Patriotic. Vaccine is on to find a amid warnings of a greater resurgence to come. Haidi pretty mixed midweek outlook when it comes to trading here in asia and for the first time in a while, we have seen equity markets kind of take a step back in terms of not headlines. A great deal of activities and commodities. Lets take a check of futures. Contracts trading higher after we saw a lack of conviction in u. S. Markets as we get concerns that perhaps this fourth round of fiscal stimulus will not be forthcoming. We are hearing the republicans are in the midst of crafting their own proposal to take to the democrats and we also heard from President Trump as he resumed his virus presser, encouraging americans to wear patrioticart of a duty. Over in japan, we are seeing outside of point 3 when it comes to trading for nikkei futures in chicago. More earnings on tap along with japanese pmi readings as well. Take a look at gold and soldiers. Pretty much flat at the moment, jumping close to a nineyear high. We are also seeing silver climbing at just about a six year high. Precious metals getting consistent concerns over the drag of the coronavirus on the and the outlook for stimulus worldwide. We had the european stimulus package finally being agreed after five days of talks. Down by just. 1 . The u. S. Dollar cannot find a bid at the moment. Front and center when it comes to the fx story. Take a look at the impact on emergingmarket stories. Really kind of showing the emergence of emergingmarket stories. The 200 daysting moving average since march. We have a strong yuan and high Commodity Prices potentially paving the way for a greater rally in emerging market fx. Resumedresident trump his virus briefings with a warning that the outbreak in the u. S. Will probably get worse before improving. Tone,k a more reserved urging americans to cover up. Pres. Trump we are asking everybody that when you are not able to socially distance, wear our mask a mask, whether you like it or not. They have an impact. They will have an effect. We need everything we can get. On theemily wilkins is line from washington. That aboutface did not go unnoticed. We had Speaker Pelosi saying President Trump. Emily it is definitely a pivot from what we saw today. It was patriotic, when he encouraged americans to do so. The president coming out and really encouraging people to do so at a time that we are seeing cases continuing to rise in the united states, particularly some areas of the country such as the south and the west. Trump was very pragmatic. Things will get worse before they get better and he asked americans to please stay safe, wear our mask, and avoid crowded indoor areas. Meantime, are we hearing that there may be more progress being made on this fourth round of fiscal stimulus . We saw the markets react amid concern that it will not be very forthcoming at this point. Emily this will be more difficult than previous rounds of stimulus. There is less urgency at this point, more nuanced to deal with. We are on track at this point. Another coronavirus stimulus package. It is something republicans are working on, democrats passed their deal, willing to negotiate with republicans on it, and we are seeing a little bit of daylight between the two parties. Fortional funding unemployment insurance, another round of checks, except this time, instead of going for all americans, it might be a more narrow section of the population that could really use help. Shery the president continued his harsh tone on china, calling this the china virus, coming out of time when the u. S. Has charged two chinese hackers for stealing coronavirus research. This comes about a week after there were concerns about china hacking. After concerns about russia trying to hack the u. S. , something that the Justice Department has said that hackers were assisted by Chinas Ministry of state security. Defense contractors, weapons systems, and it was not just the u. S. The hackers were targeting. There were 11 other nations involved including some like the u. K. Who were spoken out against china at this point. Emily wilkins with us. Still ahead, we get more on the u. S. Claims of chinese hackers stealing trade secrets and stole vaccine data. Our interview with the assistant attorney general for National Security is ahead. In the meantime, bonds are under pressure in china despite the recent recovery. We will be discussing the outlook for the credit outlook. Karina you are watching daybreak asia. Tokyo is considering asking people to stay at home this long weekend as coronavirus levels rise once again. The capital was to be celebrating the opening of the Olympic Games but has seen infection rates spike in recent days. More than 1600 cases have been recorded in the last week with hospitalizations climbing fivefold. Tokyo and the abe government disagree over the severity of the surge. Hong kong is facing a third wave of the pandemic amid fears the citys medical infrastructure may be overwhelmed. New cases are surging with many of uncertain providence. The government has speculation the city will go into a new lockdown following the reports of fake news and rumors. Hong kong has been seen as a model of how to control the coronavirus. A new Bloomberg Survey says casino operators in macau are likely to post a combined loss of more than one billion u. S. Dollars in the second quarter. A pool of brokerages says the Six Companies will have negative numbers when they report soon. Revenues casino collapsed by 90 from april as the coronavirus closed borders and slashed travel. Thailand narrowed the race for the Central Bank Leadership to two finalists as the country grapples with the worst ever economic crisis. Names have not yet been disclosed but one is set to be a bank of thailand official and the other coming from the outside. The new governor will take over on october 1. The bank cut its benchmark rates to a record low of. 1 . Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Haidi, over to you. Haidi karina, lets get to china where the bond drought has added to pressure on the domestic funding environment for corporates, and as illustrated on the bloomberg terminal, we have seen this bomb selloff taking a bit of a breather over the past few days after the 10 year yield ended in oversold territory last week but some analysts say that pbocs reluctance to ease may continue to weigh on chinese fixed income for now. During us with some insight is the Brandywine Global portfolio manager, tracy chen. You see on the chart, we have bounced back down when it comes to being in oversold territory but we know the pboc, given the exuberance we have seen in equity markets will be very reluctant to add to more Monetary Policy easing, so where are you when it comes to chinese i think we are quite constructive on chinese sovereign bonds. I think the Interest Rate differential between chinese 10 years and u. S. 10 years is wide. I think it is a great value both from a fundamental point of view and also valuations, and a market technical point of view as well. China has been first in an first out in this covid19 situation. I think its recovery has been quite uneven, quite incomplete. Most of the vshaped recoveries for industrial sectors. The Services Sector. Airline industry. And hotel. The pboc will keep Monetary Policy very easy and this should bode well for the chinese tenure bond. As the chinese tenure bond included waiting for the bond 10 year bond included weighting for the bond and you will see more Foreign Investors join. That should serve as a great market technical. What have we been seeing in terms of volumes at this point . Emily i think the volume is quite healthy. Right now, i think the foreign bond s share as the chinese treasury bond market has increased higher than 9 . I think that direction has been going well. I think china has tried every means to attract Foreign Investors because its current account surplus is almost going to zero. Physical deficit is increasing almost 13 on the aggregate level and following that investment is also dropping. It needs foreign capital. Shery with the recent bond that we have seen, chinas local bond defaults have hit a four month high. What is the risk of the pboc really holding back on using Monetary Policy too much and too fast at a time when there still seems to be some risk to the economy . Think the reasons are off, mostly driven by the increase in the supply of the bond issuance. Determination to clampdown on the financial market. But i do not think they were premature in tightening the Monetary Policy because they are still trying to balance the versus thesus reopening. Easy monetaryry policy. Shery let me turn to the u. S. , because you are finding some opportunities in a market that some people have been more hesitant about. Commercial mortgagebacked securities where there has been a lot of gloom and doom when it comes to the sector. Yes, that commercial equity market has been the eye of the storm because it is directly linked to social gatherings because of the commercial for social distancing, and many of the sectors have some secular challenges, especially in retail at restaurants. Said, thes you sentiment is a little overdone. I have been hearing about horror apocalypse buthe actually, there are several factors that should prevent a market. Ocalypse in the most of the factors theres no oversupply of the commercial real Asset Properties this time around on the national level. You can have some local level oversupply. The market is maturity is quite tight, quite light, because most of the bonds are 10year majority. In 2010, we dont have a lot of new issuance on the market. The Underwriting Center has been included. That Service Cover ratio is higher. There is another policy, potential policy stimulus that has been under discussion that should be included in the hope at. We have some signs of fundamentals mike Hotel Occupancy has been increasing and also the late payment the speed of the late payment increases have been slowing down. Shery tracy, it was good having you on. You are running out of time. Tracy chen, Brandywine Global per volume manager. Here is a quick check of house over futures are doing because of the rally continuing at the highest level since 2013. Silver futures up in the double digits this month already, outpacing gains for gold. They are being encouraged not only by low Interest Rates but by bets on a rebound in industrial demand. Coming up next, the Hong Kong Government denies a new virus lockdown but speculation continues. We have the latest. This is bloomberg. Haidi a quick check of the latest business flash headlines this hour. Closer to service with regulators calling for new updates by october. The faa is happy with current redesigns. Plane may be able to return to the air in the next few months. That would be welcome news for boeing, although the potential return date would be later than the immediate target that the plane maker has sought. United airlines posted a record quarterly loss of 2. 6 billion through june as the coronavirus slammed air travel. From 11. 5unged 90 year ago. 6000 workers have agreed to leave as the Company Works to cut costs. United describes the period in the worst in its 94 year history. To snapchats parent slumped in late train as fears about user growth outweighed a jump in secondquarter revenue. June roseough as users relied on the app to spread information about the coronavirus p or however, active daily numbers of 238 million were behind snaps own forecast. Shares have closed near a record that fell on the earnings news. Trump warnedent the u. S. Coronavirus outbreak will probably get worse before it gets better, and in a change of tone, he is encouraging americans to wear masks. This as global cases surpassed 14. 7 million while cities like hong kong and tokyo are moving out more stringent restrictions there for now, yvonne man has more on this, and there was speculation that hong kong could reconsidering a lockdown. The government coming out with a statement saying that is fake news. The rumors that this lockdown could be happening in a matter of days are just false. They are urging the public not to spread rumors right now but this is a city that is grappling with this third wave and scrambling to contain this virus. We saw another 61 confirmed cases yesterday. Two more elderly patients have also died, bringing the decile to 14, but overall, we have seen more than 600 cases over the past two weeks, half of which are of unknown origin. Officials are saying the medical system is now critical. They are talking about isolation beds, and the words in hospitals have reached capacity of 80 now and hong kong itself has lost the ability to conduct this widespread testing we have seen in countries like china and south korea. You can see this chart compares at all. 59,000 per million of its population. You compare that to places like victoria state in australia and they are doing four times that amount of 200,000 per million. Victoria itself saying they could do 20,000 virus tests a day. Hong kong is doing about half of that. The government now really struggling to boost the testing, trying to do so as well as the quarantine facilities here around the area. Governor may be urging residents to stayathome over the fourday weekend. What do we know . Yvonne this fourday weekend was supposed to be a happy time where they would celebrate the start of the Tokyo Olympics games which now have been postponed, but now, the tokyo governors saying they are considering urging people to avoid that unnecessary travel outside during this time. Tokyo once again, the number of virus cases rose past 200 now, 237 on tuesday, and more than 1600 cases in the past week alone p of hospitalizations have jumped fivefold, they say. At this point, keep in mind that japan is starting the Regional Tourism campaign as well that caps off today. It does exclude tokyo, however. Not sure how strong the governors calls are going to be. We have seen tokyo and the National Government disagree over the severity of this karen outbreak, so at this point, japan still insisting that another state of emergency is not needed. Our markets coanchor, yvonne man, with the latest on the virus situation around asia. With novartis, it is cautiously optimistic about a vaccine for the virus. The company has a number of therapies under development. Spoke to its ceo bloomberg about what a successful treatment would do for the companys bottom line. Our efforts are focused on treatments. Clinical trials, multiple efforts on going through investigator studies. We have a broad Research Effort to find Novel Coronavirus medicine, but across these medicines, we are not looking at this as a profit driver. We have committed to really do this for more of a humanitarian standpoint. If you look last week, we committed to provide 15 medicines at no profit to 79 countries. The who recommends that for the treatment of coronavirus patients. To methadone. Many of the companies in our industry, with respect to vaccines, have also committed to doing this more on a humanitarian basis. Together, onethis global community, and our industry is just trying to do its part and novartis is trying to do its part as well. Your focus of course is on treatment. We have had plenty of vaccine news or at least updates on progress from Companies Like moderna, astrazeneca, and the oxford trial. Hopeful yet cautious seems to be the way that a number of commentators have described how they feel about the vaccine story. What would you add to that . Would that be a Fair Assessment . What about timescales . Vas my background is in fact as of action all adjust and i spent vaccinologist. It is important that we remain cautious. We see strong immune responses in phase one Clinical Trials that do not translate to realworld efficacy in phase three Clinical Trials so i think the first question is are the immune responses we are seeing in the phase i trials really translating into larger scale Clinical Trials . The second part of the story has to be if we will give it to billions of people, we need a very safe vaccine. The public has to trust it. It is not going to help us if we have a vaccine the public does not have trust in or erodes trust in vaccines over time. That will be very important as well and we need appropriate follows ups with patients, followup studies. We cannot rush it. We need to ensure we have a strong data package to enable that to happen. The timeline, if you look at it, the fdas guidance document expect 50 efficacy at least as well as six months followup on all of the patients depending on the technology being used. I think we can all do the math based on when the trials followup to really have a compelling vaccine that has all the data required. I am cautiously optimistic but also humbled in the face of what it takes to develop a vaccine. Shery novartis ceo vas narasimhan there. We are seeing u. S. Futures really flat after the open, not doing much. There was mixed guidance coming from the new york session. Faltering. Tech surge managing to end at that fourmonth high. We continue to see nikkei futures gaining about. 25 . The japanese yen a little bit stronger today at a oneweek high against the u. S. Dollar. We are awaiting the japan pmi preliminary numbers so watch out for that. Both Futures Holding steady. This of course, those levels we have not seen in a decade or so. Crude prices under pressure, headed towards the 40 a barrel level. This af