And of austerity. The u. K. Prepares its biggest dose of stimulus in decades. It really is said to plan doublings doubling stimulus to combat the outbreak. President trump appears to a coronavirus conference. He was expected to announce a major stimulus package that he hyped himself the day before. And, taking a hit. Couldsays the coronavirus knock First Quarter quarter china revenue by one billion euros. We will speak to the ceo in just over a half an hour. Youve got some breaking news down there on the green from the bank of england. Anna absolutely, breaking news. Itsbank of england reduces bank rate. The bank of bank rates by 50 basis points. 20. 25 . A surprise rate cut from the bank of england. Just as we saw a surprise rate cut from the fed. Here we are seeing me seeing a great deal of cooperation theeen the fiscal side of monetary side in the u. K. Investments are waiting for an update, waiting for the government to respond to the coronavirus. We are also hearing about a Monetary Policy from the bank of england. Really fascinating to see this move come in today. The market has been increasingly braced for a move such as this, maybe not today. You can see the instant reaction we have seen in the past with the pound on the move against the u. S. Dollar. The market was positioned for this. Lets get to our market conversation. We are joined from our markets live team onset in london. A surprise rate cut in terms of its timing, but not a surprise at this time. Not a surprise. Market wast of the anticipating we would see 50 basis points at some point, given what we have seen around the globe. I think it is a great signal, showing that various views that the u. K. Government is trying to be courted native. I think this is real positive for the u. K. On a relative basis. Believe thatt they are getting on top of the situation in italy. If they dont believe that the u. S. Is getting on top of the situation, it may help the u. K. But it could be washed by global events. Matt we are showing the pound with you. I want to pull up the futures, the equity Index Futures. We saw them briefly turn positive in london. Now they are back down. We do have passed futures right now up about a half a percent. After the gain in equities yesterday, is the panic passed just one of is this those rides we get with high volatility . Is a chance apple answers are kind of correct. I think we do have a bumpy ride. It would be naive we would go a Straight Line backup. The prices in asia showed that people thought we might get vshaped basis. But then it sinks back down to the low. Overall we will have a lot more volatility. Will we see the extreme panic we saw on monday . I suspect not in treasury markets. It does not set an entirely new paradigm. It does set a change. There is not even the bond of the Capital Appreciation and the dividend yield asset. I think with higher volatility, that does not mean we returned to the panic. In the panic we were seeing as oil andand monday on bond, we might still have greater equities in the weeks ahead. Certainly it will be volatile. I suspect we will have more of a downside the next couple of weeks. We might continue to dribble higher this week. Anna it would be interesting to see. An aggressive move by the bank of england, cutting the base rate by 50 basis points. Even just in the shortterm here in the european session. A 16 point market. Gilt markets are already ready for a loss of issuance this year. Ready for the government to go heavy on infrastructure spending. Trying to level of the country. I think they will be mindful of these domestic considerations, but also the global push from lower and lower yields are what difference will we get from the bank of england announcement to the gilt market . Mark unfortunately, a lot of these rate cuts are pretty marginal in terms of changing the markets to calculus. In terms that most of these rate cuts were price. The most important thing is that the government delivered them the market shock again. Even if they dont believe it is the right policy. They dont want to shock the markets. Obviously in a time when we are talking about the u. K. Ramping up stimulus, going at a much standing, iive think it is important to reassure that as governments around the world have been asked to borrow more and provide more stimulus, they are able to borrow extraordinary low rates. That is a use for a part positive margin. Matt we are hearing from the bank of england. Something beyond the rate cut. It is also something we expect to hear from the ecb later. New lending scheme targeted ad small and Medium Enterprises. A new sme lending scheme that will offer for your funding. The boe is saying you could provide in excess of 100 billion pounds. As you know, people are calling for that, Bloomberg Intelligence is calling for that from the ecb as well. Is this kind of program more important than the plain vanilla rate cut . Mark i think it is. As i said, the rate cut is not shocking markets at this time, but i think the lending is really important. We know we have stimulus coming through. We have an epidemic we are fighting, we dont know how long it will last. It is about companies who can stay in survival mode until we get the desk get past the worst of the epidemic and see spending come back into the economy. That means shoring up this lending and shoring up the smaller enterprises. It is absolutely vital to the function of the economy. I think this is a really positive package today for the u. K. Thank you for joining us. Our bloomberg market live managing editor. Digesting the bank of england. Sterling falling as a result of the rate cut coming as a surprise. 50 basis points taken off the base of off rates of the u. K. , down to 0. 25 . Scheme withg associates set for a mediumsize enterprise. Reiterating this new sme lending scheme for up to a for your funding plan. It could provide in excess of 100 billion pounds to u. K. Sme. U. K. Also cut to 0 from 1 . The bank of doing its part. We are here in westminster because we are waiting for the government to do what it plans to do around coronavirus. We will get the elements later on. We have banks on what they are doing with mortgages. Businesses will be interested in what is coming from fiscal and monetary action. We will look at your stocks to watch. Slide 1avirus may billion off its revenue. Bloomberg radio is also available to you on your mobile in the london area. This is bloomberg. Anna welcome back to the european open. 12 just 10 minutes minutes past 7 00 in the u. K. 50 or so minutes into the start of the trading. The surprisere of rate cut by the bank of england. Taking off Interest Rates in u. K. By the bank of england. No surprise that we see rate cuts coming. The timing of the surprise on the day that we were expecting to hear from the government around the fiscal policy, also get that Monetary Policy boost. This is what we are doing for the pound. The pound is weaker as a result of this. We will keep showing you the european futures picture as well. Disappointments the side with a lack of detail around President Trumps plan to tackle coronavirus. Lets go to bloombergs first word news update. The bank of england has cut rates by 50 basis points at a special meeting. The special Monetary Committee voted unanimously to reduce the rate. They are also introducing a new lending scheme, in excess of 100 andion pounds for small medium businesses. Italy is set to double the amount of fiscal stimulus to tackle the coronavirus. It is increasing the amount of money for the fourth time in a month after the European Union agreed to stretch its budget to help fight the outbreak. Italy is looking at as much as 60 billion euros of additional spending. Officials saysth some parts of the country are now beyond containment. John hopkins says the total number of cases in the nation has now topped 1000. President trump did not provide any new detail on a package to fight the virus last night. Instead, the Economic Advisor given in the be near future. Global news, 24 hours a day, powered by more than 27 hundred journalists and analysts in more than 120 countries. This is bloomberg. Laura in london with your first word news. Bank is joining us right now. I want to ask you quickly, before we get into anything else , about this breaking news from the bank of england. Points to 25sis basis points in an emergency or intermeeting cut, and providing 100 billion with up to 100 billion pounds of lending incentives to smes. What do you think . I think the 50 basis points is without any significance to the Overall Economic challenge we have. I think the lending scheme is absolutely on port point. It is all about the companies that are really having and stealing the biggest impact from this fallout. Dont forget what we are dealing with. It is both a Global Demand breakdown but also a global supply. In my 30 years of doing this i have never seen these two things happen. Very much on point with what the bank of england did this morning. Does this seem like some joined up thinking between monetary and fiscal authorities since this comes on the day that we expect the budget announcement here in the u. K. . I think the budget is a numbers region. I think i have to congratulate the u. K. For becoming the first country to embrace mmg, giving away on the National Break that has been in place. It is a absolute breaking story in my opinion. The u. K. Will become the first country to go all the way. And also politically very interesting because it seems to be indicating that this transition from a london run whereu. K. To there is more power given to the role there, it is certainly a new trend. I think the budget will set to new trends youre the giving away with the fiscal break and giving support to the new political idea that, in the future, to get the voters you noncapital city structured policy. Matt are we going to get coordinated action now . We have had an emergency rate cut from the fed, now we have an emergency rate cut from the bank of england. Tomorrow is Christine Lagardes time to shine. Will she impress the market . Steen i am sorry to say this, but i dont think it will really matter if they are coordinating. Interestay past the rate. The price of money to solve this. What we are dealing with is a potential new credit crisis. That comes from the fact i just stated. Global supply lines have been going down. Now the lines of coronavirus. Global demand is falling. As you have seen this morning, some companies are out ticking when billion dollars of the top line with a full impact on the bottom line. I think it is only the first of a number of companies that have take these precautions. Think is really disturbing the market is that we have no sense and no ability to know how long this will last for. I think the authority has been extremely holding back in terms of getting an action plan in place to deal with this. Matt certainly the market has reflected that disappointment. I wonder when it comes to the underlying economy, we will talk with the ceo later, it is a big number for the First Quarter, but he can afford it. The small and mediumsize company cannot. China came out with a rescue package for them. Now the bank of england is looking to support them to the tune of 100 billion pounds. Bloomberg intelligence is saying that the ecb may have a program that provides 10 euros in funding for every one euro in lending to smes. Is this a kind of thing the Global Economy needs to see now . Steen it is exactly the right thing for what is going on now. But you have to remember, it is the gratitude to what we are in. The average sme let me say, youre absolutely right, that is where the real structure is in the curve system right now. But they only have an average threemonth cash flow. That is the consolidated companies. Business has a month maximum. Even though they are now facilities available, if we look at this, the bank has been very, very slow. The bank of england, a number of times before, it was always seen as something leading in terms of the edge, but the uptick has been very disappointed. The slightly concerned that intention here, in terms of helping the average sme and companies is to be based on evidence. Steen, the cio at saxo bank staying with us. Fighting the market with the 60 basis point rate cut. A scheme to encourage lending to the economy. Helping to reinforce the transmission of that bank rate. Too to incentivize banks provide credits for businesses and households, to bridge them through a time of economic dysfunction. We will have plenty more on the response of the bank of england move, and look ahead to westminster. Bloomberg radio is available on your mobile device or on Digital Radio in the london area. This is bloomberg. Matt welcome back to Bloomberg Markets european open. About 38 minutes away from cash equities trading. Just a few minutes after the emergency rate cut comes through from the bank of england, futures turn from negative to positive in terms of equity indexes. That it takestle to change Market Sentiment. As opposed that is not little an emergency rate cut a 50 basis points and a Lending Program targeted at smes. Take a look at the pound right now, in terms of the british currency, we see a little bit of a drop at about a quarter percent in dollar terms to 12878. But i think really the more interesting seeing is a Market Sentiment move that you see right now and equity Index Futures. Lets get your stocks around the newsroom. Looking at this company for us. Our Equities Team is covering the u. K. Budget and impact on stocks. Many burger is focusing on this. It is called that because the founders name was this. What you have on them . He was just talking about the fact of looking at this big headline that came out for the company. The are saying sales could fall 800 million to one billion euros. Of course this is due to the impact of the coronavirus. They are also saying chinese 2019 were 80 below the level. We are also seeing slowing in japan and south korea. Be oneen said this could of the first Retail Companies actually really dire impacts the coronavirus is having on the battleground. Lets come to you on the u. K. Stocks in focus because of the budget. I guess because of the lending measures to sme being announced by the bank of england as well. Right, leading up to the budget i think the concern for the markets has been the virus and what kind of spending would be coming in the budget related to the virus and ensuring that the economy would take much of the attention away from what was expected to be infrastructure spending. Now with what the bank of england had done, it would appear that it is for the real economy, specifically virus focus. The huge amount of spending we are expecting from the governments very later on will indeed quite a big impact on infrastructure stocks. Construction Companies Across the board, and also the supply chain. The main place to watch is the ftse 250. The more domestically focused of the index. Matt what is the story there . They are freezing their investments to ease their they are canceling them are putting them on hold. The a hub and of visibility of the Coronavirus Impact and this is something that if enough companies are doing it could really impact the economy. You see things like the bielby in the lending facilities they are offering. Cannot seey we clearly what the impact is going to be for their earnings. One positive note they did say, that china is starting to improve. Theyre trying to start to see some peaks of green shoots coming out of china. Morgan stanley notes it is ready with airport sales. One of the most exposed Luxury Companies to airport sales. That trend is likely to get worse before it gets better. Thank you for joining us. Get all of the latest stock stories from our Equities Teams by going at first go on your bloomberg terminal. You can also get the first word news on your mobile app. Last nights 5 surge on wall street, investors are looking for stocks to capitalize on. Any turnaround, however brief it may be, saxo bank has got a number of companies in its bounceback basket. They includes chp and some semiconductor stocks. How likely do you think it is how risky is getting out there and trying to catch the proverbial falling knife . Steen it is very risky. Ill the we have seen this fall impact the economic crisis. Been slow ins response. But the bounceback that we released is really based on the fact that stocks that sold the most during the last four weeks, and who has a highest quality in terms of the number of metrics we use, they are among them. But we are really saying, here is stocks you should be buying from 5 15 from where we are today. But overall it is getting from being extremely expensive to being fair price. Normally we have to get it cheap before we buy. But i think its the next 5 to 10 in my opinion. Its fast to get the names on your watchlist and look at these names now. The cio at saxo bank with us this morning on the program. Coming up, no show from President Trump as he fails to appear in a News Conference where he was expected to 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. Matt welcome back to Bloomberg Markets european open. We are 30 minutes from the start of cash equity trading and just about 15 minutes ago, we got an emergency rate cut from the bank of england, lowering its benchmark lending rate by 50 basis points to just 0. 25 . As a result, we saw futures t