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tv   Bloomberg Daybreak Asia  Bloomberg  April 12, 2020 7:00pm-9:00pm EDT

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shery: welcome to daybreak asia. i'm shery anh in new york. haidi: i am haidi stroud-watts. we are continue down to asia's major market open. opec and its allies finally but his new oil curves, crew giving updates as investors fear the deal will result in glut? the u.s. has the highest number of virus deaths in the world as talk turns to reopening parts of
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the economy as early as next month. almost 2 million people have died worldwide. the imf and world bank prepare to meet amid the most down -- the worst downturn since the 1930's. the new reality of collapsed trade and mounting unemployment. oily: we are seeing reversing gains as much as a percent at one point in london .25%, sames now down for wti. we had the reduction coming from opec and its allies are that would have been the sickest -- single largest in history. goldman sachs but says it is insufficient. u.s. futures gained at the open, reversing earlier prices. the nikkei futures also down 1%. we have markets closed on holidays including australia and new zealand. global cases also affecting sentiment in the markets.
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those cases rising towards 2 million with the united states the epicenter of you break after fatalities in the country surpassed italy. there are signs of optimism in the hotspots like new york. let's bring in sophie kamaruddin with the latest. we have seen president trump. .ager to reopen the economy we are seeing cautious optimism from governor cuomo. despite new york state seeing a more than 9000 cases there. you have governor cuomo saying he hopes to begin lands to planst the economy in -- to restart the economy in new york state. parts of the u.s. could be ready with emergency controls, but it will not be an all or nothing situation with state governors needing to oversee a reentry.
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trump's top advisor on testing said the u.s. is working diagnostics tof reopen the economy including auntie body -- antibody testing. -- meansy this needs administering millions of tests per month, so it is a logistics operation. there is also push in the u.k. for the government to release its exist relative after three weeks of the lockdown. what are we hearing? there is a question about whether there is confidence the epidemic has peaked. it has gone above 10,000, making it the fifth country to mark that milestone. there is confidence the government -- but the health secretary says there has been a flattening of the curve given
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the social distancing measures and nhs will launch a contact tracing out. and the prime minister has been discharged from the hospital after a week in which recorded three days of intensive care. his office hasn't provided guidance when he might return to work but parliament will resume activities april 21. shery: we are seeing signs the worst may be over especially in italy and france. slowdowne are seeing a in cases which could remove lockdowns. italy has the fewest number of fatalities in three weeks. the prime minister could see a tentative restructuring -- restart of the economy on may 3. we are seeing this in spain as well as new cases have declined, confirming a broader trend since the end of march. the prime minister said lifting
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the lockdown will begin sooner, within two weeks, but it will be staggered and cautious. the construction and heavy industry are preparing to go back to work. in france, the third hardest hit, new cases fell the lowest in a week. is to addresson the nation monday. that will be closely watched the speculation is he will extend the national lockdown until may. kamaruddin with the virus latest. let's get you a check of the first word headlines with karina mitchell. >> the imf and the world bank will hold digital software to hold a meeting. the global lenders will face a new reality of shuttered economies, collapsing trade and
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mounting unemployment. the world economy is suffering its worst recession since the 1930's with upcoming data set to reinforce the gloom. indonesia's tightening restrictions on cities around jakarta as infections top 4000. the philippines is ready to act again to support the economy in what bsp governor says is a once-in-a-lifetime crisis. crisis hasd the halted plans to open its stock market. ex-patss has sent fleeing. lockdownl extend its through the end of the month. the prime minister says the government has adequate supplies of protective gear for frontline workers, think the next four weeks will be credited -- critical. he describes it as a social emergency. senior officials in hong kong are facing a cut in pay with
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money going to charity and to top off the nations cash reserves. carrie lam announced new stimulus worth $18 billion u.s. to help the slumping economy. this accounts for 10% of gdp and almost double the projected budget deficit. 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 am karina mitchell. this is bloomberg. shery: how will that historic opec-plus deal in fact currencies in asia? we will discuss with the head of his research for anz bank -- head of research for anz bank. this is bloomberg. ♪
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data out this week will
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give us a clearer picture of the all-out from the pandemic. imf will release its outlook and hold its meeting virtually for the first time. we will also get an indonesian rate decision, unemployment out of australia and setting up for china's epic contraction on friday. let's bring in the moody's analytics economist joining us from sydney. not just the gdp, which we are expecting a contraction of 6% year on year but also trade them a home prices, domestic activity indicators. i am wondering how much of the bad news has been priced in, because we know the last quarter is going to be terrible? china's economy was knocked off course by the coronavirus. we are expecting gdp will come in with the contraction of 4.6% in march and that follows the 6%
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expansion in december. it has been a swift deterioration for china's economy. what is important to note is with the march activity data we are expecting later this week, we should see some improvement. we are expecting that february was the brunt of the economic impact for coronavirus on china's economy. we saw a really significant double-digit deterioration across the suite of activity data like industrial production, retail trade. while we are expecting to see contractions again in the month of march, activity data prince, it should be a much smaller contraction across those suite of indicators. it is slightly good news for the chinese economy. haidi: what is your best case forecast as to what the recovery
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looks like? we went from optimism and v-shaped recovery to potentially a u-shaped recovery. there are signs that worries about permanent loss of activity with something that resembles l. what is your estimate? >> i would say it is very uncertain, quickly evolving situation. while china's economy looks like it is out of the worst of the crisis, we are seeing the global economy in the thick of it at the moment and the baseline scenario is the global economy first half recession of 2020. while china might be getting back on its feet, that means we will not see significant events -- reebonz in the manufacturing engines because the demand that comes from the u.s. and europe is going to say suppressed for
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quite some time. that means we will not see a dramatic rebound. while we have got improvement happening in china's economy from the june quarter onwards, it is not a really strong v-shaped or u-shaped recovery. shery: what do you think about dampening domestic consumption given we see self-imposed social distancing within china? how that could the numbers look? that is a good question. the manufacturing sector has improved more dramatically than the important services sector. while it is relatively easier to restart factories, it is harder to get the households out of their homes and have confidence they are not going to contract this virus. while shopping centers have reopened, they are not getting the same sort of foot traffic or anywhere near that they were
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getting prior to this virus outbreak. that is problematic and that means not a strong rebound in the important services sector because of that subdued household really concern sentiment, that they don't want to be infected because at the end of the day there has not been a vaccine. the only way the virus was somewhat contained in china was through social distancing. those numbers are keeping households cautious. shery: china is an oil importer as our many of the other -- are many of the other asian economies. not helping boost prices. how much will cheap oil helped out? that theia we see sustained slump in oil prices is a net positive for asia including china as well. we are expecting to see subdued
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prices. while there has been the production cut, at the end of the day that doesn't overwhelm the suppressed demand we are seeing as a direct consequence of coronavirus impacting the global economy. the supply cut doesn't overwhelm the suppressed demand we are seeing really. haidi: we are looking ahead to the central bank of indonesia, rate decision this week. at this point what more can regional central banks really do? what we are seeing for bank indonesia, they are concerned about external stability. there has been an intense amount ,f pressure on the rupiah because of global risk aversion and that sort of thing. we know that because of the acute concern about maintaining
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external stability, we are unlikely to see a rate reduction in indonesia. we should see central banks in emerging markets perhaps taylor the response to be more to what is fiscal policy. fiscal stimulus will continue to be a driving force for trying to question the impact of coronavirus. so while monetary policy has played an important role, we think fiscal policy is going to step up and provide targeted support to toast hold and -- household and tourism and consumption that have for the brunt of this virus hit so far. and perhaps nowhere more so than when we turn to australia as we look towards unemployment numbers, and they will be unemployment numbers. services, education, have all
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been so badly hit. in terms of the targeted fiscal spending, how do you rate the government's package and measures? >> what is significant really for us is the job seeker package. by offering, by the australian government offering wage subsidies to keep people in their jobs, even if they are kind of vital and networking at full capacity, to keep them in jobs is a positive thing. it is more difficult to get back when thisorkforce tremendous shock eventually ends. by keeping people vital -- idle and keeping them employed is important. it means they will have an income. there is significant social benefits that come with that. that is a positive for us. at the end of the day we are
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going to see a spike in unemployment through the june quarter because of the significant job shutting that has occurred because -- despite the fiscal spending. to get an unemployment rate above 8% would not be inconceivable because of the significant job shutting -- shedding that has occurred and will continue to. the australian economy is facing a shock it has not experienced in at least 30 years because of this coronavirus. shery: we do get this week in the imf, world bank, g20 holding conversations virtually. what else should we see in terms of were needed action from all of these economies? important -- coordinated action from all of these economies? >> what is important is social
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distancing. it is the key to containing this virus without of our -- without a vaccine. if we can't contain the further spread, the toll will continue to rise. the global recession in our baseline is going to look even more severe than it does now. at the end of the day if we cant have a vaccine, all we rely on is social distancing and keeping people at home and economies in hibernation until the coronavirus is contained really. economist, thank you very much. we have an alert on the bloomberg. we are hearing from the u.s. energy secretary talking about president trump personally being involved in that historic opec plus deal. the energy secretary saying the u.s. production cuts are forecast as 1.6 million to 2 million barrels per day that the u.s. could see continued
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declines in production. we had heard from president trump saying he did speak to russian president vladimir putin as well as the crown king -- crown prince in saudi arabia and king salman from the oval office -- oval office. president trump was personally involved in making the deal happen. when it comes to output cuts, he is forecasting them at 1.6 million to 2 million barrels per day. we are seeing reversal of earlier declines in oil prices in wti above $22 a barrel. this is bloomberg. ♪
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let's take a look at where wti crude is trading, after the historic opec-plus
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meeting. we are seeing the reversal of sentiment at the moment, paring the 8% gain when it comes to trading in new york. let's bring in our asian energy editor. you can tell the market reaction from some of the analysts we have spoken to, like a short-term bounce. goldman sachs saying it is a historic and yet insignificant view very does this mean ultimately we are looking at the demand side of things? >> i think that is the real question and what a lot of people are thinking about. like you said, this is a historic deal. it effectively ends the price war between saudi arabia and russia. the agreement of the opec-plus clients, it will cut about 9.7 million barrels a day of production off of the market. output byoduces
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nearly a 10th. that is an important deal but like you said, the question becomes is that enough to offset the demand destruction we have seen from the coronavirus as countries go into lockdown and then quarantine? there is a lot of skepticism in the market when you look at the reaction, this morning in prices with brent around $32 a barrel, $22 a barrel. there is a lot of skepticism whether these cuts go deep enough. shery: when it comes to those cuts, we are getting lines from the energy secretary saying u.s. production cuts forecast at 1.6 million to 2 million barrels a willnd reduced u.s. output
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have some mexican cuts they hope reducers will make use of opening up storage in the strategic petroleum reserves. what do we know about where the u.s. stance in terms of the reductions? we are hearing president trump touting his involvement, but how much of the burden will u.s. carry? president trump did play a role. he brought together the leaders of saudi arabia and russia and it appears he did help orchestrate this. the cuts are very different. the opec-plus groups, those are voluntary, 9.7 million barrels a day. we should be able to see that. that is mostly among state producers. the cuts the u.s., brazil and canada have said they will make, 3.7 million barrels a day and the additional cuts a lot of the
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g20's members have said they will make, those are really cuts that are likely to come about anyway because of lower prices. they could take months or longer than a year to filter down into the market. we get back to this question of whether these cuts are sufficient to offset the demand from the coronavirus. a lot of people have said globally it would be 20 million this month and next month. that is half of what we are seeing. there is question whether the cuts go deep enough to offset the demand destruction from the virus. shery: oil prices have been fluctuating even with this historic deal. thank you. we will have more on oil with our insights ceo and founder, plus the global head of analytics guy will. let's get a quick check of the
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business flash headlines. virgin australia is in contact with the government as ministers try to ensure there is a competitive airline industry after the virus. travelers are not expected to go overseas for at least six months and virgin and its rival qantas have grounded their staff. money towardsged aviation. is suspending production of three plants in south korea as the coronavirus slashes demand for new cars. two of the factories are closed and 300 kilometer -- in the capital at 300 kilometers to the south. beijing and shanghai high school children look at returning to classes in two weeks from now as the nation grapples with a new
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surge in virus cases this is bloomberg. ♪ . this is bloomberg. ♪
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>> this is "daybreak asia." i am karina mitchell with the first word headlines. the oil price word is on hold with top producers restricting output. opec and its allies agreeing to slash production. mexico held out but u.s. pressure finally -- producers will cut an historic 9.7 million barrels of supply each day. meanwhile, the u.s. enters a new week with the highest number of coronavirus deaths in the world but with the administration still hoping to ease lockdown restrictions by may.
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fatalities of about 20,000 surpassed those of italy and make the u.s. the epicenter of the infection. aide,pe white house virus anthony fauci, said infection theys are stabilizing and may be ready to open next month. reports indicate a slowdown in new cases. italy has the fewest fatalities in more than three weeks while france record the smallest rise in deaths in four days. spain is also seeing a slowdown in cases and feigned optimism is allowing the government to look for ways of easing nationwide lockdowns that have crippled economies. meanwhile, north korea says it is ready to take more steps to guard against the coronavirus but insists the situation remains stable. kim jong-un chaired a meeting over the weekend and state media says they agreed it is impossible to totally insulate the country from the infection. said the pandemic
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may create what is called "obstacles" to north korea's progress. 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 am karina mitchell. this is bloomberg. let's get you a check of the markets. we are seeing some downside pressure when it comes to u.s. pretty strongsome gains across that session last week. we are getting that reversal of views when it comes to the market. bothan sachs saying it is historic and yet insignificant as we see that reversal when it comes to crude prices, wti and brent trading under 1% higher. we had gains of as much as 8% earlier. a number of markets are closed across the asian region. australia and new zealand closed before the easter holiday.
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hong kong shuddered today for the holiday. taylor: beijing announced plans to reopen schools for some students even as quarantine measures are tightened near the russian border after a surge in imported cases. tom mackenzie is on the line. give us the latest about what is happening in china in terms of reining in the south. >> you have a great divergent picture. with and what is happening in beijing. you have seen a surge in the number of people returning from russia, chinese nationals who have the virus. it is causing concern amongst officials. people are being told they have to quarantine for 28 days and they have to have a number of tests as well for the virus. they reported more than 100 imported infections from
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russia. the challenge of trying to limit the numbers of the use infections was thrown into focus over the weekend when we saw a flight from russia to shanghai. than half for more the coronavirus infections reported on sunday. switching focus to beijing, you are starting to see some of the --ors ease when it comes to some of it ease when it comes to schools. senior students in beijing high schools will be able to return to school on april 27. does the pandemic risk and damage to the economy -- domestic activity numbers as well as the gdp numbers on friday, does all of this potentially risk on during the phase i trade deal struck between china and the u.s.? tom: that has been the concern.
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what we have heard from the chinese ambassador to the u.s. in an interview recently, he was saying that china is phase one deal. you'll remember part of the deal was the commitment to buy at least 200 billion dollars in additional u.s. goods and services over two years. we can remove restrictions on it is a changing situation as the pandemic batters the global economy. there is a commitment to continue the phase one deal. whether or not it gets done in the timeframe, the question remains. mackenzie in beijing. we will have much more on the
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coronavirus impact with the founding manager -- managing partner, the ceo of biologics will be joining us later. one of our top stories, the imf seeing the world economy routering its worst since the great depression. director spoke with bloomberg about the extraordinary actions ahead of the groups meeting this week. this is a crisis like no other. seen the worst week i have since the great depression. and it requires extraordinary action by everyone. including by international organizations like the imf. our message is twofold. fight the virus and
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protect people. it is first and foremost a human tragedy due to that health crisis. so governments ought to do everything they can to support health workers and health systems, so the faster we did the virus, the faster a recovery can begin. ao, because it is such gigantic, dramatic development, a virtual standstill of the world economy, it requires massive wealth targeted measures . we see governments setting up $8bally up to that moment trillion of fiscal stimulus and central banks, including the fed .ere, doing a heroic job that has to continue, but we
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need to remember there are countries that do not have this capability, and for that, the imf, the world bank, we ought to step up, and we do. we have a $1 trillion capacity. all of it is at the disposal of our members and we are moving very rapidly, responding to extraordinary flow of requests. over 90 countries, 90, never in history of the imf, never, ever have we faced that demand, and we are very fast to act. on that basis, revive the economy. is so important here, you quoted the economist from the 19th century, victor hugo, and you talk about the fraternity of strangers. your strangers are the g20 to find a new
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vehicle and an increased vehicle. special drawing rights. what do you need from the g20 to assist you with more funding under fdr, and specifically, what do you need from america? iswhat i have to recognize our membership, including the united states, by making it possible to have in a timely manner that $1 trillion i spoke about. trillion the $2 stimulus package. isre was a component -- this the authority of the imf to ourow that boosts resources. our first demand is indeed to make sure that we have the resources, the $1 trillion i now, about available, and we do. ifn we look into the future,
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this crisis continues for a longer period of the uncertainty we are wrestling with. or if there is a second wave of the epidemic, which epidemiologists say is not necessarily out of the question, we need to look into further beating up the resources of the international monetary fund, and to explain to the viewers, it is a fast way to provide liquidity to all countries. the shockn, after that came into thousand eight and 2009, there was a boost of 250 billion fdr's net was spread among the membership to improve the liquidity position. why is this valuable? many emerging markets find affected by a health
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crisis, by a standstill in their own economy, and on top of it. capital outflow. save youlying to dollars with less emerging markets. that makes the liquidity position of these countries more challenging. moment, it can provide a much-needed liquidity. lena.sta coming up next, what the opec-plus deal means for asian currencies with the head of asian research. this is bloomberg. ♪
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by nearlyer days of -- after days of talks, they have decided to cut oil output. we have the initial reaction from some petrol currencies including the canadian dollar the mena region krona. let's talk with the head of asia research. great to have you with us. will there be any lasting impact on some of those commodity linked currencies across asia? >> we will see a temporary respite.
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oil price has not really rebounded or reacted very positively in morning trade. that is because it is factored in already. at the end of the day, it is not binding. number two, it falls well short of how much man has collapsed. i think oil prices will stay -- and as a result, the currencies in asia that tend to benefit from high oil prices such as the ringgit, most likely will not be expected to react that positively. is the biggest market forces moving asian currencies at the moment? are we talking about rate differentials or coronavirus headlines and risk appetite? is very much the virus outbreak evolution and risk appetite. the yield differentials do not really play an important part at this particular point in time. what is important is the market
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reacting to how counts are progressing. there is a trend for declining on each case. equity market rebound. of live tot a bit investor risk appetite, which currencies,sian particularly the risk sensitive ones, let the korean won, recover. it remains to be seen. we are far from being in the clear. the economic damage is still being ratcheted up. i think ultimately, that will come back. haidi: in terms of how much support they could get potentially, would you be watching for countries where there is increasingly, you know, i guess a political narrative
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that will see a sooner rather than later reopening of the economy even if that comes with risks of premature reopening or subsequent waves of infection? ease up ons start to restrictions, i think it will be important in terms of trying to teach where we can be in the bottom of the economic contraction. that everyonetry is looking at obviously is china. already restrictions. they have started to see indicators of chinese activity. pmi in march. the chinese authorities are still cautious and i think they are very concerned about one thing to avoid a second wave outbreak. i think the world is watching easingna manages the
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back of restrictions. i think we will look at europe as well. italy and spain may be starting to think about using back. we will watch those very carefully to see how things go. the recovery, when it eventually comes, easing up of restrictions, will be fairly slow going. yuan continues to trade pretty much in a stable trajectory, not necessarily gaining, mind you, but in a tight range, as they tend to have managed since the very beginning of this crisis, does that mean there is an omitted downside for our asian currencies given the yuan, for a long time now, has acted as a regional anchor? remains a very important anchor for asian currencies and i expect the want to be fairly stable although it will probably continue on in a slight weakening bias given that external demand has pretty much collapsed so you will not get much export revenues.
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of foreigno a lot currency denominated debt. the ongoing pressure dollars still remain. economy is starting to recover. that should help to keep the yuan stable. it will help to keep an anchor, but asian currencies will continue to be influenced by the domestic developments as well with regards to the virus regards to howth well the economies are navigating this. i still expect further weakness to come in some, such as the indian ruby, given the outbreak continues to worsen and the lockdown will be extended. and that will in part greater economic -- to the indian economy. shery: how much does it help
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that the indian economy is an importer of oil and we have prices at the bottom? helpwer oil prices will india. it is a bit like tax relief, if you like. however, the negative headwinds from the virus outbreak have been knocked down and it far exceeds any benefit they are going to get from the oil price decline. also again as well, the rupiah has weakened to all-time lows against the u.s. dollar, helping to offset some of the positivity from the oil price decline. i expect the indian ruby to continue to weaken further into all-time lows. forecasting 80 in the third quarter. finally, you mentioned the korean won being affected by broad risk sentiment across asia . what about what the bok does?
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this after an emergency cut last month. we are anticipating the bok to come back to the rate cutting table. they have a bit of policy space to ease further and expect them to fully utilize that space. ae current one has benefited little bit from the improved the sentiment earlier as markets are taking some heart from the slight decline in case counts. the economic costs and damage start to become more apparent and the hits to korean exports will possibly start to wave back on the korean won. shery: thank you very much. we are talking about korean exports. 10 the first 10 months -- days of april, south korean export numbers just breaking at the moment down 18.6% year on
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year. that is a significant decline after we saw south korean export numbers really starting to stabilize after the double digit losses that we saw last year. imports also not doing great for the first 10 days of april. it contraction of 13% year on showing how domestic demand has been weakened by this coronavirus outbreak as the bok held steady in its last meeting but after that 50 basis point emergency rate cut that we saw last month. exports, first 10 days of april, down 18.6% year on year. haidi. yes.: really pretty astonishing members. perhaps answers rising -- perhaps unsurprising. we are getting that one extra line when it comes to chip imports for south korea. a decline of 1.5%. chip exports, it kind of breaks
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that narrative but we are expecting to see a strong recovery in chip exports. we are also getting japanese money stock numbers, rising 2.7% year on year, so taking a look at broad money supply, growth year for japan rising 3.3% on year as we do continue to see the sort of extraordinary monetary policies send credit throughout the economy. you can get around up of the stories you need to know to get your monday going in today's edition of daybreak. -- your day going in today's edition of "daybreak." bloomberg subscribers can go to dayb on their terminals and it's also available on mobile in the bloomberg anywhere app. this is bloomberg. ♪
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thei: woodside petroleum ceo says the opportunity has now passed. they rejected an approach on 2015. he hopes other opportunities open up. oil says shares have slumped more than 60% this year. version australia is in contact with the government as ministers try to ensure there is a competitive airline industry after the coronavirus.
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travelers are not expecting to go overseas again for at least six months and virgin and qantas have grounded most of their fleets and laid off staff. the government pledged about 450 million u.s. dollars to aviation so far. potential avert bankruptcy. disney world is laying off 43,000 workers because of the coronavirus fallout. the park closed its doors last month due to social distancing measures and the company is now being forced to furlough staff. the layoff will begin next weekend and come after an agreement between disney and a union coalition representing workers in florida. japan and south korea coming online at the top of the hour. australia, one of those markets closed on holiday as well as new zealand, hong kong, and thailand. futures under pressure, down .5%. kospi futures up .8%. we had really surprising export numbers for the first 10 days of
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april for south korea and down more than 18% year on year. we will be watching u.s. futures closely. they were gaining ground at the open but they are now under pressure, down 1.2%. oil prices have rebounded from what we saw earlier and they were in negative territory. we heard from goldman sachs that the opec-plus deal was historic, but really not sufficient when it came to the size of the cut. we are seeing brent crude gaining 1.7 percent. of course, this is using from that 8% job that we saw earlier in this picture coming on the back of emerging market stocks, seeing their best week in four years, and u.s. equities also in bullish territory. coming up on the next hour of "daybreak asia," we will get more insight on that historic opec plus deal with the founder. the market open is next. this is bloomberg. ♪
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.> good evening haidi: asia's major markets have just opened for trade. welcome to "daybreak asia." opec and its allies finally agreed to new curves but the market is not a inquest. crude struggle to gain since investors fear the deal will not solve their problems. the u.s. has the highest number of virus deaths in the world amid talk of reopening parts of the economy next month.
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almost 2 million people have been infected worldwide. they: the virus triggered worst downturn since the 1930's. the global economy faces a new reality of shattered economies, collapsing trade, and mounting on women. japan and south korea coming online. that's get you started with a quick check on how the nikkei and japanese yen are trading. really coming down from that two week high. we have seen the japanese yen hold steady in the last few sessions. this as we had most of or many of the asian economies away on holidays. japanese yen the moves ground, gaining ground against the u.s. dollar. the topix down 1%, this coming out a time when japan has now announced a series of fiscal stimulus measures. take a look at what the kospi is doing because it is also under pressure, coming down from that one month high. we had pretty abysmal trade
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numbers for the first 10 days of april with exports falling 18.6% year on year. the south korean won trading at that 115 level. we continue to see a diversions when it comes to currency trading across asia as we have of course had emerging-market stocks and u.s. stocks rallying for the past few sessions, haidi. let's take a look at these close markets because it is a holiday session start of the week. australia and new zealand as well as hong kong markets closed for the easter monday holiday. thailand is closed for a public holiday as well. you another look at oil because that really has been the story. also the story of the morning, we had 18% at the start of trading and since then, we have seen wti and brent pairing those
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gains, struggling to hang onto positive territory as the likes of goldman sachs was saying this was a historic deal. nonetheless, and insufficient --l to deal with the heart what is a demand story for markets. let's get more analysis with market strategist. she joins us now from singapore. , aing a look at the oil deal price war seems to have reached a detente stage. is that enough when you take a look at the price action we have seen so far in the markets this morning? is it enough to reverse the fortunes of the energy sector? >> good morning. thank you for having me. if we look at the price action prices have think been leveled. beforemention of course
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the whole covid-19 situation that erupted in a big way for markets. it has a bit of a surprise. that was not so much expected but again, the expectation that perhaps, looking at 20 million barrels per day. the numbers on the lower end. it did see some supply and demand. out to helpingk places recover. it is certainly what we are seeing this morning. prices -- continue until we glean more improvement in terms of production coming back online. haidi. haidi: does it change your assessment of energy names in the market?
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does it create anything more than just short-term relief for these companies? i am still a little bit cautious just because of the longer-term outlook at this point in time. we have the likes of china, for example. they have really been ahead of the curve in terms of the covid-19 situation. , last week orces so, have been seen gaining. find --you don't particularly for many of the stocks including energy. even though i think we have moved a little bit of this we have to keep the issues.
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is to ber picture cautious while moving forward with regards to energy. shery: let's talk about staying cautious. we have seen gold really being propelled to a seven-year high because of safe haven demands, but at the same time, we know that gold has suffered from margin selling. can it really sustain these gains? even though i think there needs to be -- on the upside at this point in time and perhaps do a little bit on the technical perspective for a bit of a correction. that being said, -- global picture. it points to a little bit more
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on the upside. the uncertainty we have on hand. and of course, the economic situation, the economic damage. mention, -- second wave for covid-19. that will keep people looking towards this. -- given howps covid-19 has been really in discriminant across these markets itself. bery: and yet we seem to seeing some stability. asian getting ready to open pools again. how will this bode for the markets? positive sentiment on the outbreak within china will also bode well for market stability? i think it is generally
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for the chinese situation. certainly, i think, you know, as we look at the market movement we are starting to see gains. we are looking at various other markets. the benchmark. is only by 8% compared to the likes of the msci asia-pacific index. releasing that steep decline. marketuation is that the is reflecting that kind of sentiment, showing that stability in terms of covid-19. is aiding theiver situation. market, even if will keep things a
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little bit subdued, but nevertheless, benefit a little bit some of the other regions that are catching up. driver is that it is going to be one of the bigger risks. ,, it may be some time to come. the chinese market is just wanting to you get a little bit better relative to the rest. does that mean he would remain cautious on any country that is talking about reopening parts of the economy because the risk is happening prematurely? i think the countries have actually -- for the likes
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of south korea, we have seen the country itself not seeking so much of those restrictions in terms of movement. be differentiation will people will be more cautious. there are no expectations that the reopening may introduce more of these cases, but i think, perhaps, you know, it also depends. i am not an expert on this, but that will definitely be a little bit more cautious. likewise to have equity prices. shery: lots of unknowns when it comes to the public health crisis. thank you for joining us. market strategist. still ahead, schools in beijing may reopen in two weeks as china's leaders trying to ease
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restrictions by important virus cases are on the rise. the latest on the outbreak in asia, next, plus the outlook for oil after the end of the price war. he ceo joins us later. this is bloomberg. ♪
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karina: you are watching "daybreak asia." the imf in the world paying called their spring meetings using digital remote software. ae global lenders will face new reality of shuttered economies, collapsing trade, and mounting unemployment. officials have already said the world economy is suffering its worst recession since the 1930's with upcoming data set to reinforce the gloom. meanwhile, the u.s. enters a new week with the highest number of coronavirus best in the world but with the administration still hoping to ease lockdown
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restrictions by may. fatalities of around 20,000 surpassed those of italy and make the u.s. the epicenter of the infection. the top white house virus aide, anthony vinci, says infection levels are stabilizing and part of the u.s. may be ready to open in the next month. meanwhile, the euro edged higher in asian trade as covid-19 reports from across the european union indicated a slowdown in new cases. italy has the fewest fatalities in more than three weeks while france recorded this most rise in deaths in four days. spain is seeing a slowdown in cases in the feigned optimism is allowing governments to look for ways of safely easing nationwide cripple have economies. india is set to extend its current virus lockdown until the end of the month to allow more time to evaluate the spread of the infection. the prime minister says the government has adequate supplies of medicine and protective gear for front-line workers, adding that the next four weeks will be critical.
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asi has described the virus a social emergency. 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 am karina mitchell. this is bloomberg. shery. shery: thank you. beijing announced plans to reopen schools to some students even as quarantine measures are tightened here the russian border after a surge in reported cases. tom mackenzie is on the line from beijing. explain to us this approach when it comes to handling the fallout from this outbreak. china probably has the coronavirus under control but there has been some flareups in the number of hotspots, towns, and cities along the russian border. that single province reported more than 100 imported infections so these are chinese nationals coming back to china from russia, where the virus remains relatively rampant in
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that country. what you are seeing in cities andother towns in mongolia other places is the ramping up of restrictions, particularly quarantine measures. they will be tested as well. the flipside, as you alluded to, is in other cities, restrictions are starting to ease. we saw this in beijing. we are starting to put in place the education system. students can return to schools. again, it is a mixed approach. in some cities, it will be increased. in others, it is slowly being eased. back riskthings get that the economic damage will potentially undo the phase one trade deal that was so hard between china and the u.s.?
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tom: that has to be a risk. commitments from the chinese side. that was already seen as ambitious for the pandemic. china committed two things around intellectual property protections, reducing barrier to entry for some key u.s. businesses but what we heard from the number one man, the top man in the u.s., he is the ambassador to china. he said china is ill implementing the deal, still buying u.s. goods and not removing restrictions on, for example, u.s. financial firms as well. we saw that on april 1 when some of the firms increased holdings and expanded business operations. see bothy he wants to nations sit down and assess the changing situation. it seems like they are trying to take a realistic approach to how quickly this phase i deal can be implemented but they are trying
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to remind the u.s. that they are and remain committed to the phase one deal. is a secondoncern wave, a third wave of infections in containing the initial outbreak area one of the new measures we are seeing -- outbreak. what are the new measures we are seeing? tom: senior government officials will be facing a 20% reduction in their salaries and some of that money goes back to the government coffers, will go to charity to try and support the coronavirus fight in that city and he also said, interestingly, that they do not have any plans for property control measures that were aimed at -- the real estate market. no measures around the real estate sector. and it follows what we saw in terms of additional stimulus from carrie lam of $18 billion
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in a last week. unprecedented additional stimulus. over in singapore, they said they will start imposing fines on people who flout social distancing rules. people are not sticking to these rules as much as they should be. for publicg transport as well. they are both wrestling with these flareups, as you said. haidi: tom mackenzie in beijing with the latest. we will get much more on the coronavirus impact with the founding managing partner as well as the ceo of a biologics company. coming up next, a make or break moment for the virus fight as international policymakers convene. we reviewed the virtual spring meeting. this is bloomberg. ♪
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>> the international monetary fund and the world bank face a make or break moment this week, aiming to garner support for emerging-market nations hemorrhaging capital as the coronavirus hits economies and draining budget coffers. michelle joins us now for a preview of what will be these virtual meetings. i mean, what interesting times, right? really unusual challenges facing emerging markets right now. why is the imf and the world bank specifically highlighting the vulnerabilities of developing nations? >> there remains so many special challenges for these nations. firstly, a lot of them are forng a little bit countries that are just getting on board with a lot of testing and reporting cases and kind of
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isolating and quarantining and trying to implement social distancing measures, which, by the way, are harder to practice in some of these countries where convenienceve the of working from home. it is harder for them to get on board so that is all very concerning from a medical standpoint but from an economic and markets standpoint, we are seeing foreign investors have fled these ems in record numbers. they have shown a staggering record on the first 90 days of this crisis. outflows outpaced by three times over three different prior crises in the global financial crisis. the taper tantrum and 2013 and china's devaluation in 2015 so this is leaving countries at a record pace. some are left with very little policy space. they pumped out tens of billions in stimulus, some of them come on the fiscal side, and on the central banking side, they slashed interest rates.
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and then lastly, i would say that they are suffering disproportionately from the dollar liquidity crunch and the federal reserve has done a lot to try to open up lines for many of these countries that have been able to access the sorts of lines before and even in previous crises, but there is a need for more. weekend thepast prime minister's published an op-ed in bloomberg talking about how much africa needs $100 what theore on top of imf pledged of $50 billion so really, urgency for this. flail, then it is not going to help anyone. this is not just an altruistic thing. the imf, the world bank, and others, are really concerned that this could top of the global economy. shery: you should consider measures like capital controls. they should be given a legitimate place now in this
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sort of uncertainty. what are the imf and world bank proposing now? michelle: there are a lot of solutions floating. there may be a freeze on bilateral government loan repayments for six months to nine months into 2021. there is talk of more swap lines for other countries. mason was talking about opening those up to indonesia, india, and she lay. there is talk of removing the stigma of borrowing so ems can come forward and not feel that they will be punished by investors for asking for more funding. and really, the whole underlying theme in all of this is they are asking for more from the imf, which that it had a $1 trillion war chest, estimating that we are closer -- the imf is looking at short-term loans, special rights, anything they can do to pump more stimulus into the
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economy, especially these ems. shery: thank you very much for that. let's get a quick check of the latest business flash headlines. is freezing global operations today, laying off thousands of staff. the pandemic has hammered the travel industry, leaving hotel rooms empty. it threatens to be another problem for softbank, which is still reeling from the failed ipo. risinghi son -- valuation and they have to take losses instead. reports from seoul say kia motors is suspending production at three plants in south korea. the coronavirus/is demand for new cars. two of the factory -- slashes demand for new cars. virgin australia is in contact
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with the government of ministers , trying to ensure there is a competitive airline industry after the coronavirus. travelers are not expected to go overseas again for at least six months and virgin and qantas have grounded most of their fleets and laid off staff. the government pledged 450 million u.s. dollars to aviation so far to avert potential bankruptcy. next, the minneapolis fed president says the u.s. may face 18 months of rolling shutdowns. more from him, coming up next. this is bloomberg. ♪
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>> this is "daybreak asia. " top producers finally agree on a deal to restrict oil output. bilateral phone calls and opec lashallies agreed to s production. u.s. pressure forth the agreement. producers will cut nine point 7 million barrels of supply each day. the ecb is mourning the eurozone is likely to see a more severe coronavirus recession the rest of the world and may not recover until next year.
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deteriorating across the european union as governments extend lockdowns with germany's decline at 10% in the current period. indonesia is tightening restrictions on cities around jakarta as infections top 4000. the philippines says it is ready to act to support the economy in what the governor says is a once in a lifetime crisis. hasmar says the pandemic halted plans to further open into stock market. there were hopes of attracting foreign investment, but the xpats fleeing. e a cut in money going to charity to pop-up the administration's cash reserve. carrie lam announced new supporting hong kong's slumping economy. the additional spending accounts were almost 10% of p and almost
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deficit.e projected north korea says it is ready to take steps to guard against the coronavirus, but insists the situation remains stable. agreed ita says the is impossible to insulate the company from the infect -- to insulate the country from the infection. the politburo says it may create obstacles to north korea's progress. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. >> thank you. let us take a look at the markets. zealand, and hong kong markets are closed. thailand not treating today either. let's look at what we are looking at. the nikkei resuming losses.
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declines of 1.3%. close manufacturers and retailers. the kospi way down by chipmakers and auto stocks. to currencies, liquidity pretty thin amid the easter long weekend holiday. volatility easing as we get a bit of fatigue among market participants. u.s. futures have been turning lower at the start of the earnings season. also on account of what we have seen in the oil market share, that initial mark. with the clearly agree likes of goldman sachs, saying that this is a historic deal at
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the end of the day, but not enough of a deal. >> the prospects for crude cut. to have you with us on the line. discuss what is happening with the price of oil at the moment. it has been a bumpy ride in early trade. what do you make of the price action so far? volatile start to the trading session. i think the market has a lot to take in. what happens over the long weekend. a lot of detail to digest. not the least of which is going the alliancet that was not able to grow itself, if you will. countries like canada, brazil, and the u.s., which may have -- by mandating their
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own reduction have not done so. have promised, but not pledged. the other is mexico. of timent a huge mess in negotiations to bring that country on board, which points to potential fault lines, which may prove risky in going ahead. >> for now, the saudi arabia and energy minister saying opec-plus is up and alive. is that true? is the price were over for now? over for now? >> probably. it was dormant or some people said dead. for the market, what will count more than any word of reassurance would be exactly what they do in may.
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are they able to cut back by such a huge amount? it is not that you can just do it. markets want some sort of reduction starting to happen this month itself to have credibility on the 9.7 million barrels to make up for next month. agreementgile is the given that this is a political problem looking for a political solution? vandana: all opec or opec-plus cuts have come with the shadow of doubt as to whether the members will comply, whether the agreement will stick. this one, because of the magnitude, unprecedented in the history of the oil world and the fact that it took so long for mexico to come on board and a huge compromise was needed,
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mexico is cutting much less than its fair share, i think all of this puts a bigger question mark on whether they are able to stick together. given given that u.s. stockpils are so elevated, is there any choice for u.s. shale other than to also cut? >> that is a good question. the 5.7 million barrels a day are mandated. organic --for circe for sure see organic market-driven test starting to happen. some have already begun in canada especially on the u.s.. oil countteeply the has been dropping for the past four or five weeks. the u.s. has said it expects to 3ere from 1.6, even up million barrels a day drop in production.
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i think the concern for the oil markets is going to be that those organic cuts are going to be lagging severely the demand we are seeing right now. those promised by the u.s. and canada idle production instead of real cuts? they are not saying we will mandate these cuts. they have calculated what they expect to be a natural decline in their production as a result of pressure on the oil companies due to oil prices. >> how optimistic are you on the demand side of things? particularly as we look into what no doubt will be horrible sentiment out of china. is there some hope we might see quicker than expected, more robust than expected recovery from china? does that change the
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expectations when it comes to the demand side? >> the ultimate savior for the low oil prices is going to be the tapering off and the demand recovering. the past few days have proven to us that opec-plus can only do so much. they might be able to put a but asfter the decision, far as the pandemic is concerned, it is very unpredictable. we are still not seeing the peak in terms of cases and deaths and so on. i would think the second quarter of this year looks really difficult, probably the worst demand destruction is going to happen. hopefully the pandemic starts ebbing, we see some sort of demand recovering in the third quarter, but i expect it to be
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very very gradual. >> last week we heard from the international energy agency saying they will update the numbers when it comes to plans from consumer nations on adding to their reserves. how much could countries buying cheap crude help in offsetting the pressures when it comes to oil? i would not bet too much on that. plansare probably already for china to stock up in commercial and strategic storage. india is looking to buy a little bit, way smaller than china. you have japan, korea, australia, new zealand, which do have storage in line with the i ea. altogether they could buy a few
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tens of millions of barrels, but if you look at 25 million barrels a day every single day of excess production right now, it is going to be a drop in the bucket. >> thank you so much for joining us. talking about that opec agreement and the reaction of oil markets. we are just getting the latest coronavirus case numbers out of china. 108a saying they have seen additional cases for april 12, importantthose are cases. also a symptom medications for 98 cases being imported. onare seeing restrictions quarantine, measures being taken after the country reported 100 new cases that were imported from russia.
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we have much more to come on daybreak: asia. we havemonday, australia, new zealand, hong kong, and thailand markets as well. ♪
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>> like its peers, the federal reserve is digging in for a
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drawnout battle against the coronavirus in they're willing to take action and their sense that it is a war that is fall waon.- far from being we heard from fomc voters. who are they and what did they say? >> let us start with the president of the federal reserve bank of minneapolis on one of the sunday news shows, face the nation, this morning. he said it is going to be a hard road for the economy. until a vaccine and therapies are found. he says until that happens, we are going to keep seeing flareups. 18 months of flareups, volatility in the markets, and he is echoing as he is responding to concern over something anthony she was talking about as well on cnn -- cnnony fauci was saying on saying that the reopening could
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start in stages in may. we will see what happens. neel kashkari saying we should aped recovery. u a lot of concerns about a -shaped recovery. we also heard from a voter who does not see light at the end of the tunnel that comes to the virus. the reserve port of -- even though he says we will see that rebound, mester says the door is open to more lending programs.
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she says that the federal reserve we are likely not close to having it all done, but we are always looking for things to do, and if we think something is going to work, we are going to try it. the door is still open. they have various programs in place including repo operations that would have totaled $2.3 trillion when they are all in a new bond with facility, money market fund, all kinds of things. she says she thinks the fed is building a bridge to the recovery. >> what should we be watching out this week? just to see how badly that bridge needs to be built. for the u.s., retail sales is going to be a big one for the month of march. it is supposed to be down 8%. that is a big drop.
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manufacturing closely watched as well, looking for a loss of or percent -- 4%. it isy this is something, an anecdotal report from the 12 fed districts, each president has had to put in the report. this time, this is going to be coming into this last week, we are going to be looking for anything people have to say about the impact of the virus on small businesses, what workers are saying, what experts are saying in their districts, so that is another one that will be closely watched. >> think you for that. there.n hays china has opened up its credit tap. this is bloomberg. ♪
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>> let us get a quick check of the headlines. the australian newspaper says woodside petroleum has ruled out oil surge. an interview says the opportunity has passed.
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oil storage rejected an approach from woodside in 2015. other as saying he hopes opportunities will open up. oil surge shares have slumped this year. from the usa disney world is laying off 43,000 workers because of the coronavirus fallout. the park closed its doors last month due to social distancing measures. the company is being forced to furlough staff. the layoffs will begin next weekend after an agreement between disney and the union coalition representing workers in florida. meat asial shortfall of the coronavirus shuts a major plant in the u.s.. idling a facility in sioux falls, south dakota after employees were infected and meet supplies across america are, quote, perilously close to the edge.
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workers will receive pay for at least two weeks. let's get a quick look at how markets are trading at the moment. it is really in terms of the loan markets, they are trading this long weekend, the nikkei online as well as the kospi. yen.respite for the volatility down as well as liquidity down in japanese markets. we have the easter week shuttering markets in new zealand as well as hong kong. thailand also closed today. oil remains the top story when it comes to markets. finally a deal from opec-plus. still not impressed when it comes to the fixation on the demand side. we are also counting down to the opening of markets in mainland china.
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it is a week when we get new gdp, but let and us talk through these money supply and credit numbers. the clearest signal yet beijing 's responding to the malaise caused by the pandemic. because indicated, there are so many measures of credit from the very broad and more targeted, so what out of the data stands out to you? a very good point to make. set apart from the other months we track is fairly consistent almost across the board pickup in everything from your usual measures of the formal banking sector, you are also getting massive pickup in measures of shadow finance, the otherd bankers,
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thing that also stood out here was a pickup in corporate bond issuance and government bond issuance. if you put those two together, we are talking over 200 billion u.s. dollars. , to put that into context. one last note on the bank lending as well. it was very broad-based. the rollingometimes over of loans, that is a key figure. another would be short-term financing going up. for this, it was broad-based, household and corporate, both short and long-term lending picked up as well. hopefully we will see this show up in numbers.
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impact of thatt thinking on what china's economic recovery could look like? david: you know, that is a good question, because i have yet to see anything that indicates that because of this we get a v-shap ed recovery. bloomberg economics to just test bloomberg economics suggests there will not be a v-shaped recovery. you have a global recession to contend with. china has to dig itself out of. indication the best when gdp numbers are out. the quarter on quarter estimate, the best one, in quotation
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marks, it is -5%. -20% out forecast is of capital economics. the median forecast is 11.2% contraction. that comes out on friday. we will see how this progresses. >> historic numbers. thank you for that. let us get a check of how futures are trading. david just mentioned those gdp numbers later this week. -6% year on year could be the number for first quarter gdp numbers out of china. down 0.3%.s closing 0.6%.futures down u.s. futures reversing earlier gains that we saw after u.s. stocks posted the biggest weekly gain since 1974. the s&p 500 closed at the highest level in almost four weeks and we didn't get that historic opec-plus production cut.
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are the games not sustained across asia, we are talking about futures to the downside, the nikkei down more than 1%, the kospi as well under pressure. really coming down from highs we have not seen in a few weeks for the kospi and the nikkei. well have close markets as . australia and new zealand closed , hong kong, thailand, away on holiday. when it comes to volumes across asia, pretty muted this monday. ," ang up on "the china open founding managing partner joining us after the start of trade on the mainland. plus a look at the challenges facing india's auto sector. that is at 11:30 a.m. if you are watching in hong kong. that is it from "daybreak asia "china open" is next.
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>> it is 9:00 a.m. micron beijing and singapore. >> as we count you down to the start of the trading day in the chinese mainland, hong kong is shut today. stocks on the back foot. all amid the coronavirus uncertainty. u.s. futures declining in early asian trading. >> opec and its


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