Oils biggest drop in three decades. Some buyers of saudi crude are said to seek 50 more after it slashes prices. The ferocity of yesterdays in this mornings rolldown. You are seeing a moment of either reprieve, and the best opportunity to sell in terms of the s p futures over the past two days. On a futures front, we are off on the s p up on the s p futures. Up 3. 5 . All out recession was being pumped into the prices yesterday. We turned into a bear market. Dropping futures by 20 . Have a look at the bonds. Yesterday was down for equities. This morning there is a limit down. Thats giving you a nice spike in yields. My last guest said expect a further pump higher in terms of yields. That is when they would seek to enter the market. The fed are active. The new york fed are adding liquidity. Turning on the repo tap. Say the fed as opposed to a Global Central Bank reaction. The fed is acting on liquidity. Roll over the currency market. , yields protectionism rise in the United States of america. Aussiedollaryet falling. Reprieveeyen seasonal sees a reprieve. Worldrst country in the to completely shut down, affecting more than 60 million people. Ofeffort to stop the spread coronavirus. It is one of europes biggest economies. If you are looking for shock and all, the italians have gone for it. What does the lockdown really entail . Ofit is the same sort lockdown they had in the north, it does notagain, seem to be like in china where you see nobody in the streets. Public events are closed, universities and schools are closed. As we have seen the first couple days in the zones we designated originally, people seem to be moving around quite a lot. People are in cafes. It is a broader lockdown but we are yet to see a real situation where we truly had empty streets. How will this extended affect the Economic Impact on the country . Take me through the impact. The areas that were first cordoned off, those were the of the country. If you slow down activity everywhere, if people cannot travel, that is just more businesses, more Small Businesses that are suffering and just thousands and thousands of more citizens that are going to need aid in the future it is going to multiply the relief the government is going to have to provide. They are talking about 7. 5 billion euros right now. Everyone expects that relief money to arrive. Us turn to maria. Good to see you this morning. What steps are the u. S. Taking . We know yesterday was a terrible day. Immediately you did get President Trump saying we will put a Major Economic measure, we needed to help the coronavirus talking about major tax relief for industries that were hit. He is also talking about payroll tax cuts. The thing that is interesting if there was a lot of mixed messaging yesterday on the coronavirus. The president tweeted there are Many Americans who die on an annual basis because of the flu and life should go on. He hinted there could be a package to prop up the markets, but it was not just trump. You look at the World Health Organization yesterday, they said they were close to a pandemic. They fell short of describing it as such. They said this could be the first time in history where we are able to control a pandemic. What is clear is the numbers continue to climb. We are not at peak virus yet. We just look at italy, talked about it, but its not just that country. European leaders today are going a speak at 5 00 p. M. To put coordinated response to the virus here. The criticism as it has taken two weeks for the europeans to get on the phone to try to do this together. About theis coordination, or lack thereof. Thank you very much to the bloomberg team. Virus is whatthe market voices anticipate. This is not going to repair itself. A recession. Many countries are going to be hit. You are going to see a whatever it takes policy approach from the fed. I dont think this is a micro problem. This will sort itself out. It will not sort itself out before further damage, unfortunately. Now is theing me founder and president of good to see you this morning. We have an entire european nation in lockdown. Xi jinping going to visit wuhan. President trump promising stimulus. Yesterday, we were talking about global recession. Nothing has changed, a market has gone into lockdown, yet we are in rebound. , now you have italy, its going to hit supply chains across europe. No coordination in terms of policy at the moment. Chinese growth is already cut. At best we can expect 2 to 3 chinese growth this year. The impact on a global basis is largely europe, china, the u. S. Smaller heading toward growth. Globally you are going toward recession. Manus i have had enough guests tell me there is a lack of coordination. What do you want to see . What can g7 do . Take it out to g20. What can g20 do at a global level . It has to be fiscal policy, not monetary policy. Manus g20 tax policy . You want tax cuts. You want cuts for certain industries. I think the taxcut industry the Airline Industry will be coming for a bailout. Payroll taxes may have to be cut. Manus how do you coordinate that as a g20 . Each country lives in a different economic paradigm. That is true. You have to do something about health. Infrastructure. All the levers have to be used at the same time. Is a Global Health crisis, not a Global Financial crisis yet. , but is itrespecting not that we need a much more demonstrative g20 Health Response . Which we have not had. Manus what would that look like . You want to do something about Health Supplies area if you look at europe, everyone is keeping their Health Supplies locally. We dont want to trade them any longer. I think you need to make a major effort saying we are going to ensure Health Supplies. Manus is that a message that should come from the white house , bringing every Major Pharmaceutical Company together to face the world and open the supply . Yes. That has to mean china. It has to mean india as well. They are big producers. And then the europeans. We need key Health Policy indicators from the g20 manus i want to get your sense from the european. Italy is in lockdown. Strategyted 7 billion in terms of stimulus. This is the first layer first real test for Christine Lagarde. Who wants to borrow . What does Christine Lagarde need to do . Send a message once more about fiscal policy. It is not about monetary policy. T is short term liquidity you need to look out of the money market. That is where it might start. The credit markets i think you need to worry about. Today, tuesday, might be black tuesday for credit and highyield bonds manus Scott Maynard goes on to say let me get you a chart. Sorry about this. Have a look at this. Highyields. You talk about it could be black tuesday. Saying you canis given what you see here, i take it back to 2008. There is a long way to go. Look at the energy sector. Particularly shale on oil and exploration. Their and will start and transmit there itself to the highyield sector. Manus we have had the japanese bond market. The yen is rallied. Now to the ruble. The bank of russia starting fx sales today. This is fx intervention. We have had verbal intervention from a kuroda. Policy initiatives from the United States of america in here of payroll taxes, and we are this morning now looking at actual physical fx intervention. This is the repercussion you have when you have a dislocation in markets which is trying to steady the situation. Gbs really whipping around let me get you up to speed with your first word headlines. Jinping, president xi has visited wuhan for the First Time Since the outbreak started, a trip intended to project confidence that the government has managed to stem the spread of the virus. Sincehas been quarantined january 21. The total number of cases around to world has dropped 113,000. Oil is growing after the biggest drop in three decades. Plus haspse of opec seen saudi arabia threaten to raise output to record levels. Mp upa says it will ra production. Crude demand could drop this year for the first contraction since the financial crisis. , the resilience of shale second, the impact it will have moree economy, this is than the discovery of new oil policy. They are playing russian roulette, which may have grave consequences beyond oil. Global news 24 hours a day on air and on quick take by bloomberg powered by journalists and analysts in more than 120 countries. Coming up, the imf calls for targeted policies to counter the virus impact. The fund says the virus will create shocks to specific sectors. We hear from the chief economist. Plus we speak to frank appel. What is he seeing on the front line . Logistics in focus. Manus this is bloomberg daybreak europe. The narrative is shifting. Talks of payroll tax and benevolence in the u. S. Mnuchin and kudlow were disparaging of payroll tax cuts last week. Hearing talks of intervention from russia and japan. Equities have a moment of reprieve. Lets dig a little bit further into coronavirus. Pushing the Global Economy to its worst performance in more than a decade. Investments are proving their resilience. What are they . Within this market we have seen over the past week or so, a few shares could be opportunities a Public Health concerns change how this how consumers behave. The uncertainty has shifted Market Dynamics. We have companies that encourage employees to work from home. Slack become vital. It stands to reason if you are working from home you will be ordering more food in. For that moment, we saw analysts upgrade grubhub. Companies, netflix, these have over performed global stocks. Therial capital calls this effect. In china, consumers pushed back from going to restaurants. If that traffic falls again, operators in london like the Restaurant Group could fall. Many outlets located near cinemas whose stocks have been tumbling, especially after last weeks announcement the James Bond Film release will be pushed back. Amc trading at its lowest on record. Finally, the push for cleanliness. This is another Consumer Behavior habit where we have seen sanitizer snatched off of store shelves. You look at clorox, it climbed to an alltime high last week. I dont know whether i am panicking enough. I have mine a account uptodate. Throughger taking you how to react in markets. Context, in many ways, it makes very good sense. Back. To go financial conditions from the federal reserve. Im trying to benchmark where we are. Showingl conditions are the most stress at the fastest pace. It is the pace of deterioration of financial conditions on the chart. I looked at the response mechanism in the United States. The new york fed having 50 to be benevolent. I go back to 2008 and i can understand isolation versus the global coordinatorglob do you trust to the runup . Do you trust this repricing or is it something to sell into for markets . You are running to a safe haven. This has traditionally been viewed as an indicator of recession. A supply shock because of coronavirus. You have a shock resulting from that. Will that make any difference . I doubt that. There you go. Our guest host for this hour. Coming up on the show, investors looking for protection. This is bloomberg. Manus oil is clawing back some of the losses after yesterdays implosion. Investors are still on the edge when it comes to crude. Annmarie hordern has been checking out the chart. We see oil prices clawback but investors are on edge. Discipline shattered. The market has slumped. Im looking at volatility. The price of the wti options decrease the most on record yesterday going back to 2010. Rent options surged to a record yesterday as well. Investors need to start protecting themselves against further price drops on oil. The streets as we can dip into the 20s according to Goldman Sachs and bank of america. What does a 20 handle look like on brent or wti . Manus thank you. Ok. International Energy Agency is warning crude demand will drop this year for the first contraction since the financial crisis. One should not underestimate the resilience of shale, second, the impact it will have on the economy. New than the discovery of a oil policy, it is proven to be a russian roulette, which may have consequences beyond oil. Manus grave consequences beyond oil. Fatih warning about the consequences. What is the most immediate consequence . The gulf Oil Countries are going to dip into recession worse than we might think if this continues, then what we had in 2015. If this continues, they are going to cut a lot of spending in the nonoil sector. Manus will russia come back to the table . I doubt it. You have a lot of personalities facing each other, none of whom will give up. Manus more work to do. Up, Deutsche Post reports its fourthquarter ebit that falls short of estimates. We speak to the ceo of the Worlds Largest express to revelry Delivery Company. W . W . Uhiono from good morning bloombergs middle east headquarters. It is daybreak europe. After the storm, global stocks stabilize after the worst selloff since the Global Financial crisis. President trump says he will bring substantial relief. Italys ban on travel and Assembly Goes nationwide. Sacrifices must be made. The World Health Organization says the threat of the pandemic is very real. And price war. Some of theack ground after its biggest drop in a decade. Manus air france cancels 3000 flights in march. It cuts longhaul capacity by 13 , european capacity by 25 . Theres going to be locked down in italy. Italy. Down in xi jinping goes to visit wuhan. Thefic falls in terms of load factor, you are seeing load factor falling by 2. 5 points. It is literally close of the doors, leave the planes. The eu are actively weighing the stoxx. Airline carrier in europe to have to use 80 of your stops. Lets talk about another company in error sightlines. Deutsche post reporting ebit that fell short of the estimate. The Worlds Largest express Delivery Company suffer negative impact from coronavirus of 60 to 70 million euros, but confirmed its guidance for the full year. Brave move. Always mr. Frank appel, good to have you with us. 2008. Th of february we are talking about global recession. Does this feel like the beginning of a global recession . You look through the eye of the 2008 storm. Your interpretation this morning . I think we are not at that moment. The headlines are, but not the reality, i think. Into our trading have seen an improvement yearoveryear. If i talked to china, they say it is Getting Better every day. I think there are encouraging signs. I think we have to stay calm. You have to be clear what your strategy is. Do toe to know what we help our customers. We have to go out of that stronger than we went into it as a company. Manus air france is cutting longhaul capacity by 13 and european capacity by 25 . Frank, are you cutting your capacity . Are you cutting capacity across the system, and if so, where . Frank we are managing that constantly. We have flown more in the first week of march because we needed the capacity to move the shipment. It is too early to say march will be much better than last year, but i think we have encouraging signs. Capacity, strength, it is an opportunity to help customers get stuff moved. Manus you are not cutting european you are not cutting your capacity at all . Capacity at all . I dont know every detail on that, but as i said, we need more capacity, not less. We will manage that on a daytoday basis. Manus let us talk about airfreight and Ocean Freight. You sell the first week of march you saw levels rise relative to last year. Give us the market extent of your airfreight and Ocean Freight from the start of the year. We have seen impact in february, of course, and a drop in volume, not surprisingly. Now it is starting to come back. Earliest impact is expressed business. Express business. It is encouraging, it is what we have seen in other crises. It is not over, but we have to stay patient. Will then you really manus you gave us some guidance was a 70navirus million euro hit. Europe is italy is in lockdown. Do you need to revise that guidance. Guided for more than 5 billion because of the coronavirus. We confirmed that today. We have to watch. More, 5every month billion has been possible, but we have to watch what we are seeing. As far as we understand the situation in italy, i think it is a smart decision. Let us wait and see what really happens. Our focus is on daytoday operations. Let us just pick up on that, frank. We see a whole host of various companies dusting off their Disaster Recovery plans for Business Continuity plans. What measures can you tell us that you are taking at Deutsche Post . We are monitoring on a daily basis. It is different by country. It is based on the regulation that countries have. Our most important thing is to protect customers and employees. Things are changing on a daily basis. We got the question of, have you stopped it . Our upsets are on a daily basis. This morning we walk in to headlines about how the United States might help businesses, a payroll tax cut. You are a ceo. You have run this company for a long period of time. What are the most appropriate measures that can be brought to help ceos like you when you go into this kind of storm . That is a very good question. Way,nk it is a different how the Market Dynamics are, how the labor market is working, i think every country has to make its own decision. In germany they are talking about helping companies who have to reduce work somehow. It is different by country. Manus you did not manage to street scooter into a profitable venture. Mobility. Hype around e are you likely to come to a deal . Decided now we will reduce our own fleet. We saidthe reason why we dont want to become a car manufacturer. We still operate a very huge fleet. I think this is the way how we should deal with that subject. It is not a big challenge going forward. We are focused now on our logistics and customers. Manus thank you very much. Stoic and calm. Frank appel, the ceo of Deutsche Post with the latest numbers. Joining us now to discuss all the Market Action is Juliette Saly in singapore. Annmarie hordern in new york. Dani burger in london. My question to you is, is stabilization here on an enduring basis . As you mentioned earlier, the fact that president xi went to wuhan seemed to be an encouraging sign today. Equity futures encouraging recovering. The nikkei having its best jump in the month despite on the open being down more than 4 . Yen helpingthe there. In bear market watch. Hong kong, china also looking good. Best day for the markets since 2018. This is a recovery for singapore stocks which entered recovery yesterday. A little bit of a pause in the haven. The bond markets are down in terms of price. We are seeing a pullback in assets we have been tracking the past week. The yen into the swiss franc. I want to dig deeper into the yen. Retreating from a three year peak, a very substantial week for businesses. Impacted, things like President Trumps comments driving that dollar bid. Relief from the chaos we have seen over the last 24 hours. Manus quite literally chaos. Dani burger, good to see you. How is my old friend the vix . It has surged to its highest since 2008. I want to be the contrary and here and say things could get worse. Thats because the vix. Has not priced in the degree of volatility we have seen in the markets. That blue line, thats realized volatility. 50 does not reflect the extent of the panic in the markets. Things could get worse. Correlation also important for volatility. Correlation has continued to be the highest, its longest streak of elevated correlation since 1996. Mid 50 vix scary, but maybe not scary enough. Manus plenty more tough moments to come. Thank you very much. A global lineup. Coming up on the show, italys nationwide lockdown. What impact will the shut down half on europes number four economy . We speak to the director general. Bank employee contracts coronavirus, what measures are being taken to contain the upper across europe . Manus this is bloomberg daybreak europe. Here is what you need to know for the trading day ahead. Another kkr in london contracting coronavirus. Meanwhile, italy has become the first country in the world to attempt a nationwide lockdown to try to stop the spread of the disease. Here now is dani burger. A nation in lockdown. Good morning. Its not even the nation. Its these corporate says well, seeing more people trying to contain this. Deutsche bank and kkr are latest Financial Firms to contend with workers who have contracted coronavirus. Deutsche bank will provide sales and training teams in frankfurt. It is sending personnel into recovery until march 27. Some employees might also be asked to work from home. Kkr said it is closing both its London Office is to have them completely sanitized. Staff are working from home until further notice as well. A representative from the firm said the individual was at home and recovering well. Whether it is italy or firms located in financial hubs, the goal is to limit the potential outbreak spread through a disruption that could disrupt businesses or markets. Other companies that have seen individuals contract the virus include hsbc and wells fargo. Deutsche bank said it expects no impact on their ability to operate a full range of services. Thats Business Continuity. Thank you very much. Full lockdown mode nationwide. The first country in the world to attempt to complete shutdown as it tries to stop the spread of the coronavirus. Italy is europes fourth biggest economy. The countrys leader has called it the nations darkest hour ill the finance ministry is saying italy is better off prevent asures to financial crisis. My guest host is the director general of italys Main Business that represents more than 150,000 companies. Good to have you with us. The lockdown of europes number four economy, smart move . Pragmatic . Getting ahead of things . Good morning. We did agree with the government decree that was adopted yesterday evening because an extraordinary measure was necessary. We were collaborating with the government, we are collaborating with Member Companies in order ,o ensure Business Continuity which is insured also by the decree. To go to workle or go to hospitals or to buy food. In any case it is a strong measure. So you are there for lynn square with the government. Square with the government. A payroll taxing relief. What do businesses need the most . We need extraordinary measures to face the consequences of the shut down on the economy which will be quite serious. Some measures have already been taken manus what would be the best measure your group once . On the one side we need to , forsure fiscal measures example, physical payments or liquidity of companies. We see a shock on credit and liquidity. We need guarantees. We need the suspension of payments of bank loans for some time. On the other hand we need whoures for employees cannot work during this time. We need really a Huge Investment plan in order to compensate for the loss in demand. Course, europe is now outside. We need a strong Investment Plan in order to support all other european economies. Manus let us talk about the bank response. You have called for urgent measures and a fiscal response. From the banks, what do you need to see from the italian banks . We already had a response from banks. We signed an agreement which allows what we spend on payment of bank loans and other contracts. We had already adopted during the financial crisis. Now it has been extended and will be impacted by to all the countries that will be impacted by coronavirus. We will collaborate with the banking system. We all want to avoid it and we will work to avoid it. Calling foricron is ron is calling for a european response. What would be at the top of the agenda . We need a strong Investment Plan. We need to put money into the in the healtht system, in research. Also we need urgent measures liquidityres ensuring to companies. Micron macrr. On. Europe has to be fast. Manus we wish you well with everything. Director general of italys Main Business lobby. Coming up, global stocks. We will bring you the selection on your bloomberg agenda. Manus bloomberg daybreak europe, from dubai. Jeffries has some suggestions. No risk global stocks. Suggestions, adidas and unilever. H me i dont know whether this is going to weather the storm. You say we need a more demonstrable response. What do you mean by that . Ofthat means taking care liquidity in money markets in particular. Second we have to deal with the banks. What of the helicopter money . Helicopter money could help, but particularly when it goes to consumers. That means retail credit, credit card credit, this is where you need relief. That is reunion where you need greater attention. Consumers. Manus you say they have the firepower. They have accumulated reserves. Including the sovereign wealth fund. The central bank and the sovereign wealth fund, they can deploy. When it comes to the shock, they can absorb that shock. Manus what do you want to highlight . I look at dollaryen. We have less than 60 seconds left. You are seeing a reprieve this morning. There is the ruble on the move. Let us roll it over, have a look at dollaryen. More intervention from the bank of japan, is that next . They cannot afford it due to the depreciation of the yen. We have to look at the export market. We are trying to buy as much as possible and keep it steady. We are beyond the intervention stage for the bank of japan. Manus well done, rolling with the punches. My guest this morning. Markets are rallying. Down yesterday on stocks. There is a reprieve on a payroll headline. Will that save the markets . Anna and matt will decide. Tv just keeps Getting Better. How you watch it does too. This is xfinity x1. Featuring the Emmy Awardwinning voice remote. Streaming Services Without changing passwords and input. Live sports with realtime stats and scores. Access to the most 4k content. And your movies and shows to go. The best tv experience is the best tv value. Xfinity x1. Simple. Easy. Awesome. Xfinity. The future of awesome. Goodorning, well to morning, welcome to Bloomberg Markets european open, im anna edwards alongside matt miller in berlin. Matt asian stocks rebound after the worst global selloff since the financial crisis. Equity futures points to a positive open in europe and the cash trade is just over an hour away
vimarsana.com © 2020. All Rights Reserved.