tv Bloomberg Markets Asia Bloomberg June 15, 2020 10:00pm-12:00am EDT
rising in china and america. beijing locks down parts of the city and bans potential carriers from leaving. sees saleser says it picking up in china. we will have the latest in mumbai. we really see a turnaround in the mood music in the last 24 hours with the fed committing to its plan to buy up corporate bonds directly. sessionee a risk on united right here. look at markets, stocks are flying, you do have the dollar broadly down. let's look at the risk assets here in asia, the asian-pacific benchmark is up 2.5%. jakarta is coming online. highertures are pointing close to 1%. india could be having another
session here. we are seeing korean stocks up, some 4%. this has certainly been a shift in the risk on sentiment we are seeing. the concerns over the waves are being brushed aside. across assetsg here. when it comes to your bond, we are seeing yield ticking higher. 73 basis points for your u.s. ten-year. we saw a rise but it is petering off. did selloff overnight. take a look at currencies, the dollar dropped will be the key story here. that is living these markets here today. as aen has been steady rock here. despite the volatility we have
seen. that should give some breathing room for the boj. perhaps they are likely to sit tight when it comes to policy levers but look for hints on what they do with the corporate funding program. you're seeing that dollar is really trickling through here. the taiwanese dollar is blaring green here today. we are up a third of 1%. the korean won strengthening .7%. mmb is unchanged. there has been a sense that the feds have the markets back. letting the companies borrow admits to the virus pandemic. where's -- we are expecting the boj as well. the fed announced of program weeks ago. what is different now?
it is a big step for the fed if you look at history. the fed never did this before. this is too much like the fed playing favorites, deciding who wins and who loses. pandemic times need unprecedented staff. -- steps. they will buy individual corporate bonds tomorrow through the secondary markets. of course, they are buying individual corporate bonds after they bought $5.5 billion of etf's. this is why it is a step forward. if you want to see what the fed is up to, we can get a little more detail. this fed is made up of all the bonds that make up the market. approach will come at the current purchases of
exchanged rate of funds. there is an index of u.s. corporate bonds created especially for this facility. white is so important is because investors and probably some cup selling corporate bonds are wondering if they might meet the criteria for the bonds that the fed would buy but now they don't have to worry about that using the fed index. it is another step forward in that regard. this is one of nine emergency lending program set up in march. they have taken their time to roll some of them out. the mere announcement of this plan helped bowing out. -- boeing out. they were looking at the corporate bond market. they figured they would not have to pay the issue yet. as soon as this is announced, corporate bond yields fell. financing costs looked better. listening to his closest advisors -- it's closest
advisors. fed isoteworthy that the opening up the mainstream lending program as well. that will help small businesses. they are still moving ahead. they may not raise rates but they're not holding back when it comes to this kind of facility. shotough of an adrenaline for market. perhaps not as much excitement when it comes to the boj. they may also step up support for small and medium-sized businesses at today's meeting as well. what is expected? are in thehey pandemic fight for their life. they have to get jobs going again. they have to maintain financial stability. a shopping mall in tokyo shut down because of the virus. they definitely helped exacerbate a bad economic situation. at the sense of what
they are doing. they are not going to change any of the key rates. any certainly do have economy, we are waiting to see. it does not do better kluth -- with what they have so far. the second quarter of negative growth is expected. that is why people are wondering if they will take emergency lending facility. to ¥60 trillion trillion. they could triple it to ¥100 trillion. other things people are waiting to see, what the governor said about the recent rise. they will that the yield curve steepen a little bit or not, that is something that people are went to see. after jay powell said that he is not even thinking about raising rates, i wonder if governor kuroda will find some equally
pithy guidance comment. if anything, they're waiting to see what happens with the special programs and waiting to see if they have to do more. >> that was kathleen hays. ellis get the first word headlines. -- now let's get the first word headlines. quick chinese authorities have locked down the beijing central district after a spike in the coronavirus. a second wave of infection. people with high risk of contracting covid-19 are being banned from leaving beijing. the world health organization says the new cluster is coming. some states are considering pausing plans to reopen post lockdown. seen 100,000 new
infections each day. day, there are more new cases in the first part of the pandemic. level infections have passed 8 million. >> it took more than two months cases toirst 100,000 be reported. for the past two weeks, more than 100,000 new cases have been reported almost every single day. >> the seventh richest person in china has been involved in a kidnapping plot after an abduction attempt in his home over the weekend. he founded the home appliance hent and was rescued after escaped and swim across the lake to raise the alarm. he's worth around $24 billion. five people have been arrested and people are continue to discontinue into investigate.
yvonne: asian equities are rising after the fed said it would begin buying individual corporate bonds, expanding an emergency lending program that has purchased only etf's. this comes after the specific index fell for three straight days after a concern of a second wave of the coronavirus. joining us now is the investment director, catherine young -- yeung.
just when investors were beginning to question the durability of this rally, you see this once again. does this actually put enough of a backstop for risk assets to go further? catherine: i think investors need to be cognizant of further volatility. there is distance between what we are seeing in wall street versus main street. i think the key drivers over the next six months are the question of the covid curve, the economic recovery, this is all global. of course, policy response. at a think we are out of the woods even in the post covid-19 world that we live in. yvonne: does the central bank liquidity given the amount that we have seen -- is that enough to keep the momentum going? catherine: back before the actual virus outbreak, the economy was pretty fragile to begin with. real growth drivers remained quite scarce.
the economy relied on liquidity for a long time frame. thatcovid-19 situation, shook the economy, shook the market. tooink we are a little optimistic in terms of market performance on the pace of recovery. investors should anticipate further downgrades. we could have interesting opportunities in the asian region and in particular in china. credit markets are the best indication of where risk is being priced right now. if you have the fed intervening in these credit markets, that could perhaps distort the price of risk. what are the parts of the market that you think are looking a little too stretched? where is a place that looks to be an opportunity? if we go back to that
policy response driver, we see moving central bankers on the economy. we see the pickup of economic activity because of the lockdown. just looking at china in particular, you see those e-commerce health care names really outperform and even during the march time when we were in lockdown, it was almost like china was still gravitating toward those names. it is quite contrarian and quite unpopular but there are some interesting opportunities, especially from the fundamental perspective when we look at the value side of the market. --linda: outside of china evaluations look pretty high, even though they have even somewhat. catherine: it is on a case-by-case basis. in this kind of market, what is key for us is ensuring that the companies we speak to, given
that we are on the significant decline in revenue, how are they positioned? how they -- how are they going to weather the storms? if they had this balance sheet quality, but say they are giving strong management, good execution from the management if they are in an unloved sector, that provides buying opportunity for us. china has talked about this big infrastructure spending plan. how do you play that? catherine: there are certain companies in the unpopular sectors. materials, some of the industrial companies, this is not just related to policy response but some of these companies are providing really attractive evident policies. in the world that we live in today were 70 companies are reducing or/and their dividends
and spending them, some of these companies are backing the trend and going the -- bucking the otherand going in the way. you mentioned that contrarian call about the value stocks in china. look aid that they may little stretched now and now you have fears of a second wave. why are you still looking into the china space? there are argument about first-in and first-out. because the virus is a bit more understood, there is still a long way to go in terms of our understanding. the containment efforts, the monitoring, the tracking of the people who have it is all a lot more stringent now versus where we were at the start of the year. biguse we have seen this
flurry, the e-commerce health care names, other parts of the market, there is distortion there. people are not even looking at them. still down days, you can add to those names. yvonne: it seems like you're still adding names in china but what about india? fidelity has cut their position in that market. what do you see there? catherine: when we look at india versus china and those three drivers, there are still a lot of cases coming in through india. the indian regulators don't have that same kind of talk that the policy makers have. you know how china is back in the trend. seen different types of
support but we haven't seen as aggressive policies for other central banks around the world. has is why china still tourism that india might not have. we will be taking some money off the table. those three drivers, they don't look attractive in india at this point in time. cheap: china is looking in relative terms. he for your insights today. still to come, beijing races to control the new covid-19 outbreak as cases linked to leading markets. we will have the latest, this is bloomberg. ♪
of the extreme measures that help fight the first wave of covid-19. beijing is said to be banning residents with high virus risks from leaving the city and it is compounds indown the district. john.bring in one of the latest containment measures? -- what of the latest containment measures? with thisdifference third market that has been closed is that it was in central beijing. the others were on the outskirts of the city. it highlights the risk of how quickly the virus is able to spread throughout the city. markets were wholesale markets. there is this natural .istribution
yvonne: i'm sure it will be hard to find sam anywhere in beijing after the link to one of those markets. do we have any indications of whether this virus can be transmitted through frozen food now? john: that is the worry. we have not seen any conclusive evidence to say that is where the virus came from but they virus on as of the forping block that was used imported salmon. as of right now, it is causing this concern. there is a little bit of worry there. haslinda: has there been any reaction about the who? is there concern about this
possible second wave in china? >> the who has expressed concern. many ways, the cost of shutting down will be tremendous, the impacts, there are people that come in and out of beijing. people whot allowing are high risk to leave beijing at the moment. is a real risk that it could spread to the quickly across the country. yvonne: that was done with the update on what has been going on in beijing. j.p. morgan will return more stepped with manhattan trading floors. will begin formally reopening offices post lockdown. the company will start bringing workers back in waves to the
madison avenue tower. j.p. morgan will start with 20% of staff and build to 50% in the middle of next month. other parts of the business will follow later. boredom has been great for game makers. of thepany that owns two biggest hit has fortnite and the networking app house party. they are close to raising $750 million and giving it a value of about 17 billion. new investors come in while existing partners will also participate. china's largest online classified business has agreed to be taken private with evaluation of around $8.7 billion. it is listed in the u.s. and being bought by investor groups. is offer of $56 a share slightly above monday's close. the founder and general atlantic will hold majority voting at 44%.
more potential investors for hertz. they would need a miracle to avoid a bailout. they sold half $1 billion in, stocks to raise funds. shares fell as much as 38% but that is still better than when the company filed for chapter 11 bankruptcy. rapidlyys it will need improving conditions if it is to survive. there are risks back on in asia after a week of negative sentiment. we have a corporate pond that shows that the fed has the markets back and will put a floor on the global equities. the index is up by a whopping 2.6% after losing about 2% yesterday. there were stay since mid-march. we have futures pointing up by 1%. afterd is boosting that
worries of a possible second wave of the virus. yields at 0.7% it was flatlining here. 10-year yields are looking like that. the nikkei 225 is higher by about 3%. we are awaiting the boj decision , expected to stand pat on rates. this gives the boj room to do that. it has been steady. the boj will reassess measures put in place to prop up the economy. we have samsung electronics otherbuting to loss with electronics. hang seng is up by 2.33% after falling yesterday.
a.m. in: it is 10:29 shanghai and hong kong. i am serena mitchell. the european union is taking on china's global -- with an unprecedented tariff decision. for the first time ever, the eu -- distorting eight in a third state. ultimately based in china. meanwhile, the eu and the u.k. are one step closer to a deal with russell's more confident boris johnson will compromise
and the prime minister saying chances of an agreement are very good. johnson held a virtual summit with the eu commissioner with officials on both sides saying there is new momentum to the deadlock in negotiations. reiteratingump is his threat to pull out u.s. forces from germany against berlin raises spending in its own defense calling germany delinquent. natoys germany owes billions and will have to pay. he is now threatening to slash u.s. numbers there by half. a unilateral annexation of occupied land in the west bank will lose research grants and other funding. israel has received more than a billion dollars from the eu since 2014 what is being warned that future payments may be withheld.
powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. yvonne? coming breaking news through here. according to our sources, president trump is weighing a $1 trillion spending package for infrastructure to try to boost the economy according to people familiar with the situation. this comes as the current funding law is scheduled to expire on september 30. the plan is to set aside funds for 5g and rural broadband. there are still a lot of questions about how much of the $1 trillion will be new spending and how they well fund it. does it necessitate a bond issuance. that will be a key focus for
many as they look at this administrative draft plan. that remains under discussion. congress will need to turn that plan into legislation. haslinda: the u.s. possibly going the china way. as was mentioned, the bank of japan is expected to leave policy unchanged while reviewing measures are ready taken. joining us now from sydney is moody's economist, shahana mukherjee. good to have you with us. the boj can afford to sit tight. the worst of the economic downturn is possibly over and the yen is stable. ,hahana: yes, as you mentioned the analytics are expecting the bank of japan to keep its monetary settings unchanged and o -- is primarily because tw have been already delivered. we do expect the bank of japan to hold steady. we heard corrode a say
say the bankuroda of japan will do whatever it takes. say -- how heard abe do you expect japan to manage those two? shahana: currently, japan is of domesticg forces demand as well as weak external demand. this is not just the case for japan. otheran issue in countries of the asia-pacific and other parts of the world as well. the bank of japan and the shinzo abe government have already mobilized significant resources. 40% of gdp. one of the highest among industrial nations. shahana, let me jump
in here because we have the boj's decision already. as expected it is maintaining its policy balance rate at 0.1%. it is also maintaining its target at 0%. the news pretty much expected. the sense is that there is no need to boost the economy. -- this is probably the most significant point here, right? shahana: absolutely. and if you also take a look or if you were to assess the effectiveness of the measures -- if youd so far, take a look at the bank lending. the bank lending has grown at a record pace of 4.8%. companies have really been
tapping into that to keep liquidity levels high at a time had short-term cash flows been fundamentally disrupted. the provisions made have been used by companies and continue to be used so it is no surprise that the central bank is holding its policy for now. yvonne: that special lending program boosted from ¥30 trillion up to ¥110 trillion. we were expecting more than a doubling of that. also coming through is they are talking about the short-term and long-term rates expected to remain at current levels or lower. and talking about the special virus program which is also toing from ¥75 trillion up ¥110 trillion. what we have been seeing when it comes to the superlong bond, touching the highest in more
than a year. is it the stability of the yield curve or is it to avoid an excessive drop in those yield? -- in those yields? shahana: i would say that the focus of the current point will be to maintain and this is because the bank of japan is faced with multiple challenges at the moment. low but to keep costs it also has to make sure that bankers and lending institutions are not differently incentivized to lend. they have to make sure that they yields, the longer-term yields are managed and kept stable for the foreseeable future. yvonne: how important is that yield? is it to coordinate on the fiscal side as we see the debt supply increases starting next month? shahana: absolutely.
as you know, the government had -- andsively mobilized it was supported by government provisions. ensuring that stability is maintained is critical to making sure that this extra spending is managed effectively. the focus on this will be critical. yvonne: more lines crossing from the boj. the economy is in a severe situation right now. there will be ample provisions of yen with out the upper limit but they are carefully watching the impact from the coronavirus. anically saying it is extremely severe situation for the economy right now. current measures whether from the government side or the bank of japan, do you think essentially these are a enough to avoid or at least get japan
out of a recession? or could we be in a deep recession for the rest of the year? shahana: at this stage, we are a quick recovery but a more prolonged one. we expect the economy to contract by more than 3.1% over this period. -- reason we say this is one, the economy stepped into ote. on a weeeak n the after affects of the u.s.-china trade war. the covid-19 pandemic itself and the containment measures have severely undermined domestic spending. that has weighed heavily on domestic spending. loudusinesses have been a
to reopen but our expectation is that households will remain cautious in the near term. the risk from a potential second wave of infections has not entirely mitigated for japan. this combined with the uncertainty over the overseas demand will maintain downward pressure for the rest of 2020. that is what we expect. , the boj saysana it will keep financing and ensuring stability for the market. when it comes to solvency issues in japan, how much is that being addressed? shahana: i believe this is a bit early to comment on this now. one way of looking at this is that businesses, like i said, had been drawing up on these funds. at the same time come if you
look at the labor markets, unemployment moved up marginally from 2.4% up to 2.6%. at a first wrote it looks like compared to changed the impact in the u.s. and other parts of the world. however, we do not believe the strain on the labor market will weaken operating conditions. it is building up to a big spike. furloughed workers or those put on unpaid leave has shot up to a monthly high. as it expect this to rise sees the effects of the emergence of the national lockdown which was in place for much of april. we do expect solvency issues are likely to remain soft or weak
through the june quarter. yvonne: shahana, we are going to leave it there but thank you for joining us. shahana mukherjee from moody's. a recap -- no change in the boj when it came to the policy levers or rates. rates unchanged. also unchanged when it comes to asset purchases. but the special virus program will run to 110 trillion yen, bigger than expected. and helping out some of the corporate funding pressures we are seeing with some of the smaller and medium businesses. they also mentioned about inflation -- downgrading the inflation outlook. likely negative for the time being. and private consumption has decreased significantly. we will see how markets react
fundinglines has raised by borrowing against its frequent flyer program. it says goldman sachs and morgan stanley participated in the financing. united plans that was planning to sell junk bonds last month. the arrangements will be secured by the mileage plus loyal program. citigroup.ng with u.s. carriers including delta, southwest, and jetblue also have investors --. american [indiscernible] airways is rejecting -- it's parent group
says it does not accept the reports finding and its approach to job cuts is perfectly acceptable. lufthansa is the major airline to warn of job losses. and 250000 pilots flight attendants could be eliminated. half of the staff is raised in germany but some jobs will be cut at its austrian subsidiary. it's as it would have gone bust without state help. the supreme court ruling has established it is illegal to fire someone because they are gay or enter. let us go to su keenan with the latest. this was a split decision but now millions of lgbt workers will have protections.
>> this is pretty groundbreaking. it is signed into federal law. civil rights protect gay and transgender workers. it was 6-3. in the decision, the supreme thet tackled the irony in issue. it made gay marriage legal across the country in 2015 but in many states gay and transgender workers could still be fired. president trump had little reaction but let us listen -- >> it ruled. i read the decision and some people were surprised but they have ruled and we live with the decision. that is what it is all about. we live with the decision of the supreme court. it very powerful decision, actually. but they have so ruled. su: it is important to point out that trump's controversial
appointee to the court, neil gorsuch, joined the liberals in this 6-3 majority vote which was a surprise. he was widely expected to guilt the court into a more conservative stance. it is a defeat for the trump administration which has been trying to roll back rights for gay and transgender individuals. more than half the u.s. states do not cover identity in their own antidiscrimination law so it is viewed as a significant victory for the gay rights and help -- and lgbt movement. leaders: jp morgan's were quick to praise the supreme court decision and condemn the trump administration's attempt to roll back transgender protections. what is the latest on that?
su: both the those issues were addressed by jamie dimon. lgbtnt out a memo of support to the entire staff. it read in part -- our commitment to support lgbt plus isues is in during week supporting our colleagues, suppliers, and clients in the u.s. and around the world is most importantly the right thing to do and it also makes good business sense. it is a powerful statement when you consider jamie dimon in recent years has been seen as a spokesperson for wall street. he has been very outspoken on social and public policy issues in addition to his testimony before congress. he has also challenged fellow see it -- fellow ceos on wall street to do more of the same. back to you. haslinda: su keenan in new york. still to come, a silver lining for china as sales have a
-- wecould hold for some could hope for some positive news. we need to understand that strengthened sentiment will stay now. real.oblem in india is the recent estimate of cases to rise 800,000 in about a month. we are opening up gradually. the question in front of the government is to support both lives and livelihoods. haslinda: india's largest automaker came out with its earnings. how did tata motors do? >> the silver lining in
otherwise bleak results for jaguar land rover is it is seeing some pickup in sales in china as retailers reopened. but we should watch for a few months before we call this a recovery as we have seen a new spate of cases and in china as well. there are a lot of good points. there is improvement in china and the u.s. though the u.k. is still struggling. the company is trying to find another partner for the car business. our equities reporter with the latest on what to expect from the session in mumbai. let us take a look at markets before we go. japan is the key focus. we are seeing the futures on the back of this boj an announcement
on a policy decision. they did not do anything about the policy rate that the headline is a special lending program has been raised to ¥110 trillion from ¥75 trillion. there will be ample yen fx funds available. committing more liquidity into the market. we will see how things go when the markets reopen in about a half-hour. a report fromg the beijing daily. they will be suspending these three highway terminuses as they halt buses to the capital. the suspension is going to be starting on june 16. shake off to really the euphoria and the markets
following the fed announcement to buy corporate bonds. we continue to see risk assets. gains, extending the higher than more than 2.5%. and the dollar weakness continues to be the key story. news witharing on the the likes of the korean wan really gaining from this news. the japanese yen is seeing a little bit of weakness though it has not budged much since the be ok announced -- since the boj announcement. has? haslinda: plenty more to come, yvonne. feds risk on helped by the and the boj is helping to boost that sentiment as well. continued economic stories as we discussed the outlook for japan. keep it here with us. this is bloomberg. ♪
haslinda: it is almost 11:00 a.m. in singapore and hong kong. welcome to bloomberg markets: asia. salaam.rishaad the federal reserve lifting mark ritz with the corporate bond service while the bank of japan commits to unlimited liquidity in what it calls the severe economic situation. haslinda: global coronavirus cases past 8 million with
sections arriving in america and beijing. news -- jaguar land rover sees sales picking up in china. it is broad-based rally here in asia. all of the benchmarks are ups digesting there is more upside from here. getting a lift from the fed. and we have the bank of japan also boosting sentiment. the msci asia-pacific index going up i almost 2.9%. 300 up by 1% as well. beijing announcing more areas for a lock down. the hang seng up 3%. adding to those gains as well, the kospi rising almost 5%.
rising from the get-go. after four point -- after 4.8% yesterday. the economy was set to shrink the most since independence back in 1965. 0.7%.r index up the government says it will keep its capital under loose restrictions allowing businesses to continue to operate even as the virus cases continue to rise. gains for jakarta and thailand as well. >> a quick look at the bank of japan and the reaction. marketkei futures -- the comes back in about a half hour. futurese nikkei replicating that come about 5%.
japan 10 year yield weaker by about zero point -- .01%. it was the overall lifting of its special lending facility here as well, it was raised to ¥110 trillion. it was ¥75 trillion. the protection was increased --n the prime minister this is the current state of play in japan. geting for the market to underway properly in just under a half-hour. haslinda? haslinda: let us get some insights and bring in jessie lu. good to have you with us. the latest move by the bank of japan shows it is on an unlimited qe path.
jessie: good morning. the meetings by the bank of there were no major policy changes except the bank has increased and support for corporate financing. i think the central bank has already taken steps to increase liquidity lending support. reflecting the severity of the crisis. we think the central bank is likely to adopt a wait and see approach. japanese economy hit a bottom in april and may and we see a gradual recovery. coming to a country -- coming to a comfortable position for the boj. we believe that has supported the boj's decision at this meeting. haslinda: how much clarity to we
have as to how much the boj has shifted its focus? seen -- i think part of this is a combination of sectors. there was a concern over the supply-side given the japanese government is planning to issue government bonds. there are also expectations of economic recovery and that is helping the yields. we think that the central bank is likely to allow a moderate steepening of the curve in line with improving fundamentals. however, should the longer data believe they we will adjust appropriately to
prevent excessive moves. have the boj saying the economy has been in an extremely severe situation. how concerned are you about the second wave of cases we are seeing especially in china? on recoveryigh going forward? some signshave seen of second waves in countries like china and recently in japan where there was a pickup of cases in tokyo. overall, looking at japan's experience with covid-19, even without the highly strict closures, they have dealt with the virus pretty well. we continue to watch several key indicators including the number cases as well as cases
with an unknown infection route. we see future waves of covid-19 sections to be localized and japan. with the virus situation being stabilized in japan, we think recovery will be gradually returning. it is a pretty bleak statement, wasn't it? it was not exactly an economy that was going great guns before we entered into this terrible pandemic. jessie: yes, indeed. japan's economy was hit by the consumption tax hike even before the pandemic hit the economy. i think the economy does look quite bad in the second quarter. but recently, the mobility data shows that the economic
activities are gradually picking up in japan. we do expect a decent recovery starting in q3 if japan of lloyds a major second wave of covid-19 infections but that being said, we have still greatly revised down our forecast partly due to the sharp decline in output in the first half of the year. gdp growth is seen to contract i about 4.5 -- 4.3% this year with a strong rebound of 5.2% is expected for next year. what are you expecting out of kuroda's news conference coming up? there has been a lot of speculation about what he will say regarding the steepening of curve. will try toink he
avoid being too optimistic. he has said the central bank is ready to use all necessary tools to cope with the economy. likely tos he is allow a moderate steepening of the yield curve with the improving fundamentals in japan. >> i suppose if we have a look at those fundamentals, we will be looking at the data coming out this week. we have trade numbers and inflation numbers which is expected to be about 0.2%. fortrade numbers could make particularly interesting reading, one would of thought. the trades, i think numbers look good. we expect exports to drop about and imports are
expected to drop 18% year on year. extra no conditions look quite challenging. relaxation of the lockdowns in several major countries does help to ease some of the disruptions in the global supply chains. however, the global economic downturn is likely to continue to weigh on global trade. and japan's key trading partners -- the u.s. and europe, will still be grappling with the recession outlook. tradeill weigh on japan's going forward. inflation remains quite soft and that is partly reflected by the weak demand and the low oil prices. , thank youessie lu so much for staying with us. you can also turn to your bloomberg for more on this. fromommentary and analysis
bloomberg experts. now, here is the first word news. chinese authorities have locked down several -- seven compounds as a spike in coronavirus cases strikes. there are fears of the second wave of infection. people with a high risk of has beenng covid-19 banned from leaving beijing and the world health organization --. rising coronavirus cases across to u.s. causing some states halt their plans to reopen. the vast majority of new cases are in the americas and south asia. newy day there are more cases than in the first two months of the global pandemic. global infections have now passed 8 million. >> it took more than two months for the first 100,000 cases to
be reported. for the past two weeks, more new cases have been reported almost every single day. haslinda: a divided u.s. supreme court has ruled that federal law protects gay and transgender workers from job discrimination. it gives millions of lgbt people civil rights they have been seeking for decades. rolling meansty gender identity will be covered by a long-standing federal law that bans sexual discrimination in the workplace. the south korean military is on high alert after his a media and the north says kim jong-un is weighing plans to send parts of the army into the demilitarized zone. .his escalates tensions
presidents. global economics and policy editor is here. than subtlee differences. >> this is an important development. let me preface this by saying that we just heard from the bank of japan and the only change made is to boost the size of the emergency lending program. your monetary, conventional monetary policy tools in place and you can also bring in more spending and support for market for the banks that lend to them. the fed is actually following through on what it said it would do in mid-march when it a new facility. as of june 16, they will buy
individual corporate bonds. billion worth.5 of corporate bond etf's already. another interesting thing is they have a new diversified index of corporate bonds. this is what they said about it. ofs index is made up of all the bonds and the secondary market set of an issue by u.s. companies that satisfy the facility's minimum rating. this indexing approach will come from the current purchases of exchange traded funds. the other thing it will do is people were wondering if they would meet the criteria and the program to qualify as a corporate bond that could get sold. there is an index and no one has to worry about that. a non-emergency lending program that was announced. and if you recall when boeing and other big companies in march
after the bond market went crazy and the lockdowns were getting ready to start -- how would they finance themselves? as soon as the fed announced this program, just saying they were going to do it, corporate ,ond yields fell, boeing said we don't need any grants or loans. we will be fine. it has already had a powerful impact. the fed is also opening the main street lending program this week for small and medium-sized businesses to be run by the boston fed. this also is where the federal reserve is concentrating its policy and its hope for moving the economy forward past the bottom of the covid valley towards growth. and the boj is on the same track. banknda: three fed to presidents spoke ahead of howls testimony tomorrow -- ho jay
powell's testimony tomorrow. fed sees about 10% unemployment rate by the end of the year. needs to meetd its dual mandate. said targeting black unemployment is an interesting idea. it is nearly 17% right now compared to nearly 13% for the broader population. mary daly from san francisco said there are plenty of tools to use before tapping the yield curve. sheet quantitye targets are more powerful. she also defended the asset purchase programs. there has been so much criticism about the fed doing this. you are helping the wealthy, what about the unemployed workers? mainly aidey do not
the market. this is what it is all about. from the dallas fed, he sees a 30%-40% drop of annualized. he wants to get through the summer before the fed decides the next step. he worries about distorted financial markets. we will hear from him tomorrow. we will see if we can get more in depth from rob kaplan. whatever jay powell says to congress tomorrow will be closely watched. we will see if he makes some news tomorrow. hays -- weathleen will have that exclusive interview with robert kaplan wednesday at 6:30 a.m. hong kong time. don't miss that. still to come on the show, the u.s. ambassador to the u.n. says china's moves to a certain
haslinda: headlines from china. the government says it is closing 11 food markets and will .ubsidize 276 this has to do with a concern that the second wave is coming from the markets. beijing announced more areas on lockdown. seven compounds in several districts. it is also banning residents with a high risk for the virus from leaving the city. worldwide cities -- worldwide cases surpassing 8 million cases.
rishaad: the united states is saying that china's move to a certain more control over hong kong is a human rights issue. they will continue to push at the united nations. the u.s. ambassador to the u.n., kelly craft, says she expects swift sanctions on china. amb. craft: this belongs in the u.n. space. the recent actions of the chinese communist party and the general secretary have given us absolutely no other choice. the fact that they have broken their treaty obligations and this is an issue that i am going to continue to shine a light on, to continue to force into the yuan space because -- into the belongsce because this in the security council. we will be placing sanctions
only on china and the people responsible for the actions against the citizens of hong kong. wouldt sort of actions you expect? our craft: i think it is responsibility as the president puts forth the actions. it will increase the dialogue within the security council. and it is an-- issue that i am trying to incorporate into different dialogs i am happy with -- i am having with ambassadors. any area i can bring this up within the security council to continue to raise the importance and the relevance of the fact that we care about the people of hong kong, we care about their plight. the fact that they have been a
bastion of freedom and free enterprise -- this is something very serious when china, the communist party, breaks the treaty. we have a treaty as they do with the british and we want to be certain that they uphold the treaty. >> we have seen other u.s. allies being vocal about investigating the origins of the coronavirus. how much support do you have among other members to bring this issue to the forefront? issue of honge kong, being a human rights issue, the council cares deeply about human rights. that does not stop us from doing the right thing. when it comes to human rights, there is no better president than donald trump that protects the rights of other people. allies like-minded within the security council and we speak frequently. this being during the covid pandemic, we have been more
cognizant about speaking on the phone or virtually outside of our meetings and that is what we have been doing and we will not are one second allow there to be any light between raising hong kong issues and other issues. rishaad: that was the u.s. ambassador to the u.n., kelly craft. let us get a check in on the hibor rate. down three basis points. 0.518%. since 2017.lowest this is where we are at the moment. to theinue to lurch upside. the hong kong dollar is right against the upper part of its ban against the dollar. this is where we are with the chinese markets.
is almost 11:30 a.m. in the lion city. in positive territory in line with the rest of the region. this economy, most of the economy open by friday, something we were told exclusively three days before by the minister in charge of the virus measures. singapore will implement contact tracing but it has ruled out apple and google contract -- contact tracing system. it will develop its own technology. singapore is the first country to reject the apple-google
contact tracing system. indonesia, some headlines, the shence minister saying expects second-quarter gdp growth to come in at a contraction of 3.1%. that is the 2020 gdp growth on the third quarter and a recovery in the fourth quarter and the 2020 economic growth will be closer to a range of 0%-1%. fragile to recovery is for indonesia. its growth at 0%-1% versus 2-3% earlier. >> the bank of japan left policy untouched boosted the estimated size of virus measures and pledged to do more to help the economy. it left interest rates and asset purchases unchanged but said the
overall virus package would rise to the equivalent of $1 trillion from $700 billion. japan's economy is forecast to shrink when he 2% this quarter although the recession is likely past its low point. the coronavirus followed triggered a record fall in employment in singapore. job losses in the first quarter fell by 25,600, mainly due to a significant drop in foreign employment. initial data says 19,000 jobs were lost for march. that has been revised higher. the ministry of manpower says labor market conditions are likely to worsen. the philippines is to keep the capital region under loose restrictions as virus cases rise. metro manila will remain under a general community quarantine until the end of the month come although strict stay-at-home rules are being reimposed. the philippines reported 490 new cases monday, taking the total to more than 26,000. with almost 1100 deaths.
iran is being worn to allow inspectors into its nuclear aboutamid rising concerns undeclared atomic material. the iaea says they took the request of the high-risk -- the highest level. the dispute relates to activity before the 2015 nuclear accord was signed. iran assists the organism -- insists the organization has no right to inspect the plants. the seventh richest person in china is involved in a kidnap plot after an abduction attempt at his home over the weekend. founded home appliance giant midea group and was rescued after his son escaped and swam across a lake to raise an alarm. he is worth 25 billion dollars. five people have been arrested and police are continuing to investigate. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell.
this is bloomberg. looking at japan, reaction to the central bank and what they did was up there estimated size of what they need to fight the virus, leaving interest rates and monetary policy untouched. revising those estimates, as well, and they see the size of the overall package of measures to combat the virus at ¥110 trillion. a tearkei on eight -- on up. the broader market gaining ground. look at what is happening elsewhere, the hang seng up nearly 3%. unemployment figures out later today. the kospi at the moment, also to thereat guns, 4.7% upside. that is where we are with regards to the reaction from the markets and their verdict on what is going on with the
estimated overall package of virus measures increased to roughly one trillion u.s. dollars. as for the nifty in singapore, the futures contract, we should get price discovery soon. the rupee at tad weaker. there you have it. -- a tad weaker. there you have it. haslinda: more on the market action, following the fed announcement on bond buying, the s&p 500 rose on the back of that above 3000 again and with the boj, the ecb and other banks pledging more stimulus, is the path for equities markets clear? >> thanks for having me on. it looks like the single most important thing in the downmarket these days, don't fight the fed, don't fight the central banks. after the0 fell hard
somber assessment on the growth trajectory last week, but it changed overnight after the announcement as you said, to begin buying property bonds in the u.s. equity is a key piece. ,he fed chairman made it clear the principal focus is to get the devastated u.s. job market back in shape. the asset price inflation concerns are a factor. this is a key point to remember. $1 trillion- we had infrastructure plan this morning of the boj raises the size the virus lending program and providing no upper limit. market,ort means in the they won't see the march lows but these markets still need to andfundamentals improve
asset prices. in that sense, today, the u.s. data will be something important to watch for. april retail sales, they are plunging by a record 16%. last night, we saw the june u.s. empire manufacturing index surprised to the upside. other data points including industrial production and housing needed to show the u.s. economy is firmly on the mend. what of the potential risk? what other measures and additional drivers could keep people from having this appetite for risk? ,> barring the central bank they are surrounded by myriad risks.
this is culminating in retail spending to bankrupt companies. exerciseome reason to a coalition here and the first round is part of what has been already done. we probably see trading from here and the volatility may not decline as fast as it did right after the march route. particularly in the u.s., election-related politics could keep this elevated. as of now, the lockdown risk is very low. mnuchin said the damage is too big to shut down the economy again but it depends on how severe the second wave is and the winds of change will be available. despite these risks, the risk margin will continue to go helped by this trend
the dollar weakness, the dollar trend may continue from here. massive in a mask it -- fiscal deficit. much.d: thank you so quick check on the latest headlines, virus lockdown boredom has been good for game makers. the company that owns two of the biggest companies saw its valuation sore. we are told epic games is close to raising 750 million dollars, giving it a value of $17 billion. new investors include t. rowe price. existing partners will also participate. china's largest online supply business agreed to a deal to be taken private with the valuation of around $8.7 billion. isis listed in the u.s. and being bought by an investor by general atlantic.
the offer of $50 -- $56 per share is slightly above the close. they will hold majority voting rights at 44%. saysnasa's -- lufthansa 22,000 people's positions would be eliminated including 600 pilots and 2500 flight attendants. at least half of the staff are based in germany but some jobs will be cut in an austrian subsidiary. they say it would have gone bust without state help. a philippine court convicted a journalist critical of the president of cyber libel, the first ruling of its kind in the country. the move has been viewed as a blow to press freedom. an executive editor told us they will challenge the decision.
but in quite angry, search of justice. i felt like yesterday it wasn't , it was therial justice system. it is targeted by authorities for years. it followed this kind of attacks on social media, the weaponization of social media. yesterday, the judiciary became implicit in this insidious campaign to silence us. court codified it into law. they are going to fight this. we won't be silent. tom: will you take this conviction, appealed this conviction or take it to the top court? maria: this only happened yesterday. we have yet to meet with lawyers. the verdict itself, the way it is written is contentious both of me, of rappler, it tries to frame it as a quality of
journalism issue when it is far from that. it.ill challenge the proper venue we are not sure of, but we will let you know within the week. you could putd if this in the context of the erosion of press freedoms in the philippines under president duterte. they are 100 surge -- 136th in the world press freedom index. to what extent do you think the calculation is from dutere and his team that the u.s. will turned a blind eye to erosion of press freedoms given trump himself has shown disdain for the free press? maria: that is part of the calculation. you can also see that the dutere government is consolidating power. he may be the most powerful leader, i would say he is the most powerful leader our nation has had because essentially, he has been able to get martial law
type conditions, control without having to declare martial law. this is with the aid of covid-19 lockdowns, but there is an anti-terror bill that quickly passed through the house of representatives and it really codified the loss of rights and allowed for arrest without warrants, detention for up to 24 days. this is just waiting for the president's signature. tom: in terms of i guess what moves the needle for you and sends a strong enough signal perhaps in your view that press freedom isn't a threat in the philippines, is the minimum for you and acquittal for -- from all the remaining charges? : these cases should never even have made it to court. i am not a criminal. being a journalist is not being a criminal. but that is the message that has
gone out since 2016. keep doing investigative journalism because there is a and a lots happening of these decisions have life-and-death impacts here. covid-19, the data and how it is being related to the public, for example. i think we are at the precipice. if we don't fight for our rights now, not just freedom of press but for our rights as filipino we will be harmed. rishaad: that was the founder tata motorsappler. out with better than anticipated revenues. a surprise sales surge coming from jail are in china. -- jlr in china. india sticking with its rating. we will be asking why. you are with bloomberg. ♪
have been fears in the country about the spread of the virus as today,s its economy, but the sentiment remains positive in line with the rest of the region. the sensex and nifty are rising. a look at what is going on, the price down by didly one rupee, and tata come out and clock a 1.3 billion loan dollar loss, the highest on record, not a surprise given how the industry is struggling with a slump in sales that began even before covid-19 wiped out demand. there was a bit of a bright spot. perhapser says it has the green shoots of recovery, the beginnings of a rebound in china. let's bring in the cl of -- the ceo of maybank.
at least one other security came out and cut the company. nothing in this report really mood orly changed your moved the dial for you. indicates the result clearly that there is pressure now because of the debt the company has and they are wanting a commitment at least for the next 1-2 years, both in india which ihe jlr level, believe they have the liquidity but it is going to be tough especially if the recovery is not as good as they expect. we thank it is a challenging environment right now to gauge automotive demand unless you are an electric vehicle manufacturer. in our view, the debt being more
than the market cap is a risk. any development that allows them as an indiaity passenger vehicle subsidiary, that will be positive but otherwise, we remain quite concerned on the short term liquidity and capex mismatch. rishaad: you mentioned the liquidity position. that will be impaired by the use of something like 2 billion pounds of cash, cash flow for the first quarter of next year. that?o you make of jigar: if you see the enlistment requirement, it is 8 billion pounds. eventually, if your earnings are as poor or worse in 2021 compared to 2020, you have to take on more debt.
valuation atidity this juncture, because of the marketplace, the this kind of compounds the problem further and we are not yet done with covid. if you take that scenario that there is a second wave, that can further delay the recovery and it is not just a problem for tata but for the automotive sector. haslinda: if that is an issue, embarking tata motors on a debt reduction exercise? what form will it take? jigar: it is clear they are already onto that exercise but not at the main company level. they are going to raise some funds through equity participation by inviting a strategic partner in the india passenger vehicle subsidiary, and probably once the earnings improve the next couple quarters
as they expect, the jlr will arrive in the europe, you can other markets, china in particular, than they can probably raise money at a higher rate. they haven't confirmed anything as of now. what are the chances glr? whats would sell would you rate the chances of that happening? understandar, as i tata motors is a company that is a reflection of the tata group and they wouldn't be averse to committing more money, especially when jlr is such a good cost savings and product development. they may not, they may have some kind of technology related participation with another company, which is like-minded, but i do not think they will
ever give up the stake -- the majority stake in jlr. have no optionlr left apart from going to the british government and asking for help? jigar: they have already done that. the furloughs that were there that they have been taking help this hasgovernment, so come down. given the number of employees they have in the u.k., they may helpe stopping from taking from the u.k. government. i don't see anything wrong with that. considering the long-term commitment in the country. much.d: thank you so ceo of maybank. loads more on the way. a full market check. this is bloomberg. ♪
taking a targeted approach compared to the mass lockdowns that happened in wuhan when other cases were discovered there. they have shut 11 markets and sanitized over 300, and they shut down nearly 30 housing wereunds near the markets cases have been discovered. public transport is still running, people are still allowed to go to work, restaurants are still open, so it seems like they are waiting for the results of this mass testing and contact tracing campaign that is underway to see whether or not they need to resort to that kind of strict measures that have been undertaken elsewhere. rishaad: that's just it, that is what we have in terms of what is going on with regards to covid.
is there a sense of panic on the streets? sorry? hello? rishaad: i was asking whether there was a sense of panic on the streets, deep concern. sharon: yes. i think people are really concerned. there is a lot of uncertainty right now because it is difficult to determine just how bad the spread is until those numbers come out. i think people are on edge, and it is twofold, kind of, uncertainty about how, why and how quickly the new cluster has spread, and also uncertainty about what measures will be put in place and kind of what restrictions may be reinstated and how it might impact daily lives and the economy that is just opening up. rishaad: thank you so much. our beijing euro chief joining
us. from malaysia, the prime , theyer is talking about have denied reports he has been breaching the countries quarantine rules. this is the prime minister. they are saying there is no evidence of cancer, as well, for him. and he is fit to carry out duties. this is coming out of the prime minister's office. there we go. , we have amarkets big day in asia, it started on wall street. the fed responsible, the nikkei boosted by 4% on what the boj has been doing. broad-based rally, asia having its best session since april 6, holding a three-day decline. the yen 107.46,
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>> this is bloomberg daybreak middle east. >> the fed says it will begin buying individual corporate bonds. aesident trump weighs trillion dollar infrastructure plan to boost the economy. manus: the u.s. leader says china is rooting for joe biden but in beijing come are they changing their mind? yousef: oil prices could be back to normal within a year or two.