And infections surge around the world with outbreaks and 65 countries. Withe a 50 jump in cases 34 people know dead. Well, what a day. Take a look at markets right now. Lets start with bonds. Were going to take a look at the aussie three year, hitting a record low at. 35 . The aussie 10 year, pretty weak. The new zealand 10 year also slipping. Were seeing yields on bonds falling to levels previously unseen. Barrel. Ude 49 a wti is below 45 a barrel. Lets check in on currencies. Dollargot the kiwi trading like this. Coming in betterthanexpected , 2. 6 . But this predates the coronaVirus Outbreak. Weve seen exports rise in new zealand to 1. 7 . The yen was a big mover, strengthening 3 against the u. S. Dollar. That trend looking to continue. A 54ussie dollar has handle, and that happened after we got those absolutely shocking pmi numbers out of china for february. So, hows that setting us up for Equities Trading around the region today . New zealand up and running and off 3. 2 . We have got sydney futures pointing south by 2 3 of 1 . Oh, and i neglected to mention we got a call from jpmorgan this morning that sees the rba cutting the cash rate in australia by a quarter of 1 . With a further cut in april. That will take us to a quarter of 1 australia. It appears we will be looking at unconventional policy measures in australia later this year. Kospi futures also weaker. So, as you can see, from all of that, investors bracing for more oil after a weekend of negative coronavirus Manufacturing Activity in china falling to the lowest level on record in february. More, lets bring in Tom Mackenzie in beijing. Pmi data way worse than we were expecting. Give us the breakdown. Ruly ugly set of numbers. It is the first time the data has been able to factor in what was a broadbased shot down over february in china. We saw manufacturing pmi at 35. 7, a record low, well below estimates from the economists, well below the surveys and significantly lower than what we saw in january 15. And conception and services, another record low, the lowest they have ever seen. 29. 6 for Non Manufacturing pmi. So, very very ugly numbers. It has led to economies to downgrade their growth forecast for china was again. You have the likes of nomura saying they expect to see a contraction in the First Quarter by 2. 5 from the previous quarter. Amz bank saying they expect a contraction of 2 . Vshaped recovery. Pimco says you could be looking at an annualized basis of a drop in growth of 6 in the First Quarter. All this comes down to how quickly businesses and factories are getting back up and running here in china. Youre looking now at about 80 of businesses back up and running, but that does not necessarily mean they are full capacity. Theres challenges around supply chains and getting employees back to work. Paul so, were going to see some more measures from china. Regulators to support businesses. What do we know . Well, this is interesting. This is the regulators for the Banking Sector saying dont downgrade loans from Small Businesses that have been hit by the coronavirus. Give them a bit of leeway. They are allowing some of these businesses to extend their payment deadlines for some of these loans, because they know that these businesses are particularly badly hit. Banks being told wait until the end of june before you start to downgrade these loans or report them to chinas credit scoring system, this nationwide credit scoring system. Its part of an attempt trying to take down these mpls to try and put something of oa floor under the economic damage from the central bank and regulators, whether that is through tax cuts or cuts to reserve ratios, or Interest Rates, getting liquidity into the financial system. Smp global have warned. They said they could reach 6. 3 . They could triple if there is prolonged damage as a result of the virus. That could lead to that 800 billion of bad loans. This is another attempt to ease the pressure on the smes. The banks have to suck this up. Paul Tom Mackenzie in beijing. Meanwhile, europe bracing for mo re fallout as italy saw a new coronavirus cases surge 50 in one date. That brings total infections to 1700. Our rome bureau chief joins us on the line. Just how fast is the infection spreading . Well, experts are saying now the infection may be what they call at the exponential phase. Are no longer growing linearly but transmission from persontoperson is going so fast that we see as we have seen today the numbers rise 50 in only one day. For now they have not been more further infections within italy. Which make up for 1 3 of the economy in virtual lockdown but the rest of the country continues normally, especially the center and the south here in rome where i am now. But we might see more measures in the coming days. The u. S. Has advised all americans to avoid all travel to italy and American Airlines have suspended flights to milan. So, what is the governments response so far . Well, the finance minister has announced today tourism measures worth 3. 6 billion euro s. That is not much, but lets remember that italy is a heavily indebted country. Is already running a deficit. All sort of, there is a deficit limit for euro area countries which must be with other euro area countries, and therefore, European Partners must agree to this. The minister said there is no doubt this be approved but of course, italy does not have a lot of space to stimulate the economy further. Bureauloombergs rome chief, thanks fo for joining usr. Lets check in on first word news with su keenan. Su we start with europe which is facing a new migration crisis after turkey told millions of asylumseekers they can use to escape syria and other warravaged countrys. Greece is the most in has invoked an emergency cause and refused to accept applications. 76,000 people have left turkey on sunday, although it is not clear if they crossed in europe or remain at the border. Police and demonstrators clash in hong kong on sunday is antichina protests. Arrested once again erupted once again. Local media reporting the police are Pepper Spring and one officertrain services were suspd after protesters set fire one of the to one of the entrances. Former Vice President joe biden is hoping his South Carolina primary victory will boost his campaign into super tuesday. As senator Bernie Sanders continues to beat him strongly. It was bidens first primary victory and allows them to stake a claim as the strongest moderate and the one best position to stop sanders and challenge President Trump. Israels Credit Rating could be lower if mondays National Election again fails to produce a workable government. The banks says a review may happen if the vote will the country without a new administration. Israels economy is already under pressure from two Inclusive Elections after the coronavirus infections. While growth is seen widening the deficit. 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 su keenan. This is bloomberg. Come, plentyo more on the coronavirus. Stanford universitys asia Health Policy director will tell us what a pandemic is a question of when not if. Cornell Capital Partner gives us the Market Outlook as we get set for another grim start to the week. This is bloomberg. Paul this is possibly the worst thing ive ever seen in my career. A rate cut is on the table. To thefed will respond threat of the coronavirus by lowering rates. The Central Banks realize that whatever we do they do they will be shown to be ineffective. The fed the policymakers are going to do Everything Possible to prevent the u. S. From going into recession. Lowring Interest Rates is not going to encourage someone to take risk. They will deliver even if they do not see i have no doubt that Central Banks are going to be cutting rates. Because the markets are going to start to have dysfunction because Financial Markets will have dysfunction but they will not deliver a better economic outcome. Weigh ome of our guests ing in on the feds next move amid the coronaVirus Outbreak. Joining us for more is ann ber ry. Thanks so much for joining us. I want to bring up this chat on the bloomberg terminal, a pilot shift in sentiment as discussed by our guests about the fed. Markets pricing in a rate cut at the next meeting. What are your expectations . See. The fed is a wait and att being at mo, if you look other times recently weather has been uncertainty whether it is the trade war, for example, around what the next move is going to be saw the fed being datadriven. That is likely to be the case here. It is a big week for macro indicators and i suspect they will make their decision based on what the facts are telling them. Paul does policy easing make a difference in a situation like this . Money is quite cheap. Is that going to combat the impact of a possible pandemic . Ann it is a big question. What is going to be interesting is to looking at how different parts of economies respond to rate cuts. One thing that has been consistent in the u. S. Manufacturing sector has been weak or unresponsive relative to Prior Experience when it comes to rate cuts. What will be very interesting to track, particularly with the earnings season underway, as what the consumer response to rate cuts will be. If you look at u. S. Economic growth, so much that has been driven over the last 1824 months by the consumer and watching to see the impact of the rate cut on sentiment and whether it can turn to encouraged credit driven spending. And we can see some impacts and that is what we will watch. Marketypically, the bond provides good clues about what is going to happen next. Were seeing the yield on the 10 year cratering. Yields in australia falling to levels never before seen. Ann when it comes to the outlook for sentiment there will gold pricesngs, and treasuries. If we start to see prices come down it suggests stabilization expectations. I think the bond market has shown over the last two years it is not a traditional indicator but definitely one to watch. As we look to see how 60 countries who are now impacted start to respond to the impact of the spread. Paul there has been some confusing signals. Weve seen the threemonth 10 year deepening. What do you believe . Ann we have seen some the confusion, i think, throughout the less two years i think at this point in time what we have learned through a prolonged period of uncertainty, whether it is the coronavirus are looking to back at other big macro shifts in the trade environment, its important to look across a number of different indicators to see what may happen. Some of the traditional indicators have not proven to be as accurate. Couple ofout the next weeks looking to hear what the manufacturers are saying about getting a handle on their supply chains, looking at what the big retailers seeing what they are saying about traffic into their stores. It is no longer about one particular indicator. More about how you look at these different facets to see whether we start the consistency in a direction we are moving in. Yeah. This is probably a good time to get into the corporate impact of all of this but i want to talk about equity prices as well. I am pulling up a chart on the bloomberg terminal. It shows another violent movement. The worst five days since black monday. Where do you see the pain ending for equities . Ann if you go back and try to look at what happened in response to outbreaks in the past, sars being one of them, it was a very different environment in 2003. If you look at that and others across time, it indicates, sars specifically, the s p bounce back up 15 within six months and back up 20 within 12. And you see other health driven operates. In this case, if we looking at a transitory and zogenix shock, you would hope that as enous shock, exog you would hope reduction with stabilize as uncertainty stabilizes you hope to see the rebound coming up. N the markets stabilize that is typically what we have done historically. Paul i guess it is a question of time, isnt it . In terms of the corporate impact we got the prediction from goldman saying zero Profit Growth for the coming earnings season. What are your expectations there . Ann for the next quarter it is hard to see how it could be robust growth. The goldman reports that slowdowns the potential to bounce back up towards the end of the year. The key things we will be watching is the pace at which we are seeing supply chains come back into full production over march andrew able. And through april. We could start to see a big pick in china in february and it is being pushed up to march. We will wait and see how that picks up in april and getting back on track in may. Paul i want to get your thoughts on the chinese pmi numbers we had over the weekend. You do see a return to full production in china, but how much pain are we going to endure until then . It is another how long question, im afraid. Ann exactly. The pmi numbers were not unexpected. Everyone anticipated that drop. It was reported out we would be seeing. I think the pace ias we continue to see things pick up in march. That will be important for the early part of april. If we begin to hear trading partners, we hear apple of the and talking out about stabilizing surprise chains, i think sentiment will start to stabilize. Paul weve heard from tim cook saying it is more a case of ratherng the nobs, than making any wholesale changes. But, ok. I want to talk a little bit about commodities as well. Weve seen a huge cratering in the oil price. Production cuts are they going to make a difference . Ann i dont think so. What we have seen so much and last year or so is so much of the oil price dynamic has been demand driven. As we look to continue to see what the impact is on Chinese Markets in particular and what the impact is globally as a supply chain issues start to shake out, ultimately we have to look at what they are going to be to see where wti shakes out in the coming months. Paul all right. Ann berry, thanks for joining us with your insights ahead of what promises to be a most fascinating week. You can get a roundup of the stories of you need to know in todays edition of daybreak. Bloomberg subscribers can go to daily it is also available in the bloomberg anywhere app. You can customize your settings. This is bloomberg. Paul just getting an alert right now about twitter. Announcing its suspending noncritical travel and events due to the coronavirus. Twitter the latest update to travel policies in the wake of the ongoing crisis. Lets get a quick check of the latest business flash headlines. Speaking of twitter, Elliott Management is said to have taken a sizable stake in 20. It plans to push for changes and replace jack dorsey in twitter. Elliotts nominated four directors to fill any vacancies. Twitterhas 4 of placing it among the top 10 shareholders. China has taken over the running of struggling h a gouroup. The government of Hunan Province has appointed an executive chairman to alleviate the growing threat to the travel industry which is h as main source of income. The Civil Aviation authority and China Development bank are also involved. Abu dhabi is turning to its 240 billion wealth fund to bail out troubled hospital operator. Its considering a potential investment in uaes Largest Health care provider. The ftse 100 company is said to be facing investigation by regulators over allegations of fraud. Abu dhabi is keen to support the companies who shares have been in freefall since december. Risk currencies are plummeting as traders are getting early taste of how brutal the turmoil in markets is going to be. We bring in our editor. Andrea, we are seeing some really heavy losses from the likes of the aussie and the kiwi. We certainly are. Down quite a bit this morning. Also the yuan is down. We had those really poor china pmi numbers. At the same time we have got the yen going up. As there is this race to save harbor assets. Weve also seen australian bonds jumping this morning. Yields are at record lows. They had a very sharp decline this one. Of course, we had the fed s aying they are prepared to step in with an Interest Rate cut. Unlikely to give much solace to the markets, given the fear and the panic we have seen out t here, but we also have expectations that the rba, the reserve bank of australia, meeting tomorrow, that they might cut Interest Rates. Thats why we are seeing the aussie come under pressure and why we see those bond yields with record lows in australia this morning. Paul lets talk more about that rba decision. Coming tomorrow afternoon our time. What are the expectations there . We have had some updated predictions from jpmorgan. Andreea we have. There is a potential that they could maybe cut more than the market has priced in. It probably also comes a bit earlier than expected. G comments makin about a gentle turn in the economy that definitely looks, in jeopardy given what is going on. Yeah, that is going to be the first Major Central Bank and that is definitely going to be one to watch tomorrow. In the meantime, definitely Australian Dollar and bonnie of here and bond yields under a lot of pressure. Potentialhere a we are talking about unconventional measures again . Andreea that conversation is going to come up again. There were expectations that perhaps they would not have to go that far, but nobody really knew the impact this coronavirus was going to have. This is a lot bigg