Although probeijing officials have said we should not be too concerned, it will lead to stability in the city. 7 . Sci asia pacific down it is certainly something of a riskoff mood, following off what we saw toward the end of play on friday in the u. S. The nikkei is down more than 1 . In the mainland, you have a bit of pressure as well a despite industrial profits up 6 coming in over the weekend for the month of may. On to the next board. We will be looking at the currencies. A bit of dollar weakness. On friday it reached its highest level in four weeks, but it has since come off slightly, leading to a bit of strength for the offshore currency here in china. The korean won is up about plan to 01 . On to some of the commodities we are looking at. Wti has been under pressure as the demand story as we focus on the rate of infections, 10 million infections, 500,000 deaths, you can see that it is lower today. Gold, science that investors are preparing to cross through 1800. 0. 64 . Year yield, futures in the u. S. Are looking a bit more positive, yvonne. Yvonne yes, they have turned positive. We are paring some declines here in asia, looking a little better but still a distant pullback in the region decent pullback in the region. Senior adviser to hong kongs chief executive says trying to oppose beijings law in the city would be in usethose would be a loselose and would not threaten the principle of one country, two systems. When i said that we do not know the exact details, we know the framework of the bill is to address National Security, specifically in four areas, subverting the state power, secession, terrorism acts, and foreign interference. These are the four specific areas the bill targeted. We basically know what it is. Of course, it boils down to the actual interpretation and enforcement. That needs to be determined. Details, ithout the secretary of justice in the hong kong and our secretary of security repeatedly assure us the law will be enforced in hong kong. Under commonlaw jurisdiction. So it is clear that even though the law is being legislated in the mainland, the enforcement and adjudication would be in hong kong. So i have great comfort that the Mainland Authority are taking one country, two systems into consideration. Or they could just enforce mainland security to hong kong. Not. Hey did they know we are different jurisdictions so they would want to make sure that this specifically designed National Security law can apply and work kong. G in the past committee have said you expected the law to have a deterrent effect, that it would not be used as much. But now you are saying that it is really needed in hong kong. So how much do you expect the law, was implemented, to be put into use . Bernard the law is a deterrent factor. I was told that they dont have retrospective effect. It is really to warn people that you cannot cross the red line. You cannot ask for hong kong independence and we do not tolerate terrorist act, like what happened last year during the social unrest. So i tell people abide by the law and we would not have to use this legislation. Another special Administration Region in china passed a similar National Security law in 2009 and so far, from what i was told , not one case has been prosecuted under the legislation. So i suppose that if people behave and do not cross the sidelines, we will never need to use this legislation. We saw a report saying that secession and subversion are very broadly and vaguely defined acts of criminality. That life sentences could be imposed. Can you confirm or deny that . Is that entirely necessary . Bernard i cannot confirm or deny it because i have not seen the details of the bill so i dont know. Seenhen, again, i have National Security bills in other jurisdictions, singapore and thathere, and i believe sentence is very hard in those jurisdictions. Including the u. S. I have not seen the hong kong version. I am yet to find out. About that,orried about these countries putting sanctions and that may hinder business relations with hong , not to mention what happens if the special trading status with the u. S. Is revoked . Is all of this, the law and the protests and the negativity that comes with it really worth it, given hong kongs future especially as a Financial Hub . Bernard as you rightly put it, we are one of the top three Financial Hubs in the world. There is tons of u. S. Interest in hong kong. I will not be surprised to find that half of the Financial Service providers in hong kong are from the United States they could end up hurting their interests if not as much as our own interests. Chan, hongas bernard kong executive Council Convenor , and top advisor to to chief executive carrie lam. Lets get more on the law which could come as early as tuesday morning. Our chinese correspondent, selina wang, has the details from beijing. What did we learn over the weekend, more specific details about this legislation being discussed by the Standing Committee . Selina tom, we know that it is being discussed at this chinasy meeting with top legislative body and there could be a vote as early as tuesday morning. If that is the case, it comes in for the july 1 anniversary of the hong kong handover to china in 1997. Local media have reported the proposed law includes a light sentence for acts as subversion answer session desperate life sentence for acts like includes a life sentence for acts like subversion and succession. The talk among activists is how that is going to be implied, how it will be defined. It will be broadly defined to broadly shut down dissent. We have yet to see the full text of the law, but to state media has announced it would allow beijing to set up a local Intelligence Bureau and take cases. Of some sensitive probeijing officials and the hong kong leader have tried to assure people that peoples legitimate rights and freedoms would be protected, but the law faces significant public opposition. Oppose6 of residents the legislation compared to 34 who support it. Yvonne we have seen the Senate Passing a china sanctions bill over the hong kong issue, the u. S. Putting visa bans on chinese officials as well. Are these largely symbolic moves . Selina we have heard in terms of rhetoric, a lot of criticism from foreign governments criticizing the fundamental blow to the one country, two systems. Of the visa been secretary of state mike pompeo announced, it would ban chinese officials, including retired ones who have been involved in undermining hong kongs high degree of autonomy, they would not be allowed to travel to the u. S. While it is largely symbolic that those officials will not be troubling to the u. S. Given the pandemic, the travel ban, we are told, is the stepsstep in many the u. S. Is planning in terms of punishing china over its actions hong kong. There has also been intense debate in the Trump Administration about how hard to if youchina, given that are stripping hong kong of its special trading status would send a message will also damaging both sides. Wang, our china correspondent there with the latest business lets get the first word news. Retail sales in japan rose in may for the first time i sinc february, adding to size the Coronavirus Impact has passed. It. It was 2 , less than the 3 rise expected. The overall trend is seen staying week. South koreas finance minister will doubt need for a fourth extra budget, and said to the economic shock from the virus pandemic may have bottomed out. He says they can make it still avoid its first and will contraction in more than two decades first annual contraction in more than two decades. Profits rebounded in china last month for the First Time Since november, signaling the economy is finally recovering from the virus checked on. 6 . Its rose the Statistics Bureau says the improvement is jew to smaller Cost Increases russian president Vladimir Putin is expected to easily win a constitutional vote that would leave him in power for up to 60 more years despite weak ratings amid a slumping economy, falling oil prices, and the pandemic. The vote, close on wednesday, with little doubt he will be given authority to seek a new term. He will be 83 years old when the new mandate runs out. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Karina Mitchell. Tom thank you very much indeed. Still ahead, claudia kwan on why she still likes tencent, despite its resent run to record levels. Are amid rising fears of a resurgence in covid19. This is bloomberg. Tom welcome back. Said morevirus has grim records, with global death topping 500,000, and infections surging past 10 million. Our next guest says the recent spike in cases, including those in the u. S. And here in beijing combat may not have a similar negative impact on markets as they did in the first quarter. Seth, from in neeraj blackrock. How much of that view is tied to the actions of central banks, and would you expect the fed to be contemplating additional measures in light of the outbreaks and the increasing infection rates we are seeing in the u. S. . I dont expect as much of a market reaction. There is a reason to be cautious with the spread of the virus. The resurgence in terms of the number of cases. But you want a combination of the central bank policy, the fiscal stimulus we have seen, as well as a basic understanding among people in terms of a social norms. Now, would we see more action from the fed on the back of these cases . I dont think so, i think it is too early. The fed has put a tremendous amount of stimulus in the system, let us come alongside the monetary, so overall i think we will have to see the combination of fiscal and system. Works of the and i dont expect anything immediate coming on the back of it . Tom as investors look to the second half and take into account the increase in infections particularly in u. S. States like texas, florida also in tokyo what are they telling you about how they want to represent and for the second half . How much effort it is therefore fixed income at this point . Neeraj over all, there is still some caution in terms of investors in terms of the allocations, the idea of building resilience in the portfolio has never been more important. I dont think that is going to go away. But when you think from a fixed income and credit perspective, we arehe level of rates and the expectation of were rates will be in the coming years credit is gaining a lot more attention in terms of allocations. Something we see becoming a mainstream asset class. It will be an interesting time but we see an ac uptick in the default rates and in the global highyield markets. You will see credit as an asset class gaining more importance in the second half of the year and in fact longer than that. Yvonne so, for those looking for yield right now, what areas of credit you see where spreads can tighten further . Neeraj lets start from a global perspective. I still think there is value in u. S. Investment grade and highyield. We have seen a meaningful amount of retracement from the march selloff. Given the fed positioning, i think there is still value in that space. From a global perspective, european credit is still very well placed given the ecb support. Spot,ctually is in a safe where a combination of the quality in yield and lower riskoff, i would argue the default trades relative to the global, the rest of the emerging markets. The pickup we are seeing in asia relative to the u. S. And europe. I think you would see, not in a straight line, but potentially a continuation of some rate compression in asia in the next 612 months. Yvonne i know that china is an of the market you look at as well for opportunities is one of the markets you look at as of opportunities. The selloff of government that has taken a positive the last couple of days, but does it push you to focus on the offshore market . Where are you seeing opportunities in china . Neeraj i am positive on both onshore and offshore markets. Offshore obviously has been one of our strong conviction sales in the last 1824 months. We remain comfortable with overall positioning we have in and investmentes grade credit. Onshore is actually getting more interesting. With the backup in the rates that we have seen, we still like the onshore rates on the back of improving technical valuations. We see a lot of dispersion picking up in the short credit markets, which is a lot less of a focus for global investors. I think onshore markets given adthsize and the bbre of the market, provide ample investors . Es for tom you talked about valuation and thisdriven opportunities in india. Walk us through what that means and what you are looking at in that market. Bernard over all we are positive neeraj india, over all, we are positive. There is a risk operating down great going up. To junk in 2020. But the fiscal and that levels will define the risk. In terms of value, we like Investment Grade credit in asia. Selective invery the rest of the highyield. Arket in india but from a technical perspective, it is worth highlighting that india is a very small part of the index. 6 of the asian credit index. Yvonne thank you so much, neeraj seth, from blackrock. You can catch up on our interviews by using our interactive function, tv , and also you can send us instant messages during our shows. Or if you have a question for our guest, feel free to send it our way. Make sure to check it out at tv. This is bloomberg. Tom welcome back. Here is the latest business flash. U. S. Show this cheerleader, chesapeake energy, has become one of the industrys price crash victims, filing for bankruptcy as the coronavirus devastates wide parts of the economy. It has a play for chapter 11 protection and is entering a deal to eliminate 7 billion in debt. Chesapeake is seen as vulnerable to the ship explosion that has contributed to the Global Energy glut. Tencent is preparing to make a into American Social media, rolling out a Live Streaming service to miller to amazons twitch similar to amazons twitch. It has been testing a Service Since march which is now branded as trovo live. It has tencents own portfolio of games such as fortnite as well as titles like grand theft auto and destiny 2. The federal Aviation Administration has approved a test flight for the boeing 737 max after a comprehensive Safety Assessment of the multiple fixes made. The testing is scheduled to begin monday, more than 50 months after the plane was grounded because of two fatal crashes. The f. A. A. Says it is yet to make a decision on the 737 maxs potential return to service. Lets take a quick check of the markets. We had entered the session in asia with a riskoff mood. That has been slightly pared around the edges. The Msci Asia Pacific index is still down close to 1 . China also down. 06 , opening for the First Time Since the twoday holiday on the stand friday. We have stories around the securities brokerages. Indian features as well are in the red. The japanese yen currently at 107, offshore currency strengthen a little bit, just a little over. 01 , the u. S. Dollar slightly up, and the aussie showing some strength. A tightening story in china is the Company Continues gradual improvement. Looking at some of chinas brokerages, securities companies, in the red firmly on the back of the news that regulators are looking at issuing brokerage licenses to some of the commercial banks in china. And a market share of again will only be gradual. Nonetheless, investors are not pleased about that report of regulatory changes around the banks being issued brokerage licenses. Plenty more is coming up, great interviews, including with claudia kwan. This is bloomberg. 10 29 a. M. In beijing and hong kong. 10 29 p. M. In new york. Global coronavirus cases have broken through 10 million. Warnedauthorities against reopening too quickly. President Trumps Health chief sammy window is chief saying the window is rapidly closing. Vice president mike pence saying that the u. S. Is wellplaced to respond. Travelers. O ban a draft decision, 15 countries set to be given entry, and that does not include the United States. Chinese travelers will only be allowed to enter the eu if european citizens are welcomed in the mainland and return. Virus inspections have soared in japan since early may, breaking a key threshold level. 57 new cases were confirmed saturday, more than a month after japan lifted its state of emergency. The government has abandoned trying to wipe out the virus, focusing on limiting its spread as National Travel at interNational Travel resumes. Protests returned to the streets of hong kong as lawmakers in china are said to be debating new security laws for the city. They will vote on tuesday, the day before the city marks the anniversary of its return to chinese control in 1997. Hong kong police have refused to permit the annual july 4 march in the city, citing social and potential violence. We are off some of the lows of the session here but we are basically contending with this resurgence of cases around the world. Then we have come on the others, better data out of china with industrial profits as well as the vietnam gdp numbers to the upside. Pretty much, slightly lower to the asiapacific. Manila still seems to be the culprit, falling more than 2 . U. S. Futures have reversed those losses and are edging higher. Nifty, seems like we could be following in this downtrend when mumbai opens in the next hour or so. The resurgence in haven demand seems to be taking a pause. The risk on trade, also going to be seeing some strength as well. You see that with the taiwanese dollar, strengthening quite a bit. We are watching, when it comes to other assets like the u. S. 10 year yield, that remains unchanged. Wti stille and heading lower, still seeing some slippage. Appear today.