Package amid disagreement on how to spend nearly 2 trillion. President trump says coronavirus measures shouldnt be worse than the problem itself. Europe tightens its grip. Leaders scramble to enforce unprecedented restrictions as 2000 more people die in italy and spain over the weekend. Angela merkel says she is self isolating after contact with a doctor who tested positive for the coronavirus. An hour awaynder from the start of cash trading across europe and it looks like it will be another risk off day as futures fall. Euro stoxx 50 futures as well as ftse and dax futures, down 4 . Futuresftse mib gaining, but i believe that is actually fridays trade, so that is not current live futures contracts. All life futures contracts are down, deep, deep in the red. If you look at u. S. Futures, we also see drops of about 3 across the major equity indexes, so s p, dow jones, and nasdaq futures all down. Its get into the markets with laura cooper, bloombergs mliv macro strategist. Laura, we have seen some forecasts. Dire James Bullard saying unemployment could be 30 . Gdp could drop 50 . This is essentially selfinflicted here. How bad is it . Laura i think it is too soon to tell. Certainly we will likely see a significant contraction in the Second Quarter. We will see the Unemployment Rate spike, but it is unclear yet whether markets are pricing in just a degree of contraction we are likely going to see. Crucially, it will be looking at the more timely, really key indicators. Joblessat the initial claim numbers Going Forward and the extents of the lockdown measures that could actually be spread out to the u. S. , because only 1 5 of the country right now is in mandated isolation but that could ripple out and have greater impact. Matt how much assistance are we theg to get from the u. S. , fed, from congress and the senate . How much are we willing to pay in order to slow the spread of this virus . This case,ink at what markets are looking for is the quick injection of cash into the system, because at this stage, what we are seeing is it is less about a case of worrying about deficits. It is more about the deployment of the fiscal stimulus. The fact we saw the senate bill blocked last night is probably why we are seeing markets react so negatively today. We will have to see some kind of agreement come through, there. I would expect that some major fiscal package is likely and are not pricing in that focus it yet, but certainly are seeing hurdles and the window is narrowing for whether that can provide temporary relief to the market route we are seeing today. Matt in terms of assets, we still have what typically are safe haven assets not really bid. Yes, we seen the treasury yield but wewn to 81 bips still have gold under 1800 an ounce and you can still buy over ¥110 for a u. S. Dollar. What gives here . At the end you look specifically, there is something going on in terms of the week ago, we saw the repatriation of those foreign funds back to japan. A record 4. 2 trillion, whereas data from last week showed that actually reversed partially, 500 billion outflows. That is why we are not seen the ended. The yen bid. Other traditional safe havens like gold, it is still the case there is dysfunction in market and a search for liquidity. So it is a case of selling those assets in order to shore up the cash come in the liquidity needed to fund your positions elsewhere because we are not yet seeing a floor for markets in this current environment. Matt laura, you are asking on the blog today, your question of the day is what would be the impact of 30 u. S. Job losses . What are you hearing from people responding . Laura interestingly, when we saw how markets reacted overnight in new zealand, how whenreacted in singapore these countries enforced more widespread, more tightened lockdown. If we were to see that in the u. S. , i would expect that is what could potentially spook markets a leg lower because by the time we get the Unemployment Rate figures, it will be in the rearview mirror. Certainly we are expecting to see a significant contraction. I think markets are anticipating that and it is crucially dependent on looking at the more timely indicators in order to gauge the magnitude of the depth of the contraction, as well as looking at the pace of the spread of this virus on a daily basis. We really need to see the likely peak and begin to slow in order to create some calm into markets. Matt do you think it will be worse in europe . We talk about the u. S. Economy, clearly one of the big engines european growth, but unemployment is typically higher and our contractions here, as well, are. Think nocertainly economy is going to be amy and from this, but what we are seeing from Central Banks and the government side, notably news out of germany this week that they are likely going to abandon their zero rule, they will see deficit spending. That is a material change, so i yes, we are going to see a hit but it is about being able to provide credit for company so they can survive. When we do see more the dust settle and economic recovery take hold, there are jobs for people to go back to. Crucially, what we are seeing in germany and europe could potentially curb that more so than what we have yet to see in the u. S. That is likely coming. Matt nonetheless, there are a lot of people working at jobs a lot of people who arent getting any income right now because of the government impose lockdowns, and youve got a lot of companies that are letting workers go without pay, airlines, in particular. Is it too late for european governments to provide the stimulus necessary . They havent yet. Laura i dont think it is necessarily too late because we dont yet know the duration of how long the lockdowns will persist, how Long Companies will have to be closed. We are seeing the covid Corporate Finance facility that will allow the government essentially policymakers to talk out wages to the tune of 80 for three months. We could potentially see that coming from other policymakers, likely from the u. S. , and that would certainly help to provide the kind of floor for collapse we will potentially see in labor markets are nearterm nearterm. Cooper, our bloomberg mliv macro strategist. You can join the debate on todays question of the day, what would be the impact of 30 u. S. Joblessness . Reach out to the team by typing ib tv. Weve got some more down arrow news coming out from corporations. Shell this time, reducing its cash to 20 billion or less for the year. Shell is prepared to take further strategic decisions. It says it will cancel the next trench of its buyback program. Investmentuce its from 25 billion the 20 billion. Thats no good for jobless numbers, and it will also cut the next trench of its buyback program. Want to be a surprise at all, shinzo abe says he wants to talk with the ioc about the possibility of or atning the olympics, least saying the currency of the world current state of the world is not appropriate for the olympics. You surely could have guessed that yourself. Senate democrats blocked Mitch Mcconnells attempt to advance a coronavirus economic rescue package on sunday. Thats next. This is bloomberg. Matt welcome back to bloomberg market the european open. Awaye about 48 minutes from the start of cash trading across europe and you can see futures down significantly. , cac, and dax futures down 3. 5 to 4 right now. Index closed in , at 18 point 27. If youve invested in that, youve lost 20 off the high. Has warned the u. K. Faces tougher measures, potentially including a full lockdown if some members of the public continue to ignore calls to stop social gathering. Newspapers this week and were full of reports of people meeting in parks and coastal towns against medical advice. Everything is on the table as far as the Federal Reserve is concerned. Thats according to st. Louis fed president and noted hawk James Bullard. Hes warning unemployment could hit 30 in the Second Quarter. He also sees an unprecedented hit to gross domestic product, which could shrink by 50 , he says. Morgan stanley also sees a record plunge by about 30 , though they are just talking about q2. China is talking of the prospects for a rapid economic rebound as the Global Economy sees further lockdowns to curb the spread of the disease, but people there go back to work. Mostations premier says of china is low risk and returning to normal. The central bank is echoing that sentiment, saying it sees the economy bouncing back in the Second Quarter. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Now, Senate Democrats blocked majority leader Mitch Mcconnells attempt to enhance a coronavirus economic rescue package on sunday. Thats after leaders in both chambers disagreed on how to spend nearly 2 trillion. , butparties want a deal differ on key sections including a 500 billion chunk that could help companies or local governments. The democrats are against that. Asmany may borrow as much 370 billion in an unprecedented financing push to cushion the fallout from the coronavirus pandemic, or the spread of that. Joining us now with more is bloombergs maria tadeo out of brussels and Annmarie Hordern out of new york city. How significant are the measures in germany . Well, im not sure if i would call them again change her, but they do show germany taking this idea of whatever it takes. We are looking at 150 billion euros in new spending financed by new money. These are not old measures. Somethingw borrowing, that has been a political topic for germany. You have to factor they have already said they would be willing to put 400 billion euros in guarantees and potentially 200 billion euros in loans to safeguard liquidity for companies. I would also say the story is not just in germany. The spanish Prime Minister is something calling for that will be need and no country will be able to deal with the fallout on their own. Know this is happening behind the scenes, but now you have an actual leader coming out and saying my country wants coronabombs. Matt spain, meanwhile, pushing for corona bonds there. In your native country, how likely is that . Likely,m not sure how significance to the fact the Prime Minister was willing to go there and it signals it was a difficult weekend for spain. There was so much escalation in the state of the week and that will hurt economically, the industry will hurt from that and we expect the lockout lockdown to be extended to april 11. What i do think is happening now is the government is looking at aand making sure recession guaranteed now, they say we need to safeguard the economy and that means corona bonds, politically, very toxic. Matt maria, thanks. Lets get over to Annmarie Hordern in new york. Ofre do we stand in terms the economic damage done by these government imposed measures and the kind of bailout the government can then give us . Annmarie well, it is definitely spend 2 they need to trillion, but they just dont agree on the details. Yesterday, we saw that when the democrats blocked this senate bill, this procedural vote that would have taken it to the next level, the main crux of the argument was this 500 billion dollars, a chunk that would go to corporations like airlines, which we have seen hardhit due to the pandemic. Senator schumer just said this is another Corporate Bailout. We spoke about this last week, similar to 2008 with general motors. This will be highly political and definitely controversial. Schumer, along with other senators on the democratic side are saying more money should go to state and local governments, things like hospital aide, ventilator aid, etc. Now this leads a question to what happens to the bill and the timeline. Already yesterday, Mitch Mcconnell pointed to the fact that since they didnt act on it, you are already seeing it play out in the markets. U. S. Stock futures hit limit down. Matt which they seem to do every day anyway. So what, we get mcconnell will bring this back to the floor, i believe, 15 minutes after the market opened this morning. Annmarie he said maybe there would be a change of heart after u. S. Equity markets opened at nine 30. He said lets have a vote at 9 45. Nancy pelosi said she will work with the house to come up with their own bill. To add to the drama we have seen in bc, a lot in washington, d. C. , rand paul got tested positive for coronavirus. He had met a number of senators through the week. Paul as well as mitt romney and mike lee, other senators are in quarantine. It is just adding to more pressure and more questions about where the bill stands. The third lawmaker in washington, d. C. To test positive for the virus, which means more lawmakers are having to stay inside and quarantine if they were in contact with any of them. Matt thanks very much. Onwill keep you updated these bailout attempts throughout the morning. Coming up, gold suffers a rough start to the week and oil drops toward a 17 year low. Commodities in turmoil still. This is bloomberg. Matt welcome back to bloomberg market the european open. 40 minutesess than away from the start of cash trading and once again, futures are down. Today is likely to be very risk off. Weve got ftse, plus500 cac and dax down 3. 5 to 4 . Germanyn as we get news is willing to scrap the black zero rule and borrow 370 billion to spend, even as we get news the u. S. Is working on a 2 trillion bailout and the fed says anything goes. Neel kashkari on 60 minutes yesterday saying the fed still has many tools and is willing to use them. The problem is, government imposed shutdowns across the globe destroying the economy with an absolute sudden stop to everything. As a result, James Bullard from the fed says unemployment in the u. S. Could rise to 30 and that the growth in gross domestic anduct could evaporate, actually turn into a contraction of 50 , so half of Economic Activity in the u. S. Disappearing overnight because of government imposed regulations to try and stop the spread of the coronavirus. Thatnt helping so far cases continue to add up, as do deaths. The u. K. Briefly suggested that building up herd immunity was one of the ways to deal with a virus. Destroyed, ands bloomberg click take breaks down how heard immunity would work and how effective it could be at halting the global pandemic. Heard immunity is basically the idea that if you get sick with a lot of infectious diseases, your immune system kicks in and it helps you survive the infection. As part of that, you build this immunological memory, a memory of the infection and this means for a lot of infectious diseases, if you then are exposed to the same virus, the same disease again, your immune system has a head start and is able to combat the infection very well, so you tend not to get sick. This is exactly how vaccines work. We shortcut that process without you having to get sick. What this means is that in a whole population, if a disease or in this case a virus starts to spread through the population, many people will get sick, but many people will also recover and they will have this immune memory that will allow them to fight the infection again, and once a certain portion of the population has become immune to this disease, the virus can stop circulating in the population, which means that another person wont get infected. No. It really doesnt, not as a strategy, and i think there has been some unit miscommunication in the information that has been relayed from the government. , and i hope i am correct in this, but i dont think that the government weategy was actually to say are not going to do anything and we are just going to let herd immunity developed, that that is our strategy. Herd immunity is a relevant thing to be discussing in terms as ais pandemic, but potential outcome of the pandemic, not necessarily as a strategy. It is not something you are actively doing. Next, we will give you more on 2000 people in italy and spain dying in just one weekend. The coronavirus, taking hold across europe, and new restrictions going to place. Way, one of the people who is self quarantined is the chancellor of germany. Angela merkel came into contact with a doctor who actually tested positive for coronavirus and she is now in isolation, although ruling from there. We will discuss. This is bloomberg. Matt welcome back to the european open. 30 minutes from the start of cash equity trading. Im matt miller in berlin, where you can now be fined point 5000 euros for meeting in a group of more than two people. These restrictions have shut down businesses from cafes to restaurants the barbershops. Pretty much anything where people are selfemployed. They will have absolutely no income Going Forward. It will just make it difficult to pay rent, to make car payments, to pay for health insurance, etc. And be very detrimental to the economy. Our next guest and talk about what will happen in europe. Predictions of 30 unemployment in the u. S. And gdp dropping by half. In europe, where the measures are so far more draconian, do you think we will see something similar or worse . I think there is no doubt we will head into a technical recession. How persistent that will be depends on how the virus spreads. Are seeing are helping that direction. It will also depend on the economic support we are seeing and weve seen the ecb act with a package that is openended and it says it will be there for the economy as long as is needed and finally, fiscal policy is starting to move. If you are in berlin, we are seeing big measures out of germany. Combination, the recession should be contained and we will see a recovery after the virus shock is happening. The virusod and how develops which is something economists cant predict. Matt are we seeing these economic rescue responses coming quickly enough, because it strikes me that youve got rates soaring in certain sectors. In terms of the credit market, it doesnt seem like there is a lot of liquidity there, and regular people are still going to have to meet rent payments in a week, and still have no access to funds. What we seen so far is on the National Level but we need to see the euro areas more coordinated response across the Member States and coming from the center, so that is something that is a next step, i would say. The good thing is there