The city has not seen widespread infection from the coronavirus. Still, she says more than 5300 people there are subject to mandatory quarantine. Hsbc revealed an employee in hong kong is one of them. The bank is urging workers who came in contact with a person to stay home for 14 days. House Speaker Nancy Pelosi is backing President Trumps assessment by the proposed by american ally doing business with huawei. Speaking at an International Conference in munich today, Speaker Pelosi warned european allies to steer clear of the chinese tech giant as they build their next Generation Cellular networks. She added, doing business with huawei could embolden chinese president xi jinping as he undermined democratic values, human rights, economic independence, and national security. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Live from bloomberg World Headquarters in new york, im vonnie quinn. Live in toronto, im jon erlichman. Here are the top stories we are following from around the world. Cleveland fed president Loretta Mester says recent announcements tied to stable coin are to wake up call to regulators. We talk to the ceo behind the First Canadian dollar back table coin. In just a moment, we speak to Canadian Defense minister hargett said jen. His thoughts on huawei and the new nato. There is an oilman on jpmorgans board and climate activists want him out. Why he may be a problem for the bank. We been fluctuating between small gains and losses throughout the day. It is a product on into a long weekend, no training on monday. The s p is down. 1 . The nasdaq is down about. 1 . No huge moves but there are some individual moves including expedia, nvidia, both rising 10 next to earnings. Within the individual indices, a lot of movement. Without, maybe a few market jitters about coronavirus. Also looking at the dollar index. That probably tells the story a little bit more than other asset classes. It has been gaining throughout the week, but dont forget, sterling appreciated this week as well with the various changes around in Boris Johnsons cabinet. The u. S. Dollar above 99 right now. Some better Economic Data at least when it comes to confidence. Handconfidence on the one but manufacturing is something were also watching. We wanted to take a deeper dive into the latest read on factory out. If we look at what happened in january, we saw a drop. A lot of that has to do with boeings decision to halt 737 max production. If you take aircraft and parts out of the equation, factory out what was up. But something worth considering when we look at the economic road ahead and impacts potentially from coronavirus. On the u. S. Economy, because perspective on where things could be going earlier today. Lets go to florida, where Michael Mckee just wrapped up an interview with cleveland fed president Loretta Mester. How does she view some of the data . Michael an interesting question to put to her because not just the manufacturing contraction but weak retail sales in january may suggest the economy is getting a little tired. I asked her, did she think there was any reason at this point to change your forecast Going Forward . I think the consumer side is holding up. The business side has been weak. We have had signs of stabilization on the manufacturing side, and thats a good thing, notwithstanding todays numbers. That is kind of the way the u. S. Economy has been, the consumer side has been driving things. The business side for a number of reasons has been weaker. That looks like it is stabilizing, too. I expected to pick up later in the year. Michael as a forecaster, she would not rule out the need for any additional rate cuts, as wall street is pricing for the year, but she did say Monetary Policy at this point is in a good place, and she is happy with their stance. She said inflation will pick up, but will not hit 2 until the end of this year or sometime next year, which would at the same time, rule out any idea of a rate increase. The view from the fed seems to be at this point, status quo, steady as she goes. They can stay on the sidelines, even if the numbers are a little week, they are not bad yet. Vonnie she also said it is too early to see an impact from phase one, which goes into effect today. On coronavirus, she said it was a risk to her outlook, although not yet. Michael the phase one trade deal, she said it will not Impact Business investment because it doesnt remove the threat of tariffs, just suggest that things may not get worse for a while. She is in the heart of the manufacturing sector. They are not saying they are going to increase spending, which doesnt bode well for the investment side of the economy. The coronavirus, like everyone else, she thinks it will hit china, their trading partners, may have an impact on the United States, but it is too early to say how big that impact will be. So the fed can do nothing more than watch and wait. Vonnie wonderful interview, lots to chew over. Thank you to Michael Mckee. U. S. House Speaker Nancy Pelosi was at the munich security cant its today in germany. There, she backed President Trumps assessment of the threat posed by countries using huawei equipment to build five g networks. So where do other countries stand on this and other Big Questions facing the community . Al we are pleased to be joined by the Canadian Defense minister from that conference. Thank you for joining us today. We know that the u. S. And britain are at once on this huawei question. Huaweis involvement in next jen technology for their countries, and they are very strongly on opposing sides of the question. Where does canada stand . Harjit first of all, when it comes to our Cyber Protection inside canada, it is something we do with extremely seriously and because of our decisions in the past put us in a very good position. Infrastructure has allowed us to have a robust Cyber Defense architecture. Now we are going through the analysis, so we can look at all of the various threats that are out there. What we will be doing is making sure our systems for 5g are going to be just as robust, or if not better. We are mindful of the security concerns that various companies have come including huawei, but we want to make sure we take a look at all of the threats, so the protection we have right now in 4g technology continues into 5g. Vonnie sounds like canada has not made an official decision would beether huawei allowed to be a part of the upgrade to your infrastructure, useell as having huawei canadian parts in its systems. We leave that question for a moment and ask about the other essness, a failing liberal order. What is your response to the idea that liberalism is failing, and could mean a return to oligarchy . Harjit what we need to look at is why people have the anxiety we feel. If you look around the world, complex are increasing. The increased migration that is happening is putting a lot of strain on countries, especially in europe. This causes concern for citizens. What we need to do is come up with not only the appropriate strategies, but we have to make sure our citizens of our respective countries all benefit from the Economic Development that we have enjoyed for such a long time. But we also need to ask ourselves the question, why are some of these concerns happening . And then making sure we take corrective measures now to read some of these issues. We are very mindful of some of those concerns, but that is why we can have these appropriate dialogues at this Community Security forum, and come up with possible solutions. Jon staying with those world dynamics and tying it back to huawei, do you worry about, whenever the canadian decision may be on that front, how that may impact the relationship between canada and the United States . The reason we are taking our appropriate time to make the decision is, because in the past, we took appropriate measures an assistant we put into place put canada into the unit position. Our systems are well protected right now. To make sure that we go in the same direction, we had to the proper analysis. We dont want to be rushing a decision when it comes to 5g technology. We have to understand the security threats, also look at the positive impacts it can have on society. We are mindful of the concerns and threats huawei poses, but we have to look at all the various concerns. That is something i want to make sure that we stress. Between the various nations having these discussions, canada isnt a good position, because we took that time. We will be speaking with the Security Experts and will make the appropriate decisions accordingly. Before we wrap up, obviously here at home, weve been talking about the antipipeline protest blockades. As the defense minister, with so much question around what the move by Law Enforcement may or may not be, do you have any safety concerns, depending on what ultimately actions of lawenforcement could be . First of all, my focus is always on threats outside the country. Supporting comes to canadians in times of disasters, we are always there. Protestsomes to the that we see, canadians have the right for peaceful protest. But we do understand the Significant Impact that these protests are having. This is why its important for all parties to have that important dialogue, to be able to get through it, so that things can subside. Strictly a matter that has to be done with in terms of safety, national defense. My responsibility is making sure we protect canada from outside threats. Im sure that through appropriate dialogue that we as a nation can get through this. Jon minister, thank you for your time. Harjit sajjan, can does minister of defense. Of bothp, the best worlds. Will hear from the man behind the launch of the First Canadian dollarbacked stable coin. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york. Jon im Jon Elrichman in toronto. Fed officials expressing interest in Digital Currencies in recent days but some fear the volatility in bitcoin and other cryptocurrencies make them unpredictable forms of payment. A possible solution could be stable coin. A new class of crypto coin backed by reserve assets. Welcome the man who introduced the First Canadian dollar back stable coin. Stable is the keyword here, to have the Canadian Dollar time to this asset. Tell us more about how these stable coins work. We believe the Capital Markets are going to be significantly digitized in the future compared to today. The only way that can work is if we take all of the Financial Market instant infrastructures that exist in todays analog market and represent them in the digital market, but in a way that is wellregulated, reliable, adult. Those mechanisms include exchanges, custodians, and include ways to exchange value. The Canadian Dollar stable coin we have launched is a mechanism to allow Canadian Dollars to be exchanged in a digital way to support other transactions in the markets, whether transactions or other cryptocurrencies, securities, bonds, stocks, or any other asset. The beauty of stable coin is that it is stable. By stable, we mean equivalent to the Canadian Dollar, equivalent to a Canadian Dollar today, tomorrow, 10 years from now. Jon you are somebody who understands the world of exchanges given your background running tmx. Given your background, how do you see a product like this being used . The immediate thought is foreignexchange markets. If we are talking about these Digital Assets being tied to a currency other than the u. S. Dollar, is that the kind of usage case you see for Something Like this . Jean foreignexchange is one of the use cases. We have wellestablished stable coins in the u. S. Now we have an established one that we would grow in canada. The ability to use these two stable coins to make foreignexchange remittances, payments, is one of the use cases. More importantly, it becomes a tool to allow for the settlement in very quick, immutable ways of the sale and purchase of any other token asset. Without waiting a day or two that you may in more traditional analog markets. Vonnie 2020 is supposed to be the year of the stable coin. As anre cropping up now answer to the problems we have seen in other cryptocurrencies. There was a conference in france recently. They said stable coins are still far less effective than a settlement with legal status. Because they offer no guarantees of a refund in the event of fraud. Why is stable coin better than any cryptocurrency . Jean i cannot comment on other stable coins. Our model is fully transparent. The amount of currencies that exist to support the stable coins issued his public on our website. These are held by an independent custodian. Sure, it will be transparent to everyone who holds these assets that they are there to support these stable coins. Vonnie can i get Canadian Dollars in steals my stable coins . Jean like every other tokenized asset, to redeem it, you need to redeem it through established processes. If you own it personally through an independent wallet, you need your passcodes. If you rely on a custodian or exchange, they will be able to do that for you. If those custodians and exchanges should cause your stable coin to be stolen. If we think about some of the driving factors are run more awareness around these Digital Assets, one of the biggest stories over the past 12 months was facebooks own cryptocurrency push with libra. That did nogo according to plan. Did that conversation helped or hurt the possibilities Going Forward with other areas, such as when you are focused on . Jean i think the conversation about libra was actually an effective one. It allowed Central Banks and other organizations to truly think about what stable coins are, how they can be used, and how they can help digitize our Capital Markets. Libra itself had a series of challenges. I understand they are still working through them. I think it was a net positive for the marketplace that they introduced this idea and got focused on the ideas that these values can bring. Vonnie congratulations. Thank you for joining us today, jean desgagne. Coming up, Climate Change is changing wall street. Grouphow a shareholder that tried to push out a member of jpmorgans board for his ties to big oil. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york. Jon im Jon Elrichman in toronto. With Climate Change becoming a defining issue of our time, we recently launched bloomberg green, which uses due to an indepth order to illustrate the scale of the challenge. A Shareholder Group is trying to push out the most influential director on the board of jpmorgan. Michelle davis is one of the reporters who broke the story. An incredible story. While some are familiar with lee raymonds time at exxon, they may be lustfully with his long history with jpmorgan. Is thee lee raymond most influential person on the board after jamie dimon, of course. He has been on the board for 30 years, so he is not only the longest serving member but also the longest serving member of any of the biggest wall street bank boards. He is a key advisor to jamie dimon. As ceo of jpmorgan, jamie dimon is very influential himself. This is one of the few people that really has his eaer. He is the former ceo of exxon. Vonnie activists are targeting his seat. How will this play out . Michelle a lot of it remains to be seen. A lot of shareholders used to be passive, blackrock, state street. They are becoming more focused on Climate Change as an issue that they can have an impact on. It really depends on if majority action of the Shareholder Group that is pushing to get the raymond off the board is able to appeal to these other shareholders. They could succeed. It all depends on what they say. Described bybeing some of the people you spoke to as an incredibly important moment. How do you think this may ultimately play out . Michelle this Group Majority action has had success in the past and getting the largest proxy advisor to get on board with some of the proposals. If they are able to do that, they could succeed. At the end of the day, jpmorgan is a company that has risen to the top in terms of its biggest bank in the u. S. Last year, record profits. Lee raymond arguably has a role in that. I dont know if shareholders will say this is something that needs to be changed. Vonnie do they have a positive alternative . It is one thing to say lets undo this because we think it is bad. What better do they have . How would that work . Michelle i dont know that they have anyone in mi