Holding fire today after two emergency cuts, futures point lower. The economic cost. Larry kudlow says the jobless claims figures today will show a very big increase. Bonusese, wall street could be cut by 40 this year. Just under an hour away from the start of cash equity trading in europe, lets take a look at futures. After two days of backtoback , we did have a record jump on a lot of indexes the day before yesterday. That was bolstered by another gain. Futures are down by 2. 5 . Take a look at futures in the u. S. This morning, we had a mixed picture. Now it is turning red across the board. Futures globally turning lower as we get closer and closer to the european open. The u. S. Senate has passed a record 2 trillion Coronavirus Relief package. The approval comes after both parties moved past a lastminute dispute over Unemployment Benefits for lowwage workers. The onus is now in the democratic led house to pass the bill quickly and send it to President Trump for his signature. Joining us from new york is Annmarie Hordern. How is the delay over Unemployment Insurance resolved . Annmarie there was a group of gop senators who were saying that the 600 per week, they thought that would give an incentive to employers to lay off workers and for those that were out of work to stay out of work. They said it should be to the most recent salary of the worker. We got over that hump, this was one of the biggest holdups before passing the legislation. It needs ton said be 600 flat. Directere needs to be money injected into the system. Able to get over that hurdle and then we saw yesterday, late evening, they were able to pass this bill. As it was passing, the death in america topped 1000 people. According to johns hopkins. Now the United States with the sixth highest death toll among nations around the world. Matt yes, youve got to think about the human cost here. Who will be the winners and losers of the stimulus package, getting back to the money . I would say there is something in this for everyone, except the energy sector. President trump wanted to fill the strategic reserve. You would have to say this was a grain of salt. There are no Strings Attached to almost everything. 500 billion dollars going to corporations is not just Free Cash Flow of money. No buybacks, a lot of limitations on executive pay, as well as stipulations in protecting workers. Small businesses are bleeding cash. They need this. 350 billion worth of loans, but the Small Businesses were looking for more cash injection. It is not completely everything everyone wanted, but there is something in there for everyone. As well as checks directly to americans. 1200. There was still at a lot of complaint about this bill. Many are saying they are going to need to do another phase. Cuomo,k governor andrew he said the state aid they are getting from the stimulus package, he calls it a drop in the bucket. Thanks very much. Annmarie hordern talking about the stimulus weve got and the stimulus that may be to come. Lets get into the markets with laura cooper, our mliv macro strategist. What do you think . How have markets taken the stimulus . Was it already priced in . I think it is the case that it was already priced in. Markets are looking through it. What they are focusing on now is the containment. Ford it be enough governments to flatten the infection carved within the u. S. There is also the question about the effective and timely deployment of this fiscal stimulus. Times could take around three weeks. We look at the cash injections directly to households. The precedent we have is looking back toward the economic stimulus looking back to 2008. That bill was passed in february of that year. That is quite a time lapse. I dont think at this stage we have the luxury of that length of time. Absolutely. Time is of the essence. Take onut the market stimulus to come . Yesterday, i spoke with the german finance minister. Germany may need more targeted stimulus and the u. S. Is also already talking about more trillion from 2 the state and trillions more from the fed. Is the market expecting anything more there . I think it was quite interesting what you asked yesterday about the 50 billion package, was that something they typically had in the past . I think at this stage, markets are just not yet there yet. Markets, it is about the clear need for timely injections. I think crucially today, we are going to get initial jobless claims that will be ever record with a wide range of estimates. That will really be the first indication of the depth of the economic crisis facing the u. S. Right now. Will beside to risk instead of the longer horizon at this stage. What are you expecting for initial jobless claims . Next week, we get the nonfarm payrolls numbers. How bad is that going to be . Laura i think if you look at consensus estimates today, they are about 1. 6 million, which is a record high, but there are wide a wide range of estimates. Think the risks are really asymmetrically skewed. Likely to see yields come under repricing the a insight on the gross perspective. I dont think at this stage, we did not see a lot of layoff. That is unlikely to feedthrough just quite yet in terms of a massive drop of nonfarm payrolls. I would expect that that number is going to be substantially higher when we look at the volume after that. Matt all right, very scary numbers indeed. Thanks for joining us. Laura cooper of bloomberg mliv macro strategist. You can join the debate on the question of the day. Will aid plans put a floor under stocks . And the mlivus team on your bloomberg. Always check out the mliv blog, it is the first thing i hit in the morning. Mliv on your bloomberg terminal. Coming up, spike and jobless claims. The white house chief economic a very largets increase in claims. We will talk more about that as the pandemic hits the economy hard. This is bloomberg. Matt 47 minutes away from the start of cash trading in europe. We do have futures down after backtoback gains in the last two sessions. Even after german lawmakers approved an historic spending plan to cushion the blow of the coronavirus pandemic. In an exclusive interview, bloomberg spoke to, i myself in fact, spoke with the finance minister about the stimulus package. This will be enough for the next months because we will just have to make it feasible that the economy survives and you should always understand that there is a very successful system of social welfare state, which is working as an automatic stabilizer. The robust social welfare system of germany is one of the most effective systems of the world to deal with a crisis without making feasible that the people dont lose their income and gives them confidence in a very difficult situation. Is question of stimulus coming when we are through the situation. Then i think it is absolutely necessary that we just wait for the economy to run again. Matt on the other set of this crisis, after we have the spread of the coronavirus in check, then germany is going to have to think about you are already working on another stimulus package. This is something we could do and we are thinking about the. Ossibility in what thee sense economists tell us that is it needs to be timely. What kind of size are you thinking . Germany has a love for the 50 billion number. We saw that. The last environmental package was about 50 million 50 billion. We will do the necessary things and we are able to do the necessary things. This will very much depend on the situation which we will have after the situation. We are more important that we need to do that. N the situation right now tourism is booming. At the same time when we stop tourism. So it is not the right way. Matt of course, but you bring up an interesting point. Germany has given itself the ability to do this kind of stimulus. You have brought your debt down to 60 of gdp. A lot of countries have had difficulty with that. How much firepower does that give you . I much space do you have now . I think we have all the power firepower we need. This is the message we give to anyone. Behindalways the idea our fiscal strategies. About the question of why it might make sense to reduce the public debt. Argument saying it is because there might be a crisis. Then we need to do the necessary things. It came to mankind all of a sudden then away. But now we have the strength. And we will use it. Matt that was a part of my exclusive interview with the german finance minister and we will be playing more of that through the day. Joining us now is the chief economist at bnp paribas. What do you think about all message about that germany has all the firepower it needs and that it stands ready to use it . The message is of course comforting from a german and broadly speaking european perspective. They are putting a lot of money at work. The German Government using its Balance Sheet as a state to support companies and, if necessary, to make sure that the succeed. What im less happy about is the way he dodges the question about what we are going to do in helping other countries by a topic that is very tricky, very touchy. Issuance so joint important to all of the countries . It seems that is important to all the countries that need money and those that have the money dont want to do it. Is that unfair . Yeah, well, you have countries that have a lot of fiscal policy. Germany or the netherlands. Havenk it is important to the sequencing rights. When you consider that at some policythe ways of fiscal will be matched with higher yields in the markets, then you first should issue corona bonds to address the health care issue. Secondly, you leave it to the countries to go to the market. What is happening here is that the countries go to the market, but it is not really going in the right direction. I was struck on your program yesterday when the Spanish Foreign minister was being interviewed as even he did not go into the detail. It shows you they cannot agree on this. It shows the moral hazard, certainly. Matt what is, what would have to be done in order to ensure that the italians remain fiscally responsible when you enter into such a situation . Or should that be less important to those countries that historically have been more fiscally responsible . , if you are in a Health Care Crisis which is global and what you have not seen in decades and then the first thing that springs to mind his moral hazard, im slightly disappointed, to put it mildly. The Health Care Crisis needs to be addressed and it needs a lot of money and it needs to be addressed in terms of its immediate economic consequences. That and by definition the finite maturity, the problem will solve itself. Need to be repaid. That would have benefited subsequently have a fiscal policy that would not be disciplined enough, it have to pay them back by issuing new debt at a high yield. That would then be in the country to pay for that. What we are doing now is we are completely doing it in a different order. Matt but of course, if you end up in a situation where the peripheral European Countries do have to pay new debt at a high yield and then they end up in a debt crisis, surely, you understand the germans are going to have to bail them out again. Right . Post health crisis. It depends on how the economy goes and whatever. Thatnk the key point is this is a textbook example where you need publicsector risksharing across the euro zone. If you are not able to come up with that, in this situation, then i wonder whether we will ever get there. It is clearly the responsibility of individual countries to conduct a fiscal policy when things will have gotten back to normal, which allows them to satisfactorys at a and affordable condition. Clearly. At some point, we will go back to the normal assessment of fiscal policy, which now has been put on hold by the european now, we take time off on that. I think by giving countries the issuey to tap into the and without having to go back again to the ecb as we always is a very i think it important element that should not be forgotten. This is really a kind of stress test for that way that we conduct Economic Policy jointly within the euro zone. It means there is an externality attached. If you are able to issue these bonds. In terms of the credibility that it brings. If you are not able to do that, it will be in reverse. Excellent conversation. We will continue the conversation with you. To talkstays with us ,ore about this incredibly incredibly fascinating issue, that a lot of people, including nine heads of state have been pushing hard over the last couple days. We will also talk a little off about soup coming up. As europes potential rescue measures build up. We will talk business of bailout. This is bloomberg. G. This is bloomberg markets, you are watching the european open. Im matt miller. 7 24 over in the u. K. Right now. Futures pointing down. They have moved lower through the morning. European and u. S. Futures indicating we are going to see a little bit of a risk obsession this morning. The white house chief Economic Advisor larry kudlow says todays jobless claims will show a surgeon americans filing for benefits because they have lost jobs. Larry kudlow did not specify a number, a median estimate by economists surveyed by bloomberg show jobless claims rising to a record 1. 6 million. Some predictions run as high as 4,000,000. William is still with us. This is, william, i think once you move past the health issues, this is the most terrifying economic aspect of the effort to stop this pandemic. How many people do you expect will lose their livelihoods . William we dont know. We certainly dont know. I think there is a big difference between different countries. European Social Security versus american Social Security. There is also an important countries or companies, sorry, organize labor force in europe and in germany in particular. In 2008, there was a big recourse. In the u. S. , that has been not the case. Or far less. Is also generating different dynamics with respect to the labor market. There was such a bottleneck before. This is a shortterm shock. It remains to be seen. Are already concerned about the jump in unemployment in the United States. Consumer spending and the financial situation. Entails for their own situation. The ramifications seemed tremendous. Malnutrition, this is the kind of thing that i would expect hurts and economy and keeps it down. Kind ofould hinder the vshaped recovery wall street wants to see. William, thank you for your time. Excellent conversation with you this morning. Up next, the bank of england gives the policy decision today with rates at a record low. 0. 1 . Welcome back to bloomberg markets, this is the european open, im matt miller in berlin. We are 30 minutes away from the start of cash equity trading and it looks like we could have a riskoff day. U. S. Futures are all falling as well. The bank of england gives a Rate Decision today. This meeting could be more about assessment then action. The coronavirus outbreak has already prompted officials to cut Interest Rates to a record low 0. 1 and kickstart a new round of bond buying. Joining us to discuss further is that of u. K. And european rate strategy at ubs. What do you expect from the boe today . I think you are right. I think they will be assessing what they have done in response to the unfolding crisis and how the crisis is developing. It is also too early to see how policy changes they have made are playing out. , they look at markets will give themselves an opportunity to try to see how the landscape is looking. Is the poundortant to the boe right now . John i dont think they will be watching any levels that closely. How things have stabilized over recent days is a reassurance. Markets are viewing their policy decisions. It was always going to fall heavily against the big reserve currencies as it became clear how serious the crisis was likely to become. But in the bigger scheme of things, it wont be an issue for them. For example, what it does to inflation will overwhelmed by the impact on domestic activity and domestically generated activity in the bigger moves in global prices, the oil price in particular, which will bring inflation down. Matt they have been able to watch closely the negative rate experiment at their neighbor central bank. Do you think the boe has considered that . We have always thought that their insistence, which is quite longstanding, that if rates would fall, they would not go below zero. Also for very good reason. There are all sorts of things the bank of england is doing. I think once you go into negative territory, you more than offset any beneficial consequences by the fact that you are squeezing lenders margins severely at that point. I think that is probably the right assessment. Of statee, some form contingent guidance and more aggressive funding and lending facilities for companies in the u. K. Are likely to be more impactful than just cutting rates and you were down at this ultra low level. For us, the markets are not pricing and any further cuts from here. Matt you do expect more and faster qe. You expect record bond buying. Are obviously already doing record bond buying. The pace at which they have started is just under 10 billion a week of fresh qe. At that rate, they will finish the 200 billion they have announced around mid to late august. None of us know how this will go. If at that point we are still in this economic decrease, they will absolutely do more at a similar pace. What is key is that will far outstrip what they will be selling, even when you look at what the government has already announced and maybe has announced over the coming days. Issuance is not going to pick up to an equivalent rate, which is the pace of guilt purchases we are now seeing from the bank of england. They have done it very deliberately to push down the yield to compress yields and make sure that lending rates in the riskfree curve are kept in the low, ultralow, and making sure that it falls out into the wider economy and pushes Corporate Bond costs down and thereby finding that the companies have access to extremely cheap honey to try to keep afloat while the economy is frozen. Matt john, thanks very much for spending some time with us. European ratend strategy at ubs talking to us ahead of the bank of england meeting later today. I want to quickly break some headlines for you that we see crossing in the airline sector. Asia off, malaysias air is said to explore options for its air asia x. It is weighing introducing a new investor,