virus hotspot with cases surging. we have the love very latest from new delhi. we areg markets now, seeing gains in the asia-pacific. it is looking a little bit like we are seeing more consolidation. markets taking a breather ahead of the fed. one of the big investors out there saying it is time for humble pie. take a look at u.s. futures. still up about 0.6%. we did see a pause in that rally overnight. u.s. 10 year bonds as well. did see a bit of a rally, retreating as low as 0.8%. but really feeling that threshold. and oil, slipping back after a surprise jump in crude inventory. supply concerns rearing its head once again.

jakarta just coming online. interesting when it comes to the hang seng, we are close to those session highs for the hang seng. cathay pacific certainly one to watch. spike onned that brief this government-backed rescue plan. we come back to earth a little bit. still seeing shares elevated a little bit. chinese stocks slightly lower. we missed on the inflation numbers. small caps in china close to 20% higher from those lows we saw. india futures also pointing positive. we are watching the dollar as well. down for nine of the last 10 sessions. a little bit of exception with the yen, 107.79. the hong kong dollar still on the stronger side but kyle bass

doubling down on his bet against the peg. we will see what kind of demand there is. offshore renminbi pretty much unchanged right now. haslinda: let's stay with china. factory prices continue to fall in may. the country continues to deal with the fallout of the coronavirus pandemic. let's cross to selina wang in beijing. break down the inflation numbers out of china today. selina: what is clear from the numbers is that the recovery in china is not strong enough to produce inflation pressures. the big focus here is -- [inaudible]

companies are losing pricing power and the manufacturing sector is still suffering from the impact of the pandemic. from aprilices, down and less than expected. [inaudible] prices have slowed, down significantly from the previous month. even as the chinese domestic economy is getting back on track , businesses are facing -- demand for their product. expect cpi and ppi to continue to fall. [inaudible] yvonne: reporting that chinese

regulators are asking small and midsize banks to cut down on provisions for bad loans. more effort to extend credit to businesses. selina: the goal here, this is the latest move for businesses that have been hit by the pandemic. what we've learned is that china's top regulator is slashing the amount of money they have to keep on hand to cover losses from bad loans. this will further reduce requirements. requirement will vary -- [inaudible] [no audio] yvonne: we may have lost selena

there. that was china correspondent selina wang. let's get to the first word news. we have karina mitchell in new york. >> the imf says the risk of default is rising. they want creditors to offer debt relief. the managing director told the u.s. chamber of commerce that there would be time for restructuring. private investors said they may offer low income nations extra cash to ease the burden of debt payments this year. in the u.s., george floyd has been laid to rest in houston, here as protests continue and across the world. floyd was remembered as a father and a brother and potentially a force for change after his death in police custody sparked outrage. he has become a global symbol of injustice. and standardbc

chartered are being rebuked by a top shareholder for their support of china's sweeping security laws. david cummings says he's uneasy at their decision to back the legislation without knowing how it will work. he adds, if companies make political statements, they must accept the corporate responsibilities that follow. and mass protests returned to hong kong. protesters converged on the central business district, defying warnings of unlawful assembly. at least 25 were arrested. says executive carrie lam she wants closer financial integration with china amid concern about hong kong's future. 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'm karina mitchell. this is bloomberg. up, we digoming

deeper into cathay pacific's $5 billion lifeline with investment and advisory group united first parties. , j.p. morgan asset management tells us where it is putting its money. this is bloomberg. ♪

haslinda: after a record-breaking rally that added $21 trillion to global stock markets, technical indicators suggest a pullback is overdue. investors will be turning their attention to the fed's latest meeting where it is expected to stay the curse. joining us is j.p. morgan asset management strategist patrick.

good to have you with us. we are hearing stocks are in overbought territory. s&p in overbought territory for years. would you say that any pause we see now is just a pause, especially given a lot of money sloshing around, waiting to be put to use? >> good morning. i think that sums it up quite nicely. australia had a tremendous .un-up in stocks argue that they don't look pretty fully valued. but at the same time, there are plenty of other indicators, particularly position indicators, that show us how many businesses have not

participated in this rally. it seems like there's a lot of money that can still be put to work. the drivers of this is why we've seen a massive rally in prices. volatility has stayed stubbornly high for many institutional and systematic players. still comee could back in. haslinda: when you look at the markets, the rally per se, is it suggesting a v-shaped recovery in the economy? when do you see eco-data coming in line with what the markets are suggesting? if you look at korea's unemployment, it is at the highest in 10 years. we saw data out of china lagging expectations.

>> i think it is a little bit ironic. we got the official announcement cycle endedthat the in february. and the same time, we've been saying for a few weeks -- we probably will have had the shortest u.s. recession of all time. i think it is important to bear in mind how markets behave. i don't think you need to assume a fully v-shaped recovery to the levels we had before the virus to explain where the market is today. markets look forward. isle the actual situation pretty dire, things are getting better. the recession is basically probably over here. we don't think the economy is

getting back to where it was until probably 2022. but we also don't think that necessarilyrkets are headed south. i think the two are not inconsistent. yvonne: you seem to be of the camp that perhaps this whole rotation has legs ahead of it. but we've seen markets go from recession to euphoria in just a matter of weeks. things are looking lofty, but are there parts of the market you say we could still keep going, but other parts are looking vulnerable? verythink that is a important point. let me say, yes, there are some indicators that point to euphoria by investors. if you look at things like the options market in particular. but plenty of others don't look

quite in euphoria territory yet. but i think you are right to point out that not everything has rallied in the same way. we all know the story about the u.s. tech sector. of areas,plenty particularly cyclical areas in the market that have not rallied as much. they have started to rally. we were expecting that to happen at some point. it is happening much faster than you would normally expect. but everything is on fast-forward in this market cycle. but we do think the rotation into the more cyclical area, we think that has some room to run. it won't run forever, but it has some room. areasoes not mean other have to fall.

we think they probably just underperformed. but that can carry the market for a while and we almost think it is required. patrick, is the fed going to do anything to keep the market going higher? we had a stellar u.s. jobs report. we have economies reopening. is it time for the fed to think of withdrawing emergency support or is more still needed? >> i think it would be dangerous to get into that game already. that discussion will undoubtedly arise. i think it is too early to go there. one of the near-term risks to the market -- we don't ascribe a huge probability to it, but there is a risk that we could get a mini taper tantrum, where bond yields should higher because the fed is rolling back.

if the fed loses control, that certainly wouldn't be or riskted by equities assets in general. tread very fed will carefully here. while they might not actually do anything at this meeting, i think they will talk devilishly as much as they can. yvonne: will they mention anything about yield curve control and mark -- control? if we do see yield control, what part of the market does it help the most? >> we think it is probably early for them to get into that. it is possible that we get there later in the year. we would think they would go

into clarifying forward guidance if it is needed. [inaudible] there is a bit of controversy around here. we were talking about cyclical rotation. there's a lot of interest in the value trade as well. the steepness of the yield curve is what we are talking about. keeps yields from rising, what does that actually mean for the value trade? fed may be suppressing that, but it may not mean that mh. there is debate around that. if you think about the more

quantitative side of the market, there might be players that get held back from that trade. but it is a debate for later in the year. haslinda: patrick, great insight. j.p. morgan asset management. still to come, hong kong marks the first anniversary of protests with more unrest. could the time be turning? we will do again, next. this is bloomberg. ♪

mass protests return to hong kong a year after the first antigovernment demonstrations. at least 25 people were arrested. says executive carrie lam

she wants closer financial integration with china amid concern about hong kong's future. one of the largest shareholders in hsbc and standard chartered says it is uncomfortable with their decision to back china security rules for hong kong. we are joined by bloomberg's eric lamp. what was the message they were trying to send here? >> these comments were saying that, first off, the kind of uneasiness with the situation, which is a wider situation that thebeen going on back since beginning of protests last year, with companies with business interests in hong kong and china having to straddle that line between staying on the good side of the chinese government and also trying to maintain their corporate independence. the comment is basically saying that if these companies are making political statements,

they also have to accept the corporate responsibilities that follow. they hoped they would speak out publicly if there are abuses of democratic freedoms connected to the law. the national security laws, we don't know the exact details. for a lot of businesses in hong kong, they've been taking a wait and see approach. eric, kyle bass -- this comes just days after they said the peg will stay intact. >> kyle bass has been a long-standing bear of the hong kong currency. fund,interesting, this talking about potentially 200 to one leverage. it is almost like a lottery ticket. if the hong kong currency

collapses, the payout will be handsome. for things like this, there's always the risk that if it doesn't, it ends up being worthless after 18 months. u.s. dollar for the hong kong dollar has weathered multiple storms over the decades, including the handover in 1997, multiple global financial crises. chancial secretary paul has been coming out in public defending the peg recently. if we do see any additional tension from the u.s., sanctions on hong kong, he expects that china would help support the government's efforts to support the peg as well. got to wonder what kind

of demand there is for a fund like that. people are still looking for some kind of hedging tools. let's get to the latest business flash headlines. the head of china's starbucks rival has quit amid the growing scandal over accounting practices. emails reported to show that he ordered the fraud. sales at the coffee chain were inflated by more than $300 million. $2.7e's expect to raise billion and have raised the amount of shares available. the original retail allocation of 5 million shares was over bribed by 360 times and is now going up to 20 million shares. the number for institutional

investors will be reduced. honda says it has been hit by a cyberattack that disrupted internal systems and forced the closure of some plants. production has stalled in ohio and turkey. japanese plants haven't been affected and hondas other factories in the u.s. have restarted production lines. lots of questions whether or not markets need to cool off. for asia that is not looking likely. stocks continue to climb for an eighth day. shrugging off losses on wall street overnight. the csi, under a bit of pressure, off session lows. the ppi in may falling short of expectations.

showing perhaps that the chinese economy is still under a lot of pressure. 2195. continues to grind higher. brushing off, jobless rate jumping to a 10 year high in may. exports continue to fall. the asx 200 up by 0.5%. investors continuing to load up on stocks at high valuations. taking a look at the dollar right now, it is easing 0.2%. usd set to be on its longest losing streak in 14 years. taking a hit from the bottoming out of global growth. say, has taken its direction from the euro. taking a look at where hong kong stocks are right now, shares lagging behind, trading near

lows, making valuations very compelling. more to come. this is bloomberg. ♪

is 1029 in hong kong and shanghai. i have the first word headlines. making all ore nothing wagers on a collapsing hong kong currency bed. the founder of payment capital management will use contract to leverage the new assets by 200 times. the strategy is decide to generate gains as hong kong's currency tumbles but investors lose all of their money if the dollar is still intact after 18 months. cooley is become embroiled in the first -- the search for joe owe behind the 1mdb scandal.

w traveled to kuwait to escape his arrest. low was known to have deep ties with the kuwaiti royal family and the prime minister. s&p global ratings has cut its outlook for japan from positive to stable. the agency says covid-19 has setback fiscal stabilization, although expects matters to get back on track in the next two or three years. theabe government package is about$2 trillion. there is more evidence that the pandemic is hurting machine orders. down 50% from a year earlier. orders were already falling before the virus. outbreak is having a deeper

impact on the japanese economy. recent data may overstate reliance on capital spending. harvard university is hoping to cut costs by offering staff a range of options including early retirement and shorter hours. they are not considering furloughs and will extend pay and benefits for employees and contract workers. harvard and other colleges are assessing when to resume classes after the pandemic global news . 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. this is bloomberg. >> let's take a look at markets right now. it seems like we are stalling ahead of the fed meeting later on today. he still see asian stocks eking out marginal gains. and seeing an eighth day of gains. one of the longest rallies we

have seen for asian stocks for a couple years. the dollar still down for another day. the u.s. entrepreneur stabilized a little bit -- the u.s. 10-year stabilize a little bit and brent crude slipping. it seems like people are pushing the pause button after the massive rally we have seen. movers, cathay pacific one of our top stories today. on the rescue plan. we've seen bank after bank downgrading the stock on this $5 billion government-backed plan. also when it comes to the recent cash burn. you did see cathay pacific shares spiked. now we are heading slightly higher, up 1.5%. air china also coming back online. air china down 3%. watching watching another stocs

well. as the accounting scandal escalates. more now on the cathay pacific situation. we are joined by our guest. justin tang. at united first partners. thanks for joining us. first off, were you surprised by this bailout from the hong kong government and do you think it was the right approach? >> thanks for having me on. -- givenat is going on what is going on, i do not think anyone is surprised by the capital of cathay pacific. and, given the national and economic implications of that carrier, i do not think anyone is surprised the hong kong shored up the airlines. >> is $5 billion sufficient? or will they have to recapitalize again? , $400you look at the cash

million among -- per minute. month. given that most economies around the world -- sorry. move in theust one midst of several moves that cathay pacific needs to make to survive. -- what is itleet that they are doing? >> they are trying to cope with the pandemic right now. they are going to slowly moved to the adaptation stage. at some point, they would have to reimagine the future of their business. changing thean business models in terms of the planes they are utilizing. their roots. routes in moving more into --

based. how much clarity is there in terms of their survival? we saw that the recapitalization will see them through 1-2 years. a recovery ine the aviation sector till 2025. so, i think between 2025 -- i took most people are optimistic or too pessimistic. the reality is that we will be somewhere in between. some airlines have really started resuming -- in china, vietnam. i think if we do not see any outbreak of the virus similar to

what we have seen on the crew ships, i think people will start to be more confident about air travel. and that should help cathay pacific. >> what about the political implications of this rescue plan? some analysts are saying that the government, now that they are a shareholder, you add that with the 30% stake air china has. this will raise concerns about beijing's potentially political interference into the company and state control. china has a slightly below 31st -- 30% stake for a long time. it will be slightly dilutive. -- slightly dilutive. luted.ghtly di

of theructure transaction shows of the management and the hong kong government are aware of the situation hear a merger between air china and cathay pacific may not happen. the you think this announcement is bullish for the stock, or what is your long-term outlook for now? >> i do not think anyone can say for certain what the long-term outlook of any airline is. pacificy we saw cathay stock appreciating strong this morning due to the short-term -- of the stock. a lot of things need to happen before one can say that the outlook is good for airlines in general.

clearly, if there is a vaccine for the coronavirus that helps. another -- for cathay pacific would be the hong kong protests. and, also come i think the most important thing would be consumer confidence in getting back on board aircraft. so, these are all the headwinds. i am just wondering, with the recapitalization, cathay pacific will see to professionals on this board of directors. will anything changed. >> these will be to observers. two observers. how will have some say in that the company is managed going forward. and we also see that the hong

kong government has also entitled to -- that gives them some -- go ahead. >> ok. thank you so much. justin tang joining us from singapore. up india's capital faces an overwhelming virus outbreak as lockdowns is. .- lockdowns ease this is bloomberg. ♪

>> the world health organization is walking that comments made monday it is very rare for people who have the virus who show no symptoms to pass it on. bloomberg spoke to johns hopkins nurse manager about so-called silent spreaders. >> i actually read the press o and i doom the wh think that, not having or having that thedity asymptomatic population does not transmit the disease is very important to the reopening process. >> what do we still not understand. we have had various reports, it is difficult.

if you're just a citizen trying to figure out what you need to do. how this virus involved. who should we listen to? we were told not to wear masks and then wear masks. what are you certain about that we need to do to make sure we are safe? francine, i talk about a few simple things and one of them is wearing a mask. social distancing. and sanitizing. we at johns hopkins are starting to reopen for outpatients and those are the three topics we have to be reviewed on. we had to sit down and speak measuringtaff about out six feet apart so we could really be social distancing for the importance it was. one of the things we have noticed is that the transmissions that we have seen among employees primarily are in

situations where social distancing, like a break room, may not be as strict as it is in another area. back toreally gone those basics of the masks, the social distancing and sanitizing. >> when it be safe to send kids back to school this month if there was appropriate social distancing? >> i think children are sort of the variable. it is difficult for children sometimes to understand social distancing to the level of adults can understand it. i do not know the answer to that question. i think there would have to be a lot of work with early childhood educators about how you can get that message clear to children and how children could do that on a consistent basis. earned, speaking to bloomberg. the johns hopkins school of public health is supported by

michael bloomberg, founder of bloomberg philanthropy. the latestis one of coronavirus hotspots with infections rising at the fastest rate globally in the past week. new delhi is set to be the latest city overwhelmed by covid-19. south asia government editor has the latest from the indian capital. why the spike in infections in this region? >> well, unlike other countries with significant epidemics that waited for their cases to stabilize and start fallen before that used their lockdowns, we did not do that in south asia. india and pakistan and --gladesh were basically raise their lockdowns because of the economic crisis. and they did this as infections were spiking. infections have jumped 30%.

in just a week. what does that look like on the ground? >> it is pretty chaotic on the ground. sent crematory in's are overflowing. hospitals are full. and people are finding it difficult to get a test for the virus. let alone get treatment or get admitted to hospital if they are extremely ill. it is also affecting the senior levels of government, because delly is the political capital of india. they have the defense ministry closing. bureaucrat in quarantine. a senior finance ministry has the virus. we now have authorities today telling us that new delhi will have around 550,000 infections by the end of july. >> wow.

>> prime minister modi. sorry, i did not catch that. >> sorry about that. >> how is the government responding? yeah, well, they were government response has been lacking. it is clear that governments at the state and federal level did not use the lockdown as expert told them suit -- two, to ramp up testing. india still has very low testing rates. it is taking cases that we are seeing now, probably the tip of the iceberg. south asia government editor ruth pollard joining us from new delhi. coming up hedge fund manager kims, has skeptics like eating humble pie but dunlop warns that stocks can still fall

from their current purge. this is bloomberg. ♪

2 hedge fund billionaires are sharing their views. he was doubting stocks were bounce back and says he is eating humble pie. jeffrey dunlop warns stocks are likely to fall from here.

let's go to su keenan with the latest. two camps of thought. one is saying that the market is looking to offbeat. >> he also sees a possible way the white-collar unemployment. as we go on the bloomberg you is not on the -- he alone because the s&p 500 future are near the biggest net short since 2015. a lot of investors shared down lots -- dunlop's view in the near term is lower. in addition to seeing a pullback from the markets. he is bullish on gold long-term. and he also sees gold reaching new highs. he is also keeping his weak dollar call. he says the dollar can devalue against the number of currencies. andy had a lot to say about the fed. he expects chair powell to follow through on controlling the yield curve and warned that in the 1940's central-bank

policy may make a return as bond yields for the 30 year continue to rise. he sees the central bank keeping the fed funds rate is zero for the next two years and he says traders you -- view powell as superman. qa, and zero rates, he says that they are the biggest kryptonite. and he says they are fail for the banking system. notably his comments are coming on the eve of the feds june meeting. another money manager has a slightly different view. he began warning of a market drop at the beginning of the pandemic. what is he saying now. that is saying he regrets he just did not see the rebound coming. and he is one of many wall street heavyweights that are just confounded by the recent rally, we have seen the market more back from the march selloff.

he is talking about eating humble pie. one of his quotes. he spoke from a webcast from the new york -- he said if there were a franchise for humble pie, there would be a mile-long line because we all had huge gulps of it. referring to himself and the other hedge fund managers. me included. of the very first warned about the coronavirus in late january. so, he was positioning himself for our market drop prematurely, and he admits he just did not see the rebound coming on so strong. he was a fan of gold. he put a small bit of his investments in bitcoin. he also explains that what we saw was an unprecedented government intervention with trillions of stimulus being poured into markets, unlike any response he has ever seen before. what could bring a rosy picture to an end?

he says sometime down the road, inflation will be an issue. he says inflation will be almost all ofble to check with the stimulus that is currently pushing the markets. back to you. >> su keenan in new york. now a quick check of the latest business flash headlines. to be preparedd to cut shares by 15% of the vision fund following record dax losses. -- losses. it is up from 10%. softbank reported a record -- of afterllion last month writing down we work and cooper. boeing failed to sell or deliver a single one of its marquee 77 nth even ass last mo

the stock soars on hoped that the airline industry will rebound. shares are up 75% since the start of may. the number of sales lost this year is said to have reached more than 8600. macy's surged by 9% in new york. of its stores have now reopened across the united states. the store posted a revenue decline with sales falling 45%. 630y's net loss was $ million. the company has gained new financing to get to the coronavirus crisis. -- said to be starting a new fund. sources say founder of hayman leverageanagement will the new assets by 200 times. the strategy is designed to

generate outside gains as hong kong currencies tumble. -- investors can lose their money if the dollar is still intact. >> checking some lines crossing from china. from the civil aviation administration. they are saying they could actually start increasing air flight with some countries. so, china looking to possibly reopen more flights with other countries. of course, we've seen the travel bubble in place with singapore and china. china and south korea, the potential we could be seeing more of that. also reporting that may our passenger volume fell 52.6%. on year. 25.8 million when it comes to transport volume in may. you see the reason why they need to start increasing some air flights with other parts of the world.

take a look at markets. we are taking a look at -- it has really been a treading water situation. the fed coming up. looking for more catalysts for this global equity rally to continue. basically hit the pause button with the exception of taiwan. and you are watching u.s. futures. still pointing positive. oil continues to extend losses, down 2%. wti and brent crude inching closer to that 40 threshold. that was a surprise jump in crude inventories as we see -- as they come back online. cla >> we are also counting down to the open and india. whether those gains can be sustained. mixed sentiment. we do not know. people look out for that. plenty more to come on bloomberg markets: asia. strategist lee

will be joining us and not twin bill founder. keep it here with us. this is bloomberg. ♪

it is almost 11 a.m. in singapore. -- i amzling to online haslinda amin. welcome to bloomberg markets: asia. cathay pacific is having a wild ride on his return to trade. the government-backed rescue prompted the biggest surge since 2008 and the shares fell back. and standard charter under fire under the support of's china security will for hong kong.

atop invested said they must accept responsibility. and a big deal. the geo-platform breaks and more money as indian tech prepares to challenge the might of the top chinese players. we begin things here with a look at what is happening ash some u.s. risk assets they were, just having a look at what is going on with the bond market. also what is going on with currencies. 10 year yields on change. pretty much unchanged. looking at the dollar index. seeing more weakness again for the greenback. seeing at the moment sterling at 1.27 and the euro at 1.13 107.

checking in with the aussie and japanese -- and looking at what is happening with the yield picture. there we go. at the bank of japan two basis points above it. 2% there. brent crude continuing slightly lower. that has been the trend the last two or three days. ts for brent.68 cen and their ago. aussie 10-year yields approaching 1%. part of a mixed picture for equities at least. i suppose people are taking stock, pardon the pun, of this risk rally we have been witnessing of late. haslinda: and what a rally it is. what a rally it has been. that --ry to hang on to those gains. the index of just .2%.

the back of losses in the u.s. ahead of the fed meeting on wednesday. sentiment remains a negative. --estors perhaps take talk take stock of the risk. the asx 200 down. china largely has escaped the bear markets amid the pandemic. the kospi up .2%. off the jobless rate jumping to the 10 year high in may. the hang seng unchanged. -- caféwe are giving which resumes trading today. some of those early gains. hong kong shares pretty much compelling in terms of valuations, cheaper than the s&p on a price-to-earnings basis. flip the page. southeast asian stocks.

asiaber, southeast equities among the first two tank during the virus but among the last recover. index is an off -- couple of weeks behind. down .7%. even though indonesia expects to recover in terms of growth. better than expected. now let's get the first word headlines with karina mitchell in new york. >> thank you. the imf says the risk of default among nations is rising and wants creditors to offer relief. the managing director told the chamber of commerce the debt service pause would provide time for restructuring. private investors say they may offer low income nations extra of debtease the burden payments due this year. meanwhile, there is more

evidence of pandemic is hurting the japanese industry. down moreol orders than 50% from a year earlier. the steepest drop since 2009. orders were falling before the virus. but the outbreak is having a deeper impact on the wider japanese economy. overstatea may resilience in capital spending. in the u.s., george floyd has d to rest as protests of police treatment continue here and across the world. floyd was remembered as the father and brother and potentially a force for change after his death in police custody sparked outrage. the 46 role has become a global symbol of injustice with mourners saying his death could help change the world. return to hong kong a year after the first antigovernment demonstrations. protesters converged on the central business district, defying warnings of unlawful assembly. withople were arrested

police firing pepper spray to disperse demonstrators. --rie lam says she wants financial integration with china amid concern about hong kong's future. 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. this is bloomberg. let's recap china's data from earlier this morning. consumer prices rose 2.4% from a year ago. producer prices fell 3.7% year on year. also missing expectations. both of those data points signal a slow recovery from china. asia, good to have you with us. slow recovery in china. how much of a risk is that for the markets. well, obviously, the data are

not really extremely strong but when you look at -- the data we think there is a pretty robust recovery happening in the country in the second quarter. we expect this momentum to continue. in the next quarter. think, basedon, we on that scenario, the recovery in china should be supported by markets. mpc addedurse the more fiscal stimulus. so, we would slightly disagree with the idea that the recovery in the country is slow. we see it as robust. have mark is priced in the recovery your anticipated -- you are anticipating giving where they are right now? >> it is true that the assets have valued from april --

sharply. thatusly, we are having conversation with our clients. first of all, the overall market volatility are pretty high. -- projections are pretty high. it is higher than the levels we saw in past years. in the inflation expectations in the bond markets are still very low. so we would argue that markets are pricing, first of all markets are becoming more symmetrical and the possibility of some recovery medium-term. helped in part by a very, very strong hairy strong fiscal stimulus. in most countries around the world. , they are nothink fully embracing the scenario of strong recovery combined with exceptional health through the second half of the year and

extending through next year. to bee full recovery priced in, inflation expectations will be much higher. will be lower. we are not there yet, in our view. that, a: having said true recovering means that we will see a recovering in earnings as well as jobs. what assumptions are you making? i we looking at the next six months, 12 months or beyond? >> that is a very good point. this year, alongside -- the corporate earnings will take a significant hit, no question about that. if you think about the medium-term earnings picture, it is different. leastcoalescing around at a pretty healthy reversal of the contraction this year. in terms of gdp. that, itourse, beyond is opposite -- the main conversations we have had --

shipments instead of simply staying on the curve. if you factor in these possibilities into your equation, then it is plausible that the valuation you give to equities is reasonable. with prices where they are now. so we think those factors should be considered. and we are not complacent. but we are more open-minded about the recovery in 2021, 2022. rishaad: we've had short-term liquidity globally come through. and part of that is responsible for the surge in asset prices. that liquidity will fade over time.

we are also at the same time seeing money coming from the likes of the ecb. we are not thinking about further down the line we may be getting inflation from all this. we could see growth -- fall significantly. this disconnect, if you will, has got a lot of people concern. what about you? well, first of all the markets seem to overestimate -- an underestimate the rise. and the monetary 30's have done their job. -- the monitory authorities have done their job. the markets have benefited from that. the medium and long-term strategy, managing the situation. to make sure that you face different types dax -- with these mass injections. ideally the conversations around

the monetary policy targets should be more detailed and robust. we do not have that yet. but at least in terms of the asset plans the policymakers have made very clear. their expectations. thealso it is one of reasons why always beginning to think people in the market are beginning to sense shatter about yield curve control. they have patience on rate over a long time. perspective, it is one of the key tells for the market in the next three to six months. but if they can formalize that, before the end of this year, it will definitely be a major boost to markets in terms of the worries of the potential -- from

the current levels. always a pleasure. thank you for joining us. up, foreign investors are piling billions into the digital to confirm hoping him as the richest man in asia. platformsar weigela will soon be able to rival the likes of tencent and alibaba. ♪ just ahead, hong kong's pro-democracy movement marks when you're a protests. as concerns grow over china's expanding influence across the world. this is bloomberg. ♪

rishaad:rishaad: we have mass

protests returning to the streets of hong kong a year after the first antigovernment demonstrations. 25 people were arrested. the chief executive carrie lam saying, she was closer financial integration china amid concerns surrounding hong kong's future as a business hub. shareholdersrgest standard chartered's says it is uncomfortable with their decision to back china security rules for hong kong. the -- chiefbout investment officer. what is his beef, basically? is speaking to the wider issue of companies with significant business interests in hong kong and china. they have been grappling this -- with this for more than a year now, going back to the beginning of protests, trying to straddle that line between corporate thependence and staying on

good side of the chinese government. , ifthe concern here is that they are speaking a politically, va, they hopeof e that they will speak out publicly with future democratic freedoms connected to that impending law. it's based to that tension that has come into focus as things have accelerated the last few weeks. -- makinghow bad headlines going all out on the get the hong kong dollar pe will collapse. >> it is interesting. kyle bass has been a prominent there on the hong kong dollar for a while. this new firm is looking at leverage of 200 times to one. it is one of those bets that will pay off handsomely if the collapses, bute it would not

beg the first time they would have been burned by the hong kong dollar. g has been in place since the 1980's and has withstood multiple crises globally. so the financial secretary has been vocal recently that the government stands ready to .efend the peg if we see we stations -- sanctions from the u.s., he expects the chinese government to step in and help support the peg as well. expensivepotentially -- still to come. u.k. looks to redefine his relationship with beijing, we hear from the head of the british chamber of commerce in china. this is bloomberg. ♪

rishaad: the united kingdom is looking to protect critical industries from foreign takeovers. prime minister boris johnson has urged -- to establish a cautious relationship with china. we caught up with the head of the british chamber of commerce in china and asked if relations are at a turning point. >> china is the uk's second-largest trading partner outside of the e.u. year grewtrade last 18% and topped 80 billion sterling last year. if you added hong kong on, it is 100 billion in trading. exports grew last year by 34%. i think it is difficult to say the golden era is over. the opportunity is how to continue to grow that. if you look at the growth curve, strong year on year growth. the question we ask within china is how do you accelerate that growth to the benefit of businesses? >> one of the key lines from

your position paper's request for the governments of the u.k. and china to work together on a free trade agreement. between the two countries paid given everything that is happening around huawei where it looks like the you came way put in place measures to ban the company and the sensitivities around hong kong and the u.k. position on the security law, how likely is it do you think we will get to the point where the two sides said down and start discussing an fya? >> we cannot comment on the governments themselves. but what we can call for is informed and instructive engagement that is absent from political pressure. that is vital. and we welcome an ongoing robust debate around china. it is critical we be informed and informed voices are heard equally and assessments will be rational. there are undoubtedly remain areas where we have mutual shared interest across the u.k.

and china. one area is combating climate change. it ranges through the global health. there will also be areas where we have different points of view. and these must be approached with informed interactive engagement. itself, as i fta mentioned there is clearly a strong trading relationship that continues to grow. we see in importance of continuing to grow that. the nations that have been prioritized by the u.k. for free trade agreement as we come out into this new brexit environment , the e.u., the u.s., which makes total sense. they are the largest trading partners the u.k. has. they followed with japan, australia and new zealand. last year the u.k. and japan trade relationship totaled 31 billion. australia 18 billion. new zealand 2.9 billion. china is within the mainland context of 80 billion including hong kong, more than 100 billion. we advocate for informed discussion between the nation,

and we should be robust and our positions but we should be balanced and look at the full picture right now on the economic and if it that comes to british businesses as we continue to engage with china. >> china has threatened countermeasures to the u.k. over some issues, some contentious issues. to what extent are your members having to think about those potential countermeasures, when we look at what beijing has done to australia, an independent investigation into the pandemic? is this something your members will have to take on board? are the things they need to protect themselves if countermeasures are applied by beijing? >> every is this is looking at all options on the table. what i can say sitting in beijing at this time, and having sat here through all of covid-19 and a lot longer before that, as we are not seeing that coming through to businesses on the ground here. you ask questions about hong kong and, of course, we look at

that as well, but the fact is that further clarity on the details of what is being proposed are critical. the commentary right now is an emotional response to the potential of that. we wait for the real detail. as i said before, we believe in informed and engaged dialogue between the u.k. and china is critical. we're business side, what are doing here is looking at how do we engage? we are doing our part to ensure there is a productive environment here. st. john moore, chairman of the british chamber of commerce in china. a check of the latest is this flash headlines. softbank is preparing to cut 15% of a vision fund following investment losses. the plan cuts have risen to 80 of 500. employees at the london-based operation have dropped from 10% over last month.

holdings ing down we work and uber. netease expects to raise $2.7 billion from its second listing in hong kong. and has raised the amount of shares it will make available. the chinese gamer set an original allocation of 5 million shares and was oversubscribed by 360 times. that is going up to 20 million shares. as a number of investors will be reduced to 150 million. trading begins tomorrow. the head of china's starbucks rival has quit. as chairman of the nation's biggest rental car fleet, amid the growing scandal of their accounting practices. he says he is leaving to concentrate on his other businesses. the move comes as they reported --ils show that he ordered

inflated by more than $300 million. rishaad: let's get to the market action. inwe head to the lunch break shanghai. a mixed bag. we are moving to the downside for the large caps. by shanghai composite down .5%. the rally questioning whether the data really supports what has been happening. over in china, inflation deepened in may. consumer price gains -- and slowed down. a recovery that is not yet strong enough to produce inflationary pressures. data.s in the probably also in the data, inferences, is it enough to create jobs as well? overall markets. market moves. this is a look at what is going on in asia. one of the biggest moves for wti crude, down 2%.

the poc off by 3%. this is bloomberg. ♪

>> it is almost 11:30 a.m. in singapore. we are in the middle of the trading day. ining for a seventh day eight. a survey saying that the economy will see a contraction of 5.6% in 2020, much deeper than what the government is forecasting, which is a contraction of 4%. a chance of a recession happening over the next 12 months is 100% according to those respondents for singapore. it is spending about 20% of its gdp on stimulus.

will be crucial in rebuilding those reserves. 0.2%.i up let's get the first word headlines from new york. >> thank you. coronavirus cases in south asia are increasing at the fastest rate in the world. in india, are up 17% 19% in bangladesh and up in pakistan. south asia and latin america are seeing the most infections with 136,000 cases reported on sunday, the most in a single day so far. nearly three quarters of them came from south asia and latin america. in other news, s&p global ratings have cut the sovereign outlook for japan from positive to stable on the record stimulus plan to tackle the fallout from the coronavirus. the agency says covid-19 has

setback fiscal stabilization. i don't expect them to get back on track in the neck -- get does expect them to get back on track in the next couple years. kuwait has become embroiled in the search for the man accused of being accused of malaysia's multibillion-dollar scandal. according to a report by the dow jones, he traveled to kuwait to escape an interpol red notice for his arrest. it reports the money trail through china to the golf and said he was known to have deep ties with the kuwaiti royal family and the son of the country's prime minister. the palestinian authority is threatening to declare an independent state if israel presses ahead with annexation plans for land in the west bank. israel plans to claim dozens of jewish settlements in the occupied territories. the prime minister said such a move would have serious consequences.

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. i'm karina mitchell. this is bloomberg. rish? rishaad: thanks. let's get you to the market actions. the nikkei just coming back into the frame. unchanged. up by 0.2%. this is the biggest drop we have stocks inhilippines two months according to my colleague, david ingles. kospi is pretty much flat. looking at the prospects for the indian session. for the prospects are

rupee which is slightly weaker. looking now at the story here in hong kong and turbulence to say the least. it is the latest global carrier to get a lifeline. u.s. to raise $5 billion dollars is necessary to avoid collapse. let's have a look at all this. i'm joined by our bloomberg intelligence analyst in singapore. does this ensure their survival is to mark how long do you think this will actually give them? in much time will this give them? this i think they are pretty safe for quite a while. for all the key shareholders including the hong kong government now, they are showing their commitment and throwing their weight behind the recapitalization plan. you can look at what cathay has

disclosed. about $2.5nd rate is billion hong kong dollars per month. this will last them at least a year, this $39 billion. ratenk the cash-bond should come down as we go along and revenue should be picking up a little bit as well as cathay increases flight slightly in the coming months. i think the key point with this recapitalization is also that tohay's net will come down 0.5 times, a lot more comfortable and i think it gives if theyot more headroom need in the coming period. but what about the extent of the dilution that will result from this recapitalization? dilution, wegs calculated to be 39% at least

based on the shares being issued. assume that the warrant is fully exercised by the hong kong government, then the eps dilution can go up to 43%. but if we look at the ownership stake, the dilution is actually not that much. hong kong government picking up 6%. air china just marginally from 30% to 28%. changed fromch has the ownership point of view. rishaad: now, the hong kong government would be pointing to observers to cathay's board. what do you make of that? with thethe concern government rescue packages is

that there would be a lot of government interference in the management of the company going over. i think it is a good thing that they have made it quite clear that they will be just observers. it is just to give them the ability to look at what is going on in the company and i think that is fair given the huge amount that the hong kong government is putting in. from the airline perspective, airlines are a very complicated business. that yout is great , veryxperienced airlines experienced in the airline industry and they are continuing to manage this company. will not be having intervention on a day-to-day basis and that is a good thing. china,a: speaking of air what are the implications of this recapitalization for it? has committedhina to subscribe to the right issue of cathay and that is going to

cost them about 3.1 billion yuan in cash. it only represents about 0.2% of air china's current debt. little change, as we mentioned earlier. one more concern is that it might receive a little less dividend from cathay in the future. the preference shares are being issued as part of this recapitalization through the hong kong government. is hong kong government looking at any distributable profits in the future. that is bloomberg intelligence's james teo. just giving a virus update coming out of islamabad, casesan, adding some 5385 in 24 hours. huge increases taking place there. the total for the country is 113,702.

this against the backdrop of a very mixed response to the coronavirus. of course, we have had the army take charge in some parts of the country of containment at least. the pakistani health ministry reporting 2255 deaths from covid-19. it is the third worst affected country in asia. now behind india and iran. coming up, backers including facebook, kk i, and silverlake are piling into technology industries. big bets taking place. in a moment, we look at the rise of india's digital economy and ?sk when the domestic giant you are with bloomberg. ♪

rishaad: covid-19 does not seem to have affected dealmaking at least in india's most reliable company which has secured investments of $13 billion for its telecom services geo platforms. a host of others are piling money into the company as they look for a slice of the world second-biggest internet market. has been ag -- guest

big part of it. good of you to join us. give us your basic take on this flood of cash going into geo platforms. think you very much and good morning. in has transformed india terms of the conduction of internet and mobility. in the span of less than maybe 40 years, we have seen the average consumption of data per capita increase to now potentially in the region of 30 g-v user -- gb per user per month, which places india among the highest in the world. what that does is it creates an and norma's appetite for the consumption of a variety of digital services.

market.tal payments clearly, jio has changed the way tele-communications companies operate and they have set the benchmark for the way global telecom companies transform businesses. has first of its kind, it invited partnerships and investments from the likes of facebook. to truly leverage on the tech giants' expertise to help ,urther grow into adjacencies adjacencies like commerce and payments, etc. and that is what is capturing the imagination and attention of global investors. yet? what are they actually buying here? is it also potentially a bet of trying to get there early and hope that they can replicate tencent or alibaba or an indian version therein?

>> that is precisely. toh jio, they have access about 400 million customers. reliance is a well diversified conglomerate. they have aspirations to get started playing in the retail space and they want to build a rival to amazon. creates investment is to an alibaba of india or a tencent of india. and you can see the company has the potential to make that possible. manoj, there are likely to be other companies ,hat will be likely to follow but tell me, what are the biggest dangers of the regulation looking ahead? we found that in the tele-communication sector with

taxes. is that one of the biggest roadblocks do you think for people to invest in india? because we just don't know what happens down the line as the country has in the past shop itself in the foot? >> correct, correct. investment is less about the telecommunications infrastructure, but more into the digital services and the future digital economy. the telecommunications is the foundation on which they are building the next generation of services. yes, you are right. telecoms was responsible for this huge pricing pressure that resulted in so much pressure on the operators and their ability to pay taxes. i believe we are at the tail end of being able to resolve this and move ahead. ahead, vodafone

still has some challenges in paying the past dues, but what the tech companies who are looking at potential investments in india, we see the ability in betterr base to sell digital services and connectivity services. haslinda: whether it is telecom or digital or retail for that matter, india's regulator has been a huge headache for businesses, especially foreign companies. i mean, what is the risk there? >> yeah, that is true. in recent times, particularly actors like retail, there is nationalism, protectionism being given to certain local companies. so, that is the risk that some of these investments carry, but nevertheless, you see from the perspective of global companies, for them in many ways investments in china were not

possible, but within to get is far more open. so they do not want to miss out on that opportunity and that is one of the reasons. partners witheing a big, established conglomerate it gives them a chance to play in that market. so, it is more a partnership rather than trying to do it alone, which may be far more difficult. and that is why companies like facebook are investing in reliance and we may have somebody else with vodafone. haslinda: but what needs to win-winor it to be a situation. we have seen a rush into telecom , we saw the likes of british telecom coming in, but they got banned. what needs to happen for it to be win-win? >> yeah. you know, from a telecommunications standpoint,

there was a perceived gold rush between the late 1990's to maybe 2010. operators too many competing for a very small piece of the pie. but i think as we look at yes, therevices, will be a lot of casualties. as is the case we have seen with global digital businesses. there are a few companies that will end up being successful, who will have a majority of the shares. that inherent risk is not going to go away. i think the opportunity though is that the market is that a less than 5% for any of the digital services when you compare it with markets like china. so, when they view the opportunity vis-à-vis that, it becomes a lot more easier decision. hardre right, it is very to pivot in today's global world

order, where governments and countries are looking inwards more than outwards. so, that risk will continue to be there, i'm afraid. yeah. rishaad: we talked today a lot about jio and these other companies which are investing in that company. but what other companies or internet space are you finding very exciting in india? ofyou know, the last couple areas. one, digital education. companies like baidu. what we have seen happening in the last 15 weeks or so is that the consumption of internet has moved from just the big metros to now across the length and breath of the nation. things like digital education, online learning, e-learning are now growing rapidly to tier

three cities. streaming platforms. when we think of streaming platforms globally, we think of disney, disney plus and netflix. what we have seen in the last maybe 15 weeks or so is the growth and accelerated growth of many localized streaming platforms in different provinces of india. you have a streaming platform just in a small province which has 30-40,000,000 people catering effectively to the needs of that province. we have seen a spurt of these companies come along. digital payments have received a tremendous boost in the same time, as well. online gaming and entertainment. online gaming in particular has also seen a lot of uptick with people spending time indoors. covid-19at sense, this has been a real accelerator for all of the digital businesses from education to health care.

to join us.d of you thank you so much. manoj menon there. coming up, more on the coronavirus. offering more natural protection. we will hear from a chinese genetic testing firm, 23 and me. this is bloomberg. ♪

genetic testing firm 23 and me has found that certain blood types are less affected -- susceptible to contracting the coronavirus. a survey of hundreds of thousands suggests the o type is especially resilient. the ceo tells us what this may bring about. >> our customers rose to the challenge and contributed to the research. 750,000 customers took the survey. 2000 who had covid-19 said they were hospitalized. we were able to analyze the data. we found that the o blood type looks like it is protective. it is not a huge increase in productivity, but it is -- , but it is less likely to be severe. i want to emphasize, there is more research to be found here, which is part of the reason why

we are still enrolling people in the study. we are giving away 10,000 kits for anybody who has been hospitalized who had covid-19. in part because i really believe we have the potential to find genetic associations that will help us know who is the most vulnerable and then can we do more to potentially protect those people? >> it is obviously good news if you are type o. i know it is very early. have you found any clues showcasing any trends for other blood types? anything for lemon eric? >> it looks like the other blood have ao looks like you decreased risk and the others all look relatively similar. the important thing with biology and science is first trying to understand why is it that o looks like it is potentially protective in some ways? biologyrstanding that and then will that help translate into a genetic test that would help the able to

identify people with saying hey, you should be more protective or helping in vaccine discovery or in drug discovery in any way? > what is so interesting about covid is that it can spread so fast undetected, which means some people get very sick and many people don't get sick at all. the question of the hour is why? genes and your research indicates that genes can very much play a role here. are there any other clues about the role that your own genetics can play? >> that is exactly what we are looking for and looking to see the asymptomatics will be really interesting. that is why we are giving away kits because those people are so hard to find. anyone whether they are a customer or not can participate in this kind of research. i just want to add, a lot of infectious diseases, so things like norovirus, which is known as the cruise ship virus, there are genetic mutations that say these individuals are

significantly less likely to get the disease. are things like hiv, there mutations that say people are significantly less likely to be infected with hiv who have this mutation. so, we are looking for that kind of mutation that would help people understand whether or not they are potentially, significantly less at risk for getting infected. >> most of the study so far have had a few thousand participants. your study involve hundreds of thousands of participants and still there was more work to do. how do you go from a hunch to actionable information? said, i'm like i really proud, my customers really stepped up and rallied. hundreds of thousands, 750,000 people took the survey and it shows the power of having a community like 23andme. at the same time, one thing i do need is more customers who have been hospitalized. so, there is a period of time. we need to make more discoveries.

the scientific community needs to vet it, they need to understand the biology around it and i think this will start to get integrated into how we are managing covid-19. rishaad: that was the 23andme ceo. let's have a look at indian markets. this is where we find ourselves. loosely to the upside, as had been expected here. broad-based as we look across em's of late, we are seeing emerging markets just to the upside. apart from those in the philippines, where we are seeing the biggest fall into months taking place. broadly speaking, it is a mixed back out there. people are turning to what jay powell has to say in the latest federal reserve meeting taking place. definitely that rally consolidating here in asia. manila, down by a whopping 3%.

that is that is it for "bloomberg markets: asia." "bloomberg daybreak: europe middle east" is next. this is bloomberg. ♪

>> the following is a paid presentation brought to you by rare collectibles tv. >> john kennedy served as the 35th president of the u.s. from january 1961 until 1963. jfk brought america hope, strength, and a vision for a brighter future. >> and so my fellow americans, ask not what your country can do for you, ask