Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

Texas sees record daily infections. Walmart demand shoppers wear masks. Some of the most prominent have beenn america hacked. We will have the latest. Lets take a look at how we are shaping up when it comes to the futures session going into the start of trading this thursday in asia. Take a look at u. S. Futures pointed a little bit to the negative, flat at the moment for futures contracts after u. S. Stocks climbed to her than a one month high. We had renewed optimism that we are getting closer incrementally on this Virus Vaccine Development front, not just with the news on moderna, but also a rival set of trials being conducted in the u. K. , reporting some progress. We saw the s p gaining just shy of 1 and actually manage a drift back into positive territory for the year, albeit brief. Chicago looking modestly higher after the bank of japan governor , kuroda, provided some clarity albeit still a very dire outlook when it comes to the japanese economy but saying it was now past the worst and the recovery will be slow in their decision yesterday. Sitting futures looking like we will see a possible upside of 1 . We have jobs data on tap for australia. In new zealand, steady gains of just about. 5 . Shery in the meantime, President Trump indicating he does not want to further escalate tensions with beijing and has in private at least ruled out at additional sanctions on top officials for now. Tom mackenzie joins us from beijing. What does the presence apparent president s apparent restraint tell us . Tom at least temporarily, he is trying to moderate his actions against china even as the rhetorical and symbolic jousting has picked up in the last few weeks. We know that before he signed off on the hong kong metonymy act, which of course has been passed by the democrats and republicans in the house and in the senate, he signed off on that on tuesday. Prior to that, he was presented with a list of names of chinese officials, including the hong kong chief executive, carrie lam, but also chinas vice premier peer at he had the choice to decide whether he would sanction those officials as part of that bill. He decided not to. Of course, he could decide that he wants to sanction those officials at a later date, but for now, again, trying to moderate those actions against china. We know the u. S. Has sanction to some officials including a highranking member of the commonest party, a member of the u. S. And United Nations says are human rights abuses in changing. Xinjiang. The question of huawei is still in focus for the u. S. We heard from mike pompeo, putting new measures in place around visa restrictions for that company and some of their employees. Take a listen. The state department will impose visa restrictions on certain employees of the Chinese Technology Companies Like huawei that provide Material Support to humans engaging in Rights Violations and abuses globally. Sayingawei responded by it is disappointed with that decision and move by the u. S. , saying it was an arbitrary response from u. S. Officials. Are getting secondquarter gdp numbers in china as well as the domestic activity indicators. How much of a swing to the upside can we expect . A recoveryooking at that continues here in china even if it is fragile. Second quarter gdp, the forecasts are that you will get a print of 2. 4 percent compared to a retraction of 6. 8 back in the first quarter, which was an historic drop in terms of chinas gdp. A significant improvement from the first quarter, but the question is, can it be sustained . In historical standards with china is very low indeed. When we break it down to the subsections of the data, Industrial Production is expected to improve, a pickup of 5 . Retail sales, this is potentially a weak spot, so certainly one to watch. The forecast is going to get an expansion of. 5 following contraction of 3 the previous month. Fixed Asset Investment is expected to contract at a slightly slower pace than the previous month. Nomura sayingg that remains a distant prospect. Haidi Tom Mackenzie in beijing with a preview of the ecodata set to drop at 10 00 a. M. Local today. Lets get a check now of the first word headlines. Covid19 continues to surge in the u. S. With california reporting near record cases and fatalities. Nationwide numbers grow to percent, to almost 3. 5 million, with deaths topping 136,000. Ambassadors health at the entrance to ensure compliance. That decision follows similar moves by starbucks, posco, and best buy. The philippines is weighing their imposition of coronavirus restrictions around manila as numbers continue to rise up in metro manila will stay under General Committee quarantine until at least the end of the month and that allows most businesses to remain open. Tokyo has raised its virus warnings to the highest level in new zealand is preparing for a new infection surge. The bank of japan says the economy has passed the worst of the coronavirus fallout but warns the recovery will be slow at best. Governor kuroda and his team kept policy on hold amid signs of a deeper slump in coming months. They see a slightly faster pickup in the next two years. The governor says declining consumer demand has bottomed an Economic Activity is starting to show an increase. To it or shares fell in late trade after some of americas most prominent business and political figures had their accounts hacked. Bill gates, elon musk, warren buffett, joe biden, and others appear to send almost identical tweets about bitcoin with an address linked to an apparent scam. Bloomberg and apples accounts posted similar tweets. Twitter says it is aware of the security incident and is investigating. Shery we will look at how the social network is responding as shares fall after hours. Accounts are three fleet blocked from tweeting. Chinas hot stock rally is throwing fresh challenges at the credit markets. We will discuss that next with amy. This is bloomberg. Haidi cash hungry firms in asia spiked a surge in the regional dollar bond market with tightening for an 11th straight week. Sophie kamaruddin joins us from hong kong. These trends in corporate borrowing. Sophie starting with japan, there has been a rush with sales of corporate notes jumping 99 percent in june after tumbling in april and may, and last friday, that was the busiest for japan this year as companies build cash offers. This week, nissan returned to the market for the First Time Since 2016, and softbank plans to sell about ¥50 billion of bonds next week. And switching out the board, the yield premium on you and bonds, bonds had on yen retreated, brought down by the announcement of the be rjs expanded bond buying program. Now turning to china, the onshore debt market in contrast is flagging plans, being derailed by investors flooding into the equities space, dumping safer assets, so debt sales in china fell to a fourmonth low in june with firms shelving the biggest amount of sales in almost three years. Jumping into the terminal, we see the yield spreads between fiveyear corporate paper and Government Bonds widening the most in two years. This as we are seeing that move higher generally in chinese stocks. We are expecting this trend to continue this month when it comes to flagging debt issuance on the mainland market. Haidi. More lets get some analysis on chinas bond market and its impending growth data with amy ceeo paszek amy xie patrick. Give us your expectations of what we will see from the domestic activity indicators and the growth data out today, and given the expectations for an upswing, does that give further fuel to the fire that we see in the china rally . Amy good morning. Yes, i think, you know, the recent soft activity indicators tell you the market is absolutely right to expect a small positive quarter in the latest quarter for chinese gdp and the strength of the sequential rebound has actually been rather impressive. What i will be looking at today end demandthat the recovery is actually intact and is continuing to spread and what you see more from the micro data is actually that although consumers have resumed a certain level of spending within the chinese economy, they certainly have not gone back to their normal levels of activity and are still worried about the more mediumterm and longerterm income and employment aspects. I will be watching what happens with the property market. And the property data. In particular, the recent rise you have started to see and property prices in china as a result of all this stimulus and credit creation that the government has allowed and how the government really responds to that kind of speculation again. You are hearing recommendations from analysts like basically dont even look at the chinese bond market. The easyuities market. Is this and you completely disregard the credit markets at the moment in favor of the rally that we are seeing in stocks . The credit markets are currently, you know, becoming exactly as you described, the land of the forgotten, so there is explicit support behind the equity markets thats been ,reenlighted by the government for all intents and purposes. You can argue as to whether that is a wives move or not wise move or not. This is the way that china likes to show its strength. On the other hand, the government needs to keep the Government Bond market relatively stable and sanguine. In the grand scheme of things, that is not a forgotten asset class. I think that Corporate Credit is sort of less in between and experiencing a bit of a demand vacuum because there is not that same kind of explicit support as an asset class, unlike what you are seeing in the u. S. Investmentgrade market, but whether that is a theme that can last for several monster, or whether it is just the theme to i am lessdu jure, convinced it is a lasting theme. Shery this coming on the back of rising geopolitical tensions between china and the u. S. Intouch will this factor perhaps what china, what policymakers can actually do to counteract some of those risks on ongoing trade tensions, not to mention geopolitical tensions and sanctions coming from the u. S. . Amy that is a really good point. I think that, you know, this is giving explicit support to the equity markets as well as being backed by the recent strength of data coming through in the chinese economy. It really does give the policymakers in china is feeling of being in a position of relative strength, given tensions with the u. S. Have been rising of late, but my mediumterm concern is that it is up to the u. S. Whether they want to raise tariffs again later on in the year. For now, trump seems to be thinking that, you know, i have escalated a bit in rhetoric but i dont want to go there with tariffs just now, but ultimately, you know, the chinese economy cannot withstand the ratcheting up of tariffs in the same way that it could not the first time around. Would have to be cold and perhaps one of them would have to be allowing the currency to find a more market determined equilibrium as opposed to the strength that the pboc wants to see in the currency right now. Shery we continue to see chinas role in emerging markets grow. What does the latest developments around whether it is Economic Growth or the geopolitical tensions what do all of those represent for emerging markets now that china picks up 40 of stock value . Amy that is a really great point. It is actually becoming a bigger and bigger problem in u. S. Investments, which is china is taking up a large proportion of all these major indices. It will continue to take a larger proportion of major bond indices as well and to the extent that tensions continue to escalate in the mediumterm between china and the u. S. , and depending on what the u. S. Decides to sanction financially as well could be quite limiting for the average u. S. Investor in terms of where they can go. We have seen that in the past with countries like russia being a major part of a lot of u. S. Investors being excluded from those markets, being excluded from those yields and returns. I think it does pose quite a big headache for u. S. Investors. As for emerging markets as a whole, i think this trend, you will continue to see china will take up a bigger share of indices. Also, china is continuing to be a really large influence on emerging Market Growth as a whole. Largely been an industrial recovery. It is about production returning to normal. As a result, china needs to suck in all the inputs and commodities, and as a result, emerging markets being heavily commodities driven asset class you know, it rises up with that tide. Shery amy xie patrick, always great having you with us kid havingmore to come on you with us. Plenty more to come on daybreak asia. This is bloomberg. The past to reopening in many u. S. States and corresponding economic consequences remain unclear. We are very unclear. We cannot forecast of future we do not know. We are in a completely unpredictable environment. No models and no cycles to point to. We are going to have a much murkier economic environment Going Forward than you had in may and june. We are navigating an uncertain backdrop brought on by an extraordinary Global Health crisis. The pandemic has a grip on the economy and it does not seem likely to loosen until vaccines are widely available. Of cobitect the impact to negatively impact our earnings until we see meaningful improvements in unemployment and gdp. Some big names for the world of banking sharing their uncertainties. Goldman sachs managed to post its best result in years. Bank of america and Morgan Stanley are next to report. Lets discuss earnings with the Senior Analyst with Bloomberg Intelligence covering Global Investment banks and asset managers. Really, goldman again, beaching across the board. Beaching across the board with extremely strong trading and banking numbers, especially in those figures which are fueled by the strong Industry Environment helped by all this stimulus in the market help we have had, but positive in particular for goldman is the fact that they were able to outperform jp morgan and citigroup. We will see how they go against Morgan Stanley. Specifically for the company, the fact that they were able to build their capital ratio which thatrt of a key metric could prevent them from paying out certain distributions, including dividends. They were at a certain level. They are do to have a new requirement in october and the fact that they sort of brought their ratio up a lot quarter, and close to that october level, is a key positive for goldman. We know going into this that goldmans dividend risk was one of the most heightened. What have we learned . Alison so the fact that they were able to bring the capital ratio to 13 point 6 versus 13. 7 , sort of within 10 basis points in the fact that they were able to bring that up so dramatically from the last quarter, it illustrates the fact that they do have some sex ability around that balance sheet. Forexample, they sold off billion dollars in equity investments. Helped them to really shore up that capital and they did this spite the fact that they 950 a charge of about Million Dollars related to 1mdb. That is a lingering legal risk for goldman. They also built up their provision similar to the other banks, which gives them some cushion into the second half as they start to realize more actual losses. With Alison Williams Bloomberg Intelligence, with the latest on bank earnings. The guggenheim global cio says he expects Monetary Policy to remain was enough. He also warned of a stock bubble. In an exclusive interview with bloomberg tv, scarlet fu asked about companies continuing to add on debts despite the risk of insolvency rising. When you look at the market, there are five stocks that represent almost 30 of the total valuation, and we did an analysis that showed the relative pricings in terms of earnings yield versus the yield on the corporate bonds, so you find that the prices of those stocks are largely being driven around by changes in bond yields. Same thing is true across the board, but of course, those five a lot of theriven appreciation while value in other sectors so it is clearly a function of Federal Reserve policy, and for the near term, i do not think that there is any end insight. So we should probably expect that stocks will continue to go higher. I am on record saying i thought this was a bubble. It looks like the bubble that we live through in the late 1990s. Inwe recall that in 1998, the era of irrational exuberance, according to alan greenspan, the rally went on for two more years. Thatature of bubbles are they go along and they are hard to end up they are hard to predict how they end, but ultimately, theres probably money to be made in the stock market. Returns are better off in high yield corporate bonds. You just scarlet you just wrapped up a meeting with the new york Federal Reserve. If we can continue seeing stocks elevate for the next two years potentially, how comfortable is the central bank with the optimism reflected in the stock market versus what is happening in the real economy . Scott the fed is typically very tightlipped in these conversations. They want to understand it. Sure whether they think of it as a bubble or not a bubble but one of the comments that was made to me that i thought was very interesting is how will we know if this is a bubble . The answer is after the stock market crashes. Not to say that is not to say the stock market will crash, but if equity valuations remain higher or go higher, and then we get an abrupt setback, that in their mind would probably be the definition of a bubble. In terms of catalysts for that setback, we have something coming up at the end of this month. Patrick harker talking about a fiscal cliff. He is the philly fed president and he made the comments to mike mckee. You talked to people in washington. What is the likelihood that this will get resolved in time to prevent that kind of catalyst for a setback that could potentially lead to a crash . Scarlet Scott Washington is a hard animal to predict these days. I do know that other than a payroll tax holiday, there really is not much on the table coming out of the administration. For two will be back weeks. I think there is a great risk that there will not be a deal could extendaps we Unemployment Benefits by a couple more months. Not f senators do republican senators do not think that is necessary. High and we are in a seasonably week time for assets, a i think the possibility of severe setback between here and october is probably meaningful. Highprofile twitter handles hacked. Who was affected . What the social media site is doing about it and how investors are responding, next. This is bloomberg. Karina you are watching daybreak asia. Indicatingrump is cooler tensions with china, ruling out additional sanctions on senior officials for the time being. We are told this decision came before he signed the hong kong autonomy act on tuesday in contrast with the combative tone he struck in recent weeks. The white house is said to have drawn up a list of chinese officials to be sanctioned including carrie lam. Nevertheless, china says it is ready to take action against the u. S. For ending hong kongs special trading status. Beijing says the law violates International Legislation and has gross interference. The Foreign Ministry says that if the u. S. Receives china will take appropriate action against american individuals and entities in response. China will impose. We urged the u. S. To refrain from implementing the hong kong autonomy act and stop and bearing in chinas internal affairs. Karina the Trump Administration is preparing to impose visa restrictions on huawei employees. Pompeory of state mike says Global Telecom companies are now on notice if they work with huawei. Which staff are targeted. This is the latest u. S. Mail to limit huaweis reach. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Shery. Shery twitter accounts of some of the most highprofile Business Leaders and politicians have been hacked within the past few hours. Twitter says it is investigating the incident. Shares are down after hours. Kurt wagner covers twitter for Bloomberg Technology and joins us now from san francisco. We are getting a few updates from twitter saying that some functions are Still Limited while it addresses the incident. When can we expect functions to be back to normal . What is the latest . Kurt unfortunately, you know as much as i do. Didcompany the company stop people from tweeting if they had a verification badge. At least some of those people are back to tweeting now. Clearly, the company is saying they are limiting some functions. The fact that it has now been a couple of hours and they still do not know exactly what has happened or at least they are not sharing what has happened is certainly not a good sign. Usually, these types of things are disclosed quickly after people understand what has been fixed. Suggest this is an unusual type of hacking . Do we think this is more serious and different . Kurt i think so. It is evidenced by the group of people who were hacked and the fact that they were all hacked at the same time. We are talking about leaders of the financial industry, leaders in politics, barack obama, joe biden, jeff bezos. These are the most powerful people in the world who were all hacked at the same time. We have never seen Something Like that happen before. The fact that we do not have an obvious explanation here is certainly troubling. To getwhen can we expect an update and who would be carrying out the investigation . Kurt as of right now, we are told that twitter is still investigating internally. They have been sharing updates through their own twitter account. Seeing also now answers and perhapsliticians threaten to try and use their in lawnd regulation or enforcement to try and get to the bottom of this. We will get answers, i imagine, and the next couple hours. The long tail of this could look days if not weeks or months. Boomerkurt wagner, our technology reporter, on the latest on that twitter hacking this morning. Coming up next, we are previewing the upcoming Rate Decisions out of korea and indonesia. That is up next. This is bloomberg. Haidi lets take a look at how we are setting up this session in asia. Sophie kamaruddin is in hong kong. Sophie. Sophie pulling up the board to check in on how we are shaping up so far in this session, we are seeing futures go higher. The yen trading study ahead of chinas gdp data due later this morning and in the jgb space, expected to see gains after the boj governor reaffirmed his stance to keep the yield curve low and stable. Checking in on oil, bti hovering below 41 a barrel here. This as we analyze the decline we saw in u. S. Stockpiles again against u. S. Tensions. Jumping into the terminal, the bok is in the hot seat. The central bank expected to keep rates at an historical low with implied rates pricing in one hike over the next three years. When it comes to that front, Bloomberg Economics is predicting the bok will not introduce a fullfledged qe Program Given that bond yields if relatively stable for conditions worsen further. The yield is at 80 four basis points. His stay below 1. 5 , seen as a threshold that would push the bok to expand bond buying. Wanting to see if yields will be pressured higher as the government plans a third extra budget, shery. Shery thank you so much for that. Lets get a little bit more on the bok Rate Decision that we have coming up. We also have the Bank Indonesia decision. The bok widely expected to leave rates unchanged. When it comes to the b. I. Decision, that is more debated. Joining us to discuss is crystal tan is our guest. As sophie was telling us, the expectation right now is for the bank of korea to leave rates unchanged at that. 5 . What does it mean for other nonrach tools that the bok nonrate tools that the bok could use . Krystal we see more clarity for what the bok is considering. They did indicate focus. But they have not really got into much detail. An interesting point to make is that the situation actually improved. If you look at a lot of Economic Indicators domestic demand. Consumer and business sentiment. While we may get more clarity on the framework today, i am not expecting any new aggressive stimulus to be announced. Shery you mentioned positive economics coming out of south korea but what caught my eye earlier this week was the tenday export import numbers. Exports improving. The decline is easing what happened to the import numbers for the first 10 days of july, falling more than 9 . That kind of gives me a little bit of pause when it comes to considering the domestic demand in the country. One thing that has been tracking down, hit by import values versus oil prices. The price is a driver in the downturn. There are other realtime gaugetors that can help it. We look at mobility reports. Even though there has been an uptick in virus cases more , recreation has not really weekend tear really weakened materially. It does look like the economy is gradually getting back. Haidi it seems like a tougher fight for Bank Indonesia. You expect another cut or pressure to cut today given we continue to see virus cases soaring and that domestic demand story, which was such a healthy one for indonesia, really decimated by the Public Health crisis . Krystal yes, we are expecting it today. That is across domestic growth and inflation for more and more policy support. The domestic demand has been pretty weak in indonesia. Inflation measures like you mentioned, virus spread is escalating in indonesia. That could put more downward pressure on the economies. We expect further easing. The idr was the key consideration. It is a key sector. The rupiah has been on the soft side. There is a risk that they could choose to pull the trigger today. I think perhaps the Bigger Picture is at this rate cutting cycle will cut close to the end now. Current environment, indirect spending is more effective in terms of stimulating demand. On the probably be more fiscal push instead. Haidi you mentioned the relative stability in the rupiah. Do you think that Downside Pressure has eased for local currency bonds given that we are kind of looking at at least stability and a dollar or perhaps further weakness in the dollar . Fiscal burden sharing products, that should help reduce supply risks and bond market. Think there downward pressure on the rupiah has somewhat eased. The global risk sentiment continues to fluctuate. Heres concerns about the domestic outbreak. Stabilizers,s global liquidity. Shery talking about stability, lets turn to thailand. Apparently, four of their cabinet ministers could be submitting their letters of resignation as early as today. We know thailand has been hit hard. They are reliant on exports, on terrorism. Is this going to affect their economic recovery path . A cabinet shuffle has party within the ruling has been ongoing for some time now. Undermined not government stability. The changes will introduce some quality uncertainty but i do not hask the covid stimulus been announced. It should not be expected underweight. Have cabinet will the focus would be on who picks up their financials. The market will be watching it if its going to be democrats or shery crystal tan krystal tan joining us with a look at Southeast Asia with the Bank Indonesia and bank of korea decisions p coming today, we have the gdp numbers out of china for the second quarter. Fromve been hearing Capital Economics Deutsche Bank and bank of America Securities for their expectations and immediate reaction. Do not forget, if you are away from a screen, you can find indepth analysis and the big newsmakers on Bloomberg Radio. We are casting from our studio in hong kong and you can listen in via the app at Bloomberg Radio plus or bloombergradio. Com. This is bloomberg. Haidi nissan has unveiled a new electric suv as it looks to turn a new page following the scandals with carlos ghosn. In an interview with bloomberg, the president and ceo said nissans new model is expected to play an Important Role in a companys turnaround. Representse one that a new chapter. I would say nissan has a great experience because we have 10 years of history. Have a lot from the customer that has reflected this as a new dedicated Vehicle Platform which also has a lot of nissan goods technology, starting with the connected and the electrified vehicle. Those are all this is something we can use to open the new chapter and provide a customer as excitement of the car. Moreover, given the excitement to the customer can make our employee happy, that is what makes me most happy. For us really meaningful new ourselves creation to the customer. Bringing aspects to the growth. How will consumers respond to the car . What is going to be the most attractive price, features, anything . Everything. Look at this car over there. It is read. Dont you think the color is bitter for is beautiful . The reds are very attractive. This car is more, even when you are driving. The car could be connected with you. Providedd be a battery at home. Be part of car to the customers life. I hope the customer would really, really love what we are trying to provide to the customer. From 10 years experience, which i believe is one of the core strengths. What is the main competition going to be when it comes to other electric vehicles in the market already . We are providing this idea at the most competitive segment, suv or crossover. Again, this is a focus. Nissan itself has strengthened the crossover or suv segment. To givewe would like the good value on that segment. New electrified vehicle to the customer. What is the strategy . What are they going to look like, what are they going to focus on . It is not just one ev. This is part of our mobility strategy. We have equipped with dedicated ev platforms to the next course. We are going to carry over in this system, providing what the ev feels like to the customer so this is very important for us to make the value of the nissan to recognize by the customer what does it really mean . Shery nissan president and ceo. Lets get a quick check of the latest business flash headlines. The top developer is said to be closed towards a green steak according to the 21st century business herald. The two Companies Began talks in early may. They have a portfolio worth around three point 5 billion and has been looking to undress future debt repayments. 4 billion is overdue out of a total of 8 billion that needs to be paid back this year. Issued a profit warning after sales fell in the coronavirus and the companies lost a joint venture. It expects profits for 2020 to fall 35 from last year but says it retains enough cash and credit to meet all its upcoming financial needs. The loss of the joint venture alone will cost the company 70 million. Anta sports may 3 under 30 million last year. Swatch jumped as demand recovers in china and sales bounceback across other parts of asia. The mainland accounts for more than one third of global sales and swatch says interest is back at previrus levels. The company saw a double digit yawn your growth in china. However, watch sales globally half,d 43 in the first forcing job losses and store closures. We will be watching brent crude when it opens up at the top of the next hour. This is how we are looking when it comes to wti futures contracts, near 41 after reacting to the latest news from opec on ezine output cuts. We saw oil jumping to a fourmonth high. This was on trump seemingly relative restraints trumps seemingly relative restraint. Lets start with the opec news. What were the details . It canplus is confident start using deep production cuts. And it can start doing that without hurting the rally in oil prices and that is because it is compensationst on cuts for the socalled cheaters. Brent was up. We are seeing west texas intermediate fall now a bit in electronic trading but the saudi arabia minister is saying that it will barely be felt. Take a listen. They are mindful of the fact that we have a virus, that we need to attend to, and make sure that also we will use every tool in our kit to ensure that we mitigate any potential possibilities that might emerge. What opecplus is saying, and it is important, they are meeting in zoom or chat rooms online. What they are saying is they are going to go forward with a plan to resume supply hikes in august and that is consistent with oil demand picking up into next year. They willer, they say impose compensation cuts in the socalled cheaters, those members who are viewed as overproducing and not meeting their targets during what has production cuts. As you know, almost three months of historic output curved to offset the effects of the Global Pandemic have really helped bring the price of oil back, but right now, it has been pretty much stuck in a range. Shery President Trump potentially softening his tone against china really had an impact on the markets today. Up. We saw oil shoot west texas intermediate broke above 41 to a fourmonth high on the perception that President Trump was walking back some of his earlier tough talk on china and saying he favored further sanctions. As one trader put it, conflict with china is good news for oil. Meanwhile, there is continuing concerns that oil again has not been able to break much above on the resurgence across the United States with the spike in covid19 cases and a concern that there will be a return to a partial if not full locked down in some of those states which continues to put pressure on demand and that makes oil continuing to be volatile. Very interesting to note about the opec plus plan, which is pretty firmly set. They did indicate the only reason they might pull back from their plans to increase gradually oil output would be a return, a return of lockdowns due to covid19. Back to you. Shery su keenan with the latest on the markets. We are seeing kiwi stocks now gaining ground for a fourth consecutive session. We are at a oneweek high. We had those cpi numbers earlier, rising 1. 5 year on year. Little bit higher or faster acceleration than expected. When it comes to nikkei futures at the moment, theres a little bit of pressure, down. 2 , the japanese is strengthening a little bit. Sidney futures up. 3 . We do get june unemployment numbers, so watch out for that. Kospi futures looking like this ahead of that bok Rate Decision, where they are expected to hold. Coming up on the next hour of daybreak asia, first in an first out, china is sent to give us key insight into the lockdown impact when it reports gdp later today. We will preview the big release with Capital Economics julian prichard. Plus Hong Kongbased lawyer and author anthony joins us to discuss the citys future. This is bloomberg. 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Major markets have just open for trade. Welcome to daybreak asia. I muted start ahead of muted data out of china. U. S. Stocks had a one month high on optimism about a vaccine. The pandemic rages on with the u. S. The global focus. Texas sees record daily infections. And Cathay Pacific has muted the rally but a major shareholders remains confident. Japan, south korea, and australia coming online. Sophie is in hong kong. Japan, starting with overseeing downside move for stocks in tokyo. The nikkei to between five not hitting 22,000 just yet. Chipmakers,ye on beating expectations. And secondquarter earnings are due today. Japan exchange, the stocks replace sony financial on july 29. Jgb gaining ground as the governor intends to keep the yield curve stable. Going have been stable into this session and the kospi has turned positive for the year, although korean stocks are steady this morning, Holding Around the 2200 level. The korean won holding at about 1200, not being swayed too much by the main driver for the currency. Changed at little the rising the most in a month in the midweek session. The aussie dollar now losing ground, back below 70, retreating from a fiveweek high as we anticipate a volatile session. Australian jobless data and chinas gdp on tap for today. Euro, just holding 114, a 16 month high before the ecb decision. And the question of the day, how far will the euro rise if an e. U. Stimulus deal is reached this weekend . So keeping an eye on the currency going into the ecb decision and the e. U. Meeting among leaders. Lets get to the breaking news crossing the bloomberg, the u. S. Reportedly weighing a sweeping travel ban on the chinese, according to report from the New York Times, as we heard that President Trump exercise some restraint in aborting more sanctions on chinese officials. Now were hearing that the u. S. Is considering a sweeping ban on citing peopleica, familiar with the proposal. The president ial proclamation is still in draft form, according to the report, but it could authorize the u. S. Government to revoke jesus of already members and families already in the country. Some of the proposed language is aimed at limiting travel to the u. S. By members of the Peoples Liberation army an executive state owned enterprises, although many of them are likely to be Party Members. Just to give a bit of context, there are an enormous member number of members of the Chinese Communist party, its not just a pulley elite Political Organization but a lot of civilians are Party Members as well. It could then travel to the u. S. For as many as 270 million people, so we are seeing that reaction with the downside of point about. 3 . The nasdaq extending those perhaps unsurprising given that we know tech is one whatsfronts of this developing between china and the u. S. This kind of just highlights the incredible uncertainty and geopolitical volatility that i think until now Market Participants have just kind of been brushing off. Right. I think the tensions between have beenthe u. S. Intensifying since two years ago. A number of topics will continue to be in the news, particularly what the u. S. Is going through in the president ial election cycle. Response ischinas more consistent. The second point is, we believe willmpact on the markets be significant, considering trumps Approval Rating and chinas determination for the economy. Most importantly, all that news , we do from the tensions the volatility could be opportunity as well. Haidi in this kind of environment, where there so much uncertainty with regard to the vaccine and any kind of development, now the geopolitical overlay as well, how do you reconcile the fact that valuations are high, and where you find opportunity and safety . Do you look for a domestic coverage story here in asia and even within china itself . Think valuations are circular. Are valuations that suggest that we should continue solid and in the valuation may be supported by earnings growth. There are many quality growth names that continue to do well, mainly because they do offer supported by the follow domestic demand. We will focus on quality growth, considering theres very limited or even no growth in markets. People are willing to pay a premium for growth. We do believe that quality growth is something that should be more sustainable in the near term. Shery in that same report were seeing that President Trump could ultimately reject that possible travel ban on members of the Chinese Communist party, this according to the New York Times report. Course we have also seen talks about the Trump Administration considering an attack on the hong kong dollar as punishment against china over its National Security law, then we had heard that that idea was also rejected and this New York Times report saying the president could ultimately reject that massive travel ban Chinese Communist Party Members. Still, it seems to me that at the end of the day, the Trump Administration is trying to consider every potential means out there to hit back at china. We had heard earlier today from the chief of staff talking about potential review of these apps, tictoc and we chat, reviewing their security. So when an investor looks at the Chinese Market and certain Chinese Companies to invest in, what sectors should they stay away from, given that you dont know when youre going to get caught in the crossfire . Janet right, as you mentioned, there are a lot of things going on right now. We are not an expert on politics, but from an investment point of view, if you look at , we will have gdp , and if your on look at the policy, both monetary and fiscal policies backdrop for good the stock market. Going back to the stock market simply a lot are of good quality highgrowth companies in china, whether youre talking about ashares or the hong kong listings. That is of the sector, the beauty of investing in china as well because it is a broad market with a lot of new growth stocks, whether youre talking about technology, health care, or consumer, there are many interesting stocks. For example hand, the financials and energy may have a more challenging period. I think for investors, they should look at quality growth in some of the economy sectors. Still ahead, more on the key gdp release in a couple of hours time. We ask our guests what insights the data will tell us. Up next, as the virus continues to surgeon hotspots globally amid vaccine optimism, astrazeneca is the latest out with positive results as the race toward a solution heats up. This is bloomberg. This is daybreak asia. President trump is indicating cooler tensions with china, ruling out additional sanctions on senior officials for the time being. Were told the decision came before he signed the hong kong autonomy act on tuesday in contrast with the tone he struck the last few weeks. The white house is said to have drawn up a list of leaders to be sanction, including hong kong leader carrie lam. Says theess, beijing law violates International Legislation and is a gross interference in its internal affairs. The Foreign Ministry said if the will takeves china appropriate action against american individuals and entities in response. China will impose sanctions on relevant u. S. Personnel and entities. We urge the u. S. To correct its mistakes, refrain from implementing the hong kong autonomy act, stop interfering in chinas internal affairs. The Trump Administration is preparing to impose restrictions on some huawei officials on human Rights Violations. Mike pompeo said Telecom Companies are notice if they work with huawei. While mostly symbolic, its latest u. S. Move to limit huaweis reach. 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. Globallt coronavirus cases rise again, with the u. S. Till the epicenter, and asiapacific seeing a resurgence in infections with unknown origins. We see that resurgence of cases and restrictions where you are in hong kong, but also in tokyo. We also know they have their highest level of alert in place. Give us the latest on what is happening there. Are seeing this resurgence in places like tokyo and hong kong in the philippines that have had some success in controlling the virus after the first or even second wave we now we are seeing a resurgence of the virus coming back. In tokyo they raised their alert level for the virus to the highest because they need people to modify their behavior. They had 165 cases on wednesday and are struggling to get a handle on it as the virus is extending through various nightlife places, so they are really trying to reestablish some of the earlier curves. Tokyo is not really a work from home culture. They are encouraging people to do more of that. Here in hong kong, where the the virus is still relatively well deaths since eight january. Still in the past week there have been growing cases and therefore they have put in effect a lot of restrictions, including no restaurants, no service and restaurants after 6 00 p. M. At night, and a fine for people not wearing a mask on public transportation. So its getting very serious in some places. Meantime, markets continue to price in expectations of a vaccine and a highly effective vaccine at that. What are we learning in terms of the vaccine race as well as some anyhe Global Access to vaccine that does come to the markets . Jodi we are seeing some positive results on a vaccine, had a report that positives showing vaccine results. But at the same time, theres a veryf concern about extensive access to any vaccine. Commentaries say no one is safe until everyone is safe. Their stories of a race for access that seems to be accessible to people in all countries and all parts of the world. So we are starting to see that. At the same time, these are very early tests and were seeing a number of side effects in some people in early tests as well. So its going to be a while, its not going to be a quick magic bullet here, but there really is some positive outcomes we are seeing in the very early tests. Geti and usually even to this level of result would take years that were getting it only months, so some good news there. Jodi schneider there with the latest on the virus in hong kong. The philly fed is revising its growth forecast for the u. S. Economy, given the resurgence of the virus in hotspots there. Green shoots are showing in the latest manufacturing and labor data. Here is one outlook on the recovery. Sector hasfacturing bounced back. We saw the last report last month. We are seeing some good news there. Is ty of philadelphia im concerned not just about the large medical institutions that have lost a lot of revenue, but because of elective procedures being curtailed or delayed, and also in the rural communities, those Rural Health Systems have been hurt quite badly through this crisis. What about the overall u. S. Economy . Now that weve seen this flare up across much of the country, are you revising your economic forecasts or outlook . Prior to this we saw a pretty big hit, about 20 of gdp in the first half. We thought it would bounceback 13 in the second half and be 6 down in gdp for the year and unemployment around 10 . We are revising it right now, because with the virus surging in the south and southwest of the country, we are concerned about that. Im very concerned about that. Its going to be a slow recovery, until we get the virus under control, we cannot get the economy back under control. As an educator. How important is it to get the schools open, how important to the economy this fall . Its very important, but we have to do it carefully, because we dont want to put people at risk. We know that in the childcare business, about half the childcare institutions, many of them are Small Companies that are taking care of children. Andt half of them closed, of the remaining ones, they lost at least 50 capacity in remaining open. If people cant find care for their children or be able to get their children to school, they are going to have a hard time working, and particularly in the knowledge economy where productivity is knowledge. If they are concerned about the children and that is weighing on their mind, its human nature, they will be less productive. So its very important, but we cannot do it in a way that puts the children or communities at risk. He doesnt seem to be reflected in equity prices. Are you concerned about the level of stocks and whether or not it is sustainable . It could be a bubble that will pop and take the economy with it. The stock market is a measure we look at, but its not the real economy. Looking atmaker, im the signals coming from the real economy. Employment data, inflation data and so forth. That is my main concern right now. Do you think theres any role for the fed in controlling the rise of equities at this point . We had to act early and aggressively to help stem the damage from this unprecedented pandemic. And we did that. So that was job one. Now, as we start to climb out of this, hopefully sooner rather than later, we will address other issues, but we had to act to secure the economy and save as much of the economic infrastructure in the country as we could. What more can the fed do . It was suggested you let the economy run hot and explicitly say youre going to let the economy rise. Is that a strategy thats on the table for you . The 2 inflation goal is symmetric. We are having a difficult time doing that, like all developed economies. Im supporting the idea of letting inflation get above 2 before we take any action in the country. Haidi plenty more to calm on daybreak asia. This is bloomberg. Haidi shares of Cathay Pacific trading at their lowest since 2001 he would Qatar Airways is confident carrier will overcome the crisis wrought on the antichina protests and the coronavirus pandemic. The ceo spoke exclusively to bloomberg about the outlook for travel in the next few years. We think that there are opportunities and unfortunately i cannot give you the details of those opportunities, but people now should be prepared that there will be a new normal for travel. It will not be the same. But at least it will not be the same for at least the next two or three years, when people can have confidence in the treatment and the vaccine that is now being developed by the scientific and medical community. People need to gain confidence and of course be able to monitor be able to travel. A lot of people have lost jobs, a lot of business has collapsed, a lot of airlines have folded. So things are not going to be normal for quite some time. Speaking of confidence, one of the other situations that has come to the fore recently has kong,he unrest in hong not to mention coupled with covid19. Do you still have confidence in Cathay Pacific being able to cover and reward shareholders there, and how would you approach that as an investor . I have absolute confidence in every airline that we have invested. Cathay pacific is no different to any other airline. Every Single Airline in the world was affected by the pandemic. I think that hong kong will rebound. Hong kong is a very important destination, a very important Financial Center and a very important business center. Very majorart of a player in the international market, the peoples republic of china. So i think hong kong will rebound and things will be different maybe two or three years down the line. Cathay has already stated its intention for Continuous Operation in hong kong and will continue to grow. That was an exclusive for bloomberg. Lets get a quick check of how currencies are trading at the moment. The japanese yen Holding Steady at the 106 level, after weakening slightly in the previous few sessions. We have seen the japanese in staying in a narrow range after the bank of japan cap main policy levels unchanged. The offshore yuan at the moment perhaps the Trump Administration was considering a sweeping travel ban Chinese Communist Party Members. Shery well have plenty more coming up. This is bloomberg. Haidi lets get the latest Market Reaction from sophia. We had the bombshell times report saying President Trump was looking at a draft that could put a tribal band over 270 million people. These are members of the communist party and their families. Do we still see reaction in the market . Sophie we are seeing tepid moves, modest in either direction, fluctuations across the board as markets consider the prospect of more u. S. Sanctions against china. We are seeing u. S. Futures under pressure. , just gaining down slightly, given the financial stocks are on the rise. We are seeing minors under pressure, fortescue stalling after hitting a fresh record high. The kospi fluctuating around 2200 points, looking to narrow its meager year to date gain. Japan losing ground, off. 25 . Aaa players and pharma names weighing in in tokyo. One mover to the upside is Japan Exchange rising to a record high. The operator is said to be added to the nikkei 225 index from july 29 and replacing sony financial. Trading firmyen, or a Third Session amid the cautious tone in markets while the korean won is above 1200 ahead of the b. O. K. Decision. Sinceyear below 1. 5 april. The aussie slightly under pressure, hovering around the 72 level. The offshore yuan on the back foot but sticking near seven on a fourmonth high ahead of chinese gdp data. Rishaad shery the chinese economy was the first to return fall to the coronavirus pandemic and seemed the first return. Gdp out in the next hour and a half. Suspected to confirm the upward trend. Joining us is Capital Economics senior economist julia evans pritchard. How much of a rebound of a talking about after the 6 plus collapse in the Fourth Quarter . Already havewe shows a remarkable rapid recovery in china. The economy was back to growth in may and the data for june suggests a for the recovery. Initially we had been concerned by the sharp jump in unemployment among Migrant Workers in particular. They seem to have been absorbed into the workforce very quickly partly because of the flex ability of the informal labor market. And also because of policy stimulus and we have seen strong jobs growth in the construction sector. We are looking at a 3 year on year growth in quarter two. That would bring the level of output back to where it was in the Fourth Quarter last year. Reversing the q1 hit. We also have the latest headlines on the escalation between the u. S. And china. Reports perhaps the Trump Administration is considering sweeping travel bans on communist Party Members. We have seen china not only escalating confrontations with the u. S. But also other partners like the u. K. , canada and australia. If we see this around the world and more confrontational approach when it comes to china and diplomacy decoupling between these economies, how much will that weigh on the chinese economy . Is a concern. K it we dont know whether this threat will be followed through on. We have had various threats the past few weeks including on the hong kong dollar which they seem to have backed off from. I think the direction we are heading in is not a positive one for chinas relation to the rest of the world. I think in the near term the economic implications are relatively small. Onemain risk is the phase trade deal falls apart ahead of the u. S. Election and that poses some Downside Risk to financial markets. Is risk over the medium term decoupling with the rest of the world forces the chinese economy to become inward looking and insular. That reduces one of the key pathways to growth other countries have used to go from middle income to high income which is farms go global, they become key global players. We are seeing barriers to chinese farms going global. Even though the chinese domestic market is big, the global competition tends to boost productivity growth in becoming insular and inward looking and having to rely on Domestic Technology could pose a drag to chinas growth over the medium term. Keenly are you watching what is going on in the stock market . Feels like history repeating despite analysts saying this time it is different. Do you expect to start seeing the effect to trickle through to the data . When unsureially stocks surged,re it could have been a repeat of 2015. It was difficult for the authorities to control that. Fortunately they seem to have stepped in relatively quickly to tone down the commentary in the state media and sales by state funds to prevent the market from running ahead of it itself. I think the risk of a bubble is diminishing with each day that goes by where we dont have another strong rise. I dont think there will be a significant wealth effect. Most chinese households dont have much exposure to equities, less than 2 of urban household assets. The jump in trading volumes we have seen in recent weeks could go up with q3 gdp by a couple of attempts of Percentage Points particularly for the boost to the sector output. On theill depend trajectory of how the stock market rally goes from here. Haidi how encouraged are you buy prospects of a retail recovery which has so far lagged what we are seeing with Industrial Production . It makes sense we perhaps start to see internal domestic spending because people cant leave whether through protectionist trevor ault policies or border restrictions, they are forced to spend within china . Julian that is a good point. Growing number of , chinas deficits have parked and that is mostly because of a sharp drop in foreign tourism. That has boosted gdp growth by 1 . Being forced to spend domestically is a prop. For optimism in the near term is because we have quite a significant fiscal stimulus plan and most of it has yet to happen. We have had a ramp up in fiscal spending but the majority of the 60 increase in bond issuance planned for this year is going to happen in the next few months and will be spent during the second half of the year. We have already had a recovery on Infrastructure Investment but it looks like that will extend in the coming months. As investment remains strong and diverse jobs and income, consumption which has been lagging, to recover as well. Thank you. We will have more on the outlook for china later on Bloomberg Markets with Deutsche Banks julianna me and helen show. The bank of korea leaving its key Interest Rate unchanged at half a percent, 19 of 21 economists surveyed said the b. O. K. Would keep we know it is trying to see how its previous moves have filtered through the economy and the governments fiscal response to the pandemic as well. We have seen some signals from the governor in the past he may shift his focus on nonrate tools and the last time they moved was back in may when they 25 the key Interest Rate by basis points, today holding at steady at half a percent. Plenty more to come. This is bloomberg. Shery president shop trump is reshuffling his campaign staff. The Deputy Campaign manager of the president s reelection bid will step into mr. Pascals job. This as President Trump of course sees his ratings falling. We are seeing that brad will be replaced by the Deputy Campaign manager of the president s reelection bid. This is an acknowledgment of the president s diminished standing when it comes to the public and pivate schooling ooling we got this spring. Covid19 continues to surge in the u. S. With california reporting records. Numbers rose 2 with the deaths topping 136 to lend 136,000. There are Health Ambassadors at the entrance, walmarts decision starbucks andby others. Philippines is extending restrictions around manila for another two weeks as numbers continue to rise. Spectrum will stay under general quarantine and to at least the end until at least the end of the month. Tokyo has raised its warning to the highest level and new zealand is preparing for a new surge. Staying on new zealand, inflation slowed in the second quarter. Covid19 lakhdar installed the economy. Lockdown stalled the economy. The rbnz flashed its cash trade to support the economy. It will tip further at next months policy meeting. Thebank of japan says economy is the worst of the fallout but recovery will be slow. The governor Haruhiko Kuroda kept policy on hold amid signs of a deeper slump in the coming months. The governor says declining consumer demand has broadened with Economic Activity starting to show an increase. 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. I am karina mitchell. Shery lets turn to the bank of korea which has issued its policy decision leaving its key rate on the whole on hold. Kathleen hays is here with the details. What does it mean for the korean economy . It was largely in line with consensus, but we continue to see this outbreak of coronavirus cases and it is weighing on demand. This is the question every centralbank has to grapple with, no matter if it is a small impact or big impact, it is one of the things that is weighing on the economy. The country has done such a great job getting early, so may things to help contain the number of cases and deaths. Nk of korea cant control they cant control what happens in other countries. They cant control how it hit chinas economy first, i would like to remind people korea, south korea has the biggest economy the fourth biggest economy but the worlds biggest exporters. This has been a problem. June of 2019, that is when the bank of korea started cutting its key rate. It was long before the virus. Exports are already cut and suffering back then. We started having deflation in south korea. Latest, rate cuts, the taking the key rate down to 0. 5 , that is an alltime low. Now we are waiting to see what governor lee, the head of the b. O. K. , said in his press conference. We are waiting for the forecast to come out after the bank of korea releases its decision and outlook later sometime in the het couple of hours when holds his press conference, we will talk about the possibility of nice not cutting rates more but we will relate rely on nonrate tools. Bond purchases to stabilize the markets, what will he say about that . The government has stepped up with support, 270 trillion won. You were just talking to amy tan, she was looking at better data on the consumer exports getting less bad. Now they are only down 10 yearoveryear. She really thinks that means they wont be relying so much on signaling more tools. I think that will be one of the interesting things to watch for when he holds is press conference. His press conference. Haidi Global Economic policy editor Kathleen Hays reacting to the bank of Korea Holding rates. We are getting an update from twitter, saying most twitter accounts should be able to tweet again. We have had quite a morning after we had a number of highprofile business and political accounts being seemingly hacked by something related to a bitcoin link, the likes of jeff bezos, biden, obama, kanye west as well. Twitter halting activity when it comes to some accounts, saying most should be able to tweet again. You are watching daybreak asia. This is bloomberg. Shery lets get a quick check of the latest business flash headlines. A wuhan based under investigation for using take gold bars to secure loans. Local media was raising questions whether they pledged 83 tons of gold mainly copper allied. The issue came up with the gold was assessed after an Interest Payment was missed. They said the Bank Accounts have been frozen. The affordable digital market. Global is looking to take 8 of geo to tap into the companys 400 million users. Siliconould join other valley giants who have bought into jio as it becomes second only to china. Asias richest man is now seeking investors for his retail arm. He told shareholders Reliance Retail may attract the Company Operates 12,000 stores in 7000 towns across india, 300,000 investors walked into the Virtual Meeting from 41 countries. Haidi President Trump has said Hong Kong Special status is a thing of the past. Recent moves have pushed the city to the front lines of an intensifying conflict. This man is a lawyer and the author of city on fire, the fight for hong kong. We are looking at the details of the executive order from President Trump. The very different sanctions, different bills, increased talk of other sanctions including the latest president ial proclamation draft that is suggesting they could then travel from could 200 people and their families. What is the Practical Implications for hong kong citizens and businesses on the ground . Ofthere is a myriad implications, some of which are targeted at u. S. At at communist party leadership, but some will be ordinary hong kong people. The change in visa status like hong kong passholders will now be treated the same as any other makese passport holder travel more inconvenient than it had been in the past. Things like the evolution of the fulbright scholarship program, fulbright exchanges will bring an end to ordinary people to people exchanges which might constructive and trying to fix the relationship. Those kind of things are unfortunate collateral damage. But the big headline is the impact on trade and other things. The world wanted to see a strong response to what beijing has done in hong kong with regard to the National Security law and how broad it is. But is this a useful response from western powers, or does it contribute to the increased isolation and abandonment of the hong kong people . Anthony certainly there is an argument that by cutting hong kong often this way, it pushes hong kong further into outer beijing. If hong kong can no longer focus function as the international seent has been no longer as part of the wider International Community, it forces hong kong into becoming centercapital raising for china and trade center for china which is harmful for hong kong in the long run and the people. That said, some sort of robust response from the International Community is appropriate to try and continue to put pressure on the government in beijing, to avoid them at least, make them step back from cracking down to strongly on human rights in hong kong. Some measures by President Trump, some of them are more instructive and others not. Shery do you expect sanctions against hong kong officials . Antony there are reports that President Trump has said he is not going to sanctions specific Senior Leadership including people on the list of that have been presented to him including carrie lam and chris chang. 90 days for trump to consider those issues and along with the senior vp members, those people would be obvious targets for sanctions. It would be obvious interesting to see where he goes. I think carrie lam would not have imagined this when she became the chief executive of hong kong, that would lead to her being on a u. S. Sanctions list. Haidi as a lawyer working in hong kong, are you concerned about the implications to the judiciary, this threat hong kong judges should start setting up on the mainland . Antony the real concerns coming out of the judicial law. President trump announced suspending the extradition agreement between the u. S. And hong kong and that follows in the footsteps of canada and australia who announced similar things in recent days. It is part of a pattern of hong kong being isolated from the rest of the common Law Community with which it forms a member. Shery thank you. The lawyer and author, we will have to leave it there. We will have to get a check of futures trading. Futures going to the red after the escalating tensions between china and the u. S. Watch out at the china open, the chipmaker, they are pursuing the shanghai market debut after the 6. 6 billion shares sale. Prices surged three fold since march. The china open is next. This is bloomberg. Its pretty inspiring the way families redefined the word school this year. Its why, at xfinity, were committed to helping kids keep learning through the summer. And help College Students studying at home stay connected through our university program. Were providing affordable Internet Access to low income families through our internet essentials program. And this summer, xfinity is creating a Virtual Summer camp for kids at home all on xfinity x1. Were committed to helping all families stay connected. Learn more at xfinity. Com education. Tom it is 9 00 in beijing and shanghai. I am Tom Mackenzie. David i am david ingles. We are counting down to the trade in the chinese mainland here and in hong kong. Markets are quiet as investors await data out of china. The numbers should indicate how the economy is recovering from the virus triggered lockdown. Tom the