Fewest deaths since the lockdown. Factory output across several asian economies slumped to record low. Fresh pmi data out of europe. The week culminated with a grim u. S. Jobs report. Warm welcome to daybreak europe the tail risk is back and it is wagging. Chinau. S. Trade relations in the dumpster. The United States president says as ultimate punishment, pompeo is ramping up the rhetoric. Angst deliversde hapedongation of any us recovery. That takes bond prices and yields down to 0. 25 , maybe even zero. That is the news, the pressure you have. Good morning. Nejra yes, the bad news doesnt seem to be piling up with asian factory data overnight, we look ahead to what some have called an unimaginable u. S. Jobs report friday with a 21 million plus expected out of that payroll number. Then of course you have the risk of tension between u. S. And china you have just outlined. The question is how much of that negative view is already in the price . A lot of people have said, look, risk assets are looking negative through the stimulus on the others. Are they going to continue to do that in may . Friday did set us off to a good start. More than a 2 drop in the s p 500. Japan closed, but generally read on the screen in asia. U. S. Futures point to another down day. Europe closed on friday. We are seeing european futures down more than u. S. Futures, reflecting that catchup. Treasuries trading. Futures to just we could see the 10 year yield slip. The yen is one of the g10 currencies gaining against the dollar. You are seeing oil snapping a three day rally. The expectedraised death toll in america to as many as 100,000. Also promised, he a conclusive report from the u. S. Government on the chinese origin of the coronavirus up rig. He says beijing has misled the world. For more, let us go to beijing, where Tom Mackenzie is standing by with a global coronavirus wrap. Really great to have you with us. Catch us up with what has happened overnight. Cases, wes of global are looking at confirmed cases of 3. 5 million for coronavirus, nearly 250,000 deaths globally, but it should be noted we have seen one million recoveries as well. In terms of the u. S. , cases increased by 2. 3 . A total of 1. 15 million total cases in the u. S. A lower dailyas increase than last weeks average, so that is seen as a positive. Trump has revised up the expected u. S. Death toll. Deaths in the000 u. S. Could get to as high as 100,000. In france, they have reported 135 new deaths in the past 24 hours, the fewest in the last six weeks. A positive trend in france. In hong kong, you have seen planned by the government to relax social distancing measures. They have seen zero cases confirmed for at least 14 Straight Days in hong kong. They are looking at opening cinemas and beauty parlors and gyms. Sciences is in focus. They have had that antiretroviral drug approved by the fda. That company saying they are expecting to get that drug to patients in the u. S. As soon this week. We have touched on it slightly that u. S. Officials are talking about chinese origins of this pandemic. Mike pompeo is talking about enormous evidence. Of course, we have not seen any evidence. We have not been delivered any evidence physically as yet, have we . Tom we have not. We have heard from pompeo and president trump, again attacking china over its role. Out andhad trump come set at this town hall he expects to have a conclusive report from his officials shortly on the origins of this outbreak and chinas role in what he says is a cover up. Trump is saying he thinks china misled the world about the scale and the risk of the virus outbreak. He also suggested, and this ties into that trade war conversation , that he would consider hitting china with additional tariffs as punishment for what he says is this coverup. We also heard u. S. Officials apparently believing the reason china covered this up was because they were trying in part to get up to speed on medical supplies they needed during the initial stages of the outbreak. You are right to point to pompeos comments saying he has enormous evidence that connects the virus to this wuhan lab. We had a response from china state media, again attacking pompeo, describing these comments as groundless accusations and saying it is part of unprecedented propaganda warfare designed to try to divert attention away from the trump administrations own incompetence. In terms of the evidence, so far what we know is yes, they were studying backborn coronavirus is. Orne coronaviruses. We are waiting for more evidence from the u. S. That it is getting into time of electioneering again. It suits the narrative. Let us check the asian markets we saw. Have a look at the Hong Kong Market again. The hang seng is down over 4 . You are seeing the new exertion, a roll down in terms of pricing as you begin to reassess the risks around the ultimate punishment on china, which could be tariffs. Themackenzie rounding up data. Ms eia should down by 2. 5 . Let me get you up to speed with your first word news. We start with this daily death toll from the virus. It is falling from the u. K. To italy. Leaders across the european region wrestle with how to ease lockdown restrictions. Britain is not set to unwind just yet. The government prepares guidance for the next steps, including if employees need to wear face masks and how public transport should be used. The crisis is different for Warren Buffett. He says the company has not ,ound any attractive deals leading to a record cash pile up. Fed stepped in, opportunities became less attractive. He made the comment at the shareholder meeting. North and south korea have exchanged fire in the demilitarized zone. Seoul says the north fired several times that i guard post fired by retaliation and verbal warnings. It comes a day after the north korean leaders first public appearance in 20 days. Health. Nce about his ireland closer to a new government. The rivals agreed to try to form a government last month, but they need a Third Coalition member for a parliamentary majority. 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. Nejra coming up, we will talk more about the risk off sentiment in markets. Poor Economic Data and the beginning of lockdowns lifted, of course, the increase in u. S. China tensions. That is next. Manus this is bloomberg daybreak europe. Of whats going on in asia. Risk off mode in treasuries. Pmis the lowest in a decade. Lowest on record in indonesia, malaysia, and the philippines. Of play. He state s p futures down by 0. 9 . Let us take a quick look at the bond market. Oil giving back on its gains from last week. You have seen the rollover. What happens next . Bonds and equity markets. To have you with us. We need to reprice or reengage our brains on the risks. The ultimate punishment is on the table according to the president. Is controlled, do you go straight to long dollar . Watchs it is hard to stocks the dollar remaining strong well we have this risk aversion out there. Sense thee relationship between risk aversion and strong dollar remains so strong. The question in anybodys mind this is at what point you might get a weaker yuan. We are learning as we go along. The yuan has been such a beacon of stability. The benefits of having a Stable Currency for china have been pretty clear. The difference between low and asianate emergingmarket currencies, not so much emerging anymore, and the bonds are the ones with higher rates. Brazil, south africa, turkey. The indonesian rupee is sometimes rupiah sometimes. You feel there are more people talking about risk on and more people worried about risk on, the yuan weakening. Is kind of an unfounded risk at this point. Certainly we will be micro ed into every kick higher in the offshore yuan. I suspect we will get speculative traders selling it to see what happens and whether anybody stops in. I love the distinction you make between talking about certain risks and being worried about them. If we think about all the risk we keep talking about in terms of earnings, Economic Data, a second wave of the virus, add to that u. S. China tensions ratcheted up over the weekend, do you get a sense markets and risk assets particularly are going to reflect the talking into worry into risk assets in the next few weeks . They might originally. It needs to evolve. Posturing is something we have seen plenty of times before in markets. The last couple of years. It does not necessarily go very far. Beyondd to get electioneering, posturing talk. Anybodysuch not in interest to ramp up these global of a war in the midst pandemic that affects us all. Step back and say im not going to blindly believe whats going to happen. It is just a really bad idea. We are quite used to ratcheting and reappraising risks from a variety of political administrations. , a shock, notiew least because we get it on a weekly basis in the jobs numbers in the United States of america. We are going to get a rude awakening. Throughess that euroyen, dollaryen and canadian. Which of these trades is going to give you the biggest return when we get that reawakening across the world . Certainly trades like the Canadian Dollar against the yen correlate with risk aversion in a pretty big way. If we are shocked by north American Labor market data in particular, we should not be shocked by 20 million u. S. Jobs dropped this month, even this morning, markets are surprised by asian pmi. , short theor me Canadian Dollar come along the japanese yen. The one that i would think has the potential to move people, the triple win he of core data as well as the United States, risk aversion coming back across the board and oil prices drifting lower against the weaker data. Nejra you have pointed out you are staying away from oil related currencies due to the price of oil as well. Great to have you with us this morning. Now lets get the Bloomberg Business flash. Warren buffett has dumped his stake in u. S. Airlines, but the investor remains exposed to the collapse in air travel. He bought a air supply parts company. It faces lean times as boeing and airbus cut jet production. Company toe latest an emergency u. S. Approval for coronavirus drug. Policymakers hope the tool will help. The test looks for antibodies in the blood. Deutsche lufthansa hope to reach a deal on government aid soon. The help would be a decisive step to secure the airlines future. It would make it unlikely the carrier would need protection. That is your Bloomberg Business flash. Italy prepares to gradually reopen. The fewest deaths since the lockdown began. Nejra this is bloomberg daybreak europe. We have some breaking news out of the middle east. From the saudi global giant in terms of chemicals. Riyals. 50 million last year it made 3. 1 4 billion in terms of a profit. This is a top line number. They say there is an oversupply that puts further pressure on product prices. This gives you a real sense. Sales in the First Quarter collapsed by 18 year on year. First quarter loss, just under a billion riyals. More supply pressure coming to bear on prices. That is going to have an impact on the margins. Oversupply in key products to put pressure on margins. That is not a great start. Trades a how sabic little later on. Nejra getting back to europe after a twomonth lockdown, italy will roll back measures today. Workers prepared to return to work as manufacturing and construction restart. Yesterday italy reported the fewest daily deaths in two months. Other governmental hearing governments are preparing to ease lockdowns. Using europes strictest lockdown by allowing people to exercise. France plans to reopen shops from may 11. As we turn our attention to europe, earlier we have been talking about the fact you are closer to switching from euroyen shorts to dollaryen shorts. What are you thinking of doing around eurodollar if anything . Little, to be lee quite honest. For the euro to start moving higher, you either need a weaker dollar trend to start, you have to start with a peak in the dollar against the force of emergingmarket space. The to the early 2000s, eurozone economy was growing twice as fast. Eurodollar was not going up until the crisis. I find that hard to justify. Otherwise i would need to get big positive surprises out of the european economy. Eurodollarr settles into a range, may be here to bit above, 109 or 112 for a while. Just really low historically. It cant really fall much further. It just does not have a catalyst to make a move higher while compete and all disasterfocused on the in the emerging markets. You talk about the race between the fed and the ecb. I have seen various people say it could be up to 1. 5 trillion. Wouldubling of ppp morebling of ppp put pressure on europe . It would keep pressure on. I am not sure the fed is done and i am not sure the ecb is done. I dont think the ecb can do more than maintain pressure. Changer would be positive for the euro and on the other side, really clear and progressive fiscal policies where at the moment, i dont think the way europeans have set up their fiscal strategy has convinced investors that is a strong reaction. It is more what the ecb is doing. It is not going to help europe. Quite a lot is priced in at this point. It will keep us down rather than send us much further down. Up, the oracle of omaha speaks. Hathaways annual shareholder meeting. Thats next. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need saving you up to 400 a year. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Manus good morning from bloombergs middle east headquarters. s daybreak europe the u. S. Secretary of state says there is evidence the coronavirus began in a wuhan laboratory. Trump raises the u. S. Death forecast to 100,000 as global cases surpass 3. 5 million. Italy reports its fewest deaths as the nation edges toward reopening. The factory output across several asian economies slumps to record lows. Fresh pmi data from europe. This week culminates with a grim u. S. Jobs report. Good morning. Nejra welcome to daybreak europe. Million slump in payrolls. About an trump talking exclusive report on the viruss china origin. You start to wonder how Much Negative news is already in the price of risk assets. Is this just another dimension, the prospect of u. S. China tensions thats going to be easily resolved . Manus that tariff risk between rhetoric and execution. There is one personification. A Global Chemicals maker with a huge portion of tariffs. This is the headline thats going to rock markets. They are suspending all capex except for nondiscretionary items. Looking back at the last quarter at the end of last year, you had the Lowest Reported net income in a decade. They are saying the First Quarter did not get any better. A quarter of losses. 950 million riyals. They are talking about additional exertion on prices and margins. Shale ripping up the dividend script. Bp ripping up the capex script. This is the key to the rest of the year and 2023. The fed says we will not have a hike in rates. Wti and 10 year Government Bond futures. Tariffs, government punishment is coming. That is the theory from the white house. The aussie dollar down 0. 4 . Crude down by 6 . The bond market, futures trading , you could see a quarter of a point on the bond market. If tariffs are executed we turn lshapee into an recovery. Seeing a bit of strength in yen. Let us return to our top story. Raisingout donald trump a variety of issues. One of them is the death toll in the United States. Its going take 100,000. Going to hit 100,000. Donald trump promised a conclusive report on the chinese origins of the coronavirus outbreak. He says there is little doubt that beijing misled the world about the scale of the risk of the disease before it became a global pandemic. Warren buffett is treading more carefully. The famed investor answer questions from shareholders at the annual meeting. He also said the crisis was different and that there have not been as many attractive deals. What was the reason . Dani burger. Buffett struck an almost comforting tone. He pointed to the anxiety people are facing and it was clear this was a meaningful meeting for him. Talking about Times American resiliency has been tested, but not broken. He mentioned the fact he needs a haircut, that he has gotten used to wearing sweat suits. It was a humanizing moment. Overall step to his mantra that americas best days are ahead of it. The does not quite meet description of optimism he has had, it does not match the huge cash pile Berkshire Hathaway has built up. 173 billion. They are still sitting on. They dumped airlines, the four biggest u. S. Carriers Warren Buffett held. Saying the picture has fundamentally changed. On the one hand, hes optimistic america will stem the tide. On the other hand, still sitting on a massive cash pile and getting word of their airline holdings. If buffett is so upbeat on the american economy, why hasnt he stepped in to buy u. S. Stocks . This is someone who once said often dark clouds come into the economic sky and rain gold and when they do, you want to come out with a basket, not a bucket. He stayed on the sidelines. Some of it is a fundamental changing nature of the new economy. That would be his explanation for why he was dumping airlines saying he did not see a clear picture. Stepping in hampered buffetts ability to find attractive deals. He said the fed liquidity meant Smaller Companies did not need to turn to investors with deeplined pockets to save them. The fed stepped in, markets rebound. For buffett, that means there were not attractive deals for him to step in and buy. Thank you so much. Let us get to the first word news. Donald trump says he will not pass further stimulus measures unless they include a payroll tax cut. He has been advocating the move for weeks. It is opposed by most congressional democrats. It is not clear how much support has among republicans. He made the comments during a town hall event hosted by fox news. North and south korea have exchanged fire in the demilitarized zone. Seoul says the north fired several times at a guard post followed by retaliation and a verbal warning. Theexplanation comes after north korean leaders first appearance in 20 days. His disappearance prompted speculation about his health. Ireland is reportedly close to forming a new government. The green party has entered talks with the countrys traditional parties. The rivals agree to form a government last month, but they need a Third Coalition member for a parliamentary majority. 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. Manus coming up, a decadess worth of jobs wiped out in a month. The forecast for the u. S. Jobs report on friday. Goods data coming from the u. S. The jobs report looming on friday. Nejra this is bloomberg daybreak europe. Japan is closed today. The hang seng down 4 . Asia opening after being closed on monday. You are seeing euro stoxx 50 futures down a lot more than s p futures. Wake up to the reality of more u. S. China tensions. Futures suggest the 10 year yield could dip. Dollaryen on the 106 handle. As we help you navigate the coronavirus cycle, lets take a look at key moments to watch out for. Tomorrow we get a policy decision from the reserve bank of australia. Watch for updates on their economic outlook. Boris johnsons government is due to review lockdown measures in the u. K. The bank of england makes a policy decision. Is u. S. April jobs report expected to reveal a deterioration in the u. S. Labor market since records started in 1939. This afternoon we will get factory orders from march and the u. S. Jobs report on friday will give a picture of the labor Market Impact amid nationwide shutdown. Media forecast predicts a 21 million plunge, almost a total wipeout of the 23 million u. S. Jobs created in the last decade. Was reading through one of your notes and you said that asking whether the dollar will weaken further without a direction is like asking whether the equity market can simply go on rising without any reference to underlying economic reality. Explain that to us, please. I do not think inevitably the dollar goes on rising from here. That is a challenge. Ist stops the dollar rise just the sheer scale of easing by the fed. The scale of money printing by the fed. That hasme time, driven the equity market to disconnect itself. I do not know how an equity daytegist goes through his in the face of this economic backdrop, but if you were to , focus onthing around the global economy, i do not think you could prevent significant Dollar Strength from here against the emergingmarket space. Once you have that, certainly i cannot imagine the dollar making and theant gains eurodollar going up. To weigh all the time this unprecedented policy response and the underlying economic reality against each other. It is shocking that for all the money being printed in the United States, supporting the equity market so well, we have not done anything properly to ize in the entire emergingmarket space. That level of largess by the fed is ostensibly that is not reflected in the dollar thus far. Perhaps the protection mechanism is gold. Gold can make it to 3000. In his view, the debasement of currency turns gold into the new longduration bond. What you think of that . To argue the merit of gold. I was brought up to be negative about gold. Somethinge purpose of whose only real merit is that it is shiny and rare . It is going to hold its own, yes. It is going to hold its value even in the face of this kind of monetary response. I think it will. It will take time. You need patience in the sense that although we are getting if we want to describe it as unprecedented money printing, which is kind of a stretch in some ways, what we are doing is the fed is a global fire force just pouring water until they can kind of stem the flames. Once they have stemmed the flames, i suspect the price of gold probably will get a big lift. We are doing things that historically currencies by now. I suspect it will be impossible to turn off fast enough on the other side. Nejra if we get back to the lockdown conversation and switch is notone country that yet planning to unwind the lockdown is the u. K. A government minister has said guidance will be issued while also warning the country is not going to go back immediately to normal life. Has plungedfidence the most in the last quarter. Would you be making any place on sterling . Any plays on sterling . In a limited fashion. Sterling has is priced cheap to fair value because of the of the government sticking to its guns, does not want an extension when the rest of us think, havent you got bigger fish to fry than brexit . For goodness sake. We are priced for some of that. Is going toing remain quite difficult. Anything, i would be buying euro against the pound, which is rare for me. I think sterling is vulnerable. Maybe other cities have some of the same problem, but you know, ending the lockdown, getting people back to work in a pound that is reliance on a really overcrowded public transport system is not going to be a very this economy is not going to get going properly for a long time now. What are the consequences for the bank of england this week . They are like every other central bank. They have done a lot. If they can think of Something Else on the side they will continue to be creative. Right now, they need to not disappoint markets while waiting for the norm is measures they have already taken to start taking effect. Of the rbae tomorrow. That was true of the ecb last week. Manus that is certainly all about the reinforcement, isnt it . Let us get you up to speed with your business flash. Your agenda for the day. Roche is the latest company to for aergency u. S. Coronavirus antibody test, promising to scale up. Policymakers hope it will help reopen the economy. The swiss giant expect production to reach high. Oubledigit millions by june the test is for antibodies in the blood that have been raised to fight off the virus that causes covid19. West bank is deferring the dividends as profits plunge to a two decade low and bad loan provisions sore. Launderingntimoney fines. The bank is considering some of its smaller units. The company says this is the result westpac has seen in many years. After flirtingr with various combinations over the years. A potential announcement could come as early as this week. T would see a merger the combined company could be valued at 30 billion pounds. That is your Bloomberg Business flash. We see a red the screen in asia. U. S. Futures lower. European futures sharply lower. A lot of europe was closed friday along with asian equity markets. The yen bid against the dollar. Otherwise, Dollar Strength across g10. No cash trading for treasuries right now. Futures point to the yield dipping. Weakness in oil after a powerful threeday rally. Manus we just were saying during the newsreel. Markets are officially negotiating with liberty global. A new entity, a 30 billion entity in the u. K. This is the crux of the matter. They are trying to negotiate the new joint venture with equal voting rights. The merger is live, the discussion is on. Let us keep the juggernaut going. Prevailing risks in the global economy. We are trying to establish where they are. Emerging markets, investors head into the first full week with history against them. Eight of the past 10 years, may has proven losing numbers in developing economies. I was looking at em versus oil in terms of the currency. We are looking at the highest em basket since 1997. As you look at em, do we begin to priced em lower on this reawakening on the data . Spiking on for oil, the recent 1997 highs. I think we continue to worry there is just going to be an enormous lag in terms of how long it takes for the emerging market space to recover because we have to go through the whole economic downturn. Fundamentally, we should stop talking emerging markets and Start Talking about those that require foreign capital to flow work, their economies to that bloc of countries were already we had enormous money flowed into them, we had a big now starved of capital. Concern, when you way therint money the fed does, when you cannot borrow money, when the central bank cannot buy the bonds, what happens is your currency is falling, but your bond yields are rising. That all takes not weeks longer to stabilize, but years. That is the real concern. I was looking at em currencies getting into that bearish drop. We are focusing on the lira with turkish inflation due out. How quickly to be get to a record low . Any day this week, to be honest, unfortunately. Nejra thanks so much for joining us. Manus regularly due. Nejra thats it for bloomberg daybreak europe. Quite strong risk off across assets in todays session. Looking to a lower open for european equities. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Anna good morning. Welcome to Bloomberg Markets european open. I am anna edwards in london. Lets get you headlines. The markets say, does the riskoff move have further to run . Asian stocks retreat. The cash trade is just less than one hour away. Lockdown easing begins. European leaders start to lift