Testing kits that could be coming to the u. S. And potentially could stop the spread of the virus. China pmi is driving the charge here today in asia, that beat on manufacturing and nonmanufacturing. We will see if the vshaped recovery can actually sustain itself. Money coming out of the yen, the british pound and the euro as well. Wti brent as well taking a breather here today after falling to an 18 year low. Chinas Manufacturing Activity rebounded strongly in march, signaling the economy is demand. Ng amid external tom, what are the Key Takeaways . Of readings much higher than estimates, and smashing the numbers we got in february. Record lows for manufacturing back in february. Compared tombers when it comes to manufacturing pmi, one of the major components has rebounded. That is something to bear in mind. When it comes to the export oriented components, contractions in terms of things like new export orders. We can talk about the additional pressures more in terms of Global Economy and demand. We had expected construction to be strong and likely to remain strong as well. Services may prove more challenging in the months ahead, given that people are still reluctant to go out and spend. Well look at that more detail in the next part of that. But thats the overall picture. The stronger the numbers are strong, better than estimates. The contraction may be as much is 1. 4 percent, according to the survey of economists for the First Quarter. China control can the virus . And of course the Global Demand as lockdowns continue in europe and the u. S. , major markets for china. To what extent will that way on demand . And then domestic markets as well, will people start to go out and spend on things Like Services and retail . Those are things to bear in mind. But the overall picture is at the numbers have bounced back. Consideringinas changing the way it counts coronavirus cases. What is likely to change, and why are they doing it now . Tom they are doing it now pressureseir facing mystically and externally as well. What they have not been doing is include people who have tested positive for the virus but are not showing any symptoms. Thats different than the kind of accounting you see being done by countries like singapore, for example, or japan, or south korea. So youre getting a better number of the sheer account of cases of people whove tested positive but have not been showing symptoms. We have had reports in the last few days and weeks of a symptomatically people being found in some provinces, so that raises the pressure domestically. You have this meeting with senior officials, saying local of officials need to start isolating these cases and being open and transparent. Whether they do that will be crucial to the success overall of china and getting a grip on just a many cases are out there. To be able to make those calculations around opening up the economy. There is paid leave in some areas of china, trying to get people to go out and spin. So far people are still concerned about the virus and their own job security as well. Yvonne we need to see more of these subsidies in the government to show that type of consumption once again. Tom mackenzie there, joining us from beijing with those pmi numbers. Coming through from hong kong, we were just showing you pictures from carrie lam, we are about how expecting bad numbers when it comes to retail sales in february. The estimate is for 40 contraction. Government will spend tens of billions of hong kong dollars for more relief measures. We continue to see the income numbers dwindle with the pandemic and as they tighten social distancing measures, that will hit a lot of the retail side, food and beverage and a lot of small and medium businesses. So perhaps more relief measures on the way here in hong kong. We could be holding onto that strength until the stronger into the trading band. , as bring in our next guest chief economist at citigroup. Break down the pmi numbers from china, its great to have you. Does the vshaped recovery, how long can it really last . That do definitely see activity was definitely improving. Was at a historic low. The trajectory of the month of march clearly shows improvement. But that is improvement from a very low level. , we expect recovery, arethe rest of the world continuing to the risk is there is blowback from the rest of the world from parts to think china will have thection means and some of travel restrictions being there. But china at the moment is past the worst. That gives a little bit of encouragement given the news we are seeing elsewhere. Yvonne it seems like it is manufacturing could see resumption back to his preoutbreak levels. The Services Side is a little bit lagging on that front. Can the government still expect domestic consumption to drive this recovery . Definitely i think on the ,onsumption of Services Side that will take a little bit longer for people to feel confident. Recovery is ae little bit more on production. Toont think we are back precovid levels because you have to recognize Global Demand is not where it used to be. The question is where is the end manned coming from. The rest of the world will pull back on discretionary spending. Were hoping for positive news coming out of china. Talking about positive news expected, china has said is looking at a larger stimulus. Are we looking at infrastructure Going Forward . I think we will see a host of policies. Were also expressing a special some of it has already going to be allocated this year. Its a mixture of time, the more effective way to stimulate demand is just direct spending. , peopleive people money want might not be as willing to spend that if they are still concerned about infection. We will see some alleviating of pressure. Haslinda china has also delayed releasing its budget. How much of a budget deficit is it willing to stomach, do you think . Such an abnormal, very rare shock. Its everywhere, around asia, around the world. In the likes of singapore, for example. I think theyre realizing they will have to have a larger than normal deficit. Tontually theyll be able come back when things start to warm up. You need to help cover some of the losses that are mounting on the back of the coronavirus. Lets get to the first word news. Youre talking about President Trump saying the u. S. Should see Coronavirus Infection rates peak within the next two weeks, but that the country faces a challenging month ahead. His focus more states close restrictions with virginia and maryland issuing lockdowns. New york said the rate of new cases is slowing. More than three quarters of a Million People around the world have been infected with 7000 totalitys. The world bank is warning the economic fallout from coronavirus will prevent about 24 billion people from escaping poverty in east asia and the pacific. Thanks is theres a substantially high risk of people vulnerable to the infection including tourism in thailand and manufacturing in vietnam and cambodia and those relying on labor in all countries. Haslinda the World Health Organization see signs the coronavirus rate it infection rate in europe is starting to ease off as spain and italy report a slower rise of cases. Madrid is warning people to stay at home over easter and rome is extending its own lockdown until early april. Australia heading for its deepest recession in 90 years and pledges to same gdp will decline by about 10 in the first three quarters of the year. Before showing a gradual recovery. The government is pledging 80 billion to bring back jobs. Yvonne still ahead, we will discuss the coronavirus countering measures and hear why James Bullard said america can carry more debt. Haslinda plus, an exclusive interview with a look at what may be the new normal private dont miss it. This is bloomberg. Yvonne st. Louis fed this can well afford adding trees of dollars of debt. He spoke exclusively to bloombergs Michael Mckee earlier. I did want to see pandemic relief. I wouldnt call it stimulus, i would call it pandemic relief. When i interpret the program is trying to do is stabilize incomes and stabilize businesses as we work our way through this investment in our National Health over the next couple of months. Have aployment, we do blog, if you read the blog carefully you will see there is a way to bound the unemployment rate. Somewhere between 10 and the upper bound is like 42 , but that is because we are just identifying vulnerable workers in this environment and what is going to happen is that some of those workers are going to have to seek relief so they can pay their bills during this period. So we are expecting the deployment rate to spike. With pandemic relief, they can pay their bills, and once the virus goes away, they will be able to return to normal. Hopefully if this all works smoothly, and theres a lot of legislation as well, we will be able to come out on the others and get the economy rocking again. 1, rent,days april mortgage, utility bills are due. Will we have a problem if people cant pay their bills on wednesday . My sense is, of course we are in a crisis situation, but licenses that everyone really understands what is going on now, because obviously it has been topic number one, not just in the u. S. , but around the world. I think people premuch understand that pretty much understand that the leap is supposed to enable people to pay their bills as best they can. Things, some delays in you would expect that in a crisis situation, but by and large, think there are plenty of resources in the fiscal package to handle what we will go through here. Haslinda James Bullard st. Louis fed president. Joanna, we keep talking about , it keeps buying bonds. At some stage it will bust and . Sell cheap. . I dont think we are at that point yet. Liquidity, andh i think trying to complement some of the policy experts. And by the way, the fed the fed is not alone here. Even across asia, Central Banks you never thought would do asset purchases are now including it. We are kind of in uncharted territory. Because of the severity and enormity of the shot, i think thats why Central Banks are using extraordinary policy measures. Haslinda we also heard from bullard warning that perhaps unemployment in the u. S. Could get up to 50 . 30 ction unemployment. How will this play out in the asian economy if this should come true. China gets outif of the worst of the virus, the to . Tion is what happens the asianmers economies will be vulnerable, so we have to look at economies like for singapore, taiwan, korea. His part of the reason when you combine the external demand shock over domestic man stock over the virus itself, thats why will have few policies at the moment. Yvonne how are you adjusting your forecast now . It seems to be more of a moving target. Virus kind of takes us there was a significant downgrade in our growth forecast. We have very small positive growth. Weve actually forecasted a contraction. It kind of reflects the fact is movingnfection along across different geographies. We are watching very closely. But wemis encouraging, are still expecting china growth in the First Quarter will be a record low. It seems severe when you think about it, but thats coming from the severity of shock. Yvonne it seems like the economies in this part of the world are dealing not just with the u. S. The Global Pandemic but also dollar shortage. Have we seen dollar liquidity find its way to asia . It opened up a lot of dollar swap lines. Boj, korea,e usual markets. Ay help in the it will help at the margins, but the question is, how long is the pressure going to continue . In the shortterms it looks like a big surge in the dollar has come off now. And the pmi data might help a little bit. Its hard for me to be very confident that this is the end of the dollar spread story because there are still so many things we need to watch with the infection still surging in the u. S. , we dont really have clarity yet. One of the concerns i have for asia and e. M. In general, the longer we have a dislocated capital market, it makes some of the countries that are more vulnerable, i worry about the margins as opposed to a lot of the other asian economies that are not us vulnerable. We also have to watch how infections are moving along in southeast asia. In asia started out with the , and somein china economies were better equipped to contain the virus. They are richer and they were more prepared. Asia, south and southeast its much more challenging to impose a lockdown. The question is, when does it peek . Johanna, thank you so much. Coming up, you dont want to miss our exclusive interview with sophiachen. The latest social distancing measures, and what will be left when the dust settles . This is bloomberg. Haslinda heres the latest business flash headlines. Southwest Airlines Says the coronavirus has left it in intensive care with demand for tickets plummeting. The ceo is urging employees to keep cutting as a valuate how much aid they can expect from federal funds. Adding spending cuts already impose will help southwest survive. American airlines is applying for federal aid. Coo said the carrier will receive about 1 billion, agreeing no job or pay cuts through at least september. Yvonne take a look at markets once again, pmi data is pushing the asia benchmark a little bit higher. We close to session highs for the euro come being led by the likes of manila, and jakarta. The stronger renminbi and korean won as well. Well count you down to the rest of the markets coming up. This is bloomberg. These days you need faster internet that does all you expect and way more. Thats xfinity xfi. Get powerful wifi coverage that leaves no room behind with xfi pods. And now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device thats connected is protected. Thats a 72 a year value. No one else offers this. Faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. Can your internet do that . It is 10 29 here in hong kong and shanghai. Here are your headlines. U. S. Unemployment claims are set to break the record for the second week and it made double from best they may double from last weeks 3. 3 million. Number was already more than quadrupled the record. Oil is selling for less than 10 across key north american hub. The pandemic has sent features years, witht in 18 surprise backing out throughout the distribution system. Saudi arabia remains locked in a fight with russia and saudi arabia is warding huge supplies in egypt as it prepares to flood the market. Workers going to get to leave towns and city offices in india as the virus lockdown ravages the economy. Of the index fell on monday and is poised to see its worst ever amid fears the government response may not be enough to offset a threemonth , crossing the previous record set through june of 1992. Japans industrial output expanded in february but the gain is likely to be shortlived as the coronavirus starts to hit the Global Supply chain and squeeze demand. Slowing from a 1 pace in january, the forecast was for output to be flat. Data shows retail sales also holding up in february before the virus. Japan is quashing speculation that International State of emergency is forthcoming because of the rise in coronavirus cases there. They economy minister says such a move, which could have included lockdowns in large cities like tokyo and osaka, is not needed at this point. Chief north asia correspondent Stephen Engle is tracking this for us. Steve, what is the situation now . Stephen there has been a lot of speculation. A friend of mine says they are being forced to prepare for lockdown, whether it is tokyo or osaka. Not necessarily true. The Cabinet Office said it has set up a panel to discuss the options and procedures if indeed the National Government in japan issues in National State of emergency because of the outbreak of the virus, which has arisen after pretty much plateauing over the last few weeks. We now have in japan, 1866 confirmed cases, but 443 of those developed in a cluster in tokyo. Another 13 reported yesterday. 54 deaths nationwide. This is coming from the economy minister this morning. He calls the rumors on the internet regrettable, about those social media posts and speculation on declaring a coming National State of emergency. Search movesearc would be based on the medical system and he says right now, such a call is not needed. He adds that locking down large like tokyo and osaka would have a demonstrated impact on the economy. Which was already suffering in 2019 even before the coronavirus to cold. And themind tokyo cities surrounding tokyo account for one third of japans gdp. So that would have to be a very hebrew decision to make verye that lockdown. Row betweenee this tokyo and taiwan. There were working with taiwanese experts, and now it seems that government is pushing back on that. Stephen it is a decades old row , that taiwan wants more International Recognition in and membership in bodies like the World Health Organization. The w. H. O. Said it had been working with taiwan on sharing information and taiwan says, wait a minute, no you have not. It taiwan government says shared information about its virus efforts and the who never or never gave any info in return. A lot of this was sparked by an interview that the w. H. O. Deputy director general gave to rthk, when he was asked, can the w. H. O. Give full membership to taiwan . Bruce basically declined to as a that question and at some the best some say he hung up. Or was engaged. That is where it stands right now. Yvonne Stephen Engle, our chief asia correspondent joining us from hong kong. Speaking of hong kong, pretty brutal numbers are expected to be coming through. We just heard chief executive areie lam talking say they expecting a record drop in retail sales in february. The blue line is the estimate. They are expecting a 4 contraction for february. We have seen doubledigit