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Fresh update on "asia pacific" discussed on Bloomberg Daybreak: Asia

Bloomberg Daybreak: Asia

01:06 min | 43 min ago

Fresh update on "asia pacific" discussed on Bloomberg Daybreak: Asia

"On Wall Street time to check in with Bloomberg opinion and we're joined by opinion columnist John Office used to discuss research that could help clarify the riskiness of covert 19 for market watches. John was certainly still learning as we go in terms of what is the most effective way to stop the spread of this disease. And you go in your column into quite detailed about thie F actor and and the infect effectiveness. I guess you should say off people that have covert but in terms of risk asset watches. What are we learning here? In terms of you know how governments and against Central banks have been pumping money into economies to try and keep them afloat and what that is actually going to mean for market watchers. Okay, well, in terms of the effect that central banks have had you've seen, obviously you had a remarkable effect from the feds. Initial interventions. A few Months ago. I think, actually, what is very interesting its presence if you look at China The People's Bank of China doesn't appear on the face of it to have been that aggressive in terms of its monetary policy. But if you look at the actual amount of liquidity out there in China, you can see the liquidity. Through the bond of equity markets on through traditional banks has risen very sharp because border capitalists London estimates there's a 20% increase in liquidity on that helps goes a very long way to explain why Why Chinese stocks are doing what they're doing Just that the moments And while you're getting this halo effect that you normally expect to see when, when China is doing strong, the high gold price recovering industrial metals, stronger prices across the rest of Asia Pacific etcetera on DA strengthening Chinese currency, so Plainly. The reaction of central banks to what hit the world of the pandemic is very important, but also the stage. You've reached the fact that China is Almost put it behind. It's unable to end it in the position that they in plainly has a lot to do with why it's it's mark. It's able to perform the way they are president. So whether you're a central banker John or a market participant, and you're trying to make sense of this pandemic, and you're looking at the various data points here. Is there a way that we can understand the data. Now that's more effective. I mean, I don't want to be cliche, but kind of separating signal to noise here a little bit. Things become cliches because because they're good, I good turns of phrase that you want to use a lot, They say, you know, I think in terms ofthe signal, this is noise. There's a lot of data at their most of which Hasn't gone through the normal academic checks for good reason. I think the more you look at the date, so the more it becomes clear that the are number the degree the number of people each Infected person on average, Infect Really matters more than anything else, because that's on that changes. But you know the dreadful thing of death but also the kind of impact on the economy and the impact on health systems. What does appear to be some clear at this point is that the are number does reduce Independence off Thie measures people doing to reduce them ability to lock down. Ask more people suffer from the disease in different countries. Now. That's on the face of it is Positive developments. It means that the disease is Busily coming under control. We didn't have to work out why that is And I think these this's I think the critical question for the next few months. Most of the explanations why there are numbers coming down our positive. It's that people are actually behaving with better hygiene. Oh hand washing mask wearing all that kind of stuff. It's possible that we really do get it. Herd immunity at this point, because more people have had it that we believe, which is very possible. It's also possible that the the super spread is out there. They're the really social types. I have already got it and they will use cases won't spread. It is widely as possible now, all of those sensible suggestions and mean that things could be I mean, very positive things for the chances of getting this under control. Unforced big issue is that this could all be because this dizzy this seasonal in the Northern Hemisphere. And it could come back as flu tends to come back in full. The Spanish food came back in 1918 is the great fear that that is also perfectly sensibly within the within the data, so Broadly speaking, I think what you need to do is bear those possibilities in mind. Our number is lower. Why look out for any signs that this is seasonal? I just want to be clear what you're describing is they are not when the number is one, and that correlates to one infected person, Brean or infecting one other person if the number goes much above One. We're risking. Ah, greater spread. If that number falls below one. That means that we're moving in the right direction. If you're Goal here is to eliminate the virus. The outbreak exactly. I should have said that that cleaning myself. Yes, exactly what I mean and when we're not if the virus coming under control without needing to do anything without government needed to intervene and spend money to do things Bring it down. That is obviously a positive sign unless it's Yeah. And you also make the point that in terms of staying locked down or staying inside that is based on our own fear as well. And how does that feel? Then? Come back into the markets. Do we see similar to what we saw in March? And I guess is this a reason to while we're seeing gold so well supported I think gold is largely myself. I don't think it's about covert fear so much about very low. I think this is more about central banks that central banks keeping really lt's solo, you know that yields On bonds far below expected inflation that that means people are more prepared to spend money on gold, even though it doesn't give them give them a yield. But beyond that, yes, plainly. What has happened in the Sunbelt here in the States where I am in the last few weeks has brought back a number of tell sale. Signs of fear because at a basic human level, it's scary between Wei don't understand fully. What's going on is found on a psychological level, Tio I have an amplified effect on the stock market in a very diverse way. I think you can actually say that the boom in anything in tech stocks at the moment. It is largely about fear that people think that they're gonna have to leave it there. Glad you enjoy your holiday, that.

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