Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

Regionally, as we saw a setback moments ago from Johnson Johnson. They are pausing the study here on their vaccine after one of their patients fell ill. We did of course look at, when it comes to the china 10 year, we are expecting a big dollar bond sale as well, and details as soon as wednesday. Still Holding Around the 670 level at the moment. Lets look at the rest of the market as we count down to those numbers out of china. Ratentioned in indonesia decision later today, jakarta coming online just slightly higher. Because ofpressure vaccine setbacks, and india as well, we could see a lower open in mumbai. A big power outage yesterday impacted volumes. We also saw inflation surge in september. We are watching fx as well, the dollar pretty steady and the rest of asia affects fx lower after we saw weakness in the chinese currency as well, the pboc made it cheaper to short the renminbi. We are watching the china and aussie tensions ramp up again. We see brent crude and new york crude, pretty much flat right now, but he saw it fall after libya lifted its force majeure at its biggest oil field. Tom i got slightly overexcited about the trade data, but we have the numbers now. September exports up almost 2 in china, 1. 8 year on year. We are still waiting for the dollar numbers. It is an increase in exports year to date and year on year out of china. In terms of its trade with the United States, central to the geopolitical spat the continues, january through september, total trade with the u. S. Rising 2 you are near year on year. Products fromg the u. S. To china has been increasing as china tried to meet the conditions of the phase one trade deal. In terms of imports, yeartodate imports contracting at 0. 6 year on year in yuan terms. One big question, how much more can be sustained as a virus continues to search and places like europe and the u. S. . Will it be a headwind Going Forward . We will bring you the dollar numbers when we get them. You can see live pictures now out of beijing, where officials are updating us on the trade data. , so exports will be interesting and we will see what the demand picture looks like there, and imports as well. We are looking at an estimated year on year growth for september, reversing what we saw in july and august as well. Some say it could just be Chinese Tech Companies ramping up imports ahead of the u. S. Ban on huawei. We will see if it is beyond that. Lets bring in our next guest, from jp morgan asset management. We continue to watch the data when it comes to china and it seems like the fundamentals are improving. Does that justify the rally we seen in chinese stocks of late . Marcella good morning everyone. Thank you for having me again. Yes indeed. So far, the China Economic data suggesting that economic recovery remains on track, and also we saw the golden week data, which showed us Chinese Consumer data recovered as well. Retail is still suffering and tourism and transportation. At 80 ofrecovered 2019 levels, but that are better than previous months. The momentum continues to rise and we continue to like china. Tothe near term, we suggest remain cautious because of the upcoming election risk, and not just in terms of foreign, like u. S. Elections, but domestically, issues like the fiveyear plan and potential news from shenzhen or Financial Market reforms. Yvonne we are getting some breaking news, our sources reporting that when it comes to the economic recovery, it seems like banks are not as much as we saw earlier sharing the burning of the economic recovery. They are said to be using demands on banks, to lower profits. To what extent does that these the concern many investors had when it came to investing in chinese banks and does that warrant september reratings . Marcella right now, chinese banks, Interest Rate wise, calm perley comparably higher than other regions. I guess right now with chinese banks, just like financials is a value play. Other sectors Like Health Care and the consumer sector. Those are our key focus. In the near term, abilities for growth. [indiscernible] in the near term we still believe growth might be the way to go in the near term and we are still waiting patiently for the rotation to happen. Tom any concerns at all the sectors you just flagged, i. T. , consumables, that they are looking overcrowded, particular with the runup in the last few days in china . Now,lla i guess right chinese equities, yes indeed, we see valuations have been rising. Its more reasonable compared to one month ago. A recent rally is quite strong and valuation is pushed back up, and it might become more volatile again because of the u. S. Election and the potential u. S. China tensions. With the market mostly driven by investor sentiment, it could get volatile again. The election out of and domestic political issues clarified, it will continue to pick up, also when theres more clarity on earnings performance in 2021. Tom you touched on a few of these, you released your Fourth Quarter market guide, hes to drivers keys to drivers in the end of the year. You touched on politics and we have some pandemic news with the Johnson Johnson vaccine trials halted. Morgan just released guides to markets. As you mentioned, we risk these a threepiece pandemic policy. We believe with the pandemic, the pace of the Global Recovery might be moderating at the end of the year. As we all know, governments are still trying to strike a balance between maintaining economic momentum and the risks of another outbreak. We see Vaccine Development has progressed quickly and remains crucial in completing the economic recovery. Asset it will be vaccineas we find a that can hopefully cure covid19. Hold on a second, we have some more data coming the china passenger cars association, reporting that september retail passenger vehicle sales did rise 7. 4 from a year ago. We have seen someone it comes to the mastic story in china, some improvement the domestic story in china, some improvement. I want to get back to your call on vaccines. We saw the headlines. As soon as you get a study being halted because of a patient adding ill, Market Sentiment turns quite negative. Do you think investors are still too complacent about the covert impact on economies and piling too much hope on a vaccine . Marcella indeed. You are right, we continue to vaccine what i just mentioned, [indiscernible] the current narrative may need a correction. There are headwinds not fully realized and statistical challenges once a vaccine is available. Who will get it first . Demographics will be allocated as the first group or the last group . Ranked . That be as you mentioned, if they turn out to be unsuccessful, there will also be disappointment or rotation. Will it rotate away from the u. S. Or away from the country with the vaccine being developed . All of this is not yet priced in by the market. This will be one risk the market might be missing at the moment. How just a reminder of central the Vaccine Development is for Market Sentiment. Marcella chow, thank you very much. Always great to get your analysis. Lets get the first word news with Karina Mitchell in new york. Karina Johnson Johnson has confirmed its covid19 vaccine trials have been halted due to an unexplained illness in one of the participants. Earlier this month, they joined a short list of vaccine makers moving and experimental shot into late stage human study. It has been treating about 60,000 human volunteers. The same happened to astrazeneca. Topped 10 for the First Time Since 2016. Its added more than 3 trillion since march. A flurry of there was a flurry of new listings and a strengthening you on. Total market capitalization is just shy of its alltime high. The u. S. Market is worth more than 38 trillion. President trump is back on the campaign trail after testing negative for covid19, saying he is in great shape. He is in orlando at the start of four Straight Days of rallies, taking him to pennsylvania wednesday, iowa, and then north carolina. Leadiden has a 12 point according to a Washington Post poll, with many people unhappy with the president s handling of the virus personally and for the nation. Global news 24 hours a day on air and on bloombergs quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Still ahead, malaysian Opposition Leader says he will meet the king to offer proof he can form a new government. We have james shen joining us for more on the political roller coaster. Tom next, we look at the state of australia and china relations as canberra seeks clarity from beijing on the reported coal import ban. This is bloomberg. Tom welcome back. The Australian Government seeking clarification from beijing on reports that china has suspended purchases of australian coal. The move comes amid heightened diplomatic tensions between the two countries. For more, we are joined by our Sydney Energy reported. Why is china moving to target australian coal imports this particular moment . There theres no doubt has been a steady increase in tensions between beijing and canberra this year. One flashpoint was in april the australian Prime Minister raised the possibility of an International Investigation into the origins of the coronavirus in the chinese city of will wuhan,which did of and you will recall some trillion general is had to flee the country because they were being investigated and they were afraid they would be incarcerated. That triggered a titfortat whereby canberra raided the homes of chinese journalists and australia. Seeing this in a broader increase of tensions. Weve been here before in terms of china clamping down on australian imports, it is something that coal miners in australia have had to deal with in recent years and this is no different. Long theion now is how curbs will last and how much pain it will cause. Canberraames, how has responded so far and what sort of impact will it have on prices . James its been a measured response, as you would expect. We had the minister this morning saying hes using diplomatic channels to get clarity from beijing on what the actual position is. Its difficult to get that ,larity because we very rarely in recent history, have china coming out and saying they are singling out Australia Coal imports for structural special treatment in this way. I dont think we will get that clarity at least officially. Who knows what the government will be told behind closed doors. It is a difficult one to navigate. Producers in australia so far have been pretty quiet. I reached out to a number of the reducers and they are reluctant to put their heads above the parapet on what is essentially a political matter. Theres not much to gain for them. But they will certainly take a hit in the bottom line, prices will sharply yesterday, australian coal prices. And of course, theyd already been hit hard i coronavirus this hard by coronavirus this year. We will await more clarity from china. I believe there is a press conference happening just about now where the Chinese Government will certainly be asked this question. Yvonne we will certainly see some of the steelmakers and australia getting hit today. Thank you, james thornhill. Coming up, Supreme Court nominee Amy Coney Barrett casts herself as someone who would put personal preferences aside in the opening day of her information hearing. We have the latest next. This is bloomberg. Tom top creditors at a chinese are cutting exposure as worries about its finances process, and a bank has told branches to not offer ever granted new loans and reduce financing. Adopted similar policies after the developer reached a deal to overt 13 billion of immediate repayment. A chinese livestreaming platform has agreed to buy another company in an all share deal that will create a Gaming Company worth more than 10 billion. Investors have been offered American Depository Shares, valued at a 35 premium to fridays close your close. Tencent will hold about 68 of the voting shares in the merged business. Surged on optimism of its leadership shakeup ford search optimism of its leadership shakeup and new truck. A benchmark raised its rating to five. Analyst michael ward says the new team and good thirdquarter earnings will provide a further boost. Ford last traded about eight dollars in late february. Yvonne the first day of hearings for the Supreme Court nomination of judge Amy Coney Barrett devolved into a partisan clash over obamacare, the pandemic and president trumps effort to shift the court to the right. Barrett cast herself as an independent judge and tried to steer clear of policy debate. Responsibility to the rule of law, critical to a free society. Designed tore not solve every problem or right every wrong in public life. The policy decisions and value judgments of government must be made by the political branches elected by and accountable to the people. The public should not expect courts to do so and courts should not try. Jodi schneider is joining us on the line with details. What do you make of her positioning and what do we expect to hear from barrett this week . Jodi clearly she is trying to cast herself, as you noted, as someone putting aside personal preferences, saying i will serve the law, i will serve the constitution. We hear a lot of that from justices, particularly those who have been we heard this from judge kavanaugh during his hearings. We have heard it from others. Obviously she would swing the court in a very conservative direction and perhaps for some time it would cement a conservative majority. There would be a lot of questioning around this in things like roe v. Wade and abortion. At the start shes trying to come in and say i obviously have personal preferences but that is not how i would be guided, i would be guided by laws and constitution. Democrats were not necessarily buying that, but that is how she is casting herself in these hearings. Tom of course, the background to all of this is the pandemic that continues to grip many parts of the u. S. , and the countdown to the u. S. Elections. How is that playing into these hearings . Jodi yeah, this is really extraordinary circumstances for a Supreme Court justice. We had just to republican o republicanjust tw senators on the committee test positive to coronavirus. Were at the event where Amy Coney Barrett was introduced, at the ceremony. One of the senators, mike lee, spoke without a mask, and posted a letter from his doctor saying he met the criteria for being there. Kamala harris, the Vice President nominee on the democratic side, she said the decision to hold the hearing was reckless. We have democrats engaging in the partisan debate, and the other thing happening here, no president has ever made a Supreme Court nomination so close to an election, no matter which Party Controls the senate. This is historic in that way as well and democrats are saying republicans are trying to ram through a nominee when they should be waiting. Unlikely toe very hold up the process, and looks like it will go through as republicans control the majority in the senate and will likely get their confirmation, but democrats are trying to win electoral points in the meantime. Tom Senior International editor jodi spider jodi schneider. We are still waiting for the september trade data in terms of yuan and dollars as well. ,our today, exports up 1. 8 yeartodate, here on year. The press conference is taking place in beijing. Officials saying china still faces a complex and severe situation when it comes to trade. We will continue to keep abreast of the briefing in beijing and bring you numbers when we get them. Plenty more ahead. This is bloomberg. [narrator] this is kate. Hey. [narrator] she takes two prescriptions. Kates son jack, takes one too. Kate works hard, and thought she had good insurance. But she still pays too much. Thats no good. So kate downloaded the goodrx app. Now she can compare prescription prices, to find the best discounts. She even beats her insurance price. Good for you kate, good for you. Goodrx, stop paying too much for your prescriptions. Download the free app today. It is 10 29 in new york, and here are the first word headlines. Johnson johnson confirmed covid19 vaccine trials have been halted after an unexplained illness in a participant. They joined a short list of vaccine members makers moving into late stage study. Testingeca also paused after a participant fell ill. Meanwhile, Singapore Central Bank chief says as percent of the city state economy faces deep scarring from the coronavirus pandemic. Event, it was said that aviation and Tourism Industries are particular worries. Singapore is already facing its worst contraction on record this year of up to 74 7 . Real is going to be quite on the economy. While i emphasize the utilization and skills people need to pick up, it also appears that many jobs and many activities that played an intermediate intermediary longwill find it hard after the pandemic is over. Karina consumer inflation in india accelerated more than expected last month, up 7. 3 from a year earlier, led by higher food prices and more expensive fuel and light bills. The headline rate was the highest level since january. The Modi Government announced measures worth more than 6 billion to stimulate consumer demand. Diamond on show in hong kong ahead of an auction that could fetch 40 million u. S. Dollars. The spirit of the rose is set to go under the hammer in geneva next month. Sothebys says the gym is remarkable for its color and clarity and should be in great demand. As diamond is also described wearable. Global news 24 hours a day on air and on bloombergs quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Taking a look at markets right now. We are seeing the risk of sentiment dampen on the back of announcement, the vaccine study being halted after a patient fell ill. That was one of the front runners in the vaccine race. U. S. Futures seeing losses and aussie lower as well. Gold with a bit of a retreat. Still focusing on the trade data that could come any moment for china. Expecting the export and import growth to improve. Fallouteeing a bit of a from the rally we saw yesterday on your large caps. The 10 trillion market milestone we reached for chinese stocks, we are seeing a little bit of a let up here. Seeing some weakness here today. Looking at some of the movers, the story about china banning australian coal is eating some of the big coal makers like whitehaven coal. Some of the ticker Companies Taking it bigger Companies Taking it in stride looking at chinese banks and auto stocks as well. Sources telling us it came to lenders that perhaps regulators are easing demands on banks to deliver lower profits. Not much reaction in some of the ashares when it comes to bank stocks, yesterday we saw a lot of these stocks like this surge. Optimism when of it came to auto sales. Those numbers rising 7. 4 . And marking a Third Straight monthly gain when it comes to the car market. Sector that finally has seemed to find its footing and china. Good news for european and u. S. Carmakers as well as those based domestically. Changing focus to malaysian politics. The Opposition Leader will meet the king later today to offer proof he has enough support to form a government. Expertring in a malaysia , james chen, from the university of tasmania. Great to get you on the show. Ive seen it described in an australian newspaper as malaysias perennial bridesmaid. Will he finally get married today . James its a little too early to assess what will happen. Very simply, he will meet the malaysian king today to give the evidence he has majority support in malaysian parliament. Its my understanding that the meetings have not gone ahead and there is a chance the meeting could be canceled. Things are still moving quite quickly in kuala lumpur and we will probably have a definite answer by 4 00 local time this afternoon. Tom ok, james. There are elements of this we still dont know, as you alluded to. What you expect to be the order of play the next few days and weeks . James todays meeting is very has to show to the king he majority support. The king could do several things. The first thing he would do is to see that there is really majority support. After that, the king would probably have to consult his consultants. ,he malaysian monarchy system they each take a fiveyear term to rule malaysia. He could not do anything without consulting his fellow sultans. Yvonne still a lot of fluidity with the situation, as you mentioned. What is the king likely to do . Will he ask him to step down . There are calls for a fresh election as well. Or bringing forward a confidence vote in parliament. Which is most likely . Malaysia used to be a british colony, so the westminster conventions. For example, the Prime Minister has the right to ask the king to dissolve parliament. Under normal circumstances, the the has to cede to request of the Prime Minister but we have covid19 in malaysia, and some are saying he would be a covid19 disaster in malaysia if they have the election now. Especially with people campaigning on the ground. Cause thousands of thousands of cases. There is great fear of holding a general election. Of noher option confidence in malaysian parliament, parliament is not do to sit until november. He cannot wait until november, he wants to be Prime Minister sooner than that. Mr yvonne anwar has put a spin on this, saying it is the new malaysia. What is the new malaysia he is speaking about . Is this more about policy and reforms and the democratic agenda he wants to play out, or is it a power grab at this point . James theres no such thing as the new malaysia. Fights very much a amongst the establishment as to who controls the Prime Ministers chair. Its all most impossible to reform the malaysian political system for the foreseeable future. Many of your listeners will know that in february, there was already a second regime change and that was what we might call , to form a newy government. Mpswas also done to get to switch allegiance. In terms of reforms and quality, zero. And because of nova 19 covid19, no one wants to do anything. Tom great analysis on the political intrigue in malaysia and a catfight at the top of politics in the country from the university of tasmania. Coming up, the imf annual meeting pushes for more stimulus to support the global economy. We will have the latest next. This is bloomberg. Yvonne an update on the situation in hong kong, cable tv reporting that the city is to keep its social distancing rules for another week. They were set to expire on thursday. At this point, still a pretty cautious approach when it comes to the covid distancing measures at the moment. We will get an update later this morning. Trade still suspended here today. Looking at debt, topping the agenda at the Imf World Bank meetings, persuading the richest nations to take on more. Kathleen hays is here. What is really driving this message at the moment . Kathleen the message is the pandemic recession has hit developing nations, poor countries, harder than developed ones. Imf and world bank in unison stressing that there must be debt relief and there must be the extension of suspending the debt for the worlds poorest. To 744rt is up 9. 5 billion. The president of the World Bank Sees inequality in the 2020 recession compared to 2000 hp he says develop 2008. Ofpoints out that on top fighting the virus, jobs are lost and there is food scarcity. Remittance is down. Problems are getting overwhelming. Lets listen to what he told us earlier in an exclusive interview. The activity level of the world for many countries is down 10 from what it was a year ago. That means Health Problems for children, they are out of school, not getting vaccinations. Ismany cases, malnutrition on a steep rise. Malpass and his colleagues are asking the g20 at this meeting not just to extend the debt suspension through the end of the year, but the end of 2021. The team is talking about the need for eventual restructuring. Importantly, hedge funds, china, you have to hop on too. You are holding a lot of debt and you have to agree to suspend payments. He says the leaders of the poorest nations as well have to speak up and speak out about how great the need is for need is. Tom unlike the poor nations, the rich nations have the physical scope, but the risk is of fiscal fatigue. What is happening there . Kathleen Christine Lagarde was talking about it today at a panel on the sidelines of these virtual meetings. She is the president of the European Central bank. She is worried about the governments in europe, as they are bogged down in fighting the virus and the virus researches, that they have spent a ton of money and they will get tired of spending more while help is still needed. My first concern at this point in time is that policies are tailored in such a way that we cant avoid the cliff effect. Clearly what we hope policymakers will understand and determine is that those supports have to be continued for a period of time, even as the recovery takes hold, and even as the pandemic gradually phases out. Membern an ecb board said the government should not worry about rising debt levels right now, they should be worried about fighting back the virus and boosting economies. This is something we are hearing around the world. Certainly youre getting that pushed bank in the United States and other places. It is interesting that the ecb chief is making in a point to point this out. We cannot give up now, we have to keep going, forget about the debt later. Many people, including fed chair jay powell, said the same thing. Tom our Global Economics and policy editor, kathleen hays. Coming up, investor frenzy around an unusual fundraising vehicle, how Softbanks Vision Fund wants a piece of the action. We hear from the fund head on plans for a Blank Check Company, next. This is bloomberg. Tom welcome back. Softbanks vision fund will outline plans for a Blank Check Company in the next two weeks. It is seeking to capitalize on the investor frenzy surrounding special purpose acquisition companys. So far this year, more than 100 spacs have raised more than what he billion u. S. Dollars on Stock Exchange 40 billion u. S. Dollars on Stock Exchanges. Scott minerd told bloomberg atut the fundraising vehicle the Milken Institute virtual conference. Spacs have the right Investment Opportunities be opportunities. We were given 15 billion to deploy in nine months. 10 and it has gone public. [indiscernible] the problem is not to come up with alternative sources of capital, how do we deploy it . Scott, is the spac an Investment Vehicle whose time has come . Is there maybe be some Financial Engineering . Forgive me for misinterpreting the regime. Is it an Investment Vehicle whose time has come or merely a manifestation of speculative access . Think speculative access, just like in other areas, is accelerating growth. As a vehicle is ultimately going to be transformative for Capital Markets in the way similar to highyield bonds became transformative for the capital market. There were lots of fits and starts in the early days, and and link the business eldon the business he builds. Inly on, a lot of abuses highyield bonds, companies that really should not be borrowing money and Capital Markets getting into cash. The historye this, dismal one. A are low on them list. I think that has to do with two things. One is a lot of the money is coming out of the Retail Sector because investors like us would say wait a minute, this guy is going to dilute by 20 and he also has got warrants that will dilute us further. What is so special . [indiscernible] basically is putting capital out of his fund and will make the money on it from his own shareholders. Evolve, and it becomes more of an institutional vehicle like bill ackman has done, versus three guys in a garage with a dog deciding they should do this, i think the spacs of this back will go up. Point. Me add a final the Way Companies raise money from the Capital Markets is changing anyway with blacklisting. You can bypass investment banks, which is disruptive and great, because why leave money on the table . Do that. Ourselves withac their own capital, an Investment Vehicle. We are going to put our own money and did money in. It is ideal for Companies Ready to go public a few months from now. Those are the ones we will and take them public without [indiscernible] private investor but we put money in and take you public along with it and put 500 million in. You are right, it will be an investment tool. Yvonne that was the softbank vision had and guggenheim global cio talking about spacs. Overnight we were talking that the tech stock, the nasdaq extending its rally. You have to wonder who the nasdaq whale is this week. This summer, there was speculation perhaps softbank, buying up tech shares in the options market. We buying a few billion of other stocks away from alibaba we sold in the last few months . It is diversification. We are still seeing a lot of cash and liquidity Management Strategy is diversification strategy. Is nobody, picture even with us, buying 10 billion of nasdaq [indiscernible] whale. Being a yvonne not a nasdaq whale, perhaps not even a dolphin. Whaleally seeing a nasdaq even though we are still hong kong saying the chance of lowering to a number three before 4 00 p. M. Remains low. Ive got to ask why but thats what were hearing today. Perfectly pleasant from here. U. S. Banks kicking off Third Quarter Earnings Seasons this week. See group j. P. Morgan chase up first, and report in wall streets tuesday session. Su keenan joins us with the details. Analysts are predicting the four biggest lenders will be setting aside an additional 10 billion to cover bad loans. Is that a sign of more pain ahead . Su could be. Analysts say it looks like banks are not taking any chances when it comes to loan losses from the pandemic. J. P. Morgan chase and city will kick things off and Loan Loss Provisions will be a key area of interest. If you go on the bloomberg terminal, you can see u. S. Banks are expected to continue boosting Loan Loss Provisions. While of the Third Quarter tally is expected to be slightly less than in the first half, where you see a big boost in money set aside, analysts say the billion still being set aside signal the banks might not have covered the losses they have seen since the start of the pandemic and are anticipating more pain ahead. It is not known if this is prudent management or the analysts say the banks are seeing worrying signs and are trying to prepare for it. Expectedrading revenue to drive the big revenue gains this time around, the same as last quarter, right . Su yeah, the spotlight will clearly be on trading revenue, which surged in the last quarter. The five largest u. S. Banks hauled in a total of 33 billion, so trading is a driver and big revenue for the bank and expecting to continue. The volatility from the pandemic has boosted trading in stocks and bonds and the revenue will be an area of focus. Back to you. Yvonne thank you. Plenty more to come in the next hour of Bloomberg Markets. Taking a look outside again. We are hearing from the Hong Kong Government that the chance of lowering to a storm signal low so4 00 remains afternoon sessions could still be halted. This is bloomberg. Ted. This is bloomberg. It is almost 11 00 a. M. In singapore and hong kong. Welcome to Bloomberg Markets asia. Yvonne investors still waiting for the latest trade data from china, the numbers will show the post virus recovery is continuing to gather momentum. Tom australian haslinda Australian Mining stocks under pressure as china is seeking to ban australian coal. Yvonne india with billions of dollars to stimulate consumer demand. Asian markets on pause 31 inreaching a high of 31 months. Lets look at the msa asia, down. Thats after j j pause a vaccine trail. Also losses over two days. Trading ahead of a Rate Decision today. Seen as a game changer. Taking a look at your risk assets right now, we are seeing the j j setback weighing on risk sentiment today. Weakness extending after the pboc changed rules when it came to shorting the currency. Export 75 for the offshore rate right now. 6. 75 for the offshore rate right now. Weakness in the korean won. We are looking ahead to the china trade data, which we are hoping to come, we are expecting more recovery on the export and import fronts. Treasury amidor risk off sentiments. Brent crude slightly elevated but we saw it fall on the back of libya ramping up output again. Foottaking a bit of a back today. Haslinda lets get the first word news with Karina Mitchell in new york. Karina more on that j j announcement. Johnson johnson has confirmed its covid19 vaccine trials have been halted because of an onyx plane illness and the participants. Earlier this month, the Company Started late stage shots at its study. It was trading about 60,000 volunteers. Astrazeneca also paused is test after a participant fell ill. The chinese demand for cars continues to strengthen, making asias biggest economy a lone bright spot as the pandemic puts the break on sales in europe and the u. S. Vehicles increased 7. 4 in september from a year earlier to 1. 9 4 million units. That is the Third Straight monthly increase. Bridgewater associates found china has the upper hand over the u. S. On a range of issues. He said time is on beijings side in the simmering spat with washington and the next u. S. Administration will have to deal with chinas continuing rise. Thatin july, dalio warned trade negotiations could spiral into armed conflict. Time is on china side and not on the United Statess side. What will be a difficult situation in the new destinyration is that doing better prove that are, probably. Karina global news 24 hours a day on air and on bloombergs quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. As you were speaking, we did get the china numbers coming out on trade in september, wow. Take a look at exports. Rising, close to what economists were expecting. Imports is the surprise, rising 13 into percent. 13. 2 . We are reversing the climb in the last two months and imports, bringing the trade balance with the surplus narrowing to 37 billion. 8. 7 rise in exports year on year. Imports surging 11. 6 . Lets bring in our guest. Walk us through some of the numbers, it seems like at this point, exports, we continue to see close to double digit growth. Imports surging. What do you make of this . Surprisingimports a upside for several months now. Thats maybe because china is first in, first out of covid19 and production has revived after the virus abandoned control and rest of the world is still locked down or being disrupted. China exports are performing well. I think the expectations for china exports will remain, as long as chinas infection rate remains low while the rest of the world is disrupted. On the import side, i think it shows the chinese economy is coming back. Questioning were whether the surge was a oneoff because there could be a lot of Chinese Tech Companies just trying to bring more imports in ahead of the u. S. Ban on huawei electronic components. You are saying there is more to that . Chi there is certainly more to that. The timing issue is a key factor. The other factor is china has also developed many more u. S. Export markets in recent years, especially those developing countries along with the belt , that helpstiative too. Exports to butte think that is only one small factor amid the big factors. Questionsone of the being raised right now is the outlook for chinese exports to europe, given the rising virus cases there that could impact demand. How much clarity do we have and how will it play out from here . Chi if you look at the export trends of chinese manufacturers in the last half a year, or ever since covid19 started, chinese exports to europe as well as to they have grown remarkably. I think the situation will remain in the shortterm. As long as the rest of the world is being disrupted by covid19 while china has kept the virus under control, it will continue to help chinas exports. Eventually when the world recovers, i think the export numbers will come down. Sustainable are import numbers given demand, domestic demand at home remains uneven and still below prepandemic levels . Chi if you look at chinese demand from an in court perspective, the economic recovery in china has been driven mostly by the production side of the economy. Which means china has to buy more materials, capital goods and so on and so forth. The demand side is only coming back slowly. Shortterm, all of these imports are basically going to cater for chinas production side. Demandorward, when catches up, there will be imports of other consumer willed goods, which also improve down the road. Yvonne what does this mean when it comes to policy for the pboc and government . Are they on course for a normalization of allah see . Of policy . We are forecasting hikes in 2021. Chi the next policy moves of chinese authorities is data dependence. Economy has ae steady recovery, i dont think there will be any more easing. On the other hand, the economy doesnt show stabilization and shows downside risk, we could expect another round of easing going award. As far as timing is concerned, i is a high outcome at all because inflation is not an issue in china. Next year were looking at a little more than 2 inflation thee, basically because inflationary pressures in china dont mess with the whole system because of deleveraging and the effect of flooding ands point flooding and so on and swine on prices and so on. On that backdrop, [indiscernible] in the next 12 months to 18 months is really low. Lo, thank you for your insight still ahead, banks across asia focus on revising reviving economies. We look at rates. Yvonne up next, we look at australiachina relations after the reported coal imports banned. This is bloomberg. Haslinda the Australian Government seeking clarification from beijing on reports that china has suspended imports of australian coal. Heightenedamid diplomatic tensions between the countries. They are directing questions to a different agency. Our reporter joins us now. Banninghy are they australian coal imports now . James theres been a general increase in tensions between the countries this year, and dating back to around april 1 the australian Prime Minister april, when at the australian Prime Minister asked for an invasion investigation into the coronavirus in wuhan. We also had another flashpoint when two australian journalists fled china after been subject to an investigation by chinese authorities. That appear to trigger moves in canberra to raid the offices of some chinese journalists in australia. Its all been leading in this direction, australian producers have been here before in terms of restrictions on coal imports. If not it is not a new situation for them. Also in the context of chinas annual quota on coal, it tends to be the case that they start to take off imports toward the end of the year anyway. Thes probably manageable in shortterm by australian coal producers. Yvonne china does rely increasingly on highquality coal for its Steel Industry and australia is a big supplier of it. These nations need each other, so could this backfire for beijing . James the point is being made by analysts here in australia today is that they cant escalated too much further, even as you say, chinese steelmakers are relying on highquality allergic oh coal the highquality coal that australia produces. As you mentioned earlier, we have the minister this morning saying he is making treaties to beijing to find out what is actually going on. Its difficult to get clarity out of china on these issues and that is illustrated by the Chinese Customs Administration today at the press conference essentially deflecting questions to another agency. This question of whether we will ever see any real clarity remains to be seen. How deep and how long restrictions will go on for. James, thank you, our Energy Reporter with the latest on the tension between australia and china. Next, a look at some of the top Analyst Recommendations across asian markets. This is bloomberg. Yvonne the world bank is calling on g20 nations to extend debt relief for developing countries until the end of next year. In an exclusive interview with bloomberg, the president said the situation in the worlds poorest nations is likely to worsen as the pandemic continues and more should be done to prevent people from falling into poverty. It has already gotten bad, that is showing up in the numbers and likely to get worse into 2021. One notable part of the global recession is the inequality of it. 2008, there was a great peopleal panic that hit stockmarkets and bond portfolios and so on, but it did not have as much effect on the developing world. This one is much deeper in the developing world and likely to deepen if there are further shutdowns in the advanced economies. One of the things our numbers show is the advanced economies, the recession has actually been somewhat less severe than the estimates in june. For the developing world, the recession has been worse than what was expected in june, excluding china. China is in a bit of a recovery phase, but the other developing countries are still in a worsening recession. Given what you are seeing playing out right now, there is a stigma attached to asking this question, whether the cure for the virus at the moment and approach for developed economies is worse than the disease given what youre seeing play out in poor countries. Is hard for us to judge. History will look back and try to assess. World, poorest in the covid is a problem, but the bigger problem for people is no jobs and increasingly the ,roblem of Food Shortages scarcity as incomes go down. One of the things that hit the developing world so hard is remittances got cut off for workers working outside the country. That might be across the border or in one of the advanced economies. They would be sending money back every month to their families and that got cut off rather subtly suddenly. Another thing is the act to the level of the world from many countries is down 10 from a year ago. That means Health Problems for children, they are out of school, not getting vaccinations. Ismany cases, malnutrition on a steep rise. We talked about the problem, there is a huge one, lets talk about how to remedy it or at least offset the issues in the developing world. The Debt Service Suspension is something you pushed forward. I believe it expires year end and you want to extend it. How far would you extend the initiative . We would like to see it extended another year. I should note, it is only providing shallow relief and we need to do much more. The reason it is shallow what this is done is said the poorest countries in this crisis, given the severity of the crisis, starting last may 1, they were able to stop paying their debt service. That means principal and interest, to official bilateral creditors. The richer countries plus china. They could stop those payments, and the commercial creditors were supposed to join that initiative as well. That means ranks and hedge funds, for example. Unfortunately, they didnt and even the Bilateral Official creditors did not fully participant participate. The savings for these countries, the poorest countries in the world, they are still paying their debt in some cases. I think that should be broadened and also extended into 2021. Haslinda the World Bank President speaking to jonathan ferro. Time for a morning call. Lets get over to sophie kamaruddin. Australian coal miners falling in the wake of the chinese import and. What are the implications import ban . What are the implications . Dont seem to be implications according to an analyst. They are focused more on lower quality coal, demand for the Higher Quality coal remain strong. There is pressure on hard coal and coke prices. Mightssed cargoes struggle to find a home. The u. S. Election calls continue to stream in. What has caught your eye . A chief strategist is mapping out the potential impacts on japanese stocks from a biden win. It could make Companies Make it easier for companies to make decisions around Capital Investments and trade. The combo of higher u. S. Taxes and fiscal debt could provide a positive environment for japanese stocks and a steeper u. S. Yield curve, which could drive up japanese cyclical names, leading to a softer yen. Haslinda turning to the dollar, shorts no longer working. Should dollar bears start getting out . Citi, they are neutral on the greenback instead of being bullish on emerging currencies. This on cautioned that a blue wave would mean rising rates, and they are also negative on duration, some pressure on u. S. Rates. Em credit is seen as doing better. Haslinda sophie kamaruddin. Lets get a quick check of the latest business flash headlines. Southwest aims to buck the industry trend of cutting flights by opening in chicago and reviving a presence in houston. They moved to ohare and george Bush International, setting up a clash with other carriers. Has never serviced ohare. Southwest also added services to miami, palm springs and montrose, colorado. British airways is replacing its ceo just weeks after highlevel changes at its parent company. He is leaving the carrier after being passed over in january for the past for the top job at i. E. D. Ieg. Iag. He missed out on the job earlier this year. Industrysaviation novel plans for the coronavirus down term seems to be working. For itsner says tickets popup restaurant and its superjumbo sold out in half an hour. Temporarilys are dining locations in the airport in singapore. Under 500. T at a chinese developer are cutting their exposure as worries about its finances persist, and a leading creditor has told ranches to avoid granting them new loans and reduce overall financing. Others have adopted similar policies. To developer reached a deal 13 billion of immediate repayment. A chinese livestreaming platform has agreed to buy another company in an all share deal that will create a Gaming Company worth more than 10 billion. Investors have been offered American Depository Shares at a 35 premium to fridays close. Tencent has stakes in both companies and will hold about 68 of the voting shares in the merged business. At marketsing a look right now, we are getting to the lunch break and shanghai. In terms of chinese markets, we are seeing at least climbing back from any losses in the early part of the session. The shanghai composite lower by about one third of 1 , but it was on the back of that are than expected trade data, i could get i guess you could say. Exports with a slight miss, imports better. This is bloomberg. Yvonne almost 11 30 a. M. In singapore, in the middle of the trading day, trading a little higher, reversing earlier losses. Also tracking the singh dollar. It has been sandwiched between a weaker yuan and optimist of u. S. Stimulus. Theyre awaiting the biannual policy meeting happening tomorrow. Theyre expected to leave policy unchanged this week. The s. P. I. Up about. 2 right now. Go to headlines with corina itchell in new york. Corina inbound shipments rose ore than 13 compared to forecasts of a small gain. Export growth came in as expected with a rise of about 10 leaving a Monthly Trade surplus of 37 billion. Meanwhile the Australian Government is seeking clarification from beijing on reports that china has suspended purchases of australian coal. Mainland power stations have been ordered to stop using australian coal immediately with ports told not to offload imports from ships. Australias trade minister said hes sheiking seeking assurances that theyre honoring their free trade agreement. Py and e says it may have to cut power to 150,000 people this week to reduce the chance of equipment starting new wildfires. A socalled diablo wind event could result in electricity being turned off in 21 counties in california including parts of oakland and the wine country. Pg e is blamed for inadvertently parking devastating fires. A new campaign. Korea launches 80 day work drive. A similar drive was announced in 2016. Global news 24 hours a day on air and on bloomberg quick take, powered by more than 2,700 journalists around analysts in more than 120 countries. Im corina mitchell, this is bloomberg. Yvonne in Yvonne Disney embarking on a major structural shakeup as it looks to challenge netflix amidst the virus outbreak. It is merging its film stewede and direct to consumer divisions into one group and focusing on the disney plus business. They talked to bloomberg about the opportunities that lie ahead. We want to take a consumer first approach. We want the consumer to tell us how they want to see content. We have the greatest content, the greatest executives steering the direction of our content. But consumers need to tell us exactly how they want tone joy our content. Is it at home, in at thers . Is it on disney plus . Well take their cues. Right now theyre telling us they want to see more and more content on disney plus. Youre getting learning from hat, muelan went direct to consumer, you announced another production is going that way, navigating away from theaters. Whats your gut telling you in the longer term, is this just for the pandemic or more and more will you be going strict to disney plus . I think consumers will have their choices. Obviously the pandemic has affected the speed with which were looking at things. But i will tell you that this move that we made today would be happening with or without pandemic. We want consumers to have more choices. We want them to steer the ship in terms of options. Obviously we have a lot of great relationships with legacy distributors, some of them are inside our own company. At the same time were going to take our cues toward the future, looking at it with a sense of vision, continuing the road weve been on toward the direct to consumer future for the disney company. This has been in the making days, weeks, month, but its interesting we had dan lobe calling you to focus more on content, saying cut the dividends, invest that entirely into new content for disney plus. Oll up together hulu, espn , and disney plus into one. Affect you . He this has been in the works for many, many months. As we see the trend and receptivity and the acceptance of disney plus and as first choice for consumers. And as it pertains to our investor we really like to hear from investors and hear what theyre thinking and appreciate any thesis they want to forward. At the same time weve got to do what we believe is right for our business. In this case we believe direct to consumer is a huge opportunity for the Walt Disney Company and but to do that, we have to make huge increases in our investment in our content. And were ready, willing, and prepared to do that but im not going to comment on any Decision Making that our board will do in terms of dividend Going Forward. What about the amount youre spending . Netflix spends about 15 billion a year on content are you looking in that order of magnitude . Im not going to comment any specific number but what i will say is well have something new virtually every week on our platform, across all of our franchises, between pixar, disney, marvel, lucas, weve got tom really great content and our guests love it. Theres so much story to be told. So many avenues to do it in. Thats where were focusing is how do we go ahead and take those content Creation Centers that we have inside the company, those franchises if you will, and catalize them to make the content we need across all our Distribution Channels but especially our direct to consumer channels. It must have hurt to announce the 28,000 job park, a quarter of the u. S. Theme park work force. Talk about how difficult it is to make such decisions at the moment and how optimistic you are about returning to growth. Well, you know, our task members are the center of the magic at our pashes. Every single castguest interaction is an opportunity for us to make magic. For us to have to make a decision like we did is particularly painful. But were looking forward to a more optimistic future. One where we can welcome our guests beyond, you know, particular limit every day in the park to keep that sixfoot social distancing and open up our cruise ships and reopen disneyland, hopefully someday. And really move forward with our business so that we can employ as many cast members as possible and bring the magic back to our guests and thats what were all about. India has unveiled a 6 billion trying to boost Consumer Spending and it includes handouts to Government Employees loansnessential goods and for capital. Lets get more on this from our report for the mumbai. Is it enough to boost and revive demand . The short answer is no. It is a mere change in the Spending Priorities rather than additional expenditure. In total what the government is offering is far less stimulus than what it will see from cutting expenditure. You have to remember that the government has expenditure cuts across ministries to the tune of 20 to 40 . And which according to some estimates is about 3. 8 trillion rupees. Together with the government to raise for the taxes actually amounts to contraction. This has been the hallmark of this government and we saw the finance minister yesterday saying she doesnt want to burden the citizens with future inflation. She also wants to avoid putting the Government Debt on an unsustainable path but this cautiousness also putting the commiss puts the economic evival very much in doubt. It doesnt match what other governments have put in place to increase demand. Yvonne it may not be a game changer, what more can the government do to shore up the economy . There has been growing demand to increase spending on infrastructure and calls to release more funds to states so they can spend more and the money multiplier the state has spent is far more than the federal. The government announced it will sacrifice for Capital Expenditure on roads, water supply and urban development. Theyve also decided to provide fiscal year loans worth 120 worth 120 billion rupees for capital spend bug there are strings atapped to that and some states are facing tough times financially. Economists think the number of pales in n rupees comparison to the government taxes and fee which is is nearly six million rupees. To go back to your question of what more can the government do, ompanies and banks can spend resources on a plan to boost indias infrastructure. Haslinda you said the issue really is government spend, it has been conservative but is stuck between a rock and a hard place. It is, it is. Consumer sentiment is in the doldrums and it is an economy where 60 is driven by domestic consumption. Like you said, the government is caught in a hard place but it have fiscal able to conservation in the best of times. Now they need to revive the economy and fire demand but given the prosections projections the ratio will rise to nearly 90 of g. D. P. It is balking at the idea of fresh spending because they female that indias Credit Rating could be downgraded. And be included in this. Haslinda thats our bloomberg policy reporter there. I want to check when it comes to india futures and what were expecting in the india open here today. It looks like at this point we are expecting some State Government bond audiocassettes as well. Futures are pointing slightly ower here today. Yvonne were also going to look at the bond Market Reaction to Inflation Numbers for september. Still a rate of a fastest pace since january. We have plenty more to come. To this is bloomberg. Haslinda singapores Central Bank Says as much as 20 of the states economy faces deep scarring from coronavirus pandemic. Thing moring director told a virtual i. I. F. Event that Tourism Industries are particularly worry. Singapores trade reliant economy is already in recession and facing its worst contradiction this year of up to 7 . The economy is going to be quite real. Nd while i emphasize the utilization that people need to pick up, its also feared that many jobs and many activities which played an intermediary roll as role as a middleman will find it hard to come out of this long after the pandemic is over. Haslinda now the country with Economic Activities are under pressure is indonesia. Virus levels are near record levels. Is set to group leave Interest Rates where they are. Lets bring in jennifer, our asia rates strategist, good to have you with us. It does seem like at this stage it is currency stability that is more important than growth is hat a Fair Assessment . Yes, we expect rates to hold today. I think for some time its become clear that rate cuts at this point would only deepen the yield curve and not benefit the economy. Both growth and stability are important focus for the government but i think the choice will be very important. In this pandemic what they ed urgently need to do is accelerate the peaceful efforts iskeeping under control that better by the seven or eight year bond yields. O i think it will continue its current policy mix to support stability by conducting easing whether by liquidity injection and importantly to provide Financial Market stability. I think one of the concerns of the market is that the government is expecting v. I. To continue to fund b. I. To continue to Fund Government spending. How long do you see this going . All through 2021 in some say even beyond . Bang policy action including in indonesia have become a determinant for demand and for the am of foreign supply that will hit the market. As a consequence, policy uncertainties have become a key market risk toing more. Unfortunately, looking at the trajectory in the next few years, given that the parliament has approved budget deficit for 2021 at 5. 7 of g. D. P. Or roughly unchanged from the amount that we see this year in terms of the fundraising needs. I think we will see a continuation of the situation we see this year into next year. We will still need to support demand in the bond market and reduce supply in any way possible. Most likely by markets other than burden sharing scheme that we saw this year and promised to e a oneoff. Yvonne we see Foreign Investors try, at least start to exit the indonesian bond market because of this concern of debt monetization and the amount of issuance. Will b. I. Have to pick up the slack and extend debt monetization . Does that push Foreign Investors further on the sidelines . Yes, Foreign Investors have been on the sidelines. I have to add that in the region, we saw the same behavior for marks like india and the philippines as well. Asia has been seeking inflorks especially china and korea. More recently ma lay shah and thailand has reversed in the year. However the portfolio recovery have not been sustainable in indonesia, india, and the philippines. Coincidently this is where we see heavier intervention from central banks. I think Going Forward there is a motion from the perspective of Global Investor we believe participants are reserving judgment until a clearer path forward emerges. This kind of unconventional policy is this order to judge in one Financial Year. We will need to see the impact in coming years. It is happening not only in emerging markets but also in developed markets. We will need to see how the government ising moring risk in each market and whether longterm measures are take ton complement this unconventional hift in the monetary policy. Yvonne the latest news we have seen from nishnish indonesia has been cutting red tape to boost investments and jobs. How supportive is that for indonesian assets and does it offset budget deficit concerns . I have to say that b. I. s involvement in the bond markets is substantial but temporary effects. It has allowed the government to execute fiscal policy and longer erm fiscal reform. This will determine the longterm outlook. I see the passing of the omnibus law on job creation last week as an important first step at reform. It is a Legal Framework and we need to see details in the coming months. Haslinda jennifer, inflation keeping up in indonesia and india as well, we saw how inflation exceeded expectations. Does that mean the r. D. I. Will have to stay longer than anticipated . Some expect to it stop moving perhaps in november and ecember. There are, i think we should not be too concerned with the inflation outlook of september, we are expecting a moderation in inflation outlook, starting from october. Considering the base effect that should kick in soon an easing of supply side constraints which hould do with food prices. Expect range in prices. So also we believe prices should materially subside in the second half of the Financial Year and the demept r. B. I. To look through the reading, the situation reading in monetary r. B. I. s inst the hawkish look, and that is likely to come in february 021. Yvonne thank you for your insights there. India markets just opened in mumbai. Seems like at this point slow going. We are seeing some pressure, down about 1 . Of course theyre still recovering from that power outage we saw in mumbai yesterday. Not sure if thats impacting things today but also expecting some earnings for the second quarter. Plenty more to come, this is bloomberg. Haslinda just want to recap the news of the hour, that china trade data that just came through. Seemed to be reversing a little bit of the risk sentiment were seeing in the markets, at least chinese stocks have erased some losses. We did see when it came to exports and imports continue to see that growth. Exports did disappoint slightly. We saw a close to 6 gain on the dollar term. Imports was the big surprise on that surge, 13. 2 yearonyear. Economists were expecting a slightly positive trend here. It looks like we are reversing the negative trend from the last two months, july and august, as well. Signs of perhaps Global Recovery, like the china recovery is having some legs to it and could sustain itself. We are still watching the external demand picture with europe looking at more lockdown measures as well that could lead to exports moderating as well. Take a look at a quick check, headlines now. Chinese demand for cars continues to strengthen. Asias biggest economy. A lone bright spot as the pandemic puts a brake on sales in europe and the u. S. Industry Association Says deliveries of sedans, s. U. V. s and multipurpose vehicles increased 7. 4 in september from a year earlier to 137b994 million units. That to 1. 94 million union, the Third Straight monthly increase. Ey want to buck the trend of cutting flights by opening in ohare. They set up a clash with united and american as Airline Travel demand edges up, southwest left Bush International in 2005 and has never serviced ohare. Southwest has also added services in miami, palm springs and montrose, colorado. British airways replacing c. E. O. Weeks after changes at the parent company. Alex cruz is leaving the carrier having been passed over for the top job. Hell be succeeded by sean doyle who returns after two years running aerlingus. He was seen as a replacement to billy boss but missed out earlier this year. Haslinda as Airlines Across the world have most jets grounded, Singapore Airlines has found a novel way to entice passengers on board. Ticks for its popup restaurant in a super jumbo sold out in half an hour. I was among the naysayers. I didnt think thered be demand for it but hey, people were willing to spend 600 sin gmbing h dollars to dine in the suite class. Theyll be served lobster thermidor. Are you in or out . Yvonne no. Im out on this one. I mean 600, i could probably go somewhere else and have a nice meal and not get stuck in an airplane. But i guess it goes to show the ways that airlines are doing, what theyre going through right now to try to make some money as of course the coronavirus has plagued the industry. You saw qantas selling those carts. My husband wants one of those. Those sold out recently. Theyre coming up with unconventional ways. Anyway. Well leave you on that thought here, about a 600 singh dollar meal on singh air. We are looking at this situation in hong kong, it looks likely they wont be lowering that to a three before 4 00 p. M. There you go. 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. This is bloomberg daybreak middle east. Our top stories this morning. U. S. Futures slipped after a report that Johnson Johnsons covid19 study has been paused due to an unexplained illness in a participant. Boris johnson announces bars closed toill be