Anyway. U. K. Minister Boris Johnson england can resume it using of lockdown rolerules. Welcome to daybreak europe. We saw a Risk Appetite shaking a little bit yesterday in terms of Global Equities. Global equities are still heading for a weekly gain. In china, the data shows the recovery led by industry rather than the consumer. Concern. T cause some initial jobless claims below one million, but you focus on the decline or the fact that the number that th remains elevated . Does that mean there is less pressure amid the stimulus talks . Not getting any direction from asian equities today. We did see a drop in the s p 500, and that drop was led by the more cyclical sectors, where we sawtek outperform. Where we saw tech outperform. Futures posting slightly positive, different to europe, where it looks like we could see another day of declines. The 10 year yield rose to an eight week high. We certainly have seen a little repricing around that, and around the real yield, which is pulled back from 1 . The 10 year yield continuing or resuming its decline, around 70 basis points. The dollar is steady. Dollar is steady, but heading for its first weekly drop in 10 weeks. In the u. S. , the House Speaker and President Donald Trump are putting down opposing wages on where the economy is heading. The sides are at least 1 trillion apart on another stimulus deal. Policy says when negotiations are ready to me in the middle, democrats will discuss a package. Perhaps we mistook them for someone who gave a damn. That is not the case. Reality of see the the lives of the American People, what good is it for us to agree to something that has no relationship to meeting the needs of the American People . Nejra meanwhile, new u. S. Jobless claims fell below one million for the First Time Since march. Still, there are more americans seeking work now down in the peak of the 2008 financial crisis. Highfrequency data such as credit card spending suggests the rebound remains gradual. Joining us is our guest. Great to have you on the show. Thank you for joining us. If you look at the initial and continuing claims data in terms of the jobless data out of the u. S. , do the latest numbers in any way will the market interpret them as putting less pressure to reach a stimulus deal really quickly in washington . Guest good morning. I would say the market is not focusing on the longerterm unemployment in the u. S. These initial jobless claims are interesting and can influence the shortterm sentiment. But what is far more important is what the longterm employment is going to do, and it has been grossing higher. Expectations that there is the need for another stimulus package. It is a bit uncertain whether that is up. Nejra that makes sense. See a longterm background of a weakening dollar. What drives that view of yours . Guest that is true. If you look at the numbers on it is a large fiscal deficit. When you get the packages, it will be even larger. At the same time, you have the monetary stimulus. This combination is not positive for the dollar. Not for any currency, but especially not for the dollar. When you have an environment that is relatively obstructive on risk and you see the dollar also seeling, you will that going forward. This story onhave the negative real yields. It has been recovering the last couple days, but longterm atlook overall if you look fiscal deficit and monetary stimulus in the whole environment, that is not looking great. And you have the technical picture, which has been also negative. It has been on none upturn for quite some time. Would say you get investors preferring other currencies. In terms ofo say the technical picture for the dollar, it will be less negative if the dollar index rises above 94. Right now we are at 93. 26. In terms of performance on a weekly basis, we are headed for a weekly loss on the bloomberg oflar index of a six out seven. You see any prospect for a shortterm recovery in the dollar, particularly given some of the risk off we are starting to see in equity markets in the last couple days . Some yes, i do see recovery, but this will be a recovery that is not a change in trends. The longterm outlook is still negative. But if this rises above 94, it eases the pressure somewhat. There is also another side of the coin. The euro has been moving up for quite some time. Sentiment in the euro zone improved. We think that has been a bit too optimistic. If you look at positioning on the euro side, it is extremely high. Have not seen a speculative position this long. Have quite a rally in sterling and the euro. They have done extremely well. We have a positioning issue in the euro. If you have this sentiment from the euro and at the same time more concerns about a second lockdown developing going forward, and they get maybe a bit nervous about the sustainability of the equity rally. Up, thisd this all could point in the direction of a recovery on the dollar in terms of levels in eurodollar, which means you could go back to 1. 15, especially if the dollar index breaks 94. It could go back to 96. Longterm, i would say there is room for the dollar to recover. For goldat about room to recover as it is now heading for its first weekly drop in 10 weeks . What is your outlook for gold . Guest on gold, i would say it has an extremely good run in july because of the dollar weakness. On top of the other positive things, the guidance for gold. This correction was at the time that it would start to recover somewhat. From a psychological point of the alltime high has been taken out. We have taken out the 2000 level, which was in 2011 not possible one way or another. The next crucial level is still far away. Also, positioning is an issue on the gold side. The dollar will be recovering somewhat, but there will be some buying opportunity. Go to arounduld 1800 before it starts bouncing higher again. Markets,ok at the gold all stars are aligning for higher prices on the positioning. It is extremely large. Boele staysiettte with us. Now we get to the first word news. Laura israel and the United Arab Emirates have agreed to begin normalizing diplomatic relations. The deal brokered by the u. S. Is hailed as a key step toward peace in the region. The two sides will hold a range of talks in the coming week. In the meantime, israel has agreed to suspend its assets in the west bank. Officials in palestine criticize the move, calling it a betrayal. From certainng countries up to isolate for 14 days as the u. K. Is easing more lockdown measures and issuing tougher penalties for ignoring roles. Fines will now double. With each repeated offense, to a maximum of 3200 pounds. President hopeful joe biden is calling on governors to require masks for the next months. He said that approach could save 40,000 lives, adding it is not about your rights, it is about your responsibilities. President donald trump countered, saying it would be unenforceable. Yale university discriminated against students, according to the justice department. Race asd that yale uses the determining factor in hundreds of emissions each year. Yale categorically denied claims of discrimination. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra laura wright, thank you. Coming up, jimmy lai says he was arrested on trumped up charges. We bring you the interview next. This is bloomberg. This is bloomberg daybreak. Media tycoon and prodemocracy activist jimmy lai says he was arrested on trumped up charges. In an interview with bloomberg, he says he has been overwhelmed by the outpouring of popular support. He says he thinks the National Security law has already had an intimidating effect. I dont know what they are trying to do. It is an expression of support for the company. That becauseknew the rally was not there. People want to support us and show support by buying up the stock. I first camee when out of the police station, i said, dont buy because you will lose the money. But they showed support. They bought our newspaper at 1 00 in the morning, lined up in the newspaper stands to await the publication of it. The hong kong people support the newspaper and expression of the anger of the raid. Be a bitlly seems to shortterm. Did you ever consider in the last couple days i know youre preoccupied but possibly issuing more shares to take advantage of this . Do you have any plans given the uncertainties surrounding your future of divesting . According to the latest data, of next digital. People suggest that i issue new shares. I think this is a very dishonest way to do it. I tell them that cheating is not our business. What is the future of apple daily . We will be overseas, there is no doubt. You serve a role in the community. Many people say you need to send to media, you need 8 you need dissenting media, you need a platform. Are you practicing since the National Security law selfcensorship and monitoring what you are saying on your next digital platforms . We cannot do that because the National Security law is very general. People want to hold the line. And we cannot change what we have been doing. Think what they have been doing is wrong. We are practicing freedom of speech, and that is it. We are just letting the community to the voices, and that is what we have done. If that is the crime, we cant do anything else. Do you have plans at all to divest any of your holdings . Like i said, at least from march 2019, which is the latest data we have on your shareholdings, 71 and change. Do you have contingency plans to divest and sell those shares . No. My holdings in apple daily. We have unrest. In apple daily, we have our persons in taiwan. We are the biggest newspaper in taiwan and online, the paper and online. We are the biggest. That is what we have divested. What are the contingency plans . Say, for example, if you are convicted, we have to talk about that prospect. Yes. If i am convicted, i think the business will go on without me. That was hong kong democracy activist and founder and chairman of next digital jimmy lai talking to bloomberg tv. Asia speak to our north correspondent, Stephen Engle in hong kong. Great work on the interview. What did he say about the charges against him . Lothen he couldnt say a about the charges, but he did say that they were in his estimation trumped up, and he had never, ever supported hong kong independents. He says all along he has supported what has been pledged in the basic law. That is the ultimate aim, those are the exact words in the basic law. The ultimate aim is universal suffrage. Theaid that should be ultimate aim of the protesters, not necessarily independence. He believes that was used as an law toto impose the bring best National Security law about to hong kong to bring this National Security law to hong kong. His most animated answer was when i asked about the statement office, Macao Affairs which said that jimmy lai was responsible for fostering support for their protests, including the violent protests, and hong kong independence supporters. Been tried and found guilty by them before i have even gone to court or before there has been any evidence. He says the golden thread of british common law is resumption of innocence until proven guilty. That is his most animated comment on that. That last interview that you ran was all about the stock runup. The stock ran up this week 1300 at the peak. A lot of protesters had bought small lot sales in a show of solidarity to jimmy lai. Jimmy lai today actually said in my interview, dont but my my stock. Ont buy i reported in asia 30 years. I have been in bloomberg for 17 years. Never have i heard the head of a company, the chairman of a company, tell me dont buy my stock. It was a fascinating interview. Nejra it really was, and thank you for bringing it to us. Chinas economic recovery continues in july. Industrials growth remains steady as weak retail sales undercut the rebound. Data shows the recovery is still uneven. Georgette boele is still with us. It is a theme we have talked about for a while in terms of consumption lagging the industrial recovery. Do you see it turning around anytime soon . Guest i think if we look at china, we are seeing that. The impact of the pandemic, it takes time. This is a whole process. We think china is coming out relatively ok. Other countries are still struggling with the pandemic and the second wave. Constructive are on china, does that mean you are constructive on the yuan . Guest we are relatively neutral on the yuan. It is a tradeoff between two things. We have theand, weaker dollar, which is pushing the dollarwon down. We also think the tensions between the u. S. And china will continue and probably escalate a bit further ahead of the u. S. Elections. Goingt think it is terrible, but the tensions will be there. I think it will keep dollarwon around seven. We dont expect that strong direction. A strongt expecting direction on dollaryuan. Georgette boele stays with us. After 50 years, one of the hang sengs Founding Members is at risk of losing its status. We discussed changes coming to the hong kong index next. This is bloomberg. This is bloomberg daybreak europe. Im nejra cehic in london. Big changes are coming to hong kongs benchmark index. Swipe pacific was a Founding Member on the hang seng. Now they are at risk of losing its membership. Joining us to discuss is dani burger. Great to see you. Why is one of the Founding Members losing its status in the benchmark . Dani the reasoning is really uniquely a story of 2020. Adds members based on turnover and mark richt cap. Swire has seen the market value plunge. You think of the sectors that have been hurt the most from the protests and the coronavirus, it is things like retail, real estate, and aviation. Those are all things that swire is involved in. They own shopping malls and cathay pacific. Shares have fallen more than 40 . The market cap is the lowest of any member on the hang seng index. The benchmark will decide at the end of trading today, but we are likely to see one of these Founding Members for five decades it has been on the index lose its spot. Likely to bere is kicked out of the benchmark, what would we see take its place . Dani the hong kong benchmark has made a push to include tech. They have done things like allow dual class shares, allow uneven voting rights. A lot of the Hong Kong ListedTech Companies have a form like that that has previously prevented them from getting into the hang seng. At the same time, a lot of chinese Tech Companies have had listings in the u. S. And preferred to get a listing closer to home because of the tensions. Companies like alibaba, listed in hong kong, are likely to be moved into the benchmark. There is an idea that the hang seng was outdated. They have had a lot of companies do poorly while tech has done strongly. Dont be surprised if we see some of these Tech Companies on the screen right now be included in the hang seng when Companies Like swire lose their place. Burger. Hank you to dani coming up, countries are spending billions on a vaccine, but novartis is warning a vaccine on its own is not enough. Our interview next, as we learned overnight at the u. K. Is quarantining all countries from europe, including france, while continuing to ease the lockdown in the u. K. European futures slightly negative, down 0. 2 . U. S. Futures in the green. This is bloomberg. Neijra good morning from london. I am nench jra. These are today as top stories. It is a mixed picture for equities as investors mull the stalemate in u. S. Stimulus stalks. Chinas industry led recovery continues, but weak retail sales undercut the rebound. Ley ley says investors shouldnt buy shares in his investor group. The stock kleined. England can resume easing of lockdown rules. It adds france and netherlands to his quarantine list. Welcome to day break europe where we end with a cautious time in risk assets. We have seen Global Equities heading for a weekly game. Yesterday the s p 500 closed lower. Earlier in the week it touched its february record. Futures slightly positive right now. Initial jobless claims in the u. S. Below 1 million for the First Time Since march. Dow focus on that or the fact at joblessness remains elevated . European futures on the back foot. What is interesting in the u. S. Was what underperformed yesterday was sicklyal sectors. The rotation we saw at the beginning of the week didnt last long. The dollar is fairly steady in todays session. We saw the 10year treasury yield touch a twomonth high. We are slipping slightly but a 70 handle. That move up has feaninged the the real yield and pulling back from that negative 1 level, still in negative territory. Gold steady but heading for its first weekly lost in 10 weeks. French authorities are demanding tougher enforcement of rules to stem the spread of coronavirus as the nation battles rising cases. He said a resurgence would hamper the return of the country. Five more countries have been added to the quarantine list. From 4 00 a. M. Sardinha people i have gone will have to self isolate for 14 days. The global push for vaccine is his accelerating, with russia pushing. More than 160 immunizations are still under development around the world. Giant o. Of Pharma Novartis talked about how far off a treatment is. I see this as shades of gray. We will likely have a vaccine that is vinyl sometime before the mid of next year. It could be as fast as the end of this year. But i expect that vaccine may not have the optimal efficacy, may not have the full safety data. Wont be fully characterized and wont have large scale manufacturing capacity. What i believe is bite end of next year we will be able to solve many of those constraint and actually have a vaccine we are confidence in, have safe efficacy, and large scale manufacturing and can be used in large populations. We are going to have to make some difficult calls in the coming months. What is safe enough . With limitted supplies, who will need the vaccines in the near term. Those are the discussions we are going to need to have with the Public Policy community in th