Expiring ones. The dollar index in weakness, 1200 right now and continues to slide down over the past four weeks. The dollar moving average 200 day the lowest average in recent weeks. Citi says looking at a 30 possibility that gold will get to 2000 an ounce in three to five months. Stocks rebounded yesterday after slumping 5 . China up 1. 3 , turnover has receded from its highest levels since 2015. The hang seng up 1. 6 , biggest increase since july 6. Tencent adding 5 . Alibaba is the one to watch, surging 5 . Ant financial look at where we are in terms of the Southeast Asian markets. China up by 0. 5 . Sti up 0. 7 . Theaad we also have European Union leaders running a policy marathon as there planned two day meeting to pass a massive Recovery Fund. In the u. S. , republicans and democrats are starting to hammer out a budget plan this week. Our policy editor Kathleen Hays is with us. In both cases, agreeing on a we are getting some murmurs of an agreement. We certainly are, and we know two day meetings turn into four day meetings. Insults are being hurled back and forth. Emmanuel macron pounding the table. There is a compromise they are considering. It is mainly due to the fact that led by the netherlands are insisting on changes. Of 390 billion euros of grants. Before they said it has to be way less than 350 billion. Originally the majority wanted 500 billion. They made some progress. 360 billion of low interest loans. On monday, the chancellor of germany sees progress, and sees the framework for a possible agreement or at least an agreement that is possible. Eu have toers of the agree on the plan. 216 and goay it is ahead with it. Will be part of the five including germany that will be looking at 360 billion in rebates aced on the money they put in over the next few years. It is a complicated arrangement. Some people think that will help. Linch the goahead we will see if that happens tomorrow. In the u. S. , this is a threeweek period after the july recess before they go on august recess, for congress to get a bill passed. President is calling for a payroll tax cut. Democrats oppose it and republicans do not like it. Steve mnuchin called for a 1 trillion stimulus plan, that is what republicans are looking for to help kids, unemployed, Small Businesses and vaccine development. Mnuchin, nancye , andi and Chuck Schumer the white house chief of staff mark meadows will be meeting and hammering things out. Mitch mcconnell says he help the gop can offer a starting point. You have 1 trillion on the republican budget for a new plan. Democrats are looking for 3. 5 trillion. They have big ground to cover for a compromise. Haslinda in australia, the minutes released from the last meeting as a negative rates unlikely. What else have we learned . Kathleen extraordinarily unlikely. I think they are try to tell us, they will not go in that direction. Japannations look at how has dealt with it, how the euro area and ecb have done negative rates. Do they really make that much difference . They are signaling that is not something they are looking for. The minutes of the july meeting show members saw no need to adjust policy under current conditions. They are ready to adjust the package as needed. The minutes said, knows the prize, recovery is uncertain, surprise, recovery is uncertain. The question of where the Central Banks stand in terms of debtary policy, financing etc. Could be best explained in an upcoming speech by the governor on july 21. They will speak in the next few. Ours and give us more detail people want to know what he sees on the virus, where australia is in terms of impeding it, and what that will mean for the economy and reserve bank of australia in future steps. Kathleen hays, our Global Policy editor. Continues to be at the epicenter of the global coronavirus pandemic as worldwide infections approach 15 million. Reporting numbers in the u. S. , 3. 8 million with fatalities topping 140,000. A vaccine trial from Oxford University a showing promise while pfizer could also publish positive data on treatment. The European Union is moving toward a massive virus plan with a compromise on the deal. The new arrangement reduces the total amount and grants and includes is low interest loans to countries hardest hit by the pandemic. Talks have been ongoing since friday with netherlands unhappy with how the program is funded. Hong kong is considering a ,ockdown as coronaviruses surge with isolation beds and Testing Capacity starting to run out. 66 cases monday with half from unknown origin. 560 new infections in the last two weeks, signaling hitting trains chains of transmission are widespread. A lockdown remains a distinct possibility. Chinas massive three gorges dam has a river surge, torrential rains left 31 dead and 23 million affected with property and agricultural damage topping 9 billion. The biggest oil refiners plan to reduce production at some refineries. 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. This is bloomberg. Still ahead, hong kong facing uncertainty on many fronts. E will speak with tommy wu haslinda up next, we will speak with Precious Metals strategist, ubs investment bank, joni teves seeminglys unstoppable rally. This is bloomberg. Haslinda gold and silver have surged this year as the coronavirus pandemic roils the global economy. Gold is benefiting from low real and record plays into Exchange Traded funds and increased allocation. Our next guest says the gold market is well supported. Joining us from singapore is joni teves, Precious Metals strategist, ubs investment bank. , 90 nly way is up for gold year to date. I think the market has been driven by the fall in real rates into negative territory. And further declines would extend that higher. That being said, further upside from these high levels does become more challenging particularly in the nearterm. Investors have built exposure to gold already and are more likely to manage long positions rather than continue to add here. Becomes morearket vulnerable in the nearterm, and potential corrections in real rates from record lows and selloff in equities, and any positive data as the recovery presses on. In the nearterm that would be healthy for the market. Haslinda the trajectory is higher, and looking at possibly 2000 and five months. What are you looking at in terms of gold prices . Risk i think the upside remains in focus. From a medium to longterm timeframe, this is driven by strategic interest gaining more momentum. And because gold is getting a wider investment base, becoming a more important asset to hold. Particularly given how low real rates are and uncertainty continues to be elevated. Looking at more inflows into gold etfs, is that fromh to offset demand traditional buyers from india and china . Driver for the move in gold has been investment interest. As that continues to be the case, even historically fundamental physical demand, also important, does not drive price action in the market. As long as macro factors continue to drive investors toward gold, that more than offsets the weakness in physical demand. The risk of a week physical backdrop is if macro factors surge, it makes the market more vulnerable on the downside. How far is overriding on the back of the wave of gold onhow far is silver riding the back of gold . In silver hasrest been on the back of the move in gold. Silver positioning is not as crowded as the gold positioning is of the moment. That is attracting interest from investors. The fundamental side of silver comes into play, and our view is that although silver will outperform, itl will face headwinds as well and is likely to struggle to maintain that outperformance over the long run. Behaad it always seems to jam tomorrow when it comes to commodity. Do you have a price target for it and a time frame . Silver,ur silver for the nearterm target is around these levels, 19. From here it depends on where gold goes. If we move into a bull case for gold, that is a scenario where silvers fundamentals come less therefore itand follows gold higher and acts metal. A pressur precious until we get to that point where gold is making new highs, consolidation in gold will weigh heavier on silver as well. Rishaad if you wanted exposure to gold, what is the best way to do it . Is it getting the physical stuff, having an etf, or getting involved with people who mine it . On thet really depends Risk Appetite of the investor, dependsr mandates, that that tends to be a key criteria. One thing that has become ofdent this year, in terms the positions, investors have been more deliberate making those decisions and choosing how they get that exposure to gold and Precious Metals in general. Rishaad thank you very much, joni teves, Precious Metals strategist, ubs investment bank. Deal with the worst crude crash. Up next, this is bloomberg. Haslinda chevron has agreed to buy noble energy. Is a major deal since the coronavirus cost a slump in oil markets. They said why the entire portfolio makes sense for chevron. Onthis is a deal built chevrons strengths, high quality assets in a fair price that is a good deal for shareholders of both companies. It shows why we are different from others in our sector. This is not just about the permian basin. Position an impressive in the Eastern Mediterranean, in the west africa, in colorado. This is a diversified company with assets that fit our portfolio and capabilities well, and their shareholders have access to a stronger balance sheet, stronger dividend, and retain upset exposure to a recovery. It seems like the takeover was opportunistic rather than strategic, not the start of the chevron buying spree. Is that the correct interpretation . , and wee always looking look at things through the lens of value. We have to see a good portfolio fit. There are strategic screenings we look at for any transaction. We have a high bar for these things, and we think these assets will compete for capital that will strengthen our portfolio longterm, and help us improve returns. This was not created on free for show cash flow share, it has Strong Financial attributes. These are assets we expect in our portfolio for a long time. It is a strategic fit, and we think the time is right for both companies to engage in this combination. If you have a sheet of paper with names on it, are there any more names for takeover, or is that in the door right now . Always have a long sheet of names that we look at, but a strict set of criteria we applied. We have a high bar. To createking synergies, improve returns, and this is in line with our ur disciplined strategy. We are focused on this, it is good for shareholders for both companies, and that is our focus today. Noble in particular, i wonder what is a bigger driver for you, the International Assets in that Eastern Mediterranean, or was it conventional . Where do you see the biggest appeal . It is all of the above. It is an attractive asset base. Successful in so the Eastern Mediterranean that it does bring with it a set of geopolitical complexities and potential risks that for a company the size of noble is meaningful. We have a large global diversified portfolio with exposure to many different basins and geographies, many different governments. We have many decades of experience managing these risks. It is a nice fit. Their position in the permian is not good, but not the scale on our side. We bring them together, and we have efficiencies that we will see. Their position in colorado is an add for us. We have unconventionals in argentina and the u. S. , texas and new mexico. To a high us exposure quality resource. The entire portfolio is a nice fit, it is not about one or the other. Ceo mike chevrons wirth. Amazons unseemly unstoppable bezos on then Jeff Bloomberg billionaires list, adding 13 billion to his personal fortune, the largest single day rise since 2012. Bezos has seen his wealth swell 74 billion this year to 180 billion. Earlier this month, softbank will sever from its chipmaker arm because of the limited ability to grow. Rishaad we willathe markets, the dollar having a rough time of it. Moving to the downside by 0. 2 . Drop of 0. 4 a over the last few sessions. It could be under pressure as it takes on more Risk Appetite with the prospect of a coronavirus vaccine. Barrelil around 40 per and looking at investors wondering about coronavirus concerns. This is where we are as we head into the tokyo lunch break. A move to the upside. Have stocks moving up, msa i asiapacific index just over 1 to the upside. Index justpacific over 1 to the upside. This is bloomberg. Its 10 29 in new york. Seeking aaid to be valuation of more than 200 billion with twin listings in hong kong and shanghai, and is already more highly valued than most wall street firms and may aim to earn more than saudi aramcos 29 billion hall. Its move torating challenge rival tencent. John is one in the u. K. To abandon plans to suspend its extradition treaty with hong kong, calling effect the foreign secretarys statement quote, brutal meddling in its internal affairs. They are urging them to halt what they call wrong words and actions. Ties are already strained over huawei and chinas influence over hong kong. The chinese parent a video sent app tiktok amid claims they send user data back to beijing. They paid half 1 million during june, almost twice what they spent in the first quarter. Tiktok is under pressure from the white house and capitol hill, with President Trump threatening to ban the app entirely. Myers numbers fell below 200 in tokyo for a second successive day, even as rates spread beyond the capital. However, virus cases are often lower on monday with hospitals closed for the weekend, therefore if you attest carried out. The government says new restrictions to stem the outbreak are not needed for now. South korea is central to the global tech supply chain, but it is failing to keep pace with its largest customers. The result is that the combined capitalization of all kospi companies is less than the market value of apple, amazon, or market microsoft. 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. Some breaking news. One your total shareholder return is the worst since when he 16. The worst since 2016. They own control of multibillion stakes and the like of singapore allies, all the big cap stocks in the lion city. The biggest shares have fallen about 23. 5 billion in three months. Temasetk asia tracking gains in the u. S. With stocks the highest since february. Than 1 comere extending gains for the day, rising for a third day. Asian stocks trading almost 90 times pe. Indexast asia up by. 5 , more than 30 since march lows. You to date it is negative territory. S p futures opening flat. Gold at 18. 18. 30 possibility gold will get to 2000 announced. An ounce. Take a look at what we are in terms of the north asian markets. Tracking the csi 300 index, up by. 4 . Chinese stocks rebounding yesterday, up 5 . A sense the markets in china can expand the blistering rally. China up by more than 1 . Than 1 . T up by more nikkei 225 higher by. 6 . Watching, rwe are ising. 3 . Boosting iron ore volumes. Commercial down 3 . Q2 net income falling 20 year on year. A mixed picture for the glove makers. Ashaad hong kong is facing third wave of coronavirus which has contributed to unemployment rising to its highest level in more than 15 years. Also under pressure from the deteriorating relationship between the u. S. And china. Lets bring in tommy wu, lead economist for oxford economics. How bad are things, and how bad can they get before they improve . First of all, thank you for having me here. The third wave of which happenedak since early july, things start to get that are in hong kong in terms of the retail and restaurant side of things. Outbreak, thehird Retail Sector and restaurants as well are going to suffer for a prolonged period. That maybe there could be a stronger recovery in the Fourth Quarter for retail and restaurants. But having said that, Inbound Tourism as of now is still pretty much at a halt. Premuch the only sector that is doing right now has been the financial sector. This will continue to do well for the rest of the year. For instance, we are going to have some large ipos coming in hong kong. The covid19with outbreak and also before covid19, the economic momentum in hong kong was very slow coming into 2020 because of the civil unrest last year. Expectingar, i am only to contract by 6 , actually. Rishaad we have had a series of events. You have mentioned the civil unrest and of course the coronavirus pandemic. On tap of that we have the National Security law, which has created a lot of uncertainty. Does the hong kong economy have to shift structurally in the future, in your view . There yeah, it looks like will be some restructuring. Happens is hong kong will become more of a Financial Center that serves the chinese market, which is actually what it has been doing. It is just that may be previously there were companies that treat hong kong more as a asia, but thisn world may be shifting, in the sense that hong kong is more becoming the Financial Center for the Greater China market, which means that hong kong is still going to be the gateway in and out of china. But this road is going to be even more prominent. So i think there will be offsetting affects coming from all the Political Uncertainty arising from the National Security law and also the international responses. So on the one hand you will probably have Foreign Companies thinking there is left less confidence in hong kong and they will be downsizing in hong kong. But on the other hand, there will be companies wanting to capitalize on new opportunities arising because of further integration between hong kong and china. And also the third thing i would expect is more Chinese Companies to keep investing in hong kong. All, i would think that because of the Political Uncertainty and the u. S. China tensions, i would expect the potential growth to be lower. Rishaad very quickly, and underpinning the economy is everrising house prices. You cannot base an economy on that. What is your forecast for what happens with the residential side, commercial, and retail parts of this . Tommy i think for the Housing Market, it is surprisingly resilient, even up to now. Months the city has gone through civil unrest, covid19, and also the security law. Mid2019 andsay, now, housing prices have fallen only by 5 , 6 , or even less. So the Housing Market is quite resilient. A lot of it has to do with, first of all, low Interest Rates, but more importantly is the expectation that a lot of the domestic local residents have on the city. Able to jump by a lot. I think that kind of demand is still going to be able to support the Housing Market in the short while. But taking a more mediumterm perspective, the economy is going to be growing slower than before because part of it has to do with the Political Uncertainty. Housing prices cannot be rising as quickly as it had been in the past decade or so. Itsrms of retail, i think similar. Right now they are being battered by the poor economy. They are list resilient than the Housing Market less resilient than the Housing Market. Realistically, when can we see the Retail Sector, the Retail Property sector picking up . What will it take . They willhink nextally be picking up year, but then we will probably see a more prominent pickup beyond next year, actually. A reap to have to see a return of Inbound Tourism, which probably will not happen this year. Maybe it will start picking up again at the end of this year. Expectrobably will not the level of Inbound Tourism to return until 2023. Thatat Retail Sector, segment will depend heavily on that. Wu, thank you so much for your insight. Just recapping the headlines which we got, domestic its worst performance since 2016. This is singapores estate about 214lued at billion. Officer sayscutive the company has been doing well in the three quarters leading up to the virus outbreak, and markets have rebounded since march, but he warns there could be more pain to come as geopolitical strife escalates and we see new waves of the infection. Again, temasek reporting april luminary one year total shareholder return of 2. 3 percent. Rishaad coming up, water levels continue to rise along the yangtze river. We will have a report from the megacity of pyeongchang where some 30 million residents have seen almost two months of nonstop rain and the yanks landslides. This is bloomberg. Chinese Authorities Say the strongest wave of flooding so far this year has passed through the dam. It might be overwhelmed by the youngs the rivers by the rivers rising water. Upstream, civil regions continue to see heavy rain. Of chan is in a 30 city of 30 Million People. What is a situation like . Tell us how they are dealing with the situation . Hey. The situation here is still calm. We are in the city center where residents are not really affected by the flood because it is more rural areas and people who lived close to the river. Residents said in the last couple days the water levels had seen in years. But has not rained for a couple days, like you said, the government is expecting another surge in the water levels, and also heavy rain in the coming days. This areas prone to flooding. How bad are the floods this year . Sharon it has reached some highest levels since 1998, a year when there was record destruction. On, theyars have gone have found ways to cope with the flooding that happens every year. So the impact on buildings and on the infrastructure has been minimized, although already so far this year, more than 23 Million People have had to be relocated. We also see millions of hectares of crops that have been impacted. But people are used to do it happening. It is just that with more unpredictable weather, these levels can kind of rise and fall in more unpredictable ways. Haslinda in terms of economic cost, what have we seen, and should we expect more . Sharon the government has already said that there has been 2 billion in damage in july alone. Analysts predict but could be costs in other ways like inflation in the construction sector. The government also said last week that they think the rain may move north, and that will impact more farming up there. Then they predict that the rain might come back down south again. So the Economic Impact really hits the people who are the most vulnerable, the ones who either depend on the river for their livelihood would live close to the river, or are farming and depend on more productive a weather patterns. Predictable weather patterns. Rishaad coming up, the world bank saying president xi wants the lender to participate in chinas debt suspension. We may hear exactly why, next. This is bloomberg. Is is bloomberg. Global pandemic of course putting developing countries under immense pressure. Speaking about the debt owed to china and the fiscal crisis facing lebanon and other countries. These are tough, tough challenges. Intoon has taken dos its Banking System and paid a very high Interest Rate. History, butour remember the fnl crisis long ago in the u. S. You had this elevated Interest Rate that made it look good for depositors but then when they began to withdraw, it created a banking crisis. What we are doing in lebanon is trying to support the social safety net. That means actual cash to actual people, individual people, rather than trying to run it through the government and the Banking System, which is so problematic now. You know as well as i do that Everyone Wants to receive a grant, nobody wants to receive alone. When you see when you say there needs to be haircuts, he we are speaking to . Who are you speaking to . David the creditors right now. That is institutions in the u. S. , government institutions that our lending more than half of it is chinese institutions that have lent to these countries. Ist they are doing right now putting the debt payments at the end of the term, they are pushing it down the line rather than reducing it. So the net present value is being preserved. At some point, you have to reduce the net present value in order to create light at the end of the tunnel for the poorest countries. That is what i proposed. Asked themhe g20 has to do comparable treatment, meaning they would be reducing the net present value of their loans, or of whats owed to them. We are talking about the poorest countries. Given the pandemic, it does not make much sense for the wealthiest countries and creditors to get back all of their money from the poorest countries and the people in those countries. We could just as well be talking about europe but we are talking about much poorer countries. You have a lot of empathy for what they are going through right now, and i can sense that. When you send this message to the Chinese Communist party, how receptive are they . David they are receptive. President xi has said he wants to fully participate and he wants all chinese entities to fully participate in the suspension initiative. Then that gets into the details of what that means. So that is why what i have tried to do in the g7 meeting last monday, a week ago, and in the g20 on saturday, is be very specific about the need for transparency. I will give you one example. Central banks have been making deposits into other Central Banks, and not labeling it alone. A loan. I will put money in your bank account, but it is still my money, but it is not a loan to you. That needs to have more transparency on that practice, so that others, when they are lending or giving grants to these countries, know what the totality of the debt is. So a lot of the work we are doing this month and next work, what i have had people doing is put on the website all the information that we have, and then invite more information. We can shine a lot of light on this and make progress. Is reason it is so important countries can then invite investment into their countries with the knowledge that its transparent. That the investor, the new money coming in knows what it is getting. Haslinda that was World Bank President david malpass. Quick check of the latest headlines. More than one quarter of its staff have agreed to take leave or quit permanently, boosting their efforts to save cash. To leave0 have agreed for good with 12,000 signing up for emergency time off. Southwest has been trying to asid involuntary job cuts, coronavirus ravages aviation. Indias Biggest Airline is set to cut 10 of its workforce, as the virus continues to hammer airlines and travel demand around the world. Indigo is one of the Fastest Growing airlines before the pandemic, and was seen as one of the more healthy carriers, with enough liquidity to write out several months of turmoil. It will affect around 2700 workers. Lockheed martin agreed to compensate the pentagon for f35 ready and isre not discussing how the money will be paid. They say the equipment was considered inadequate, not because of safety, but because they did not come with the required history and data. Quick look at the market. These shares had a gain of about 7. 9 in hong kong but that has been erased. Reacting to studies showing results for its experimental vaccine for the coronavirus. Anarently it did induce immune response, but the authors nothe journal said participants were exposed to covid19 after the vaccination. It was not possible for them to study and determine whether the vaccine actually worked against the infection. Down 1 now. Lets look at what is going on elsewhere. As a prospect perhaps of vaccine which propelled u. S. Stocks higher, and we are seeing that across this part of the world as well. Shanghai taking back some gains we saw yesterday. Singapore fell, and taipei all in the green. Haslinda plenty more in the next hour of Bloomberg Markets asia. Stay with us. This is bloomberg. H us. This is bloomberg. Haslinda it is almost 11 00 a. M. In singapore and hong kong. Welcome to Bloomberg Markets asia. Rishaad this is a look at our top stories. North of 200ation billion dollars between listings in hong kong and shanghai. New york, though, missing out on the action. Haslinda the race is on to find a covid19 vaccine, as global infections approach 13 million. Cases whiles new hong kong says rishaad the pandemic may have changed the Aviation Industry forever. We look at struggling carriers around the world. Haslinda green pretty much across the board in asia. Asia tracking gains in the u. S. , sentiment lifted by tech and the progress in a virus vaccine. Taking a look at where we are in terms of the benchmark in the asia index, up almost 1 . U. S. Futures higher than 1 . Futures in the u. S. Pointing to a flat open, 3247. S p has turned positive for the year. Nasdaq at a record after amazon and zoom surge. Eye on d. C. , an lawmakers hammering a rescue package. The dollar index continues to weaken. Down for the past four weeks, as stocks edge higher. Gold futures a tad higher at 18. 18. Citi says look out. To chance gold could get 2000 an ounce in the next three to five months. Take a look at where we are in terms of the north asian market. Currently flat at 4679. Hang seng up by 1. 6 . The biggest increase since july 6 right now in virus cases in hong kong, which will be another blow to its economy. Look at taipei go surging more than 2 . A 52 week high boosted by chipmakers. Surging more than 5 . 6. 987. Yuan parity at marchre yuan at 2020 highs right now. Rishaad breaking news concerning tesla. Ene ev manufacturer had be subject to certain taxes here. There is a purchase Tax Exemption for the tesla model 3. Been at the moment has compiling a promotion list for some cars for the electric vehicles, and the highperformance model 3 is being included in that. That is coming ahead of its earnings on wednesday. Lets have a look at what is going on with regards to the markets. Nifty futures. Looking at the possibility of gains. At the moment up 1 , adding to the 1. 1 rise we saw yesterday. Earnings taking center stage. Four companies. Out with their latest quarterly numbers. Thai market just opened up in bangkok. To the upside. Quite surprising. Protests on the streets, antigovernment protests there. Also seeing the possibility thailand could extend its state of emergency and locked down the end of the month. At the moment a tired a tad stronger, rebounding from seven we close. Seven week lows. With all that in mind, lets move over to you new york and Karina Mitchell with the first word news. Karina singapores state investor temasek has had its worst year since 2016. They reported a shareholder return of 2. 3 . Temaseks portfolio value was 214 million. Billion. The ceo said they were doing well until the coronavirus. While there has been a slight recovery, geopolitical risk and a second wave could mean more pain. China is one and u. K. To abandon plans to suspend its extradition treaty with hong kong, calling the foreign secretarys statement quote, a brutal meddling in its internal affairs. Beijing is urging london to call what it calls wrong words and actions, saying comments on human rights are smears and slander. Ties were already strained over huawei and chinas influence in hong kong. The chinese parent of tiktok sent a Company Record on lobbying last quarter as it fights claims it sends user data back to beijing. Twice what itst spent in the first quarter. Tiktok is under pressure from the white house and capitol hill, with President Trump threatening to ban the app entirely. Recordedassive dam has a floodwater record with another river surge looming. Torrential rains has left at least 31 dead and 23 million affected, with the damage bill topping 9 billion. The country biggest oil refiners planning to reduce production at some of its refineries as the flood hits demand. 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. To some positive development in the race to defeat the coronavirus. Several vaccines are showing promising results in early human testing, including those developed by Oxford University, nsinor, and chinas ca biologics. Rachel chang joins us. What is the status of the frontrunner vaccine . Rishaad ok, we do not have rachel, so lets try to get back to talk about this vaccine, which is in development. Showing some promising results in early human testing, a sign of progress and what is a highstakes pursuit to defeat the pandemic. Bloomberg earlier caught up with editor and chief who said expectations need to be managed. Shows is thattudy the vaccine is safe and well tolerated. That was a very important goal of this study and that has been achieved. The second part is to make sure there is a strong immune reaction and indeed, there is a strong immune reaction. Both parts of the immune system that need to be provoked, new to be kicked into action, have indeed been kicked into action. One part is producing antibodies, and the other part is the t spell very strongly provoked by this vaccine. We are in a great position now to go into phase three studies. What happens in phase three . Richard phase three studies, we need to make sure this vaccine can actually protect against infection. So we need to be due any studies in places where there is a lot of virus around. The phase three trials have been conducted in brazil, south africa, as well as in the united kingdom. And the idea is that you take two groups of people, one group of people gets the vaccine, and the other group gets a control, and then you see whether the vaccine has indeed protected people from the infection. Theres a level of disappointment in the markets, it was up 10 as soon as he study was out, and now it is only up 1. 2 . Expecting this trial to go better than it has. Richard to be really fair to the team, i do not think this study, which was a phase one and two study, i do not think the study could have gone any better. It showed exactly what we were hoping it would show. They see that it stimulated the immune response. It could not do more than that. To have expected it to do more than that would have been totally unreasonable. Now what we need are the phase three studies, and testing the vaccine in those people at greatest risk of covid19. People who are older, with chronic disease and so on. Lets say that phase three goes according to plan. What is the trajectory then . How soon could i get this in my arm . Richard ok. Well, if i could slightly disagree with one of your previous commentators. The fastest vaccine that has been produced in recent times was actually for the zika virus, and that vaccine was produced over a course of about 18 months. So we know we can do vaccines very quickly. Now, in this particular case, if we can get the phase three trial completed towards the end of this year, and if everything goes well, and then we can press the button forgetting production ramped up around the world, then we can have a vaccine, i would say in the First Six Months of 2021. Is this going to be a vaccine like the flu . That even if you have a vaccination against the flu, you can still catch it because there are various strains . Something like chickenpox where you get vaccinated and you never catch it again. Richard you are asking the 100 million question. Because right now we are only six months into this pandemic. Remember, we did not even know this virus existed six months ago. Right now we do not actually know what are the determinants of protection. What arewe do not know that. So we are still very much in the dark about what protects us. We do not know how long we are protected, we do not know to what extent we are protected, we do not know how quickly we might get reinfected with this virus. So theres a lot we still have to find out. So i think that we should be hopeful, we should be optimistic, but we need to be a little cautious, and we have to manage expectations of the public, because there is still a long way to go. Horton, richard editorinchief of the lancet. Rachel joins us. What is the status of the frontrunner vaccine . Somel we did get promising data on the front runner vaccine overnight. The chinese vaccine backed by the chinese military, and the oxford vaccine backed by astrazeneca. Both are publishing results on of three phases results on phase two of three phases. They are producing antibodies. That is the green light that they can move forward to the next stage. It is not proving that the vaccines will protect us from an active outbreak. Rishaad why might the task be more complicated than expected . Of the i mean, one things that is emerging from the published data from the oxford vaccine in particular is the strongest response is coming from people who were given two shots of the vaccine. The first shot, and a couple months later a booster shot. If that is the case you need it t a two step vaccine for immunity, that would complicate logistics in rolling it out to people around the world. Still ahead this hour on markets is are markets asia, what happens when the travel bubble stopped . Threatstalk about new to travel core doors here in asia. Rishaad next, jenny zeng shares her we get the risks facing corporate debt when fiscal support slows down. This is bloomberg. S down. This is bloomberg. Coming getting images through at the moment from brussels. Emmanuel macron in the frame at between theas talks European Union leaders on a virus package or a Recovery Fund worth Something Like 750 billion euros to help the fallout from the pandemic. These talks have been going on, and this is rbc the french delegation. This has been going on for five days. We have had the European Council president on monday evening to try and raise debt on behalf of the entire eu was Something Like 390 billion euros sorry if you are getting dizzy thewre with the camera. Themillion euros to beat should be did in the form of grants to countries hit by the pandemic. The grant element as opposed to the loaned element the weary looking Angela Merkel. Some membershing of the eu have been balking at, that they do not want. They would rather have more of the Recovery Fund in the form of loans. So they are emerging from this meeting. We do not know whether they have agreed upon anything. We should be awaiting a final communique, and that should be released if there is a deal, and that should be released fairly soon. Inela merkel, 5 16 a. M. Brussels currently. Of course all this against this backdrop of countries in huge debt, trying to deal with this pandemic. The grants portion has been trimmed from an additional original 500 billion euros, another 360 billion euros to be dispersed in the form of low interest loans. Looks like they could be flipped around with regards to that. See if that impasse has been broken. If we do not get a communique, we know they are still at an impasse. Haslinda thats right. Impasse since friday. Lets do a quick check of the latest business flash headlines. Datae a fell by 17 as from vaccine makers showed promise. The company was hit by only a second downgrade ever. The cited the stocks sixfold rise over the past 12 months, one of the reasons. All released key test results towards a possible eatmen modernity joins the nasdaq 100 on monday. They has suSpending Plans to bring stuff back to the office in hong kong as virus numbers rise. Citi already asked about 70 of its people to stay home, and now wants more to work remotely. Ubs is up j. P. Morgan and Goldman Sachs are also saying stay away. Carrie lam says there is no sign the situation is coming under control. Rishaad companies from the asiapacific have sold more than 1 trillion of bonds this year, a record, as the Central Banks support measures to keep things going i keeping Interest Rates down, making funding more accessible. However, once governments scale back fiscal support and banks tighten up on debt repayment, investors could be facing a problem. Lets bring in jenny zeng, cohead of asiapacific fixed income alliance. Thank you for joining us. That is the rough of it, isnt it . How much debt and travel down the line are various companies and countries likely to be in . Jenny good morning. As you rightly point out, we see one government that is doing proudly the opposite of everyone else. The country of the bull market equity, and china has significantly since late may the pbocn we think is has turned its policy focus from supporting the economy during the worst covert situation, to now Risk Prevention on the back of increasing activities, arbitrage in the market, as well as faster than expected economic recovery. Have seen the market has shown signs of overheating again. Think to lower the cost for the economy. Fed,tainty is around the which we are experiencing in hong kong right now. [indiscernible] more risk factors are likely. Back to you. Rishaad i think you are loser i think you are alluding to my first question. How bad are things likely to get . What levels of default are you expecting . Jenny interestingly, you ask we are notefault, really seen a default in china on entre market. Default has been stabilized. On the contrary of the rest of the market. We have seen u. S. Highyield defaults. We have seen asia highyield defaults increasing as well. But not in china. Why is that . We believe it is the pboc have lp,ir targeted measures to he and pump into liquidity. Banks negating the grace period for loan repayment. [indiscernible] we have seen there is a spike of issuance in onshore credit market, which helped a lot of companies replenish their liquidy. Rishaad are you seeing any evidence of Chinese Companies perhaps starting a process of dedollarization, for want of a better word, also moving towards the internationalization of the r b . Rmb . Jenny it is always the governments intention in the longterm strategic goal to internationalize rmb. Made quite a few steps forward on that front. We do think that if you look there are supported factors for supporting rmb. Right now there is a Significant Interest differential, and ther e, china is enjoying a faster recovery and much earlier in the cycle. These are all the factors that will support the rmb. Also if you look at the slow factor, weve seen chinas bond market receiving 12 billion net inflow in june. This is above average monthly inflows. The of course, we have equity inflows as well. Factors canthese all give rmb support in the near term. That actually creates the way for further steps. Haslinda china bonds looking pretty attractive. 10 year yielding 3 versus close to 0 for the u. S. The question is with the rally in the stock market, how will that play out in chinas bond market . Will that put pressure . Jenny good question. From then the slows bond market to the stock market on the back of the stock market momentum. However, we do think that momentum will probably wind down. Think the selloff of the chinese bond market will come to an end. And there are couple reasons. One is supply is likely to ease. Credit is likely to slow. The government cannot afford to have real Interest Rates going up too much. Ppi deflation. Demand within chinas economy. Maturitiese of the in the bond market. If you look at the china right now, we are close to the january level, precovid19 levels. We do think that provides a great entry point for investors. Haslinda we saw china integrate its bond market over the weekend. Is that a game changer . Will that attract much more foreign interest . Jenny that is a very welcoming development. There historical reasons are more than one markets in china where investors can buy bonds. Those markets are under different regulators and have different restrictions, profiles, have different disciplines. Advocateways been the to consolidate and streamline the worlds secondlargest market into world. Into one. More friendly to international investors, and to look more similar to the practice in the international markets. Very welcoming this change. We do think this is one of the many steps the Chinese Government is going to take to internationalize the domestic bond market. Thank you very much. Ok, lets get back to brussels. Time there, 5 25. We have just seen french president Emmanuel Macron and german chancellor Angela Merkel emerged out of a meeting room. They have been in talks or Something Like five days. Originally set for a two day meeting only. Apparently at the moment they are running over final details of a 750 billion euro Recovery Fund to help them overcome the effects of the global pandemic, and the economic fallout this has facilitated. This marathon summit looking like we are achieving some kind of conclusion. We do have some hardliners, trying to win them over with promises the constituent fund will have more of a loan element than a grant element. That is something which the four countries that have been arguing against. We will have the latest on that. We are waiting for a communique. When we get one, we know a deal is done. Live pictures. The msci is in the money. Singapore shares have recovered more than a third of losses. Some oil traders on leave. Trading houses. Investigations are ongoing. Bp not accused of any wrongdoing. The banks claim they found themselves in a 192 million hole from funding crude oriole oil deals involving these companies. 0. 3 . P sti up 0. 6 . D nikkei up big news, jack ma planning a listing in shanghai. Our reporter has the story. China at theg moment to list . Yes, exactly. Ipos in hong kong at the moment of the flavor of the month. We have seen a wide range of companies. [indiscernible] they guaranteed ipo in hong kong and shanghai. Definitely, you are seeing a few trends here. War. U. S. Trade we have seen a number of [indiscernible] home. Ing back [indiscernible] at the same time, those that , nowt listed yet like ant they are open to calling it home. It is an interesting trend. Continue. Looks to right. We just have breaking news right now, we have the eu government reaching that landmark deal we have been waiting for on the 750 billion euro recovery plan. On that joint debt issuance. We have seen five days of acrimonious discussion finally coming to some kind of conclusion. The deal still faces difficult negotiations. Agreeders have left to on Climate Change targets. Still, the eu government reaching a landmark deal on that 750 billion euro recovery plan. Rish. Rishaad absolutely. As we get, just the idea that we have the eu president tweeting deal, theyve done a deal here. They have reached a deal on the Recovery Fund worth 750 billion euros. Even if this proposal is ratified, there is no guarantee there is a smooth journey beyond this. So many ramifications, so many moving parts when it comes to the eu. They will have to keep the socalled frugal four happy. They are led by the netherlands. Austria, denmark, and sweden also. They want more of a loan element. They also want to know how their money is being spent and they will be demanding constant scrutiny of how those funds are actually spent in these various countries. Apparently, they are very much adamant that if they back reforms, they can expect zero tolerance here. That is the deal as it is. This is the pandemic Recovery Fund. We have eu leaders just coming through with that. It is not just all about that. There is also other coronavirus recovery Spending Plans involved, but this is the Recovery Fund that has been the bone of contention ultimately. Overall, it is a deal worth Something Like 2. 1 trillion euros. That is what we are looking at out of brussels at the moment. 5 35 in is coming up to the morning. Deal worth 750 billion euros that has been reached. That is where we are. Haslinda it is a deal. Now lets get the first work headlines. Fund with the worst year since 2016. Emaseks portfolio valued at 214 billion. They said the fund has been doing well since the coronavirus hit and weather has been a slight recovery, geopolitical risks and a second wave could mean more pain to come. Itsralia will expand flagship Subsidy Program worth about 70 billion australian dollars beyond september, as the second lockdown in melbourne threatens to see more jobs lost. Payments will be lower than the first phase. Time threatened for anyone crossing the border illegally from neighboring victoria. Tokyo has recorded new coronavirus infections, but the National Government says there is no immediate need for a state of emergency. Mondays tally sell 158 cases and one death, down from the daily record of almost 300 infections last week. The governor offered few details, but mondays numbers show slightly more than half were of unknown origin. And hong kong is considering a lockdown as coronavirus cases surge with isolation beds and Testing Capacity starting to run out. The city reported 66 new local cases monday. Almost half of unknown origin. 560 new infections have been recorded in the last two weeks. The Health Department says a lockdown remains a possibility. Rishaad just to say that we have this deal being done in brussels. The eu president saying deal done. 750 billion euros. It goes much deeper than that. It also does really include ultimately this start of the collectivization of the euro area in a physical sense, as well. That could be key. What that could actually do alternately is make the bond market, the currency market becoming a much bigger feature of International Portfolios as a consequence. Vons could benefit from all of this fiscal coordination at the core of this plan. It would create a sovereign fixed income market for the eurozone itself. It could be worthy of the name itself. That is what we have at the moment. That deal being done. We are going to take a break. Coming up, several countries that have organized travel bubbles to jumpstart tourism. But the question is will the resurgence of the pandemic caused them to pop . We will get the insights from ndcock next. This is bloomberg. Welcome back. Lots of talk about travel bubbles that can control for people between places. Singapore has entered into agreement with six mainland chinese provinces, well hong kong is in talks with thailand about a bilateral travel deal. As cases crop up across the region and hong kong now faces a third wave, hopes for the Aviation Industry to open up our diminishing. Lets discuss that with todd handcock, asia pac president. They have a range of clients in the travel industry. Also chairman of the Canadian Chamber of commerce in hong kong. Thanks for joining us. It does seem like the travel bubbles are flawed with all sorts of challenges. Certainly a travel bubble if we dont ensure there is discipline and consistency across those bubbles. As we take a look at the world, we are focused on trying to get the world traveling again and traveling safely. Safely is going to require consistency of standards across bilateral or multilateral travel bubbles. Haslinda there has been a lot of talk about travel bubbles, but the only operational one is in the eu. Needs to of protocol be there for this to actually work . Todd i think the first thing is standardization in terms of the type of testing. Rtpcry much promote testing, which is the Gold Standard used by most medical authorities across the world right now. But that also requires clarity of when those testing procedures happen. Very much recommend testing happening before travel, as well as on arrival. Youve got a number of countries where they have a number of exemptions in place. So if i use an example like the u. K. , which has just recently announced 59 countries where they will not have quarantine put in place, they already had 42 exemptions in place. So travelers in those 42 exemption categories could come into the u. K. Without orienting or testing. Onyou can do testing arrival, even for exemption categories, you will significantly reduce risk that that offers to the market. Is it really realistic to talk about standardization . Within think if you work bilateral first. The example being that we are looking at the travel bubble being discussed of australia and new zealand every of if you mark ,he market in the initial stage you have very disciplined activity, and you have to have trust between those jurisdictions. Challenge that havent happened with australia was some exemptions allowed for a breakdown in the quarantine process. In victoria, theyve had a spike that has popped effectively the discussions on the travel bubble there. Rish in hong kong. What are the other problems . What are the Biggest Challenges in your view of getting these bubbles come as they are called, off the ground . Thing ishink the first governments actually cooperating with each other and starting stronger bilateral conversations. We are seeing a significant amount of money, as reported earlier on your show, being put into post Covid Recovery initiatives, but unless we get travel going again, we get leisure travel, Business Travel going again, those initiative are going to somewhat fall flat. We need to get the world Business Traveling again. You have to have those bilateral, multilateral conversations increasing. Weve got to have trust within the markets. We have to have governments willing to listen to external expertise. In the u. K. , weve put forward a proposal for a partnership with would show that testing on arrival. As i said, they would have to have a 43rd exemption. We have to put politics aside and start looking a little bit more to listening to the scientific direction that supports robust testing. Quickly, how much youre has this done to business . This global aviation lockdown, as a work . Todd sure. It has definitely had a heavy impact on our airport lounge business, like the rest of the airport industry. You take a look at the latest numbers, forecasting and 84 billion loss for the industry this year and 20 billion of that coming from asia. Certainly in the airport lounge space we have been impacted. But we have a diverse business with global presence. We have a strong loyalty business that works with large banks. We have a global assistance business which is continuing to work well with this environment. Haslinda in your capacity as the chairman of the Canadian Chamber of commerce in hong kong , what are you hearing about the National Security law that has been implemented in hong kong . How concerned are they . Consistently say organizations are looking for stability, but the simple reality is that the National Security law has been passed and to look to the future and making sure we have strong business presence and supporting that business presence in the future. In the region. Haslinda so, what is the best way to navigate Going Forward . Todd but forgot to the bubbles . Haslinda with regard to the National Security law. Todd i think our company is very much an organization that works within the rules and laws of the environment that it is in. Withll continue to do so our business being heavily focused on the travel industry. We think it will continue to be an important travel have now and long into the future. We will continue to support the travel industry the way we have the last 30 years. Rishaad todd, thank you so much. Todd handcock there. Have the indian market just opened up a short while ago. We are looking at a positive start to the day. Indeed, we are getting that at the moment. Lots to be getting our teeth into. Companies with their latest set of quarterly earnings. The nifty up 1 basically. Nifty Banking Industry group there rising things up and that is where mumbai, the mumbai markets are at the start of the session. Building on the gains that we saw in the session monday. Haslinda thats right. Still to come, dominating the s p 500 and those stocks continue to hit alltime highs even with a volatile earnings season. We will look at what to expect from the results next. This is bloomberg. Lets do a quick check of the latest business flash headlines. Lockheed martin has agreed to compensate the pentagon for parts that were not ready. The two sides say the equipment was considered inadequate, not because of safety, but because they didnt come with a required history and electronic data. The pentagon says 80 of the parts delivered in september 2018 were not ready to install on the planes. Selling data Device Management unit treasure data with the help of Goldman Sachs. Earlier this month, softbank said it will separate treasure from its chipmaker because investment requirements are limiting ability to grow. A 1 billion sale would be 66 more than was paid for treasure data back in 2017. Amazons seemingly unstoppable rise has helped jeff bezos to a record move on the bloomberg billionaires index. Shares surged almost 8 , adding 13 billion to his personal fortune, the largest ingle they rise ins the index was launched in 2012. His wealth swelled 74 billion this year, he is now personally worth more than exxon mobil, nike, or mcdonalds. Right, weve got the eu president talking in brussels at the moment just to mention to talk about this historic deal, which the European Union has struck on the coronavirus Recovery Fund. It is really very early in the morning, just coming up nine minutes to 6 00. In order to confront the biggest recession in the eus history, officials said the eu had consensus on a 750 billion euro Coronavirus Fund will be set up as loans and grants and that will be given to the Companies Hit worst by the virus. That signals it will probably italy that gets the lions share of this for the greatest amount of money out of the hardest hit countries in the euro area. The first grants are to total 500 billion euros, but the figure is being brought down to 390 billion euros, done to assuage the frugal four countries in europe, which were white set against this quite set against this. Denmark, the netherlands, which was the primary critic of this fund, and also sweden and denmark. Just really officials getting this consensus. There we go. The European Union president talking there. Twittert right deal on as soon as there was an agreement made on this. Now, what it could do, it could lead to fiscal coordination and that is the real core of all of this. We could see the creation of a sovereign fixed income market for the eurozone, something that hasnt existed. A Recovery Program could increase that number by Something Like 1. 4 trillion euros. Ofmay even find that some europes riskiest sovereign bonds could become sturdy investment vehicles not least if the Recovery Fund is successful in sharing the cost of economic reconstruction and easing the pressure on the most indebted nations in the euro area. That is the euros in president talking. The euro stable against its american counterpart. 1. 14 at the moment. We have him talking in english now. Lets have a listen. Families, women, children, as leaders we have responsibilities. ,e have a democratic mandate and we have to answer that challenge by showing we are able to deal with these through concrete, real results and through decisions, not virtual decisions. So that we can move toward the future and meet our challenges. Thank you. Madam president. [speaking french] ladies and gentlemen, thank you very much. By thinking the president for his really hard work and tremendous perseverance. Because the success of this European Council is his success, as well. I would like to thank Angela Merkel for his exceptional guidance. We spent four long days and nights. This agreement is a signal that europe is able to act. Accused ofoften being too little too late, here we are demonstrating that the opposite is the case. Thehe end of april, european counsel gave us a mandate of designing a recovery package. Next generation europe is up and running and it has the agreement of the European Council. In the history of the European Union, that is a record for a new budgetary instrument. Europe is very extensive. 1. 8 trillion euros. They have the courage and imagination to think big. We are fully aware that this is an historic moment. We are currently in one of the most difficult Economic Health crises. Managing,s, europe is having worked really hard to tackle this crisis in a really effective way and this will benefit the eu budget and link solidarity with responsibility. All 27 countries bear and support because nextgeneration eu doesnt just point the way out of the crisis, but it serves as the foundation of a modern and sustainable europe. Two more points. You have been listening to the president of the european commission. Agreeinghe eu leaders 860 billion to help Member States mitigate the economic downturn. This is significant. It had four days of acrimonious discussions. 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. But what if you could stdo better than that . K. Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. This is bloomberg daybreak middle east. A deal on a coronavirus Recovery Fund. Senior lawmakers prepare to press Boris Johnson to take a harder stance on china after the u. K. Band arms sales to hong