Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

August 15 but also continuing down. 7 the nikkei and the futures in the u. S. Are looking lower as well. Data expected out of the u. S. Later today. And in terms of looking at some of the currencies in the region, we talked about the bloomberg dollar index. Down about. 10 . Dollar weakness is essentially beneficial to equities in this part of the world and currencies as well. Aussie, thats what youre looking like, essentially flat and new zealand had jobless numbers that came in less bad than expected. The kiwi dollar up. 2 . Lets move on to some of the commodities, gold again looking strong and well, above 2000 an ounce, a little bit of weakness in the last hour or so, down about. 2 . Terms of oil were looking at the beirut story, the port explosion there and there was concern that have geopolitical tensions emanating from that. Thats the yield picture in the points. St over 10 basis rally washe dollar rather short, and then weve got gold, the inverse correlation back at the moment. The reason for the dollar to continue going down a really getting quite stark here. Theres clear concerns that investors fear some kind of easement going on with the u. S. Dollar. The latest projections for treasury refining in the United States next quarter is close to trillion dollars. These numbers are starting to get a little bit meaningless because every country is borrowing lots of money. But when youre borrowing close to a trillion dollars a quarter and got the central bank eating up as many securities as it can, people will suddenly be afraid that youre not taking your currency seriously and thats partly why were seeing the u. S. Dollar fall. Theres also significant change in the funding costs as well. But we saw in march, part of the reason why the u. S. Dollar was stronger was that there was the demand for shortterm funding in the u. S. Dollar that pushed up shortterm rates relative to other currencies. That has completely evaporated. For currencies like the euro and the yen, the cost of holding those has gone down so much, theres almost no deterrent at euro andfor being long thats a first time in a while that people dont have to talk think about is their cost to holding the currency. But the funding picture together in the way the u. S. Is finding it isnt really that good. Its a wonder that it rallied at all at the end of july it is probably going to have a pretty rough summer as we go through to the u. S. Elections. Given that funding picture you outlined, how to set feed into the story around gold . Weve been covering it quite extensively and weve got a story this morning suggesting that gold could go to 2300 as the next major target. Theave other writers saying reasons are widespread for the support of gold and its partly because real yields are heading downward. Also look at the retail space as well. Even though there were a lot of people involved in gold etfs, the numbers are still getting bigger and bigger, at the current level the number of people involved in gold etfs actually is bigger than germanys official reserves. So you can see how big that is. Another one of our colleagues did a Google Search for the phrase by gold. It came back with the highest readings theyve had since 2011. Which is the last time that gold set a record high and we are well above that now. So you can see the interest in people looking to acquire gold has never been higher. So people are not being put off other 2000 price threshold at all. Rishaad even though we havent actually got an agreement between them between both sides of the house, has it been priced in . To some extent, thats partly why equity markets have held up pretty well in the United States. You wouldve thought that would be a bit more cautious, considering that the deadline was missed for the end of july to extend those Unemployment Benefits, but i suspect people in the market always thought that some deal would have to come together, and never thought everybody would completely back away, its just too important. With the u. S. Elections coming up, both sides of the house would be considered to be villains if they dont they know that something has to be cobbled together. It might not be a perfect deal, but you can expect that a deal will go through. Even then, the market will probably be looking for the next one. Whatever packages agree, its not going to be enough to sustain the United States through the end of the year when they still havent got the coronavirus situation under control. Shorttermely things, but ahead of the election, everybody wants to get something on the table. This is one deal, and there will be another one coming down the track pretty soon. Thank you for that breakdown. More on this story and all the days trading on our markets live on the bloomberg. Get a market run down in one click. Fromxpert analysis bluebirds bloombergs expert editors. Lets get the first word news with Karina Mitchell in new york. A massive explosion has killed at least 70 people in beirut and left thousands more wounded at the capitals main port. The blast was so powerful, a shadowed shattered windows even in cyprus. They havent said whether it was in accident or and the or a deliberate attack. Concern about the coronavirus in australias prompting queensland to close its borders with New South Wales and the Capital Territory from early saturday morning. The State Governments at all travelers will be denied entry. Xcept for rare exceptions queensland residents returning home must pay for a mandatory 14 day quarantine at a hotel. And while the defect told leader two forhas filed elections in september. She was barred by the previous military constitution for becoming head of state. Shes credited with ending decades of armed rule in myanmar but has faced International Criticism for failing to stop attacks on minority rohingya muslims. Virgin galactic is pressing ahead with plans to offer passenger trips into space. They are working with rollsroyce to build a plane that can carry up to nine passengers. Initial picture show a close similarity to the concorde which rollsroyce also worked on decades ago. 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. Breaking news coming from manila at the moment, gdp contraction from from. 2 in the Second Quarter, talking about the First Quarter, gdp contraction to. 7 , it was. 2 contraction before. And the Central Bank Governors saying gdp growth will be recovering, but recovering next year, they will be deploying all measures needed. Thats just coming through. Ahead, shining light on inequality in singapore. Will speak with an author about how that might threaten the ruling party. Next, the state of the u. S. China trade deal hangs in the balance. Senior officials are planning to assess the situation amid rising tensions. We will have the latest. This is bloomberg. Tom welcome back. Tim just tensions between the u. S. And china are set to rise even more after the white house announced a visit to taiwan by Health Secretary alex azar. He would be the most senior american official to visit taipei since 1979. According to the administration, the triple take place in the coming days. Derek, what do we know at this point about the trip . This will be the highest level visit by u. S. Cabinet official in decades and decades. As are is supposed arrive in , then in the coming days trip is billed as a trip,related coronavirus where a czar in the country that has experienced the covid19 pandemic worse and may anywhere else on earth is going to taiwan , one of the places that handled it the best, to take stock and talk with people and it all on the surface level makes a lot of sense. He said that taiwan has been a model of transparency and cooperation in Global Health during the pandemic. Obviously this is set against all the washington ivan beijing tension, it certainly is not going to go over quite so well in beijing. Im sure when they saw that there was a lot of thought they had on it that we will probably find out about in the coming hours. Im sure they have a very big response here. This is not something thats going to be viewed as good news on the beijingwashington front, but certainly washington is willing to push taiwans case in the wake of the covid19 situation and their response, so this is sort of a natural followup there, too. Got china state media getting into this whole tictoc affair as well, with them saying the tictoc sale would amount to smash and grab. Its just one more thing added on to a lot more which is causing disruptions. Thats really true. I think that a lot of people in china might not of been happy with the u. S. Demand to divest the u. S. And other related parts tok. K the idea that donald trump has put out there that there needs to be some form of finders fee, those are my words for it, not his, but some sort of finders fee paid by microsoft or tictoc in the if u. S. Are divested to microsoft. I think that has rubbed a lot of people in china very much the wrong way. That was derek in singapore just breaking down the latest beijing andween washington. Mr. As are traveling at some point in the next few days with the delegation. Azar traveling in the next few days. Some technical issues there but thats the latest in terms of these tensions with beijing in washington. Theres a line crossing the terminal we want to bring your attention to. The state of victoria and australia reporting 720 five new covid19 cases overnight. The government theyre also saying thats that 50 more people have died in the state of remains, so clearly it a serious concern as they attempt to try to control the virus. We know that melbourne and other victorian states are being locked down. Rishaad in the situation in melbourne and therein victoria comes as the race for a vaccine continues. We will hear exclusively from bill gates about the quest for something to stop this pathogen. This is bloomberg. Rishaad your back on Bloomberg Markets. Bill gates warned of the threat of a Global Pandemic years before it happen, but he says were going to be ok. He talked about the race for a vaccine, and what happens next. Innovationely, the in diagnostics, therapeutics and vaccines will get us largely out of this by the end of 2021. The therapeutics will start to cut the death rate, but the true naturals when between infection of the vaccine we have this herd immunity. For rich countries, sometime next year, ideally in the first half. So we are going to be ok . Is that what you are saying . I do think this time we will samettention, and have the types of practice in preparation. Some countries did very well. The u. S. Did not. So your foundation has given more than 350 million now to fight covid. You are backing a south korean vaccine in particular david why that vaccine . In particular. Are there any other vaccines that look promising to you . One of the few things that , wedone to help be prepared are behind a lot of different vaccines. We are finding manufacturing capacity at many different sites, particularly for astrazeneca, johnson johnson, and novavax. Those are the ones that are most scalable, low cost. We are trying to make sure we can ended not just in the rich countries but also in the developing countries. In that benefits everyone if we achieve that. We are asking the u. S. To contribute like theyve done and other Global Health crises, which so far they havent gotten around to that. Emily one vaccine in particular, is there something that stands out about that one to you . No, that is just in a list. I would say it is not as early to come as some of the others. We have really whole portfolio where some of the later ones probably will be even more effective. Looked quitene above some of the others. To really stop the virus from going into your upper respiratory tract and block transmission. Its easier to block to reduce sickness than to block transmission. Emily how confident are you that we will have a working vaccine that can be distributed in mass quantities by the end of 2020 . Is it going to be a one and dine kind of thing, or will it be a seasonal vaccine, like the flu shot . Terms initial vaccine, in of its effectiveness against sickness and transmission wont be ideal. Primary point is for 50 effectiveness, and it may not have the Long Duration that one of the later ones will. The more expensive ones will mainly be used in the rich countries as a bit of a stopgap. We would be lucky to have launched before the end of the during the first half of next year a number are likely to get approved. Then we need to scale up. We need billions of doses to get to places that have a hard time doing sheltering and are already so poor that the economics are quite dramatic. Challengee biggest the Global Health community has ever faced. I think we will rise to it, even though the right investments were not made, and in the case of the u. S. At least, the lack of organization around testing and trials has been very disappointing. And that was bill gates, microsoft founder and cochair of the bill and Melinda Gates foundation. The biggest fast food chain in the philippines has reported a 200 million loss in the Second Quarter. Lockdown into a strict and restaurants were closed. Bad,eo calls the loss very but says he expects a return to profit by the Fourth Quarter as the covid19 restrictions ease. Virginal strata has outlined restructuring plans under new ownership, as it looks to survive the coronavirus downturn. They will cut 3000 jobs from the workforce of around 9000. Brand will be discontinued and International Flights will be suspended until the Global Market recovers. Virginal study collapsed under 5 billion of debt in april. Sony is offering of gorgeous forecast for the rest of the year, despite porting earnings that beat estimates. Operating profits came in at 2. 1 billion dollars, compared with the average forecast of 1. 3 billion dollars. Sony is preparing to launch the latest version of the playstation console, anticipating Strong Demand and asking suppliers to double production. An electric truck maker offered a bumpy First Quarter Earnings Report with analyst trading barbs and shares tumbling in late trade. Saying it lost more than 86 million in the Second Quarter, a five times greater shortfall than a year ago. Expectations. At not surprisingly, the analyst disagree. Hsbc is looking to hire up to 3000 wealth planners in china to turnaround flagging profits, even amid rising political tensions between beijing and the west. The first 100 or so have already started work in wenzhou and shanghai. The rest will be added over the next fourars years. Hsbc is in the process of cutting 35,000 banking jobs worldwide. Rishaad lets get to the markets as we had to the china lunch break. Sian stocks mixed at the nikkei down , and looking also at whats going on with the yen because it is coming back, the yen strength ways on equities. The Broader Market down by the same amount against the backdrop of whats going on with the dollar. ,he dollar index turning down and dollar weakness here as well. Thats currently where we are. Democrats aiming for a virus relief bill by the end of the week. Way. Ls are on the this is bloomberg. Andaad 10 29 in hong kong beijing. This is Bloomberg Markets. China fighting back over the bottles of tiktok the battles of tiktok. State media describing orders for the up to be shut down next month again, quote, theft. They indicate beijing may block any sales. The strongest supporter yet of bytedance. Microsoft remains interested in a deal. Tiktoks troubles are proving a relief for rival instagram. It faces ames range of concerns in the u. S. Mark zuckerberg says it threatens chinas position and the influence over the internet and social media. The u. S. Health and Human Service secretary alex azar is to lead a delegation to taiwan. Due to arrive in the coming days to talk about the response to covid and to deliver medical equipment and technology. China views the island as part of its territory. Reports from washington say the ted states planning dow jones saying the two sides have agreed to open highlevel discussions. Beijinge assessing compliance with the phase i deals. The umass has the u. S. Has been hammering china over trade, hong kong, human rights and tech. Lets have a look at some more signs of recovery in china with auto sales rising for a fourth straight month. Delivery of passenger cars and commercial vehicles rose 15 from a year ago. We had the sales topping 2 million. Easing the coronavirus shut down allowing car buyers back into showrooms, reading hopes the three years sales slump maybe coming to an end. Big picking up some of the stories in terms of tiktok and trade and taiwan. We are looking ahead for the bank of thailand. You have the r. B. I. Tomorrow. Lets check in in terms of the benchmark. It is flat. In the mainland, shanghai composite is down for 10th of 1 . Services coming in below the estimates. Still an expansionary territory around 34. Japan, and big day for earnings. The nikkei is down 6 10 of 1 . Futures in the u. S. Are flat. In terms of the tech story, there have been reports from a news agency in china suggesting it will be more support for some of the Software Makers and chipmakers. That is leading to a rally as you can see. The likes of National Silicon up more than 6 and troy information up 8 . We can move on to the next board. The Southeast Asian indexes. We did have that line coming out from the philippines in terms of First Quarter gdp revised to a contraction of 0. 7 from 0. 2 . We will have secondquarter gdp on thursday. We also have cpi for the philippines coming in at 2. 7 year on year. 1 gapore is up 6 10 of despite the revision to the First Quarter gdp. The p comp is up 1. 5 . Bank of thailand looking ahead to the Rate Decision. In jakarta, index is flat. We can move on to some of the commodities and currencies. Gold is still above the 2000 level. Oil is in focus. The u. S. Dollar in terms of the dollar index, dowd 1 10 of 1 down 1 10 of 1 . In terms of barrels, 41 a barrel is what youre looking at for wti. The yield on the 10 year, 50 basis points. Rishaad the white house is pushing for a new stimulus package as the treasury secretary says he is hoping for an agreement with the democrats by the end of the week. Kathleen hays has the latest. About asseems to be fast as continental drift. Suddenly,i know, but it seems something is happening. Member how downbeat everyone was at the end of last week . It took forever for republicans to get their deal. Here we are on tuesday, lots of talks. Ublicans and the president republicans and democrats. We have people sounding cautiously optimistic. Mark meadows, who is the white house chief of staff, saying the following. I would characterize the character the conversations as productive and a step in the right direction. Probably the most productive meeting we have had to date. He also said offers have been put on the table by the republicans for the democrats on extending Unemployment Insurance , extending also the moratorium on evictions. He referred to those as the president s highest priority. Steve mnuchin also weighing in. He has been saying for some time, we need a deal, but it may take longer. We are at the point of being close to a deal, but we did try to agree to set a timetable that we are going to reach an overall agreement by the end of this week so legislation could pass next week. That is good because Unemployment Benefits at the federal level have expired. The Eviction Moratorium has expired. Goes on august recess at the end of the week. There is a lot of pressure on. Chuck schumer, who is the leading democrat in the senate, he appreciates the gop concession. They still agree they still disagree on the depth and scope of the solution. One trillion is the goal for the republicans. 3. 5 trillion for the democrats. Speaker pelosi sang tonight we will have an agreement. Mitch mcconnell acknowledging republicans internally within the party do not agree with a lot of the things out there, but he says he will support whatever the white house and democrats can agree on. President trump said earlier he supports extending the 600 a week jobless benefit. That is interesting. Talks continue tomorrow. Steve mnuchin, mark meadows, nancy pelosi, Chuck Schumer. We will see what they can accomplish. Tom how much does all of this complicate the chop of the Treasury Department as it repairs to announce is expected to be an alltime record for quarterly funding . Kathleen as i said earlier, imagine you were planning a big party, but you did not know if you are going to have 10 people coming or 40. That is what it is like now. The treasury announced yesterday they are going to raise 947 billion in the Third Quarter. It will be a record for any Third Quarter in history. They are basing it on the assumption that there is going to be another trillion dollars in borrowing needed in the quarter. Wall street is looking for on average, a record 108 billion refunding announcement in the next several hours. This is the quarterly sale of 3, 10, and 30 year bonds. This can set the tone for the treasury market for a while. The Second Quarter refunding came in at a record 96 billion. I went to show you this because one thing wall street is expecting the treasury to tilt toward longer term paper. Why not . You have these crazy low yields. We have a huge deficit. Lets take advantage. Interesting in terms of not knowing how much borrowing youre going to need before they announce refunding. Deutsche bank says what they should do is they could announce it and let it rise if it needs to. If it turns out the stimulus package is bigger. Morgan stanley saying we think they are good factoring into this we think they are factoring all of this into the amount they are going to announce. Barclays is saying the historical rates are going to play a role. Theyre going to move away from the treasury bills, which they have been relying on. That announcement coming at 8 30 eastern time. We will see what they come up with. It is going to be big. Tom it is going to be big. I like the dinner party analogy. Thank you very much. Coming up, this Coronavirus Crisis has put the spotlight on and equality in singapore. We will speak with an author about the latest win by the ruling party and how it could make an impact. This is bloomberg. Rishaad this is Bloomberg Markets. Singapores recent general election demonstrated how much the city state has achieved gender equality in politics. 27 women were elected. The city is just shy of the u. N. 30 target for women in leadership positions. Lets discuss gender equality with sudhir vadaketh. A move in the right direction, but what more needs to be done . Sudhir i think in terms of doing equality, we are quite well in political representation. At the higher echelons, you might argue we could have more ministers women ministers. As you mentioned, there are quite a few parliamentarians. We had the first female opposition lady elected this election, which is great. From a minority representation point of view. At what when you look has been happening and across the world with this pandemic and it has highlighted the huge number of migrants, there is a big and equality issue, which has been highlighted by the transmission of covid19. Sudhir if we look at social and economic and equality, the coronavirus story is a bifurcated story. You have 80 of citizens and residents who have actually had a good response from the government. If you look at the other end, the one million odd low cost migrant laborers. We had many of them from south asia. Many live in huge dormitories. Some of them in squalid conditions. It was a disaster waiting to happen. For them, you have the coronavirus sweeping through these doors. Because of the problem with the dormitories, singapore has more than 50,000 cases now. The worst humanitarian crisis since independence actually. It is looking pretty bad. It is a bifurcated response depending on how you look at it. Rishaad absolutely. With the election behind them and the eap party, they are losing a few votes, but still firmly in power. Do they have a mandate . What sort of mandate do they have . What did they have to do . Sudhir it is interesting because they one the election with 62 of the vote. Most Political Parties would be celebrating. In singapore, it was seen as a big disappointment it is one of their lowest ever vote shares since independence. The opposition has made huge inroads. The opposition has 10 seats. We have a former leader of the opposition. You see the possible beginnings of a two party system in singapore, which we have never had. We have been a oneparty state since independence. Getting back to inequality, one single from the electorate is we want more attention paid to some of the social economic and equalities that have emerged over the past decades. Singapore has one of the highest among rich countries. At everylity argument end of the labor spectrum. Thise bottom, you have high and flow of low cost labor, which has depressed labor at the bottom. Among middleclass professionals, there is a sense that high immigration has depressed wages. At the top, you have the sense that singapore is becoming a playground for the rich. It is a tax haven where the plutocrats and multinational set have moved here. The tax headquarters of singapore and so on. Different aspects of inequality. I think the election showed the electorate wants the party to focus more on this. Tom what is the policy prescription . Do the rich need to pay more tax . Sudhir i think there are several things. One argument is we need more social protections for those at the bottom. Singapore has always had this aversion to welfare. Many say this is one of the things that has made a successful. An open free economy with little redistribution. One of the prescriptions is a minimum wage. We do not have a minimum wage. Selective wage increases for particular sectors. The Main Opposition Party has said they are pushing for a minimum wage. There is also Unemployment Insurance, particularly important at a time of technological change and disruption. Singapore he faces all the same forces that have been affecting countries around the world. Minimum wage and Unemployment Insurance at the bottom. Perhaps they might have to be particular tax increases for corporations and some high income earners. There is also at some point going to be increased discussion about wealth taxes. Singapore no Capital Gains tax. I think there is going to be an increased focus on whether we should institute some kind of wealth tax as well in the country. Sudhir vadaketh, thank you for coming on the show. Coming up, a chat with john tuttle about the latest wall , special purpose acquisition company. This is bloomberg. Tom this is Bloomberg Markets asia. Special Purpose Acquisition Companies have jumped in probably already as investors and firms open up to fundraising where the ipo comes before the company is identified. Bloomberg spoke with New York Stock Exchange group vicechairman about wall streets latest fed. Let us fad. Latest fad. If you would have told me 20 would be the year of spac, i would not be so sure about that. We are seeing a strong pipeline of ipos. If you look at the first half of 2020, over a third of all ipo proceeds were raised. I think it is interesting for a couple of reasons. The product has matured over the past two or three years. A decade ago, they were not in favor with investors. Now you have larger sized spacs. You have sophisticated management teams leading these transactions. You have Companies Looking for additional ways to come to the public market. There has always been the traditional ipo. We have a few more things we are working on with regard to the more options there are for investors to access the public markets, the better for us. The better for some vcs. Talk to us about where you are threading the needle, trying to push forward on that development. There has always been the traditional ipo. About two and a half three years two and a half years ago, we started working with spotify. They said, we do not need to raise capital at the time of our listing. We went all the other benefits of being a publicly traded company. Creating with slack in this new pathway to the public markets. You could argue there is more efficient pricing than a typical tech ipo. After those transactions, we talked to banks, we talked to investors. We said, how can we improve more . What is their demand for . If you talk to the other venture capitalist, they say, can we create a direct listing and also tie in the ability to raise capital . We filed with the sec. We have been working closely with the regulators and other stakeholders to shepherd through what we think are going to be meaningful changes to the equities market and transform the way some Companies Access the equity market. Toi am interested in living geopolitical noise we see. How are you seeing the u. S. China tensions infiltrate your part of the market . We are seeing pretty successful chinese listings in the u. S. Are we going to see fewer and fewer . There are still a lot of chinese Companies Looking to Access Capital in the United States. I would say they are larger in size. That havea lot publicly filed or are reported to be filing soon. I think it is important we make sure dialogue between the United States and china continues because the u. S. Capital markets are the envy of the world for a reason. They are the deepest and broadest pool of liquidity. A lot of the issues being discussed between our regulators and nonus regulators are not new issues, they do need to be resolved. We want to make sure the u. S. Markets remain competitive. We want to make sure the leading Companies Continue to list in new york. We will continue to see Chinese Companies come to market, at least in the near term. What are investors saying about this . There was a time when these chinese ipos were propping up. Areinvestors concerned investors concerned this could be a bigger issue moving forward . They learn about the company, read disclosures, watch the ir decisions ther accordingly. What is important for us is to make sure the company is listed on the new york stock use change. And that any opportunity with us meets our standards, which are the highest in the world. Exchangenew york stock vicechairman john tuttle. Starting off with amazon, because it has won the u. K. s backing for a Minority Stake in deliveroo. The stake will not substantially weaken competition. It did warn another investigation would be likely if amazon boosts control of delivery in the future. Back in december, the cma was worried about the deal but made a uturn when deliveroo said it was running out of cash. The latest company to branch out ridehailing and food delivery ups. Aab financial is to put out investor line that allows users to save money and borrow cash. Cutting two top executives. Hot on the heels of the worst lost the company has seen since the financial crisis. The Investment Banking ceo leaves at the end of the year. Societe general lost one and a half billion dollars in the Second Quarter. Disney losing almost 5 billion last quarter after the coronavirus closed theme parks, shut movie theaters and sapped revenue. The only bright spot was disney plus, which grew to 57 million subscribers. Staggering 2st a million. Nearly all of the attractions closed because of the pandemic. Indias most valuable lender has named a new ceo. The ceo will begin in october. He replaces the previous ceo who had spent 26 years in charge. Over as indiaakes faces a deep economic struggle amid the coronavirus pandemic. Our bloomberg clients, we have an ongoing q a session on quantifying geopolitical tensions, a feud between the u. S. And china heats up. Take part in that discussion this morning. Plenty more ahead. This is bloomberg. It is almost 11 00 a. M. In singapore and hong kong. Welcome to Bloomberg Markets asia. At top stories. Newu. S. And china planning talks on the phase one trade deal. Short of agreed purchase targets. Tensions are set to rise even further on news the u. S. Health secretary is due to visit taiwan. Mostazar will be the senior american official to go to the island in four decades. Remainingicrosoft keen on tiktok but must navigate a path between the Trump Administrations critics haslinda lets do a check on the market. It does look like a pause in asia. Lacking in direction. Alex azar heading to taiwan. That is likely to cause a further provocation to beijing. We have people familiar saying the phase one deal is under review. A tentative move in asia. Lower by half a percentage. Insatiable appetite for stocks on hold. The shanghai comp weeding the drop leading the drop with energy and health care. The Rate Decision at 4 00 p. M. Come currently lower, by a 10th of 1 . Indonesia do out with gdp. It is set to shrink the most in 26 in two decades. Tentative in asia. Rishaad lets have a look at what is going on elsewhere. Hang seng and nikkei going opposite directions, signifying what is a mixed bag. There has been a move toward havens. Slamming past the 2000 an ounce level, trading 2033. We have had new york crude unchanged. We did see a spike up on fears geopolitical tensions resuming in the middle east with a massive explosion at 11s at lebanons main port. Tensions within the u. S. In china set to rise further. We have the white house announcing a visit to taiwan by the Health Secretary. He will be the most senior official to visit taiwan since 1979. Lets go to beijing and bring in the bureau chief. What a know about this trip and how is beijing what do we know about this trip and how is beijing likely to react . They are not going to react well. It is a prerogative move with the u. S. It is in line with this stance toward beijing. This is going to send a strong signal in support of taiwan. I think we can expect china is going to come out in strong opposition. It has already threatened to retaliate against the u. S. By taiwan andrms to criticizing the u. S. Supporting taiwans role in the who. This would be a much more direct affront. We can anticipate a strong response from china. The Foreign Ministry brief is today where they will address the issue. On the issue of tiktok, does china have a response . Some are saying apple could be targeted by china. Sharon china has not announced any actions, but it has put out it has responded through the state media and editorials that speak for the government and call this a state sanctioned theft, saying the u. S. Has no justification for doing this. We should remember a lot of american websites are banned in china like face look, google like facebook and google and twitter. If it comes down to the moral argument about whether countries bar certainble to apps from their countries, it is not going to work in chinas favor either. Rishaad how do authorities there look at what is happening with regards to trade here with these talks of the socalled phase one trade deal slated for the middle of the month the echo the middle of the month . Sharon it makes sense that as we reported, the two sides are soon to meet sometime evaluate the progress of the deal. Ties have worsened significantly since the deal was signed. It is kind of difficult to overstate how bad things have gotten since then. Also, it has been complicated by the coronavirus. China has struggled to meet the target, even for the purchases that they have set out in the deal. Is really a question of whether the deal is even still valid and what happens if the next phase of talks, which trump has already said are indicated to be at a standstill and not going to proceed. Haslinda trump says the trade deal is not as important for him now. Beijing bureau chief sharon chen, thank you. The australian state of victoria has reported a record 720 five new cases of the coronavirus and 15 deaths. Most of those were in melbourne, which is in lockdown. Most of the victims were in age care homes. Rising concern is pumping queensland to close its borders with New South Wales. It is already closed the victoria. A massive export already closed tub victoria. A massive explosion has occurred in they were it shattered windows across the city and was even hard in cyprus. Authorities blame explosive cereals stored at the port but have not said if it was an accident or deliberate attack. The de facto leader of myanmar has filed to run in Upcoming Elections in november. Ruling party but was banned from the previous constitution from becoming head of state. She has credited with ending decades of military rule in myanmar but has faced criticism from failing to stop attacks on minorities. Virgin galactic is planning planning flights to space. It is working with rollsroyce to build a plane that can fly at three times the speed of sound. Initial pictures show a close similarity to a project rollsroyce worked on decades ago. The latest on the new york stimulus talks. Thailand expected to hold Interest Rates when it meets this afternoon. Adonesia expected to report growth. We will also talk strategy with Principal Global Investors and find out where it is putting some of its assets to work. This is bloomberg. Haslinda the white house is pushing for a new stimulus package and the treasury secretary says he is hoping an agreement with the democrats by the end of the week. Kathleen hays is here with the latest. Are the talks really making progress . Kathleen it does appear that way. If you think of what the sentiment was, what people were saying, what democrats were saying at the end of last week before Mitch Mcconnell was ready to put his package on the table. You can see Mitch Mcconnell in this footage. It is difficult. It is different. The headline on our story today, white house and democrats aiming for a virus relief deal by the end of the week. Lets start with what mark meadows said. He and treasury secretary mnuchin seem to be growing cautiously optimistic. Mr. Meadows saying, i would characterize the conversations as productive and a step in the right direction. Probably the most productive. Eeting we have had he and Steven Mnuchin met with Speaker Pelosi and Chuck Schumer. Mr. Meadows pointed out the republicans made offers to the democrats on extending unemployment and extending the moratorium on eviction. Here is what Steve Mnuchin said. He said we are not at the point of being close to a deal, we did agree on a timeline that we are going to reach an overall agreement we can get one by the end of the week so that legislation could pass next week. They better pass it soon because theyre supposed to go on recess this friday. I guess they will stick around until they actually get something done. Chuck schumer said earlier today that he appreciates the concessions, but theyre still disagreeing on the scope and depth of the solution. Charging onens are trillion. The democrats, three and a half trillion. That is what theyre going to have to bridge. Nancy pelosi saying she is hoping for a deal this week. She says we will have an agreement. We know nancy pelosi likes to get things done. Mitch mcconnell pointing out the republicans internally are divided on a lot of these issues. How about the deficit hawks . Support anything the white house and democrats can agree on. President trump saying earlier supportsactually extending the 600 a week jobless benefits. The white house chief of staff, mark meadows, said that along with getting the moratorium on trumpss are president top priority. Just ahead, we are going to have Steve Mnuchin, mark meadows, nancy pelosi and Chuck Schumer meeting again. It is going to be important if they can build on any concessions they have made, probably make them deeper on both sides. They haveeems to be done enough internally to move more in that direction. Much does it all complicate the work of the treasury . Recording an alltime for quarterly refunding. They have to announce quarterly refunding. It is the biggest auction for the treasury every quarter. It can set the tone for the treasury market. But they do not know. They are assuming 1 trillion is going to be needed in additional funding for the Third Quarter. The announced that yesterday. They announced that yesterday. What if the democrats win out . And they have already announced the quarterly refunding amount and have to start on a plan on other offerings. The treasury refunding announcement is just hours from now. It is expected to be a record 108 billion. Second quarter, it was 96 billion. I am sure you can remember the days when it was over 30 billion. How things have changed. Certainly. Our Global Economics and politics editor, kathleen hays. News coming through various media reports in australia saying people returning from victoria to sydney will be forced into local quarantine. That coming from various media sources. Financial markets have been pricing in. Our next guest says a recent uptake in data not result in a vshaped recovery. We ask Principal Global Investors where it is putting its assets. This is bloomberg. Rishaad a mixed day of trading in asia. Reports of a plan to review the phase one trade deal. Riskext guest reduces orientation by trimming his overweight call on equities. West as the director on global investors. As this indicative is this indicative of lockdowns, which were eased and then we have a second wave . Are various parts of the road ready for a second wave given a could be much worse than the first . Kirk i think the world is quickly learning how to deal with the new waves. In some cases, youre in second waves. In other cases, we are in third waves. The federal government and the State Government are doing a good job. They are looking to contain it so they can stabilize it while the rest of the nation is hopefully in nobel eyes asian mode. Mode. In normalization youre are saying in hong kong where you are based. Seeing it in hong kong where you bait. That is the reality for now. Rishaad many businesses who endured the first wave if they get up again if they can afford it only to find they get a sucker punch. It is almost as if we have a vshaped recovery being priced into the market when there is nowhere near that certainty of that happening. What is your take . Kirk you are right. Certainomic scouring in sectors, hospitality and transportation, is going to be deeper. There is no doubt about that. That is why it is time to make sure we are getting all the stimulus we can in terms of monetary and fiscal and certainly fiscal in terms of income replacement. That is why what is happening in the u. S. Is so important. If we do not get that income replacement in the u. S. , that is what will have a fix other asset markets. Have effects to other asset markets. Rishaad we have to pay that money back at some stage, but are we looking at seriously dark times and is persisting for years, not just a year or two . Kirk there is no doubt that debt as always borrowing growth from the future. It is where you start from. If we are not providing this accommodation from a monetary perspective andy fiscal perspective, the starting point and a fiscal perspective, the starting point will be deeper. We really have no other choice should no other choice. At some point, we are going to have to pay this back. There are going to be implications of that. The repression of Interest Rates will be one likely outcome. Seeing anwe are escalation in the u. S. China tech war. We are also seeing the u. S. And china reviewing the phase one trade deal. How much of that of of that is a risk to the market . Kirk good morning. Always good to see you. In the case of china, i would war, iterms of the trade expect china will look to honor its obligations to the best of its ability. I think that is the way that will play out. In terms of all the other issues, i would consider them more prone to what is happening in the u. S. From the election cycle. I expect there will be a lot of superficial lets call it china bashing that goes on. That, i think the markets will look through. Haslinda the emerging markets erasing thefrom pandemic losses. Given a broad dollar weakness, given the stimulus, do you cems do you see ems continuing to rise . Kirk at this point, we are neutral emerging markets, both equities and debt. We do see value on the debt side, particularly on asian highyield. The majority of that is china exposure. Within emerging market equities, we have a preference for north asia and china and korea. What i would say is at some point, i expect the emerging markets will go from a neutral to an overweight decision. That is because we have an enormous amount of liquidity that will be a search for alpha generation. While emerging markets may only highs, theyecent have underperformed developed markets over the longterm over the last 10 years. I expect that will be where people go. It will be a 2021 story until you see that pickup. Look at gold go past 2000. Where is it headed yucca where is it headed . Kirk i have never been a good a big gold fund. Concerns. Nd the it has been filled by negative Interest Rates. Been fueled by negative Interest Rates. I would say it has had the best of its run. If youre looking for inflation protection, youre going to find better alternatives. One of those alternatives is likely to be in the real estate market. If inflation protection is something youre looking for, i think there are going to be better alternatives. West, thank you for your time today and your insights. Virgin australia has outlined restructuring plans under new ownership as it looks to survive the coronavirus downturn. Bain capital will cut 3000 jobs from a workforce of around 9000. Tagger australia brand will be discontinued and International Flights will be suspended. Virgin collapsed in april. The u. K. swon backing for a stake in deliveroo. Warned another investigation would be likely of amazon boosted control. The cma was worried about the deal but made a uturn when oo said it was running out of cash. Disney closed theme parks and shut advertising revenue. Int eight cents a share june. The only bright spot was disney plus, which grew to 57 million subscribers. The theme parks lost 2 billion. Nearly all attractions closed because of the virus. Having a look at what is going on with the chinese markets. We will have a look at them as they head towards their lunch break. Surging above the 2000 level. Burling past the 2000 level barreling past the 2000 level. Crude marginally down after a spike up because of the explosion in beirut. The hang seng is higher. The nikkei starts off the afternoon session in three or four minutes. They are kicking off from that. The services pmi number in earlier. 54. 1uly number is really as opposed to 58. 4. At 50. 43. E had it a minor adjustment. Csi 300 holding its head above water. T, 1. 3 to the upside. Not quite the same amount. Against the backdrop of asian stocks trading mixed. Stimulus talks in washington. We have investors shrugging off the u. S. China phase i trade deal being reviewed. Taking place between beijing and u. S. Officials in the middle of the month. The discussions on that deal would be led by Robert Lighthizer and the chinese vice premier. That is six month after the agreement took effect. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Haslinda live pictures of the lion city. We are in the middle of the trading day. Contribute in gains to the region. Contributing gains to the region. Airlines, rising the most in two months. Cafe and honk dust cafe hong kong rising today. You look at sq for the year, it is down a whopping 42 . The lowest price in more than two decades. Likely to see a delay in the launch of Business Class seats, which were set to debut in 2022 on the bowling triple nine. Cathay pacific surging 7 . Lets have a look at what is going on. A look at the u. S. Health and service sizes Secretary Health and services secretary. Leading a delegation to taiwan. It would be the highest visit with washington since the u. S. Cut ties more than 40 years ago. He is due to arrive in the coming days to deliver supplies of medical equipment and technology. China views the island as part of its territory. Therts from washington say United States and china are planning new talks on trade. The dow jones saying the two sides have agreed to open discussions on the 15th of august. They are designed to discuss beijings compliance with the phase i trade deal. Talking of which, beijing fighting back over the battle for tiktok, denouncing president of as demand for a sale quote, smash and grab. Blockndicate beijing may any sale. The chinese daily article is the supporter of bytedance. Microsoft says it remains interested in the deal and talks are continuing. Discrimination against Chinese Companies. Fair to make not such allegations without giving evidence. Haslinda staying with markets, the line between washington and beijing for decades. Major hurdles remain as the tech giant works to satisfy the Trump Administration and the shareholders of bytedance. Microsoft cofounder bill gates told us more about the growing war and doing business with beijing. The whole situation is quite novel in terms of, what are the principles involved to yoko what principles should china apply to companies in china . Are those thoughts through and predictable yoko i am not predictable . I am not at the company now. We have made investments in china. We have engineers from all over the world including china. Aboutoft is very careful data promises and will try to have strong relationships globally. We will not do things that are hostile or viewed as hostile. Emily what about the apt in general . It is a very popular app. Is it something you would like to see in the microsoft family . It is nice tiktok has created competition through innovation. It does not seem like preventing that information innovation from being available, like that makes sense when you want new things out there. I am not in the target audience. I have gotten a lot of education from my youngest daughter about this and why she spends time on it. They did a great job on it. There are a lot of ways to take it and hopefully, that is allowed to happen in some form. Emily lets talk about what is allowed. Is the Trump Administration correct in trying to force this Chinese Company to sell tiktoks u. S. Operations or shut it down in the United States because it is chinese . Should the china at the company be subjected to that . If this was such a clear thing, why wasnt it clear three months ago . When people make investments, they should understand what is allowed and not allowed and what is the reciprocal principle involved . Maybe i have not read the right article. I do not understand what happened on saturday. On the i am focused foundation and the pandemic. I will probably provide advice at some point, but i am not at the center of the decision being made here. Emily i want to get her thoughts on the antitrust situation. I sure the hearings have been a bit of deja vu for you, having gone through a lengthy review process yourself. Do you look at Companies Like apple and amazon and think they have become too powerful . Is this an effective way to preserve competition . These companies are shaping the economy. The idea that congressman get a chance to talk to their leaders and understand what they are doing in terms of media and competition makes sense. They were lucky there are four of them on the hot seat. I was all by myself with critics sitting next to me. I guess we are getting nicer to ceos than in the old days. Going tofelt washington and talking about our values and what we did was helpful. Particularly through this pandemic where these companies have done so well. Now understanding, what is it like to be an entrant into these markets . There are some issues that in a scattershot way did get raised. That was bill gates, the cochair of the bill and Melinda Gates foundation and microsoft cofounder. It is not just the United States that internet firms have to worry about. India is planning on expanding its blacklist. Get details from our technology reporter. Ba another round of app ns . 59 ith after it and apps, india has banned dozens more, bringing the total to over 100. Likeew set includes apps weibo, which is chinas version of twitter. It also includes tencents possible tencents popular platform. Ia this seems like a really concerted action against the largest of Chinese Technology giants. Haslinda what does this mean for the Technology Industry in these two countries . It is part of a sea of actions india is taking. Ecommerce platforms requiring that the specified country of thein because a lot of products ecommerce retailers sell our chinese made products as well as increased oversight over Chinese Capital coming into indian startups. Startups like bytedance whose apps like tiktok are among the most popular apps in india. Areink many indian startups finding that the field is open to grow their own versions of short video and social apps. They are seeing traction in the form of hundreds of millions of new users that do not have a chinese popular alternative and are looking for indian versions of these apps. Bansnda are more expected from india . India is said to be examining hundreds more. Local media reported 250 more chinese apps are being scanned. There is anxiety among a lot of indians that their Favorite Gaming app, which is part of tencents portfolio could also be banned. This could spread further into areas like cricket because the board of cricket control in india, which manages the premier league is under pressure to replace the title sponsor, which is the chinese phone maker weibo , which has a five Year Contract amount into 300 million. That is going to be a tough one to replace. Rishaad thanks very much. Look we just had confirmation of what is happening in australia. Imposed awales has quarantine on people who returned from victoria. Victorias the state of reported 725 new covid19 orders overnight, which i believe is a record. Have confirmation of the of that story. A big week for economic data. We are going to be chatting with a senior economist who sees diverging recovery paths in this part of the world. This is bloomberg. Haslinda the bank of thailand is expected to leave its policy rate unchanged when it meets later. Also on the radar, indonesian secondquarter gdp due at noon. The economy is expected to shrink short of 5 for the quarter. Lets discuss all of this with the senior economist. We are expecting when you take a look at yields in thailand, there falling, suggesting we are expecting further rate cuts down the road. It is already at 0. 5 . Trinh that is ripe i think today is going to be an easy call for markets. Some people are expecting a 25 point betas cut. It is an easy call in terms of monetary policy. The situation in thailand is anything but easy on an economic frame. For monetary policy, they have done everything they could to cut rates to 0. 5. They also introduced funds to stabilize the bond market. Had importantly, the bond weakened a bit. It is still expensive. All those things have been very helpful on the market for thailand. Factnnot really change the that thailand is facing a significant economic challenge and one in which everyone is asking whether or not the change of guard for the ministry of finance or the blt are going to bring meaningful change and economic momentum. Even before covid, the economy had been trending much lower than other asian economies. Much of that recovery you saw before covid was mostly publicsector investment. Now enter covid, which exposes the fundamental issues we have highlighted, which is too much concentration risk in terms of tourism. Chinese tourists have increased. Even total when you look at regions. That in itself means it is going to be much harder to recover. It is not just tourism. Trade has underperformed as well. Not just because of covid but if you look at over the years, the ability to expand market share has stagnated. Now it is the same as vietnam. That shows vietnams growth but also that thailand has grown by much less. We think that giving what is that given what is happening with coping, and needs a more diversified model. Thailand is very different from other markets such as indonesia. It has a developed profile. Demographics are declining. Excess savings. The question is, how does this stimulate private sector investments, which have fallen dramatically before covid and before then. Haslinda you hinted about the change of leadership at the vo2 you. Is there anything that the incoming government can do that has not been done . It has already kind of done that by creating these funds of stabilized markets, buying corporate bonds. If you look at the earnings and of the public sector, it is not a dead issue. Rates have been low. There is only so much you can do with lower rates. The problem is growth. There has been a growth problem for a long time. If you look at the earnings, they have done better than other asian economies. Particularly in southeast asia. Their problem is return on asset. Their problem is earnings. It is going to decline by almost 50 . The gdp figure is going to mere a sharp double digit to mirror a sharp double digit decline. Moving forward, how is it going to diversify . It has learned a difficult lesson, which is that when you depend too much on one sector and that sector is basically out of your control because that is what happened with covid. Even if it lifts the emergency decree by the end of august and brings in emigrants, it is difficult to persuade Chinese Tourists to come back or other tourist in asia that are still under severe lockdown. In europe, they have a massive market did governments are able massive market. Governments are able to recover. Thailand has a growth and investment problem. How muchto do with diversified needs to be. You cannot have a province whose economy is entirely dependent on tourism and it is shut. Haslinda how about indonesia . It is poised for its biggest contraction in two decades. Can escape an economic crisis . Can escape an economic crisis . Similart has a profile to emergingmarket story in that it has a beautiful demographic profile. It is very easy for indonesia to grow. It has been able to punch 5 . Now in the Second Quarter but since 2013 on average. Just through private consumption. Oriented. Ery domestic andproblem with indonesia not what thailand has, which is that it needs to import capital. Indoes what needs to invest because it invested so little. Much of the problem it has is selfimposed. Suppression measures that suppress demands and imports. That means it does not need dollars so it does not have the external financing issue. It has a sustainable income purchasing power issue. These are the factors that indonesia can be in control of. It has the trend that many countries do not have. Although debt is going to rise because of the revenue decline and expenditure increase, indonesia still has the lowest debt in asia and much of the emergingmarket if not the world. Leverageda very system. If it manages to normalize and come out of this selfimposed moreover, implement policies it said it would do to attract investment. We have and in asia and there growth. We have indonesia and there should this chart shows which countries have had the strict is lockdowns. The philippines have had the strict is lockdown followed closely by vietnam. It had been trailed only by indonesia for a while. It seems like the philippines is going to get hit the hardest in terms of how the economy is doing. Trinh absolutely. These are the current account deficit companies deficit countries. Issoutheast asia, it indonesia and the philippines. That means they are primarily domestic driven. Tourism and export etc. Because of covid will be impacted. It is important they are demand itself. That has been suppressed. All of these measures are going to impact them substantially chose the one driver they have control over. They need an exit strategy. It is not sustainable because we know these economies have a high of of that means the more they do, the harder it is to recovery. They need a strategy to cope with covid to move forward. That is why we think they are in southeast asia. You can see that clearly in countries where there are not going where they are not going to benefit from the recovery in global demand. Europe and u. S. Normalizing. Although they are not recovering from that, they are suppressing demand. They need to move away. One Silver Lining we want to highlight for Southeast Asian economies is that it still has the most positive will yield in asia and in juxtaposition for the u. S. Secondly, it has a low debt profile. The dollar has declined substantially. Studies have shown that the decline of the dollar is favorable for risktaking. Not just in terms of Financial Assets but also trade finances. I think that on the margin will help these economies that have suffered disproportionately during the huge risk off. They need to tame their own suppression it when that comes, i think it is going their own suppression. When that comes, i think it is going to be the bright spot of asia if not the world. Rishaad always a pleasure. Lets check indian markets. Having a look at what is going on. A positive start to the trading day. We have the reserve bank out with its interest Rate Decision tomorrow. Looking also at what is the moment jade sectors have opened with the gains. The nifty bank has opened 1 to the upside. We were going to look at movers. We are going to move to what we have coming up. A massive explosion has rocked beirut, leaving thousands dead and thousands injured. It is a developing story and a tragic one. This is bloomberg. Haslinda dozens of people have been killed and thousands have been injured by a massive explosion in beirut. The blast on the port was so powerful it blew out windows across the city and was hired in cyprus. Officials have yet to confirm whether it was an accident or a deliberate attack. Bloombergs africa executive editor has the latest. What do we know about the cause of this blast . Minister has blamed ammonium nitrate. It was apparently being stored at the port of beirut. They said that supply had been there since 2013. That seems to be at the moment the cause of the explosion according to the lebanese government. And theret is early will be a lot of questions about how it exploded, what triggered the explosion and at the moment, i think people are focused on the casualties and clearing up after the event. Rishaad lebanon was having a terrible time as it was. Is this likely to make even worse . Absolutely. It has been a very difficult time. Lebanon started with political upheaval followed by economic collapse and now the covid crisis. This is the worst thing that could happen for the country. Haslinda the impact rishaad there was an impact on the oil crisis. It is a kneejerk reaction. Something is happening in the thele east came more from u. S. The inventory in the u. S. Rishaad thank you. We have markets moving to the upside. A fresh Lockdown People returning to New South Wales from victoria. We have bloomberg daybreak middle east on your horizon next. Up Hong Kong Market moving by have a 1 and to lunch. The following is a paid presentation brought to you by rare collectibles tv. Announcer in 1792, as a Young Country in its formative stages, the United States of america needed to assert its status as a new global power to the leading countries around the world. As a way to firmly declare to the world that the United States of america was now an independent country that would continue to propel freedom, the