, michigan, pennsylvania, florida, arizona. If joe biden can take three of those and if he takes for his going to be president. Four. You have to watch those kinds of details as we are coming up here to see where we are going. In terms of pauls we are looking at now polls we are looking at now, those do reflect the assessment of that first debate. What they do not reflect yet is the assessment the public has of trumps gnosis trumps diagnosis and hospital stay. To the extent there is any reaction either way of those we will have to see the results from this weeks releases before we get a good idea. Editor dave will bank and singapore. We are watching currencies especially how they aussie dollar after the rba decision. Ubs globalined by Wealth Management executive director for commodities later. Up next, lack rock head of headredit blackrock of asia credit joins us for how credit markets are pricing in risk programs. This is bloomberg. On the treasury selloff we saw overnight. Yields held onto mennonites gains as treasures adjusted election bets. A steepening yield held onto mondays gains. Joining us from blackrock. This yield curve steepening we are seeing it seems now people are pricing in a biden when and a blue suite. Are you buying this type of inflationary scenario . You have to position for where the market, either side. Taking a step back i would say it is a combination of the expected election outcome and improvement in the data. If you look at nonmanufacturing ism which has jumped, you had the employment part of it impact above 50. I think you have positive backdrop with the reopening of economy and lower uncertainty at this point in terms of probability of outcome. You have to position and cautiously constructive in your portfolios. It seems the bond market now expectations are changing. And changing carefully. And what we are seeing with the election. How much hard to think yield can go at this point and it what point will the fed tolerate these higher yields . That is a very important point, yvonne. The bond yields lets say if you look at the u. S. Tenyear treasurys, they can live hires another 10 or 20 basis points. Closer to 90ll see bids for the tenure and closer to 1 . Going to run a very big fiscal deficit and we do have the fed sitting ready to make sure the functionality of the market stays in place. I do not think the bond yields are going to depart from here. There really fundamental backing for yields to go higher . There some. There is some. But i would argue we still have some level of uncertainty you think about the covid second wave, economic activity, fiscal stimulus, very important we are somewhat stock right now. The news changes every day on that. We are somewhat stock right now. Stuck. And the bridge toward the future economy we will keep doing that direction. Theres some reason for bond yields to move higher. German by the fed action in the covid crisis driven by fed action in the covid crisis. You do not have a major inflation impulse and there was a change in the fed reaction as we saw in jackson hole with regard to the average inflation targeting. So i do not expect too far up on the bond yield in the near future. Home, china still looking attractive . Its bonds . It is giving decent yells compared to treasuries, for compared toields, treasuries, for instance, and the fact that it is being included in the russell index. Andombination of real rates numb at monetary and policy expectation in china. And strengthening currency. Lastly the portfolio diversification benefit one cannot ignore that in the current environment. Portfolio diversification comes important. So overall still looking attractive. What about in the credit space . We have seen spreads tightened. How are you viewing risk assets now . Like asia dollar bonds or highyield, for example . Asiathin, we like highyield a fair bit. The spreads have tightened but look at where we were 12 months or six months precovid. The spreads are still meaningfully wider went and expectation of default rate which is not much higher than the last few years, and probably will go from 2 to mid single digits. ,rom a riskadjusted basis asian highyield still looks attractive. A couple weeks ago we were talking about ever ground e to,rande, and what it led perhaps a junkbond selloff. Are there other areas of the market where youre seeing that growing credit default risk . Level,at an effective nor highyield credit, the default risk is much more than [indiscernible] credit. We do see concerns among Smaller Companies where access to Capital Markets is tighter. Or some of the smaller businesses more exposed to the covid sector, industrial businesses in india, indonesia or china. Ore export oriented businesses in china. There is a team around where you have that risk factor is there, and something we have to be mindful of. But overall from a riskadjusted, broader highyield standpoint, we still think is very wellplaced in terms of potential returns. You touched on india. Bond traders have been jittery. Now that we have the new are panel, with rbi at ease and what is the outlook . Beenerall, the rbi has neutral to hawkish, driven by inflation data we had the last few months. We remain a much in the camp that inflation will drift lower as a get toward the year and, including food prices. Monsoon,l up at given land area, labor should be good. We expect rbi to ease further but they will stand the pause mode for the next few months and then embark on further easing. Constructive, more of a sideways directions for bonds in india in the near term. But media term mediumterm we think bond yields. We want to check one stock smic surging 10 in hong kong today, the most since the end of july. Wiping out the losses we saw yesterday, the big story about how the company was saying the u. S. Is placing export restrictions on its suppliers. We have regained the losses from yesterday. We are now seeing at 10. 5 higher today. 2 ,all six days to lower a as we wait geoPolitical Risks on chip stocks in china. Up next, time for a morning call, Analyst Recommendations across the asian markets. More to come. This is bloomberg. A quick check of the business flash headlines. Selling headphones from rivals including bose and logitech as it gears up to launch its own audio products. The items disappeared from apples online store the end of last month. Sonos shares fell by as much as 7 in extended trade. Exxon says it is omitted to mitigating missions after bloomberg reported it was planning to increase annual carbon oxide emission 70 by by 2025. 7 unlike rivals, exxon has not yet committed to becoming Carbon Neutral setting a date. The company says the bloomberg report is false and this leading. Buying a stake in dutyfree retailer dufry, giving the company a lifeline as the pandemic hammers its airport business. Million dollars and alibabas Participation Centers flying. The pair will form a joint venture in china. Fry shares are trading near the lowest in a decade. Markets reporter Sophie Kamaruddin tracking top calls for asia. Watching indonesia assets. Rupiahre seeing the jumped the most in four months. 1 after theetting passage of a built by parliament in a boost to jobs and investment. The mosting this comprehensive set of reforms since the 1998 crisis, that it should improve reinvestment outlook going beyond 2021. Stocks stand to benefit including banks, property and building materials. This morning we are seeing Bank Central Asia among the gainers in the financial sector. Such release thirdquarter results thursday, what . Is the outlook . Ahead of the report, shares are down, falling to a 21 month low in taipei after a soft september fails sales report. Looking ahead Morgan Stanley expecting revenue to fall by double digits in the final three months of the year as it loses out on huawei orders, and lens upgrades, looking low. And we are talking about central banks, and rba decision coming up. What are you hearing . First i want to hear what is going on with the rbi. Earlier you were talking with a guest about the shift when it comes to the npc. Nomura expects the tilt for the board to go more dovish given new members art neutral to dove us in their positive policy stance so a pause expected from the rbi out of the october meeting. I want to highlight Societe Generales view, for no further easing. In light of the central bank seemingly comfortable view when it comes to the lower yields we have seen in australia as well as the soft trillion dollar. Soft australian dollar. Markets reporter Sophie Kamaruddin. We are awaiting the rba decision, looking at live pictures of sydney. The expectation is the rba will keep its rate unchanged at 0. 25 . That will pave the way for fiscal stimulus from the government, but it does look like a lot of expectations for that and the market fluctuating in the lead up to that decision. Aussie dollars for the budget deficit is expected, is what promise are estimating, equivalent to 12 of gdp. They lifting the debt ceiling and bringing forward income tax cuts by tears. We will hear deep by two years. Rba coming up next. This is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Welcome back. We are counting down to the rba decision any moment now. Expect the rba to standpat at 0. 25 lots of expectations it will do that to pave the way for the government to come up with that stimulus package. The budget will be announced later today. The rba to lead toward a rate cut and more stimulus later perhaps in november. Ifyes, the big question is we are going to see signal from phil lowe here on whether the november meeting is going to be live for them to take action here. 24 hours away economists expect no change from the rba here today. Cutour expecting a 50 basis to 0. 1 . Hsbc and andy capital. A b capital. We have heard from lakes what could come out, bringing forth income tax cuts, bringing forth Infrastructure Spending as well. Rba cash trade target. Go. In line with expectation. Unchanged. Keeping rates at 0. 25 . The three or yield target also remaining unchanged at 0. 25 . So, not a whole lot of details yet. We will see how this plays out here. So far, what we are hearing is that the yield curve unchanged as well as that. Piercing the reaction to the aussie dollar, it was gaining on the back of this news, this develop meant and we will see how this plays out. Centsg out under 72 u. S. For the aussie dollar, still bid up but we are looking for guidance on what this means for november. Does the rate cut get pushed back another month or so . If you take a look at the terminal chart it seems like that is what the markets are pricing in, perhaps not today but maybe in november. No surprise but when you take a look at aussie assets now, the asx 200 index up. 2 . It was fluctuating in the lead up to this decision and in the lead up to the budget announcement as well. This is in line or thrust of the region, also looking at gains. Taking a cue from the u. S. Overnight. Optimism after trump left the hospital. Of course we talked about how Credit Suisse is looking at perhaps a cut later in the air, november, possibly. And weve heard from the rba as well as the government, saying there is room for more stimulus Going Forward. Lets take a look at the other markets. Not,ng at the aussie edging higher by. 3 . Fluctuatings were in the lead up to the decision. Asia pac index extending gains for the date, currently up. 6 lets get analysis bring in wayne gordhan, executive director at ubs global Wealth Management. Wayne, we saw the aussie bid up . Hi, haslinda. The key focus today is on the budget and where we would land with respect to tax cuts and Infrastructure Spending coming forward. The key issue for the budget is going to still be, particularly for the be a Going Forward to rebuild confidence, so consumers can begin to spend and credit growth can begin to pick up. Leaks we havee heard so far, it looks as though they will be focused on tax cuts, putting more money back into households. The government will be crossing their fingers that households spend the tax cuts, and we see those loosening of standards around lending that were floated last week or so indicated as well the government is keen to get credit growth going. In the rba would be keen to get that as well, to get banks lending particularly within the housing sector again. When we look at how would the rba react from here, on the basis that we have heard a lot of things about what could come out of the budget, we still think the rba we need to cut rates, as financial conditions likely tighten over the next six months. So we think the rba we need to cut rates to around. 1 , as we potentially going to the back of the year and next year. That subsequent to that we expect them to expand the qe program, to start by Government Debt further out the curve. Instead of just the 35 year level starting to buy Government Debt around the 510 year level. Wayne, where does the rba go from here . We heard the rba say the aussie dollar is just below the peak of the past couple of years. The rba the aussie supported by the dollar. Broader Market Sentiment as well. What is your take on where the aussie is headed . Is sitsorecast is it around the mid70s level as we look over the next six month or so. Rangehat sort of trading between 7075, we believe hold for a couple of key reasons. Isst, recovery and growth generally positive for the aussie dollar. And also we expect a weaker u. S. Dollar to lift that aussie closer to the mid70s. A couple of caveats. First, we expect the iron ore to aussie terms of trade, iron ore prices to move lower into the end of the year in the middle of 2021. The puts a ceiling on the aussie dollar thing about that 75 level. The second point i would make is, a lot of what goes on between the aussie and the u. S. Dollar, is largely going to be determined by the Interest Rate spread between australia and the u. S. That spread was deeply negative before covid and then it moved being positive post covid19. It has maintained that positive premium to u. S. Rates. Rbaconsequence to the moving, buying government bonds further along the curve, is to keep the rates curve on a flutter bias and the consequent of that is likely the Interest Rate spread is going to head back down toward that 10 basis points to around zero. The consequence of that as well is that is a headwind for the aussie. We think most of the movement in the aussie dollar will come from the weakness in the u. S. Dollar, rather than the crosscurrents we have seeing in the domestic level. It seems with this budget they are looking at something more frontloading some of the Infrastructure Spending, wayne. Does that helped the sector . We have seen the asset class be hit by fear of a second wave and demand concerns. How are you viewing commodities now . Into couplethat up of bits. First, with respect to the increase in Infrastructure Spending, what it will naturally do at as you put more money and housel pockets, you would expect a pickup in imports. In housel pockets household pockets. The current account surplus has been a record levels and we expect the current account surplus to head back into a small negative as we go into next year, largely because iron ore prices coming down and commodity exports remain robust. Prices coming down a little bit, see compression on the export side and at the same time imports picking up. Generally, as we drift back into current account deficit that puts a headwind in front of the aussie dollar. Having said that, from a broader commodities sector perspective, clearly the focus is still on china. And how infrastructure study in china as well as the amount of support they provide, their economy, and the need for a pickup in Global Exports or global trade now, to give china that next boost. So from that perspective we are quite, even though we see iron ore prices softening over the next six months, we see oil prices hitting 55 by the middle of next year, copper prices rising further from here, also agriculture has been delivering for a positive returned. When we look across the commodities space generally, we expect more gains on the commodity side. We have commodities most preferred interasset allocation and we expect more gains there. Nonetheless, iron ore prices in particular should come under pressure. Of course coal prices have been week but weeks to coal prices can rebound a little bit as Global Growth picks up. Netnet, terms of credit comes down, current account back into the deficit area and that puts a headwind on the aussie dollar from that perspective. Oil, we havened seen brent, it has remained in contango for most of the air. To think the year. Two think the markets can absorb the signals of oversupply . Especially if opecplus adds to me and Dollars Per Day early next year . The Current Issue in the oil market is mostly related to the uncertainty around demandside. A lot of that uncertainty around the demandside is broadly based around the pickup in cases we have seen of covid19 in some european countries, where they have extended those restrictions again. So that has created uncertainty around when we can get back traveling again, but the broader demandside picture looks like. We have recovered quite a bit from what we lost on the demandside. We went into covid19 at 105 Million Barrels per day and we are now around 94 or 95 Million Barrels per day in demand. We got down to as low as the low 80s Million Barrels per day of demand at the peak of the crisis. So we have recovered quite a bit. But the restraint on the opec side give some comfort, particularly given the fact we [indiscernible] a new [indiscernible] on compliance from some countries. Generally the compliance levels are very high and continue to improve slightly. From the supply side we are comfortable u. S. Comfortable will get back to 11. 5 millibarrels percent. It was 13 Million Barrels per day before the crisis. So there is less supply coming from the u. S. And opec compliance has been very good. The plot the supply side to us remains very much a supporter of higher prices as we going to next year, particularly as we expect to get a vaccine more broadly available in the Second Quarter of next year, which was start to see demand and confidence in demand begin to recover more fully. As well as a weaker u. S. Dollar tends to be positive commodities overall. Time for oneave final question we have to touch on gold. Where will gold peak this year . Ok. Have sentcoal prices back gold prices for all the reasons we would expect. Death picked up and are trading around 1 ,. 9 at the 10 year level. 1. 1 ,id get back to below 1. 1 at the peak of gold. With gold Going Forward, twofold. First, the mixed messages we are getting from the federal reserve, they begin to become more fully on the dovish side. The key issue post jackson hole while they did announce the average inflation targeting, unfortunately since then, there has been a number of mixed messages coming from fed members with respect to how much more on the qe site there are going to do. So that is one key point. The second is the outcome from the election, the u. S. Election. We have been full by the polls before so there is a lot of uncertainty around that time. We think the uncertainty from realevent, we think Interest Rates deeper into negative territorys next year getting back into the 1. 2 on the u. S. Tenyear and also the dollar weakening little bit as we get more confidence that emergingmarket wrote can pick up growth can pick up particular with a broader application of the Covid Vaccine in the Second Quarter next year. Those factors to us meet expect haitians inflation from the fed will be rising potentially hitting above 2 . That will force real Interest Rates in the negative territory and that can lift old back to around 2000 per ounce. Gold is still a diversifier in the portfolio for people wishing to hedge against these uncertainties we have coming toward us. Executiverdhan, director for bodies and fx at ubs global Wealth Management. Thank you for your insight. Executive dr. For commodities. President trump returned to the white house. Removing his mask for the cameras after leaving Walter Reed Medical Center where he was treated for covid19. Earlier in a tweet he told americans not to fear the coronavirus. The president will not be monitored at the white house by medical staff in full protective gear. He says he is keen to return to the campaign trail. The Prime Minister of malaysia is in home quarantine after coming into contact with a minister who was tested positive for covid19. He will spend two weeks in isolation although he says his recent tests have a negative. Monday malaysia logged its highest deli search in the upper it began. The u. S. Aims to keep pressure on china. Secretary state mike pompeo meeting counterparts from japan, australia, and india in tokyo. The quad nations demonstrating solidarity in the face of chinas auditing influence and ambitions. Quadng expressed concern is an attempt to the exclusive and stoke a new cold war. Demand is overflowing in china with half a billion people traveling to mystically in the first four days of golden week, 80 of last years total. Hotel prices are up. Ridehailing apps crashed. The travel industry in the rest of the world is expected to lose a trillion dollars this year. Global news 24 hours a day on air and at quicktake by bloomberg. Powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Yvonne . Coming up after grounding its business in japan, is air asia tata with itsg business in india . More coming up. This is bloomberg. Onlinemarkets have come and we are continuing with the risk on sentiment m byebye since i up sensex up in mumbai. 75 . 00 up the 2 orming peers with gain the third quarter. Boosted by the rare current account surplus. An asset sales as well. Seeing signs of green here in mumbai. One corporate story we are focusing on is with air asia. After retreating from japan in the long haul business the Budget Airline is said to see funding in its india joint venture as a pandemic continues to ravage the industry. It is unclear if its top shareholder, a top to group, will seven with a rescue plan. Lets get to our india reported with the story. Now that air asia has stopped funding the india affiliate, what is next from here . It is not clear at the moment what is next. Air asia group has not funded and tata group has already given around a funny and another round of funding is coming soon. Tata groups look at options including buying out there india from the air asia group. , aa has another airline joint venture with singapore airlines. It is not clear what will happen in the future. Asiais no now is that air india is not shutting down immediately but we do not know what the future holds for the airline. Asia is not the First Airline to struggle in india. Why is the markets are challenging . India is one of the worlds most difficult markets for aviation. One big reason is taxes. Individual states taxes as much as percent on jet fuel. As you note jet fuel is one of the main cost components for an airline. World beating the traffic growth we have seen in india. A lot of that has to do with fares. A pricesensitive market, airlines keep fares low that it does not cover costs. In the past decade we have seen two highprofile bankruptcies including jet airways. It gets difficult particularly for a newcomer to come in and understand dynamics. And with that covid situation with traffic disrupted it is very difficult for any airline to survive in this market. Partner in new delhi. President chicago fed Charles Evans sees the u. S. Economy recovering faster than expected, next. This is bloomberg. Chicago fed president Charles Evans says more fiscal stemless is needed to support jobs and the economy, even if the white house and democrats haggle over a package. Still, he painted up positive picture of the economic recovery, telling bloomberg it exceeded his expectations. I think the economic recovery has been pretty, pretty good. In fact it has been a little quicker than i was expecting back in june when i submitted a forecast. I had been quite nervous about, sort of, there is a normal recovery or we get back to the level of where we were, going into this, you know, sometime in 2022 maybe, and then we seem to be doing better than that, even though covid caseloads have been very, very high in the u. S. More and00 and deaths have been 200000 and more. The last employment was probably more modest than many were expecting. So there are questions as to how much more quickly recover after this. I think we are trying to figure out where the labor market is going to settle out, how much improvement we are going to get, in terms of bouncing back from when we were closed down, and how much recessionary dynamics we are going to be faced with in the spring of next year. In that environment i do think inflation is going to be week. We could get weak. We could get relative price changes that lead to higher measured inflation for a time but i do not think that is likely to be persistent. You setting your speech this morning you anticipate in a forecast more fiscal stimulus. Have you modeled what happens if we do not get it . Can you give us a picture of what we would see if they do not provide additional stimulus in the months to come . I am hopeful there will be more fiscal stimulus. I think i have 1 trillion which is not as large as some proposals. Have that effect on the forecast. If you take that away completely that reduces aggregate demand by quite a lot. That means the road back in terms of employment is going to be harder. I cannot begin to guess how this is going to work its way out. If we do not get stimulus, if the economy is slowing, is there anything more the fed can do tos to be like the economy . Or with Interest Rates at zero two stimulate the economy . Or with Interest Rates at serial have you done all you can . Pay attentiong to and see where the labor market is going and where inflation is. At the moment we are trying to figure out, where the recovery is going to stabilize in terms of what normal recessionary dynamics might look like. If we were to get additional stimulus, if we were to see continued recovery, we got the unappointed rate down to 5. 5 of the end of next year, those are circumstances where the fed, you know we are in the ballpark of what we can deal with, inflation could be moving toward our 2 objective and things could be improving. But i think we are going to have lower for longer Interest Rates for quite some time. It will probably be uncomfortable for many people, we just need to get inflation up to 2 and beyond so we can average 2 . We need to ensure the labor market continues to improve. Fiscal support would be extorted early welcome, extraordinarily welcome extraordinarily welcome. Business is figuring out how they could row in this environment and bringing on her workers be very welcome. But it is going to have to play out and the virus spread is going to continue to be important for some time. That was the chicago fed president speaking exclusively to bloomberg. A look at markets now before we go. Our broadbased rally and asia. Philippine sea exception, down 1. 4 in manila. Philippines is the exception. Up. 6 and u. S. Futures higher. We are looking out what has been going on with the bond selloff. Bidenrend pricing in a and lute sweep. And blue sweep. You see the u. S. Dollar selling off and old futures retreating. Tech the focus with hs tech in hong kong up 3 . Or, ate clear outperform has climbed back and taking weight loss we saw yesterday after political concerns around u. S. Restrictions of its suppliers. 76 basis points for the u. S. Tenyear. The aussie dollar, spike and then we come down after the rba decision to hold rates unchanged. The focus is on the aussie budget from here. That is it from Bloomberg Markets Asia Bloomberg daybreak middle east is next. This is bloomberg. This is bloomberg daybreak middle east. Do not let it take your lives. We are the greatest country in the world. Going back to work. Youll be out front. Back inresident trump the white house after treatment for covid19, removing h