Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Higher. We had a Statement Issued from the bank of korea after a government meeting that outlined some potential support measures. The asx 200 at one point close to 4 , now higher by. 8 . Than twoes up more point 5 , this after President Trump spoke. We are also seeing safe haven bids. The dollar yen after moving towards 100, back wrenching above 10 three. The worst g10performing currency today. Gold also falling for the first day in 4. Treasury yields shooting to the upside. The 30year is up nine basis points. Some of the largest moves we have seen to the upside for the 30year over the past three years. Haidi Sarah Ponczek, taking a look at the action. And how very quickly the market story is changing here in the Asian Session. Singapore forr to more analysis on where the markets are going and what the catalysts are. Joining us is all across asset. Ditor, joanna what are we seeing in terms of this slight shift in the markets . Pretty typical after you have such a big down a deep markets to take breath and regroup a little bit. We had President Trump coming out and saying that they are going to look at various measures, including a possible payroll tax cut. That remains to be seeing what they will actually do. Do they help the travel industry . One person that noted that is people had a problem with the bailout of goldman and bank of america in the Global Financial they thinkt will about a bailout of Carnival Cruise lines, as an example. Seeill be interesting to what comes out of it. A lot of governments are talking of these measures. Markets may be taking a breather coming back from what was such a historic down day, really. Haidi if you were to characterize the mood and the sentiment you are seeing in the markets today, what would you call it . Is still pretty jittery. Things are moving around quite a lot. For instance, s p futures were down to start the session then they came back. Now they are higher. But japan is still down. Is up. S a mix, australia a lot of nervousness. Things change quickly when you have a headline or two. So people are trying to slow down. It is very tenuous today. Haidi joanna ossinger, thank you so much, our across asset editor in singapore, taking a look at the markets. We have been hearing from carrie lam in hong kong, addressing the public in a regular press briefing, speaking about the coronavirus situation and saying that the Virus Testing has been extended to doctors, and free private testing at private clinics and hospitals. Also saying that hong kong authorities will discuss more travel restrictions, as italy is extending its locked down from ,ust a quarter of the country to the entire country. Carrie lam there, speaking to the public and also updating on the Hong Kong Diamond princess cruise situation, saying that attendees on that cruise have all completed their quarantine. The Hong Kong Financial has also been speaking, saying that they will continue to monitor the market situation and keep the pig stable. We continue to hear from global authorities and institutions including the imf. The chief economist is urging policymakers to put in place not just Central Bank Monetary policy measures, but also fiscal measures to combat the coronavirusrelated slowdown. There is a role for banks and also for Central Banks. There is a role for fiscal authorities, for financial regulators, targeted policies that are tailored to particular sectors that are very badly hit are in need in our. Haidi lets bring in the chief global economist from singapore, david. Great to have you. We continue to see Market Expectations pricing in another five basis points from the fed namely on march 18. But is it becoming clear that Central Bank Policy even extraordinary levels is a poor tool to deal with the slowdown . E are bracing for david it certainly does not get in the way of being able to meanst, but it is by no enough. What you need is a coordination between fiscal and Monetary Policy. This worldwide shock which we are now going through, we were already seeing more and more central bankers who were previously leading major global Central Banks, saying that actually, we do need to see even more fiscal coordination between monetary and fiscal policy, as a result of getting so close to the zero lower bound and using up so much of other types of unconventional Monetary Policy towards. The next year or so, the amount of extra experimental measures possible is rising, and a must them, the idea of having fiscal policy going even more expansionary then people would expect, and getting the support for coordination of Monetary Policy to enable that is something that makes sense, particularly when you have the shocks we have now. But it is not just coordination between any individual countries Monetary Policy, it is also on a global scale as well. That is what you consider his relative disappointment so far from what we have seen from the g7, when they held a conference call. What we need to see is more of a concerted effort to try to support growth particularly as you had just now in his segment, talking about targeted measures. They needed to be more targeted on the sectors that are more hardhit that if left on their own devices, could have bigger spillover effects compared to if they had government interventions to limit the downside. Gets if and when the fed into the effect of lower bound, and we are seeing that scenario for other Central Banks around the world, what additional measures go beyond that . Potentially a return to quantitative easing . David you could is the see that. You could in certain cases, for example in europe, you would need to see real changes to enable that to be effective, allowing Central Banks to own a higher portion of the governments bond markets in other countries. In addition to that, think of things like helicopter drops, fiscal deficits that could be partially directly monetized by Central Banks, are the sorts of things we now need to be actively thinking about and consider them as being new policy tools that will need not just in this shock but during 2020s doing this shock. Is the. Time you have these crisistype situations where new types of measures can be effective and be taken. At this stage, we are in a massive deflationary shock. Even if you are to get spikes in prices in the near term because of supply issues, you would have lasting worries about inflation. Governments need to go further than they did a year ago to support growth, but you need coordination on policy. As far as events with you see not just on supporting industries that are suffering but trying to create capacity, boost that help productivity, these things could be boosting longerterm Growth Potential and help with the rebound in growth that we will eventually be getting wants the worst parts of the virus subsite. But during this time of uncertainty, we dont know when that is. Wouldally we assumed q1 be the worst point. While that may be true for china, it is not particularly true for the rest of the world, where the worst Economic Growth beforend up being in q2 you get a rebound. To encourage the rebound and help it get more traction, that is where fiscal policy in particular would need to be used. Haidi what we are already starting to see is this negative feedback loop with concerns but even with the supply chain from china, if it gets back on its feet, we will see an elongated slowdown because the demand side, particularly with key trading partners with europe . David that is right. If you are talking about factors coming back online and production facilities going stronger and going above capacity in the Second Quarter in china, that happens to be the par point where you have the mot disruption in demand in china europe. But lets not forget, there will still be orders and projections and assumptions but will go beyond those few months, and think about what you need for the full year. There is still a pentup demand story, but again, that is where government can play a role. It does mean that it is a difficult time for the global economy. The first half of this year will be by far the weakest, hard to argue anything further than that. The key question will be, will you also get resumptions in outbreaks in places that had them and thought they had them get rid of them . We could have a more prolonged downturn than we are currently penciling in. The other difficulties when he have supply chains disrupt at an actively lowered, it can, if it goes on long enough, have the stresses on sme sectors, where company were relying on cash flow. On top of that, you have to think about, is everything in place to come back quickly, or will there be a decent lag before demand eventually comes back, that is able to be met with supply that has been so disrupted . Haidi quickly, does a price war in oil in a fit at all . All . Nefit at david in the shortterm, it has raised credit risks in credit related to the commodities sector. Thinking about this from the consumer side, this is a windfall. The challenge is that the drop in oil prices that benefits the consumers, usually you see that benefit over a 12 month period rather than it needs something that would boost growth today. So it is good news. We are expecting to see for example, brent averaging below 30 a barrel the next six months. That is a benefit that will ultimately be helping to some what consumers as they get freed up cash flow. But will they be neatly rushing back into crowded areas . That will take longer. So it is good news, but it will take a while to see the benefits of that in the economy around the world. Haidi and before that we will see that pass through to energy exporters. Globalann, chief economist from Standard Chartered joining us in singapore, thank you so much. Lets get you caught up with the first word headlines. Karina President Trumps incoming chief of staff mark meadows has of quarantined after coming into contact with the person confirmed to have the coronavirus. The republican congressman from North Carolina joins five other lawmakers selfquarantine or restricting their work. He says he is staying at home until the risk period ends. In this company extended februarys record slump of 87 in macau. Casino resorts are suffering from a double whammy of individual visas being suspended as well as widespread disruption to transport. The year to date fall to 21 . The remaining democratic president ial candidates return asthe fray later on tuesday six states hold primaries. Joe biden will aim to consolidate the lead on super tuesday, while Bernie Sanders hopes to repeat his michigan victory of four years ago to keep his campaign going. It will be the first chance voters have to decide since the contest narrowed. Afghanistans chaotic politics has seen two rivals declare themselves president. Ashraf gunny was named the winner of decembers election, but Abdullah Abdullah denounced the as fraudulentoath and declared did bounced it is fraudulent and declared himself leader. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Karina Mitchell. This is over. Haidi thank you. As the rest of the world outside china grapples with increasing Coronavirus Infections and thats, optimistic news from the w. H. O. We will be hearing from the Incident Manager coming up later this hour. We continue to track the moves in asiapacific stocks, with markets deciding to stage a turnaround. Alibaba up by just about 1 . This is bloomberg. Youre watching Bloomberg Markets. A quick check on trading in commodities, we see stabilization when it comes to trading in risk assets, equities staging a turnaround in the Asian Session. Gold relaxing just about went 1 , though bully and is trading at a close to the highs of seven years, investors not far from haven demand. Iron ore in singapore up above 2 . 50had it falling before the Day Moving Average in the previous session. When it comes to brent at wti, we are seeing oil claw back some of the losses after the biggest crash in a generation on the back of some of this price war between saudi arabia and russia. The biggest plunge since the 1991 gulf war is what we saw yesterday. Surprisingly, we are seeing prices moderate a little bit. The International Agency it Energy Agency executive director spoke with us earlier about his view on the impact of the virus on the markets. One should not underestimate, a that resilience of shale oil, the impact it will have an the economy. This is more than a New Discovery of a new oil policy, prevent be russian roulette, which may have greater consequences beyond oil. Haidi for more on what to expect on the oil markets, lets get to our guest in singapore. Our oil reporter there. Have we seen any development in this political standoff within opec, given that we are starting to see a turnaround for oil prices . Guest we are seeing oil prices today, around 5 to 6 watching a very volatile market. B pointed out, he says the russians are playing russian roulette. The development so far is that saudi arabia started on all out of official setting crude selling prices, slashing them the most in more than three decades over the weekend. Russia has responded by saying that they will produce much more starting next month. So they are out to secure market share. It is going to be we are going to have a lot of supply in the markets. But it is also a demand story. Pointed out yesterday that demand will be reduced, the first loss in demand growth since 2009. So it seems like we are having supply problems as well as demand problems driven by the coronaVirus Outbreak. Of the saudims price cuts announced over the weekend, have we seen reaction from buyers here in asia . Sharon we have definitely seen reaction from buyers in asia. A lot of them are saying they will take as much of the Saudi Arabian oil started starting in april. They have nominated they are crewed that they wanted to take yesterday, and they will get a response from the saudis later this week. Soy it looks like asian buyers are wanting to stockpile the cheap crude that saudi arabia is offering. We have to remember that saudi arabia is the biggest oil exporter in the world. Haidi sharon, thank you so much for joining us. We will continue to watch and see when it comes to this developing world story. Seeing ament, we are recovery in oil prices in the Asian Session. Lets get to the latest in the coronavirus story in china. New infections and deaths out of china continue to fall to a trickle. Meantime, we are seeing infections globally really escalate. Lets get more insight from selina wang, our china correspondent who joins us from beijing. As we continue to see these global numbers mount, why hasnt. Declared this as a pandemic yet . Selina now that the numbers have surged in 1000 countries, the0 World Health Organization still decided to hold off from officially living it a pandemic, though they say it is getting while to that point, this many experts around the world say it already reaches that criteria. A pandemic is officially designed as a pandemic that spreads worldwide. An ongoing assessment that includes not only geographic spread but also severity of the impacts on society. Officials at the who obama say they want to keep at the w. H. O. Say they would rather not increase panic by labeling it a pandemic. Cases in china have started to slow to a trickle. At face value, that seems to be the case. Just 19 new confirmed cases since march 9 from Hubei Province. Now the top priority for the Chinese Government is to stop that reimportation of cases from people returning from infected places and other parts of the world. Haidi in terms of chinas factories, most of them are coming back online. Are we seeing any opportunity for respite . Of chineseost 81 Companies Involved in trade have resumed operation according to a National Survey, but that is not released from the pressure yet. Just as they are starting to come back on their feet, they are getting slammed by a drop in demand from their biggest partners. Even though they have restarted operations, they are facing terrible orders, lower demand from other countries hit by the outbreak. He also saw the consumer inflation data and reduce her inflation data in february, which also showed interesting impacts from the coronavirus. Consumer inflation moderated, though it was still quite high, with for prices rising 22 . Pork prices rose 135. 2 , but you saw deflation in production, largely expected to cause of the economy being below lower levels. Haidi selina wang in beijing with the latest, certainly more downside expected for chinese factories. We are now starting to get this feedback loop from the damage caused by the external slowdown. We are getting breaking news in terms of the impact on banks from the s p, saying that chinese lenders will bear the brunt of high credit costs. The coronavirus will be adding 100 billion in credit costs for asian banks. Of course, this will not be helped by the banks who have exposure to Smaller Companies that then have exposure to the drop in energy costs, in oil prices as well. In the overnight session, we saw u. S. Banks sharply underperforming in the broader market, as we see this kind of dual effect of credit losses as well as profit damage from lower Interest Rates. Lots more to come. We will be discussing more about whether this current or when a Virus Outbreak should be deemed a pandemic. We will be joined by the w. H. O. Incident manager, abdi mahamud. This is bloomberg. Haidi lets take a look at how some of these markets in asia are trading, as we start to see support levels being found when it comes to trading in asia after what has been just a monster been just a monster when you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. This is not going to repair itself. It will cause a recession to start in the Second Quarter. Many countries are going to be hit. We will see a whatever it takes policy approach from the pred fed. I do not think this is a grow problem. This will sort itself out. Itself out not sort before further damage unfortunately. Haidi some of the guests we have spoken to hear commenting on these extreme market moves as we continue to track the chaos in equity markets. We are starting to see a little bit of a stabilization in the Asian Session. But spring and Sarah Ponczek lets bring in Sarah Ponczek from new york. At the very least people are taking a bit of a breather. Sarah considering the large moves we have seen either way to the upside and downside, people are a bit hesitant to step in, call the bottom or catch a falling knife. But we are still seeing the stabilization. The hang seng we bow saw bounced off of one 5000. 25,000. To losses. Fallen although modest losses. Nothing compared to the monday session. Asx 200 up more than 1. 5 after earlier declines close to 4 . It really was President Trump talking about a payroll tax that turn things around. A quick look at the oil markets because we are also seeing a rebound. Wti more than 5 . Brent up more than 6 now trading around 3650 admire. Barrel. D 36,50 a both off roughly 45 . Haidi what a day we are seeing. Sarah ponczek in new york. Lets get you more context as we dig a little deeper into some facets we are seeing in the trading session. Sophie kamaruddin joins us in hong kong. Bond rally is also taking a bit of a breather. U. S. 10 year yields earlier jumping as much as 15 basis points, the most since november of 2016. Reflect less pressure on the boj to ease next week. This, as fiscal stimulus is anticipated. This afternoon the japanese government is supposed to agree on a second round of emergency measures. Overall the bond space could limit the rise in yields. When it comes to the central bank you cannot neglect the fed. Basisn sachs seeing a 50 point got next. Again at its april meeting, bringing the key rate to a record low. But the most important thing for market is keeping functioning. Pulling up this chart on the determinant, financial conditions in the u. S. Tightening to precrisis levels. The fed may also look to other tools to ease financial distress. Could give the fed breathing room. Haidi all right. Rooms also it seems when it comes to chinese authority. To tryedible lockdown and contain Coronavirus Infections. That seems to be paying off as we see the rate of new infections and deaths slow to a trickle. Earlier i spoke with the w. H. O. China representative and he said even if we breached one peak of infections in china, there should not be complacency. If one peak has passed, this is no guarantee it will remain so. We have to remain vigilant. There is no room for complacency. Haidi lets bring in abdi mahamud, an Incident Manager for covid19 at the World Health Organization, their western pacific regional office. He now joins us from manila. Great to have you. Is there a concern that there will be levels of complacency, as we have seen in the last few days the numbers of infections outside of Hubei Province in china are coming from imported countries. So is really the focus now shifting to what we are seeing outside of china . Abdi it is important also to remember that within china, although the cases are coming down, it is a new virus and we do not know what is going to happen once we start relaxing. With what the chinese authorities are doing and preparing for a larger outbreak. Although they have one through the first stage, but preparing for the next stage will be equally important. Outside china we are closely monitoring is going on in over 110,000tries, over cases. Haidi the common misconception and a lot of people comparing this to the flu, for example. Is it difficult to be able to state facts about the virus given that there is still a lot that we do not know . Is there just one strain, are there two strains emerging, one is more mild and one that is clearly more fatal . What do we know now about the virus, and is it sufficient to be able to say what the mortality risk or rate is, given that we also do not have complete testing, depending on which country you are looking at . Abdi you are absolutely right. In the midst of outbreak, the biggest challenge has been with misinformation. So, getting the right information from trusted media is very important. As you say, this is a new virus. There is a lot we are learning. China and all the countries sharing information, there is a lot we are learning about this virus. First, how is it comparable with the flu, there are two things will look at. How easily can it spread, and how deadly is it. When you look at how easily it is transmissible, in from the data from japan, korea and china, it can easily spread within confined settings. A place like a ship. Outside there, how easily it is transmissible, we are learning more and more. Going out into a shopping mall, it is very unlikely you can get it there. But in a confined setting like a home or a meeting or conference, it can easily be transferred. The second question is how deadly is it. Determining that in the midst of the outbreak is very, very difficult. We are doing different investigations once the outbreak is open. But we estimate among the reported cases, how many of them have died. These are really rough estimates just to give you an indicator. But what it depends on is the level of testing and the severity. So if you are only testing be high. Cases, it looks but in a place like korea, it seems around 1 or less than 1 . So countries may be higher than not. But what is more important is the disease is affecting our elderly, and we need to protect our vulnerable, our mothers, grandmothers need protection, and that is solidarity we have been calling for. 1 is rough and difficult on the elderly and we need to protect our mothers and our grandmothers from this disease. Haidi you mentioned testing as being crucial, and that was essentially what was said to me yesterday. Given how much we do not know, he would like us to test more rather than less. But that is not happening in most countries. South korea is the exception in terms of willingness and capability to test. You are coming to us from manila. Is it worrying to you that companies countries like the philippines and indonesia, where we have population density in a lot of cities, are not seeing many cases because virtually no testing is happening . Abdi we have to assess countries in four different categories. Countries that have not reported any cases, countries reporting their first case, countries reporting multiple cases, and large communities. Initially for a big country like korea, they are doing extensive testing. Are. Based on where you where you have more cases you will be testing because what you are doing, for every case you detect, you go around and find the contacts and test them. The initial phases of the outbreak varies from one to the other. We see more countries testing based on a risk approach. It depends on where you are. With a globalized world and a lot of this taking place before travel restrictions were put into place, doesnt that divergence in testing approach just open the window for Community Transmission to happen . Abdi that is a potential that can happen, and we are encouraging all countries to prepare. One of the key ones is a Lab Diagnostic and surveillance system. Relying on only travelers will not be enough. We are calling for countries to expand their surveillance networks. From patients presented with flulike symptoms, others with pneumonia, test them to get an indication of what is going on in the community. That has been our message from the past, prepare. I have seen modeling by economists talking about the real danger in terms of the lack of availability of medical equipment, of therapeutic, even things like ventilators in places like the u. S. And australia to be able to do with what they see as the inevitability of how this virus will progress and spread throughout the community. Is there a dangerous shortfall when it comes to medical equipment globally . Abdi absolutely. If you remember yesterday, we were calling all countries to wrap up and move from limiting restrictions. Some countries have been calling restrictions on critical we are calling all those companies to increase the production so we can accommodate this demand. We are aware about it. Countries report outbreaks, it will put a strain on the Health System and health care workers. Haidi the Australian Government a couple weeks ago said we are operating as though we are already in pandemic conditions. A lot of criticism that this is a Global Pandemic by other any other name. Can you tell us why the w. H. O. Is refraining from labeling this as a pandemic yet . Separatehave to pandemic from a technical word and the colloquial use of it. For us built on the lessons we have learned from 2009, we shifted from pandemic phase one. What we have right now is a Risk Assessment approach and mitigation measures. We are calling every country to do its own Risk Assessment. It is very hard to put countries who have 10,000 cases and a country who has just one or two cases. We justify it into four categories. No cases, countries dealing with ae case, 10 to 15 cases, and large community. On that categorization, of it has theime potential of causing a pandemic. We will call it when we reach there. This will be a judgment, and approach with member states. We do not want to all of a sudden call it a pandemic when we do not have all the measures. We have been calling for day one, preparedness, preparedness. This virus is going to come to your country and your communities. How prepared are we . And the speed and the solidarity. That is the main message. The virus will come to you. What is the speed level and how much solidarity we have. Haidi thank you so much for joining us. Abdi mahamud, internet manager for covid19 from the World Health Organizations western pacific regional office. Lets get you up to date in the meantime with the latest first word headlines. Karina mitchell in new york. Karina italy is ready to extend travel restrictions from the north to the rest of the country as cases of the coronavirus soared by 25 . More the hat more than half the nations in the world have the infection with cases doubling. The w. H. O. Is stepping up its warnings seeing the threat of a pandemic is increasing. U. S. Stocks saw their worst day since the financial crisis, and asia is entering bear territory. Australian Consumer Sentiment fell again last week, the third consecutive weekly decline, sending the index to its lowest level in almost six years. The reports of confidence fell the weakest4, reading since 2014. The report is echoed by a survey which says the gauge of Consumer Sentiment slid to 4 in february from 1, the weakest since july of 2013. The route on wall street has reshaped the landscape for the worlds wealthy. Jeff bezos and Warren Buffett some more than 4 billion wiped away. While asias most wealthy man lost almost 6 billion. In outright numerical terms, energy mobiles are taking the biggest financial hit, with oil mired in a new price war. 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. Im Karina Mitchell. This is bloomberg. Next, moreng up change in malaysia where the new Prime Minister has kept one of the heads of one of the countrys biggest banks to be his new finance minister. We have all the details next. This is bloomberg. Haidi lets take a look at the markets. Certainly finding newfound support when it comes to trading in the Asian Session after that monstrous selloff at the start of the week. U. S. Stocks seeing the biggest oneday decline since 2008. We are seeing declines when it comes to chinese equities. Csi 300 seeing a downside of close to 1 . Hang seng retreating from earlier gains. 3 t is a market just about away from falling into a bear territory, which we had not singapore stocks seeing upside of. 8 in the Current Trading action. We are seeing malaysia just online with. 6 to the upside. Malaysias new Prime Minister picked to head be tasked with implementing a 4. 8 billion stimulus package to counter the economic damage from the coronavirus. And now from the dip in oil prices. Our economic editor is with us with more. We have been talking about this being a perfect storm for much of the world, but what a perfect storm of economic, virus implications, and a political situation for malaysia. Yeah. Thats right. Malaysia has had its own domestic uncertainty for a number of weeks. Cabinet announcement yesterday and a new finance minister being put in place. A bit of a surprise. I think it is generally seen as positive. Coming intechnocrat as opposed to a political appointee. The minister is well known within malaysian banking circles. He is a career banker. He is the ceo of one of malaysias biggest banks. He has been an investment banker in the past. Has a background in accounting and economics. You see the new Prime Minister trying to suddenly install some market confidence he to show investors competency to show they are ready to tackle these economic challenges. But it is a perfect storm. We have not only the Coronavirus Impact that is playing out, but now we are seeing a huge decline in oil prices. Exporteris an energy and very reliant on those oil revenues. Very going to have a negative effect on that. What tools are available by the central bank and what are the expectations of fiscal policy from the new finance minister . The new finance minister is going to have to roll out the fiscal stimulus that was announced by the former Prime Minister not too long ago. 20 billion fiscal stimulus. Mainly directed towards those businesses that have been directed towards the virus. Also getting some support to consumers. And i think that also we will look to how he handles being able to plug that revenue gap. Revenues ared, oil a big portion of malaysias budgets. We have seen oil prices limit to below 30 prices plummet to below 30 a barrel. They had been estimating and oil price of 62 a barrel. You can see a massive shortfall is coming. We have seen one bank today estimating their budget deficit for this year could come in as high as 4. 5 of gdp. That is from an estimated 3. 4 . Be how he isl going to get the additional tax revenue. Its a complicated factor in malaysia, because a new government that came in abolished taxes shortly as part of the campaign pledges. Toolso not have the tax to get the revenue that they need. And then also i think we are going to see the central bank also having to step up. They had already cut Interest Rates once, and more will suddenly becoming in the coming suddenly be coming in the coming months. Trading closebeen to near twoyear lows. Thank you so much for that, nasleen nasreen. We just wer, are going to go through others in the revamped cabinet. We are going to speak with the former deputy Prime Minister about what it means for malaysia. That conversation at 11 30 a. M. In hong kong, 11 30 p. M. In new york. We are continuing to watch the situation when it comes to trading in asia. Balls areike the losing control of the situation. Major markets trending lower again in the Asian Session. Msci asiapacific in his third day of losses, off by about. 7 . The tech heavy taipei taiwan index off by 1. 25 . But a rebound for indonesian stocks after that market fell into bear territory. This is bloomberg. This is bloomberg. Haidi the bank of east asia is considering options including the sale of its insurance assets as part of its strategic review. It is being besieged by activists investors. They earned 8 of the ashares. They could be seeking more than 1 billion from sale of assets including general insurance asset as well as its Pension Fund Business in hong kong. They announced last week they hired goldman for a review. We continue to monitor that story as of elements come to us. President trump reversed course on the need for economic stimulus hours after markets posted their worst losses and more than a decade. Jodi schneider is here. What are these measures that he is considering . Jodi President Trump said today at that press conference he would be considering he said significant measures, including looking at a payroll tax cut. That would require congress to approve it. And at this point democrats do not seem willing to go ahead with that. Democrats prefer other kinds of measures. They would like to see expanded sick leaves. About one quarter of working americans do not have any sick leave. 40 in the service industry. They would like to see things like free testing for the virus, and also things like expanded Unemployment Insurance for those who may lose their job as a result of any cutbacks. So, they are looking at the side, the president is saying he is looking at a payroll tax cut, but we will have to see if they will be other measures as well. Haidi Jodi Schneider there. We saw u. S. Futures rebound on the back of these expectations of fiscal measures from the u. S. Government. A lot more to come. This is bloomberg. This is bloomberg. That is almost 11 00 in singapore. Here are the top stories. Asian markets resumed declines as threat of the coronavirus spread. U. S. Futures rise modestly as President Trump trials measures to tackle the infection. Some of closed back mondays historic losses but valve nod saudi arabia surrender. Italy locks down the whole country as virus cases rise further. The World Health Organization warns a pandemic is near. This this Bloomberg Markets asia. Lets get to market action. Stabilizationng a across the region and in u. S. Futures after a brutal session on wall street. The worst day since 2008. We sought Circuit Breakers triggered for the First Time Since the late 1990s. We had seen declines of to be ok thanks. The asx 200 off 4. 5 . At the same time earlier today we saw s p futures off from the record by more than 20 . At least for now we are out of that decline, up by 2. 2 after President Trump said there will likely be an announcement that comes tomorrow. Were also seeing safe haven beds start to fade across asset classes. The japanese yen is the worst performing currency today. Dollaryen trading at the 103 handle again. Gold falling from a sevenyear high. First day of declines in four. We are seeing strong gains in yields as we see bonds fade. Some of the largest moves in more than three years. Haslinda some semblance of calm returning perhaps. Thank you so much for that. Management wells hewre now. You say buy on dips. Why buy when some banks have limited space to move . Firstly, we did feel the markets were overbought and overdone on the upside. Clearly if you have a view this is a multiquarter event, timing will be difficult. What is interesting is if you look at china and korea, there getting matters more in order. As well as property sales. Clearly well below average levels. That will be interesting to watch. Haslinda asset prices close to reflecting fundamentals right now . Prashant they are hard to pinpoint. You have to think about what is priced in. Again, they are better reflecting fundamentals. Can they go lower . Absolutely. By definition we could break lower in the coming weeks. Haslinda when you say buy the dips, buy more conviction calls . Prashant we upgraded overnight. And we think it is a big beneficiary of not just what is happening on the health side, but morten serin more importantly with biden pulling ahead of sanders, less risk on the Health Care Sector into the election. Now priced in after the big selloffs. We have a chart here on the bloomberg terminal, which suggests earnings for health care are likely to be relatively decent. Not so much for other sectors, though. Are you concerned if you buy that particular dip, you could be catching a foreign falling knife in the context of oil fall . Prashant yes. In terms of health care, it is a megatrend. When you are looking at cyclical sectors like oil you have to be more patient. The key in oil is to focus on investmentgrade companies that are oil majors and high dividends and are safe at a much lower price. This downturn in oil could be one quarter, or multiquarter were even 1. 5 years. In terms of how you implement it, it is different. Paul when you look at things like the duration of the price floor, maybe a quarter longer, what sort of catalyst are you looking for that would signal an end to it . Prashant the market is going to put pressure on the participants like a boxing match. If Oil Prices Keep going lower, that makes a higher probability that they come to some sort of agreement. But clearly there is the chance that does not happen and you have to factor that in. And you need a gradual economic coverage to actually help on the demand side after the supply shock. Haslinda when you look at the vix, people are complaining about how there was a lack of volatility for a long time. Now when you look at vix, you look at this chart im going to show, we are looking at vix at above 50. How are you factoring that in in this strategy, and how do you think the fed would factor that in . Prashant the fed is clearly worried about shortterm liquidity. They did not want to see credit markets lockup. Important beyond Monetary Policy which has limited effect, as we highlighted earlier, that helping shortterm working capital issues is a big thing. Vix is a measure that shortterm could cumber come under pressure. In the mediumterm, fiscal side is very important. It has to be targeted, though. Because that is what really hurts you in a supply and demand shock overall. Haslinda do you see the fed as a fed that is going to zero . Prashant it is possible. We have 54 this month. 50 or another 50, up to more at the next meeting in the middle of march. And if things get worse, they have seen to be proactive and leading central the banks leading other Central Banks. Paul is easing the right medicine in the situation . Perhaps something to do with bond buying be better as we see yields creator . Maybe intervention in the yield curve control, Something Like that . Prashant countries that are furthest along negative rates, japan and europe, absolutely. Up hurting other participants like the banking system. If you have high nominal rates you can cut. But like the u. S. Last year there was help from the liquidity injection. But in this level is less. We need fiscal is the bottom line. L we have never been there has been a lot of discussion about recession. Guggenheim saying it is inevitable. Im wondering what your view is. Prashant for the next quarter, a technical recession in some of the most Effective Companies countries, europe, countries already barely belong drawing below 1 . It is likely at least for one quarter. Haslinda how much can it do thursday . Prashant we see a cut in the deposit rate to. 6 . Again, i think the more interesting thing is what they do on ltro, on targeted lending. Will they buy more corporate bonds, asset purchases . I think the market will be sensitive to the other measures as well as company rates. Haslinda im wondering right now, so much volatility and people are looking for havens. Apart from the obvious haven plays but the yen, gold, is there anywhere else to hide . Prashant when we get days like yesterday there are very few places to hide. But we do like gold in the mediumterm as a haven. Having some cash, if you are an investor that is fully allocated, having some cash is helpful in these situations. That is the ultimate diversifier. But the further we get into this, the diversification impact example create credit hold of quite yell. If you havent equity combined with credit, you can stymie some losses. Haslinda no longer a good hedge, correct . Prashant less so on its own, yes. Haslinda what do do with treasuries . Prashant as a portfolio, the short end of the curve, that was not good hedge. From here we clearly do not think they will go below the zero value as things get worse. You really did not have a replacement for that impact after you get to the zero bound. Haslinda we have to leave it there. Prashant bhayani from bnp paribas Wealth Management asia. Now its at the first word headlines with Karina Mitchell in new york. Karina italy is ready to extended travel restrictions to the rest of the country as cases of coronavirus soared by 25 . More than half the nations in the world now how the infection, with cases in spain almost doubling. The World Health Organization is stepping up its warning, saying the threat of the pandemic is increasing. U. S. Stocks saw their worst day since the financial crisis, and asia is entering bear territory. President trumps incoming chief of staff mark meadows is quarantined after he came into contact with a person confirmed to have the coronavirus. The republican congressman from North Carolina joins five other lawmakers who are self isolating or restricting their wok. Work. Chinansumer inflation in moderated slightly last month. Prices reef begin next rose 5. 2 percent in february from a year earlier, following a 5. 4 gain in january. But food prices rose the fastest in almost 12 years on a continuing spike in pork costs. Producer prices slowed with the index showing a decline of. 4 . And australian Consumer Sentiment fell last week, sending the index to its lowest level for almost six years. 100. 4, te fell 4. 2 to he weakest reading since may of 2014. The report is echoed by a survey which says a gauge of Business Sentiments led to 4 in february from 1, the weakest since july of 2013. 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. Im Karina Mitchell. This is bloomberg. Paul thank you. Just want to get you across the big move in hong kong. We have shares of soho china, up onmore than 35 right now the news reported by reuters that blackstone is in talks to take control of soho china for a price of 6 per share. Thats a pretty decent premium over what it is trading at the moment, 4. 15 hong kong dollars. That is after a big move up, 39. 93 . Blackstone offering 6 per share for Property Developer soho china. Still to come, the former malaysian Prime Minister joins us to look at the countrys revamped cabinet. That is coming up in about 20 minutes time. Haslinda and oil comes charging back from an historic crash, but there is still a price war going on that got us there in the first place. This is bloomberg. Is is bloomberg. Checkda lets do a quick on the asian markets. Hong kong currently up by. 5 . Blackstone is offering six hong kong dollars for a share of soho china. A whopping 38 higher today. Csi 300, pretty much flat at 4000. The number of coronavirus cases has now passed 110,000 globally. China has been reporting fewer new cases. Infections have risen elsewhere. Pay top w. H. O. Official says a top w. H. O. Official says there should be no let up in efforts to contain the virus. Itthis is no guarantee that will remain so and we have to remain vigilant. There is no room for complacency. Paul our china correspondent selina wang joins us from beijing. What is the latest in china and what is the w. H. O. Getting out of not con this a pandemic . Cases the number of new continues to slow to a trickle. 17 cases in Hubei Province. According to state media, wuhan has closed 14 of its temporary hospitals. The city earlier converted many public venues like gymnasiums into temporary hospitals to deal with a flood. As more people recover and are discharged, they are now able to close some of those locations. The big concern is china is the fact that these cases could be reimported from other parts of the world. We have seen several instances of that. And you are seeing the top government leaders call for stricter measures in the bigger cities to try to contain that kind of attentional reimportation. Even though the coronavirus has spread to more than 100 countries and more than 100,000 cases, the World Health Organization has held off from officially called this a pandemic, although they say we are getting close to that point. They say they want to focus on containment which has been successful in places like china and south korea. They did not want to spread any panic at this point. Haslinda are chinas factories getting any Economic Relief . Selina they are starting to get back up on their feet. According to a National Survey of 2500 chinese Companies Involved in trade, almost 81 have resumed operations. But no relief yet because they are now getting hit by a drop in demand for their biggest trading partners as the epidemic spreads around the world. Manufacturing firms across china have told bloomberg that even though they restarted operations, they are facing canceled orders, lower demand from abroad. We spoke to a Lighting Company said that the virus forced them to cancel visits and exhibitions and have since seen a drop in orders from some of their big clients. It is hard to determine the exact effect the coronavirus will have on prices and inflation in china. If you look at the february data, consumer inflation moderated while Consumer Prices returned to deflation. Looking ahead there are a few simultaneous impacts. Upward pressure on food prices that may remain as you have issues that have disrupted the food supply chain. Meanwhile, you also have weak demand for consumer goods should keep overall inflation in check. Paul we are just getting some breaking news that xi jinping has arrived in wuhan. Tois paying his first visit wuhan since the coronaVirus Outbreak. What isterms of optics, the significance of a visit like this . Selina well, we have been waiting for quite a long time to see when xi jinping himself would visit wuhan. He had earlier a few weeks ago visited a hospital in beijing. This seems to be a sign of confidence that the party is confident that they are really seeing containment in Hubei Province. It comes on a day when you are seeing a very low number of new cases coming from the country. They are shutting down a lot these makeshift hospitals. As you have seen this massive propaganda push inside china to brace for the efforts wuhan had taken. You have seen a lot of state media repeat the commentary from the World Health Organization praising those efforts. So this is really a sign culminating that they feel confident enough at this point that there is containment in hubei, wuhan, and they can send their top leader there to show face. Haslinda selina wang in beijing, thank you so much for that. A headline to tell you about out of japan, Prime Minister abe says he is submitting to Parliament Today a bill on those emergency measures. Abe will be implementing those measures. We will bring you the details as they come in. Lets talk oil. Their biggest drop in a generation. Asia reporter joins us now. It is too early to call. It is also about demand issues. Dan it is too early to call it a rebound. You have people lucky enough to be shorted the last few days. And you have some people trying to opportunistically see if there is a rebound. But the fundamentals of the market are exactly like you said. You have a unique situation right now of a supply shock with opec putting all but screwed onto the market. At the same time as the coronavirus reverberates around the world, taking away demand that we were expecting to see grow. They said for only the First Time Since 2009, oil will contract this year. The oil market has no relief from either side of the equation. Haslinda in demand from asia, what are we seeing . Saudi arabia slashing all of its prices to all regions. How is asia taking that . Dan they are taking a little bit of an opportunistic look. Lower prices from saudi arabia means chinese refiners are starting to see a little more interest in crude. They can put it in storage if demand has not risen up. Or they can process it as lower fuel. It tends to stimulate some demand. But with the coronavirus, it is really a unique situation in the oil market. Paul dan, this is a real heavyweight slugfest between saudi arabia, russia, u. S. Shale. But i do wonder how some of the smaller Oil Producers will cope from this. Who will be Collateral Damage . Dan you are going to see smaller producers in the u. S. , smaller shale producers are really going to struggle to maintain through this if it lasts too long. These companies overleveraged to drill with the idea they would eventually be making enough oil they could pay it off. Now with crude prices being cut by one third the last couple days, if they cannot get up their cash flow to pay off debt, you can see bankruptcy consolidation in west texas. Haslinda dan, thank you so much for that. We continue to track oil. Brent crude currently up by 6. 7 . Wti up as much as 33 a barrel. To keep uptodate, we are running the function vrus on our terminal. Find our landing page with the latest figures from the cdc headlines from the bloomberg newsroom, as well as how specific companies vrusgo. This is bloomberg. Paul we have breaking news. Earlier today President Trump signaled that there would be a stimulus package to be unveiled tomorrow in the u. S. We know it is likely to include something about a payroll tax, and shortterm extension of paid sick leave. But we are learning what will not be in it, and that is support for the air travel industry, which has suffered particularly by the coronaVirus Outbreak. This is according to people familiar with the matter. They will be no aid for the travel industry. That obviously raises risks that the plan will not go far enough to satisfy investors. That breaking story coming across right now on the likely support measures to be unveiled by the white house tomorrow. All right. Lets get a quick check of the latest business flash headlines. The first volkswagen jury trial in the u. S. Over the beetle cheat diesel cheating scandal has ended what might be called a draw. Five car owners failed in their claims while five others will share damages. It was to serve as a guide for 350 other drivers still suing vw after rejected settlements totaling 14 billion, and many other claimants who had accepted. A Senior Executive for the largest budget carrier in the philippines have agreed to take pay cuts in order to avoid laying off staff. The president declined to give numbers but said the move shows the companys commitment to employees. They employ more than 4000 people. They say profit this year will be hurt by the coronavirus. Haslinda still to come, a look at malaysias new cabinet with the former deputy Prime Minister. That is to come very shortly. Taking a look at the markets, asian stocks trading mixed after a massive selloff. China building on its gain for the day, up by. 8 . Inflation coming in at 5. 2 year on year, lower than 5. 4 percent in january. This is bloomberg. Is bloomberg. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. Do not buy this debt. This is not going to repair itself. This dip. Ot buy many countries are going to be hit. Youre going to see a whatever it takes policy from the fed. I do not think this is micro problem. This will sort itself out but it will not sort itself out before further damage. Guests commenting on the market moves. Lets take a quick look at where we are. It does seem like a turnaround in sentiment and we are seeing gains in some of those indexes. Trend,kei bucking the down 1. 5 . The kospi up. S p futures pointing to a higher opening of 1 . Lets take a deeper dive. We are joined by from new york as a reporter Sarah Ponczek. Talking about a stabilization of sentiment, art me . Why we seeing that . Our entry . Arent we . Yes, major markets across the asiapacific region trading on the brink of a bear market. On wall street, the worst drop since 2008, triggering Circuit Breakers for the First Time Since the late 1990s. That is very extreme. You could save is a natural stabilization and a natural reaction. We did see this coincide with the end of President Trumps press conference earlier on in the asia morning he did talk about floating a payroll tax cut also at the same time he did say some major announcements will come tomorrow. There have been headlines crossing the terminal in the past 10 minutes outlining what that might be, saying the proposal does include a payroll tax cut and shortterm paid sick leave. Still, there many questions as to what the true package will look like. Give the meantime can you us a sense of the magnitude of the flight to safety . It has been extreme. Your today you look at what gold prices have done. What we have seen in on markets around the globe. Gold prices trading at seven year highs. At one point we did see the Treasury Curve low 1 . We have seen the 30 year come back to above that. Within the equity market we have seen a move up in quality. Shock. Th an oil price that is bringing it concerns over a credit crunch. Goldman sachs has baskets of socks stocks date breakup based on the health of the Underlying Companies Balance Sheets always on the us trading session, companies with strong Balance Sheets outperformed their low Balance Sheet counterparts. Since largest margin 2008. We have heard wells fargo, goldman sachs, j. P. Morgan advise a move up in quality and we are seeing that, if you look at the underlying underneath the benchmarks and the turn of the stock market. There is so much uncertainty. Oil, coronavirus, economic slowdown. Where do traders look for the next signal . Already we are dealing with two black swan events in 2020. As to the next signal i imagine investors would say the press conference President Trump will hold tomorrow where he says a dramatic announcement is going to come. We did see that risk sentiment turn on the announcement today of a press conference that will give us the actual announcement tomorrow. Markets have been screaming, calling for stimulus, not just on the monetary side but on the fiscal side. This will be a move from the u. S. Administration, the government, to produce a fiscal response and that will give us a first sense and Market Reaction as to whether or not that is enough to appease markets. And then the economic data. Southbay research is a top forecasting firm. They sent out a note that within their claims forecasting they are starting to see a hit to jobs within u. S. Claims data. We will get that later in the week and investors will Pay Attention to the labor market. Thank you. Breaking news out of australia. Health minister greg hunt confirming there are 100 coronavirus cases in australia, up from 80 this morning. The Prime Minister Scott Morrison today saying the coronavirus could pose a bigger risk to australia than the Global Financial crisis. We are waiting on the announcement of a stimulus package expected later today. Lets check on the first word headlines. The rows on wall street has reshaped the landscape for the worlds wealth a. Jeff bezos and Warren Buffett sought 4 billion wiped away. Asias most wealthy man, all caps on bonnie lost 6 billion. 6b. Ukesh ambani lost qantas is expanding for the third time in three weeks qantas cuts for the third time of aree weeks, nearly all fleet grounded as qantas switches to smaller aircraft. Its budget vision jets start will suspend flights to bangkok and cut services by have to vietnam and japan. Qantas want airbus to delay its order for the a350. The democratic president ial candidates return tuesday as six states hold primaries. Joe biden will aim to consolidate his super tuesday laid while Bernie Sanders hopes to repeat his michigan victory. It will be the first chance voters have to decide since the contest narrowed to a two horse race. Afghanistan scattered politics has seen two rivals declare themselves president. Was namedi president but Abdullah Abdullah denounced the boat as fraudulent and said he is the rightful leader. This threatens the peace till between the u. S. And taliban and is another headache for washington two decades after the invasion. Global news 24 hours a day on tv and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Haslinda thank you. Picked Prime Minister the head of one of the countries banks as his finance minister on monday. He will replaced the former Prime Minister after a power struggle. Lets assess the political environment and bring in former malaysian epiPrime Minister from kuala lumpur. Former malaysia deputy Prime Minister. We saw the cabinet being announced yesterday. As ad big technocrat named finance minister and we saw familiar unknown names. What to make of the list of names in the cabinet . Showsl, the list of names there unknown people because the majority of the mps. Even though i hold in high the doctor, excellent, the others are questionable. They are all still tainted with the crisis. They are still there. They were the ones when this crisis unfolded, they did it org to help stop from descending into such a big massive crisis in 1mdb. Youre suggesting this is back to the old. If that is so, are their policy measures that may be implement it that you hope not to see . Yes. Old wine in a new bottle and hopefully this wind is not turned into vinegar. The policies, the cropped regime , how you are entitled if you are someone that you know or in a high position. This corruption that we actually in the last election we fought against so much, so hard. And we were with the people, the people voted us in. Disappointment because we were going so well after 60 years of power, that we now have a chance to change, transition. Even though people had high expectations, they did expect a bit more rapid change. Yet i think they were willing to give us a chance to continue. Then this happened. And i do not think the voters are really for it. The voters are actually thinking this is not credible or legitimate. Even though it is legal. The big question has to do with 1mdb. How likely is it that promise and the other members and goldman, will see more leniency under this administration . That you have to wait and see. As beginning, theres a bit of leniency, bit of letting go of certain, of the things that goes on in court. If you think the courts are get these 20 we people into the government into positions of power, of influence, that is what we need to seep we actually do not want it to happen. The Prime Minister said he has chosen them, he has vetted them. Yet he otherwise, why did he take some of them that actually case of onein the mdp when it was going on . Not have high hopes in this government and this cabinet. What is next course of action. Montero mohammed wanted to table a vote of noconfidence. Is that still on the table . How confident are you that you have a majority . Well, in case of a delay in the parliamentary session, uncertainty. This is part of the things that we can do to show the new cabinet and government is not. Uch support yet we have to wait for the parliament to convene. I think we will have to wait and see how it will unfold because everything looks to be too uncertain. Insecure. Fragile, may i use fragile. Will her upon do in the meantime . The cabinet will not meet until may 18. That is a long time. What is the plan . Harrapan do in the meantime . We have to consolidate and be ready for any eventuality, fresh elections or anything. We have to strengthen ourselves. Because we were in opposition before, it is not much toference if youre going become opposition. It we have the peoples vote. So we have the people support. That is what they are banking on. They know that we stand on our principles. Have fought for justice. People to bet for put behind bars because of corruption. He fought for all of this, to cleanse our government. To cleanse our country of corruption. Wan azizah, we welcome back the defectors . Betrayal is quite difficult to accept. In any circumstances. These are challenging times. When you take a look at what has transpired, what has happened. What you think, in your opinion brought harrapan down . Some of them did not have enough or felt they do not have enough. They felt probably they wanted more. That, i think, brought us down. Lost. Not we have many of us who really, really believe in the future. Principles and the goodness of our heart is that you can pull this through for the better. This is what i think and why i thought all of this years. Thats why i fought all those years. If and when there is an election, who will lead, will it be your husband or would it be mohammed . Meeting and i a think most probably it will be on water. Anwar. So much for your insights today. Show,to come on the Southeast Asian economies confront market volatility. , and economists joins us here to assess risks and opportunities. This is bloomberg. We want to get you what is happening on the topics in the name of volatility. Moving into2 positive territory, big swing there. With the loss erased. On the topix, erased a loss of as much as 4. 2 and is now moving into positive territory. A big swing there. Southeast asias biggest economies meanwhile looks set to slow this year due to the threat from the coronavirus. Our next guest in downward revisions to his 2020 gp growth forecast for the reason region. Lets bring in nomura chief asean economist what are you expecting to see their in the communique . It will be interesting to watch in terms of what they say on the impact they are seeing, the input not the Economic Impact of the coronavirus and what sort of policies they can discuss to try to slow the spread but also mitigate the negative factors on the economy. Expect someeast kind of assessment. Although i think it will be difficult for them to discuss within the confines of the meeting, and come up with policy coordination. I think that will come when the Central Banks and ministers of finance meet in a few weeks. In terms of Central Banks we have a chart on the bloomberg terminal which shows real rates in asia. What is your expectation for who is going to move next and how sharply that move is going to be . Couple of have a Central Banks meeting next week, the philippines and indonesia. Here. A mixed bag with inflation coming down due to oil, esp will see that as giving them scope to ease so they will cover when he points under my forecast. Bi is in a dilemma because while there is a need for them to support the economy,fx will be a main consideration for them. The last few sessions. I think it will be surprising for them to keep lowering Interest Rates because historic Interest Rates differentials matter for fx and it would be hard for bi two Interest Rates. But they have all this talk of frontloading, being ahead of the curve. How closely will the governor watch with the fed does in this instance . Gives him scope to cut rates further. To do it when the idr is under pressure. They have other tools they can use. Macro potential easing they can do, to provide more liquidity in the banking system, cut reserve requirement ratios, a bunch of things. And fiscal policy is starting to look like they want to increase the deficit to support the economy. You talk about how the rupiah remains to be under pressure, that triple intervention isnt that working the way they wanted it to work . It has stemmed some of these pressures. But given the extent of the impact from the virus and oil prices coming down which tends to be negative for commodity producers like indonesia, it is not been able to offset everything which is why we are seeing a lot of pressures. They will have to intensify the interventions and complement them with other measures like fiscal policy. The impact from the coronavirus has been worse than people anticipated. With the tightening in the financial space, will that exacerbate the Economic Conditions . Yes, absolutely. A few weeks before we already made the first round of downgrades. The deterioration has been stark. Now we have the fire spreading turn nationally. Tighter financial conditions where stockmarkets are behaving in the last few days. There is a compounding effect of a lot of these factors coming together that makes it more challenging to counter the negative impact. In terms of compounding effects i want to talk about malaysia. , still 3. 2 e chart for the year. We have a dire political situation as was outlined by our last guest, the former deputy Prime Minister and now the oil price crater in. What is your outlook for malaysia . 3. 2 is a week number potentialsia, below but given the factors you mention risks are still tilted to the downside. Uncertainty isal an important factor at play it adds to the uncertainty. Government time the needs to focus on addressing these problems. But the issue here is we are in the middle of transition and it is hard for the new government to really drill down and think about the solutions to counter the effects. And oil is a very important commodity for malaysia. It will have fiscal effects. It will constrain the capacity of the government to provide further stimulus package when it becomes necessary. Prices isnge in oil an area people are watching not just because it is a boon for some but not others, but also because of the defaults potentially in the energy sector. Given indonesia, given malaysia, how concerning is that . I think from a credit standpoint, the risks are rising as we see spreads widening. It starts from countries or sectors that have been hit hard by covid19, tourism and travel related sectors. Then it is expanding to the energy sector. There arese countries bigger and Smaller Companies servicing around these Big Companies and they are the ones that need help and will be more vulnerable as the result of the drop in oil prices. Been very helpful. Thank you. As you go to break lets look at how some of asias biggest stocks are doing it the market uproar. This is bloomberg. Lets do a quick check of the latest business flash headlines. Iphone shipments plunged 60 last month according to data from china. Rus forced thei closure of stores on the mainland. Deliveries fell 500,000 from a year ago as chinas mobile phone shipments dropped 56 to 6. 4 million. Apple started ripping outlets in. Hina to help sales and demand. James lyons in a memo to staff and Senior Management are said to be taking voluntary pay cuts of up to half of their compensation and general employees will have pay rises suspended temporarily. Lets take a look at how the markets across the asiapacific are doing. Perhaps what you would expect, the nikkei a few markets in the red, currently off more than a quarter of 1 . Hang seng and shanghai composite in positive territory. This is bloomberg