As well. Down 0. 9 . That was expected considering all the liquidity we have seen pumped into chinese mainland markets. The hong kong hang seng well off the lows, very modest losses. Roughly flat on the day. Up near 1 surging, at the moment. As you mentioned, this after losses of 3 in the u. S. Trading session, the worst day in two years. That completely detracted those gains for the index. Lets look at a couple of the risk metrics. Across the fx and commodity riskts, seeing a little, seeing a little bit of tension, a push toward risk. Put it all in perspective. Some major moves in these Asset Classes in the past couple days. The yen having its best day since august. The aussie dollar trading near the lows since 2009. Look at commodities, copper pushing for the upside, representative of Global Growth in the economy. The gains in gold over the past five days starting to temper. 1650 dollars near a troy ounce. Haidi taking a look at a deeper dive, david is in hong kong. What you watching . What is driving a potential recovery . What does the market need to see . Break up answer into three parts. In chinas case, certainly the signals coming out of xi jinping and the pboc that they are here to backstop the economy. Does that add to confidence with these risk assets . That is the shortterm story. The second one and the third point i want to make is when you divvy up what is happening in japan and the rest of the region as well. I mentioned this earlier on the show. Toe on thet your foot of the bed, the initial first second is japan today. They are playing catchup to the pain yesterday. Asia is seeing the lingering 1015 seconds of after you jab your toe on the foot of the bed. It is still there. When you look at measures of expected volatility, even the kospi index, which is relatively unscathed, moving even a little bit higher. Haidi we are seeing some signs of a bottom when it comes to risk. Sustainable, particularly when you look at the bond market and that rally continuing . David it does continue. Big drop10year, yesterday. We are still out about 1. 4 . When you go with what goldman is saying interesting note, as well on top of the fundamental drivers, we could hedgingconvex exacerbating that move down. We could move further lower by about 2035 basis points because people in the Municipal Bond space need to adjust. That is the sort of treasury side of the story. Well, i wantde, as to bring this up and i think we have a chart while chinese equities have moved up as well, it has come at the same time as the value of chinese stocks being shorted. People are jumping on it, people are also putting those hedges in in the u. S. That equities fall further. And of the day for stocks, this comes down to earnings, right . Part of this bearishness is being driven by earnings being hit by coronavirus. David case in point to your question, we had a lot of companies talking about exactly what you just pointed out. United airlines, mastercard, we know the news on apple and iphone sales in january, that is another bid as well. Theave a version of this on screen. What we have done is put together the estimated eps and we have measured that across the different benchmarks from the time that the virus actually hit. What you will see is to a large extent it is china, asia, em that has been hit the worst. Nothing massive. When you look under the hood sectorwise, you get more divergence, but you are seeing it show up more in china, em, more than the s p 500 or europe. It is about asia and it is a more china and em story for now. Haidi dave, thank you. David ingles there with a look at the markets. Lets get to our top story. The number of coronavirus cases worldwide has topped 80,000, sparking fears of a pandemic despite comments from the world health organization. The sudden increase in new cases is certainly very concerning. I have spoken consistently about the need for facts, not fear. Using the word pandemic now does not fit the facts, but it may certainly cause fear. Haidi we have just seen some headlines crossing the bloomberg. Japans nhk reporting a japanese cruise passenger in his 80s has died, the fourth casualty from the diamond princess cruise ship. We are hearing from australias Prime Minister and the us trillion Health Minister saying that the impact of the coronavirus is more significant than the bushfires. Parts of australia have been gripped by the devastating bushfires, but they are saying the lack of tourism arrivals, the number of International Students that have not been able to return to australia as a result of quarantine measures really impacting the economy. We are also hearing that they are concerned about these cases of outbreak in japan, italy, and korea. That is australias chief medical officer speaking. Lets get the latest. I want to bring in tom mackenzie, our beijing correspondent. The fear over this virus has really moved from wuhan to china to the rest of the world. Tom absolutely. The rates and terms of the infections continues to go up. The death rate continues to rise. In europe, the focus remains on italy, where you have at least 50,000 people essentially on lockdown. Large parts of milan and around milan, the Financial Hub for that country, remains in lockdown. Italy has reported six deaths and 200 infections. The European Union also saying that some of the control measures italy has put in place may need to be reprobated. In asia, beyond china, the focus is on south korea, where you now have 900 confirmed cases. The u. S. Has advised citizens to avoid anything but essential travel to south korea. The u. S. Itself has 53 confirmed cases. You have concerns about the middle east, and number of countries reporting infections, not least iran, where you have had at least 8 deaths. Concerns about the global spread of the disease. The head of the who not yet calling it a pandemic, but saying he is very concerned about developments. The definition of pandemic is uncontrollable geographic spread. Haidi we did see a slight uptick when it came to new cases in china. What are we looking at in terms of these numbers . Global investors continue to be confused and somewhat doubtful in some cases over the methodology and what we are seeing in the data. Tom yes, a lot of mixed messages and many would argue lack of transparency when it comes to the data. But if you take it at face value, the top line is that you seem to continue to see this trend of moderating infections in china. An additional 508 cases reported today. That is above what we saw yesterday, 409. Given how infectious this disease is, it does not undermine that we are seeing a moderating trend. An additional 71 deaths, unfortunately. It is important to point out that in terms of the noble people that have been discharged and recovered, you are looking at about 2600 in the last 24 hours or so. The total than in terms of people who have been discharged, about 27,000 here in china. That of course is significant. In terms of what we are hearing from the experts here, there is a concern that as people returned to work and travel restrictions are removed, there may be additional spikes. That is where local officials are keeping their focus. Haidi all right, thank you so much. Tom mackenzie, our china correspondent in beijing. Lets get the first word headlines with su keenan. Thank you very much. We will start with south koreas Consumer Confidence numbers. Consumer confidence has plunged the most in five years. The index dropped to below 100, the largest decline since june 2015, when another type of virus hit the korean economy. The low reading is seen as another reason for the bank of korea to ease policy when it meets thursday. Moving to malaysia, malaysian politics have been thrown into turmoil by the resignation of Prime Minister mahathir mohammed. And94yearold quit dissolved his cabinet after a power struggle over who should be anointed his successor. Promisedosition long to his deputy. Mahathir will stay on as an interim p. M. While he seeks the numbers to form a new government or a new leader emerges. Failing that, there will be a general election. The u. S. Is expected to sign military deals with india later tuesday worth about 3 billion. President trump announced to the agreement at the start of his visit, addressing a crowd. He also reiterated his pledge that the u. S. Would sign a significant trade deal with india, although he gave nate no timeline and he later said he was in no rush. We are in the early stages of discussion toward an incredible trade agreement to reduce barriers of investment between the United States and india. And i am optimistic that working together, the Prime Minister and i can reach a fantastic deal that is good and even great for both of our countries. Deadlyning to india, clashes erupted in new delhi hours before President Trump arrived for his twoday visit. One policeman and two muslims died as protesters demonstrated for and against Prime Minister modis controversial citizenship law. The new religion based law, which was passed last year, fasts citizenship for indias religious minorities, but excludes muslims. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im su keenan. This is bloomberg. Haidi thank you. Still ahead, political turmoil in malaysia as mahathir quits and succession plans are called into question. Political instability could be the new normal. Coronavirusxt, shocks could bring the fed back to the table. Bumpng out for a trump 2. 0. This is bloomberg. Global equity selloff continues in asia, particularly in japan. Joining us for more analysis from hong kong is our guest from daiwa Capital Markets. Great to have you with us. There is a sense that they coronavirus and the widening impact outside of china is really one of the greatest macro risks for uncertainty that we have had to contend with for some time. Are we seeing the effect in the selloff . Investors and the markets underpricing the potential for economic detriment . Paul that is a really great question and good morning. I think there are a couple of things here. First of all, we have seen markets locally price in quite a bit already. But i think what we have seen is that while on one hand, weve got on one hand, we have hong kong, korea, and china sort of having corrected significantly, there has been a sense that the rest of the world has been somewhat immune. Now, the events overnight have changed that to some degree. That is why we are starting to see a more localized risk off type of event. Haidi does this mean once u. S. Markets recover somewhat, particularly with expectations that this opens up room for the fed to potentially move, does this mean we are basically getting another year where american exceptionalism, king dollar is really still the same . Paul absolutely. One of the recurring questions that i get in my discussions is is there any reason to believe example, equities, for are not going to outperform . Over the very near term, the answer to that is there is no real reason. So long as there is policy firepower in terms of Monetary Policy space. Coronavirust, the opens up a path for the fed to come back to an easing stance, because of the effect on oil. The oil market has taken a hit in particular through a decline in demand in china. This impacts Inflation Expectations very directly in the u. S. That is important for the feds policy reaction function. Unexpected, relative to the guidance given by the fed, even as recently as last month. Haidi in fact, another reason for the american exceptionalism story that you like i want to throw up a chart when it comes to what the betting market is looking at in terms of outcomes for the u. S. Election this year. Another four years of President Trump. This is what you think will happen as well, particularly after the latest developments, the latest debate. Paul when i put out my top surprises for 2020 late last year, one of them was a socalled trump bump version 2. 0. What im referring to is the market anticipating a republican victory and following that, significant fiscal stimulus. This happened in 2016 ahead of the election. And through into 2017. I guess one of the key issues is that is there likely to be any sort of meaningful fiscal stimulus coming through either another round of tax cuts or a sizable Infrastructure Spending deal . Sandersrise in bernie opinion in my increased the probability of a Trump Victory later this year and that is being reflected in those bidding wars. That means that if indeed the republicans win a sweep through the president ial, house, and senate in november of this year, there is really nothing much stopping and more aggressive in 20 to anyone. Now, the markets will not wait until 2021. This may get anticipated somewhere in 2020, but until then, we obviously have some growth shocks. Haidi outside of the u. S. And in fact pertaining more toward asia, talk us through some of your picks. You are underweight china, hong kong, japan. Are you not interested even if there is a pboc put . Paul clearly sort of looking at policy flexibility in china relative to the rest of the region has a bit more, there is no question about that. I think the fiscal deficit based 2. 8 willvious mpc of likely get increased at the next one, when it does take place. Has been talk of a potential delay in the National Peoples congress meeting. There is potential upside risk. If the fed does start to come back to the table and we do see at least guidance of more accommodative Monetary Policy, that will provide cover for the pboc to be a little bit more aggressive on easing Monetary Policy. Because hitherto there has been a concern about undermining the rmd in the context of a trade war. Haidi do you see an opportunity in chinese bonds or asian bonds more broadly, particularly with the moves in treasuries . Paul absolutely. I think some of the highyielding sovereign bonds in the region, whether it be indonesia, india, and also closer to home even in china, i think have caught a bit for very good reasons Global Growth expectations are shifting down. That is being led by the move in treasuries. I think there is a catch up trade in asia. Haidi always great to chat. Paul kitney, thai baht Capital Markets joining us paul kitney, daiwa Capital Markets. Find our quick take landing page. Headlines from the bloomberg newsroom, as well as how specific companies or stocks may be exposed. This is bloomberg. Lets get you the latest business flash headlines. The Coronavirus Spread across the country. Ubs says the drop, which came before the full extent of the outbreak was known, was bigger than usual. Ubs was expecting the number to be worse. Official chinese data shows the Smartphone Market saw a 37 drop in sales as the outbreak led to travel bans and a massive drop in consumption. Is doublingologies down on the folding smartphone. They say it is more durable, has a faster processor, and 3d graphics. The first generation has been sold mostly in china, but this version will not be sold in europe. The price tag will be just over 2700 u. S. Dollars when it goes on sale in march. Southeast asias two biggest ridesharing apps are said to be in talks for a merger. They have been battling over ridehailing, food delivery, and mobile payment services. A merger would create one of the worlds most highly valuable startups. The two sides are said to be far from an agreement. United Airlines Says it is withdrawing its redrawing its fullyear guidance due to the impact of the coronavirus. They said they have seen a 100 drop in your term demand for travel to china nearterm demand for travel to china. United maintains its guidance for First Quarter adjusted earningspershare. Lets take a look at what we are seeing in fx land. The big currency movers of the day. The continued demise of the aussie dollar. Lows trading in 2009. That risk Currency Exposure to china and impact on the domestic economy, with the Prime Minister saying the impact of the coronavirus is bigger than that of the brush fires. Japanese yen taking a bit of a breather. The biggest move in about six months. We are seeing a bit of a decline when it comes to the korean won, as well. The biggest loser, though, in the Asian Session is the indonesian rupee. This is bloomberg. Kong. Is 10 29 in hong im su keenan with the first word headlines. We start with china, which has released its latest data on the coronavirus outbreak. 449 new cases were recorded on monday, bringing chinas total since the upright began to just under 77,700. There were 71 new deaths. 68 were in hubei province, where the outbreak began. Asian markets are following the global selloff as fears grow over the spread of the coronavirus outside china. More than 1200 cases and 20 deaths have now been reported in about 30 countries, with big spikes in italy and south korea. The who says it is too early to call it a pandemic yet, but countries should be prepared. The sudden increase in new cases is certainly very concerning. I have spoken consistently about the need for facts, not fear. Using the word pandemic now does not fit the facts, but it may certainly cause fear. Su Harvey Weinstein has been convicted of rape and sexual assault. The verdict in new york came more than two years after allegations against the hollywood producer sparked the metoo movement. The 67yearold Harvey Weinstein was acquitted of the most serious charge, which carried a life sentence. He was taken into custody and then to hospital after the verdict was read out. Sentencing is on march 11. We were disappointed. We knew we came in and we were down 350 the day we started the trial. The jurors came in knowing everything they could know about the case. We could not find a juror that had never heard of Harvey Weinstein.