You are in the world. Welcome to bloomberg surveillance. We changed hours in europe to get an extra hour. Ill be joined by tom keene in one hour. Weve had a couple incredible weeks on the markets, a lot of volatility, a lot of people working from home. Good morning to you, as well. European and asian stocks declining this monday. U. S. Equity features are pretty fluctuating, investors trying to figure out negative coronavirus news means against the stimulus measures that trigger the balance in risk assets last week, dollar getting, oil falling desk gaining, or will dollar gaining, oil falling. Lets get to blooming first word news. Is viviana hurtado. At his President Trump goal of a normal life by easter. He wants the public to practice social distancing until the end of april. Earlier, Top White House advisor dr. Fauci telling cnn as many as 200,000 americans could die if efforts to mitigate the spread of the virus on to successful. Arent successful. Secretary mnuchin wants to have operations of this week. He told Fox News Sunday the massive 2 trillion stimulus plan was signed into law friday. Congress is discussing another relief package. Areeurope, officials warning against worsening lockdowns after the outbreak claims 3000 lives over the weekend. The total death toll for the nation now over 17,000. The pace of fatalities and infections showing signs of leveling off, the officials are warning against complacency. We ended in the u. K. , were locked on measures could last for months. She says the death toll will probably get worse in the coming weeks and it will take time to see any impact the current measures are happening in the data. Fitch cutting u. K. s Credit Rating to aa minus. Does havee, i think, to prepare for significant period when these measures are still in place. And i think the response of our from the british people have been fantastic, as i say. I wish i could predict when this will end, but its vitally important that at the moment, and for weeks ahead, people maintain the social distancing guidelines that have been laid out. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Francine . Francine thank you so much. President trump extended a National Morning for americans to distance themselves from one another until april 30. President trump we can expect that by june 1, we will be well on our way to recovery. By june 1, all of great things will be happening. That was an aspirational help. The decision to prolong, not prolonged but to extend, this mitigation process until the end of april, i think was a wise and prudent decision. Now for joining us Market Analysis and to put in contact into context everything weve been hearing, this human health crisis, were joined by peter dixon. Thank you for joining us on this monday morning. What will the markets focus on . Its difficult not to focus on the weekend, but how should the markets interpret it . Peter i think the markets are looking, at the moment, at the severe rate of infections in the death toll. Things will get worse before they get better. Thats an accepted view. Given the positive view in the markets last week, its a consequence of the stimulus program. Reality is setting in. Its going to be a long haul. For the economy, the markets, and for all of us who have to deal with the consequences of the coronavirus. I dont see much on the horizon, in fact. Francine how do you model at out . It out . We figure how Many Companies will you figure out how Many Companies go bust . Whether it will keep people afloat . Is that we decide what happens to equities . Peter i think you have to look at it on a casebycase basis on the one hand, topdown. Certainly my view would be to look from the top down initially, and say what has to happen to markets, generally, in order to cope with the expected gdp collapse were expected to see, thats factored in. Although im not entirely clear markets realize how bad the economy could be in the second quarter. He do have to look from the bottom up and say which takenies are going to a relatively big hit from another. You get a sense of which companies are likely to suffer the most. Everyone is suffering. Its a question of some more than others. Impact wille market be worse than 2008 . And will the economy be worse than to this night . Peter the Economic Impact will be, yes, certainly the economy we are expecting. Will be quite significant. And i think in l. A. , fisher. The question fisher. The question for sure. Amount of itis the we will take in the second quarter. In terms of what that means for markets, they will suffer a lot of damage. It will take a long time for that to be repaired. The same with the economy struggles to gain traction in the second half of the year, i think the markets might suffer, as well. He might see markets leveling of, but upside remains fairly conspicuous. Limit to is there any what more Central Banks can do . The reached the limit . Or if he put more on the balance sheet, its limitless . Peter it depends what the objective is. If its to stimulate the economy, they run that a long time ago. If their objective is to support the bond market, then obviously they can pretty much buy up much public debt as they want. The moment, certainly in the eurozone, they are permitted from doing to. Theres nothing to stop them from buying massive quantities of debt. I guess over the course of a few years, Central Banks will be the buyer of last resort. Given the huge surge in debt weve seen or will see from governments, its incumbent to keep Interest Rates down. I think were about to enter a significant era of repression, similar to the United States past world war ii. That would mean Central Banks doing everything they can to hold Interest Rate that. That was certainly certain Interest Rates down. That would certainly mean bonds rates. Francine what is the objective . We spoke with mervyn king, the bank of england governor, and he tells us we shouldnt talk about a vshaped recession. But policymakers are trying to do is suspend the world economy. Is that possible through tools . Take a threemonth month, six month hiatus . Peter i dont think it is. Im sure thats what theyre trying to do. Obviously, what we know from what central bankers have done, from what governments have done, is that theyre trying to put in place a flaw trying to prevent the damage from this economic downturn spreading widely. In that sense, theyre trying very hard to prevent the worst case happening. I suppose the will. The problem is, its going to be extreme the difficult, extremely damaging, and we look back at this period and say that was one serious downturn. We may ask ourselves could policymakers have done more . From where were sitting at the moment, its difficult to see whether they are nationalizing the whole economy. Francine peter, thanks so much. Well come back to you and ask about possible nationalization. Coming up later, well be speaking to the unicredit chief executive officer and head of european banking federation. Thats after ecb aspects to prove suspend dividends and buybacks until at least october. And whatcuss that next it means for the banking sector. This is bloomberg. Economics, finance, politics, this is bloomberg politics. Im francine lacqua. Lets get to bloomberg first Bloomberg Business flash with viviana hurtado. Viviana after Repatriation Flights. The airline says its looking for ways to increase cash cushion when planes start flying again. Its uncertain. It will depend on government restrictions and demand. Cuttingasml, its revenue a lot as the coronavirus hits its supply chain. It hasnt seen a reduction in demand. It supplies and samsung and semiconductors with chipmaking equipment. About 100 amazon employees in the new york Fulfillment Center plan to go on strike. The alleged management has been unresponsive to safety concerns about coronavirus at the facility. They wanted to close for two weeks and be sanitized during that time. They also want to be paid. And the sale of londons hotel by the barclays brothers appears to have fetched less than 8 million pounds. A spokesman for frederick sparkly says they were surprised and perturbed by the announcement of the sale. He adds he wasnt consulted and hasnt approved of the deal. If the hotel sold for less than one billion pounds, he previously alleged legal action. That your Bloomberg Business flash. Francine . Francine thank you so much, viviana. Lets get straight back to peter dixon. We were talking a bit before about the limits of monetary policy. Theres one thing that struck me, reading the italian papers, is that theres a visceral not misunderstanding, but a visceral hate against europe not helping your enough desk europe. Europe and off. This is a europe enough. This is about bonds. Is it enough not to have issuance . Peter yes. A clearly does. We have a certain amount of discord, i think, between Northern European countries, notably holland and finland, i think, probably the Main Objective but theres no doubt more needs to be done. Theyll basically iron out their differences because ultimately, isnt an alternative. And this is the kind of shock which they really wasnt prepared for. The time is wasted. Eurozone wont survive, i think, in its current form, if we play this to same way we played the debt crisis. Im pretty sure its coming. Francine its coming despite german resistance . Or is this basically make or break if you are to come together on this . Are we going to see much more concerns Going Forward . Are we going to have multiple brexits from other countries . Peter i dont know if i want to go quite that far, but certainly the strains worldwide and as you pointed out, theres a significant degree of opposition, unrest, whatever you want to call it, regarding the did edition of Northern European countries. Germany isnt keen on the idea. But its already crossed the red line, or blackline if you like, given its surface, regarding a fiscal expansion to support the domestic economy. Ultimately, i think germany recognizes its in its own interest to have germany continue. It will be dragged across the line but it will take time. Time is precious at the current juncture. It will be nice to see germany move quickly, but i preacher able have been in the afternoon. Francine what do you do with banks right now . What he deal with oil majors right now, given oil is still plummeting to a 17 year low . Peter obviously the oil majors not looking healthy. I do think its been for a rebound because they will have to bear with if its is to try and put some form into the price. The fact that dement has collapsed is the major problem. Excess in supply is the other. To some extent, they can fix. If you want to pick up something cheaply, keep an eye on oil minors. When the oil price bounces, ba nks obviously under pressure, but perhaps not like 20082009. 10 years ago, this was a banking prices crisis. A slightlyhope in better state than many other sectors, largely because theres a huge demand for credits to help Companies Get across the current difficult period. There are still a lot of demand and hopefully banks will hold up. Francine when it comes to lockdown, i know its impossible, and them asking you the impossible, but is it does it last three months, six months . And what does it mean for stocks . Francine i think is log peter i think is longer than three months. Weve seen it. Working assumption. There as it is going to take asseto get back their is going to take time to get back on track. Peoples behaviors change. Market behavior change. The entry period of reflection enter capable of reflection. That reason, it wont be business as usual. It will be a period of consolidation as we think, where do we go from here . Under the circumstances. Markets may rebound from their those. Which we , which well see in q2. Francine . , thank you peter dixon, thank you. Coming up, a conversation with peter dollar. He discusses coronavirus. St. Louis Federal Reserve president. You dont want to miss this interview. This is bloomberg. Between 100tooth hundred cases,d cases 200,000 but i dont want to be held to that. Excuse me, death. Were going to have millions of cases, but we dont really need to make a prediction when it such a moving target that you can so easily be wrong and mislead people. The top u. S. Doctor, Anthony Fauci, speaking on the number of cases, the number of projected cases and what we heard from President Trump. Lets get straight to new york city and Annmarie Hordern. How important was Anthony Fauci waiting yesterday . Annmarie it was extremely important, seeing this aboutface from the Trump Administration. Good morning, dr. Fauci and dr. Birx talking about a new model where millions will be affected, dr. Fauci talking to as many as 200,000 americans could die from the coronavirus. That really means why the Trump Administration is abandoning its ambition to get americans back to work the easter. Instead, they are saying that peaked of death could happen around easter. The social distancing, the lockdowns, that will remain in place until at least april 30. Weve seen a lot of that. More than half the cases are coming from new york state. But there are other cities now starting to really see a lot more rise in affections infections, including new orleans, los angeles as well. Francine thank you so much. Well have a lot more throughout the day. Well also speak to more later on to get the number of cases and number of deaths we could see in the coming death and months. This is what your markets are doing. A lot of focus on oil. Dollars snapping its fourday retreat. Its a great way looking at risk out there. Also coming up, a conversation with the chief executive of askeddit after the ecb banks and not to pay dividends until october. We speak to him about the european banking landscape. Thats next. This is bloomberg. Theres no place like home. Especially when xfinity has you covered with fast, reliable internet. With advanced security to help keep you secure online. And with the most tv shows, movies and streaming apps all in one place. With simple Digital Tools you can get the help you need or even trouble shoot your services on your own. Download the xfinity my account app or just say help into your xfinity voice remote. We are working to make things a little easier on everyone. Download the xfinity my account app today. Until may. Is closed President Trump says social distancing will continue until at least april 30. Medical experts say u. S. Deaths could reach 200,000. Deaths in italy top in spain at 17,000. Oil plummets to a 17 year low amid the pandemic. The markets overwhelmed by cratering demand on a ballooning surplus of crude. Good morning, good afternoon, good evening, everyone. Bloomberg surveillance. Viviana President Trump abandon his goal of a return to normal life by easter. He now wants the public to continue practicing social distancing until at least the end of april. Earlier on sunday, Top White House medical advisor dr. Anthony fauci telling cnn its efforts to mitigate the spread of the virus are not successful, up to 200,000 americans could die. Now to china, the nation rejoining the wave of Global Quantitative easing. It has cut the Interest Rates on loans to banks by the biggest amounts as 2015. The sevenday reverse report rate is set at 2. 2 , don from 2. 4 . It comes as the peoples bank of billionject around 7 into the banking system. Oil slumping to a 17year low as Global Demand erodes. New york crude briefly dipping below 20 a barrel as the price war between saudi arabia and russia continues. Contact had any russia doubling down, saying while 25 a barrel is unpleasant, it is not a catastrophe. And we end with south africas rand, continuing its decline against the dollar. As wellngraded to as unreliable Electricity Supply and weak business confidence. The treasury sees the cut as the opportunity to fix the economy and do the right thing. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, viviana hurtado. This is bloomberg. Francine . Francine thank you so much, viviana. Onto a conversation i have been looking forward to all we can. Unicredit has suspended Dividend Payment and also shared by back, the decision after the ecb friday recommended that lenders hold out to these kind of payments until at least october as the coronavirus pandemic wreaks havoc on the markets. Reviews calls for banks to be prudent on dividends persuaded previous calls for banks to be prudent on dividends persuaded banks to change their policies. A chief executive of unicredit. Vanke you so much for thank you so much for joining us for this exclusive conversation. I know suspending buyback and dividend is possibly a setback in your plan, but did you feel that this was the right thing to do . Good morning, francine. Chairman of the european banking federation, i welcome the recommendation of the ecb, which will bring capital to support the economy. So clearly, i hope them banks ie seeing other banks think it is important for banks to be here. It is important for banks to be part of the solution in this crisis. Francine as president of the european banking federation, what have you heard from federal bankers . Are they worried about their future . Do they feel policymakers have done enough to ensure liquidity . With these measures they can buy the monetized side of the ecb recommendations, which i think the ecb did a very good job in terms of liquidity. And governments in every country taking action, extremely important that we offer a Credit Guarantee which can be extended to the bank for the banks to be transmission and support space. Francine how do you see unicredit but also other banks more generally returning to normal activity . I dont know how difficult is it to think of a time frame now, for when you send a workforce back into the office . Our firste i think priority in these extra during moments is the safety and health of our employees. And has been our key goal, ensuring that our employees are safe, we can help our clients on different networks. Keying our clients is our focus, and of course we are looking with a different government to make sure that the measures we can bring them the liquidity and the support that they need. Hadof course on friday we more than 50,000 employees themng remote, and we call in front of our client, we closed 70 of our bonds sheet to make sure that we protect them, working on appointment for we pushclient work, and all of our clients otherwise to use our our core centers volume has increased 70 since the beginning of this crisis. Francine and is everything working as best as it can when you look at loans and what your clients are asking . How easy is it for them to understand what they need to do to get support from the banks . Our mobile and Internet Banking is working perfectly. The core centers are a little more challenging initially because we have sent all of our they arers at home, so remote. So we are to put in place 50,000 , making sure that all the process can be done properly. It is working perfectly. The team does a terrific job, the team members in core centers. And our network is making sure to help themt shift to this new way of working. Things are going very well. In the past three or four weeks, we made more changes at the bank than in the past two years. It has been a very intense to come and we continue to support our clients. Francine what will be the conditions to resume dividends and buybacks on 2019 earnings . Jean pierre the ecb has asked that we review the condition after october 1. Stabilized sufficiently, broadly the financial dividend. If the conditions are right, i see no reason why we will not be resume dividends. Francine how do you see the damage from coronavirus actually changing the banking landscape in europe in the mediumterm, first of all . Jean pierre it is a little bit too early to assess what will be the full impact. Banking,n say that the the core centers, internet has been accelerating tremendously, obviously by force because there is no alternative. There will be an accelerated transformation in the future to be much more remote. The acceleration will probably be there anything that regulators now need to do to make sure that banks give enough loans . Is there anything else that they should be looking at . Jean pierre i think the regulators have done many things already in terms of easing the regulatory requirements we have seen as well. On fullyanks can focus supporting the economy, to make sure that we can extend the loans that are required. So from the regulatory side, the ,egulators did already a lot and they did outstanding work. They responded very fast. Forally commend to the ecb the speed and the quality of their actions which have been undertaken by the ecb and its new president , mrs. Lagarde. Shes doing a very, very good job. Now we need to work with the team of the ecb as well as the team of the treasury to make sure that the measures taken are properly implemented. More process driven than policy driven. That has been the focus last week and the focus of the team this week. Francine give me a sense about Smaller Banks. How difficult is it for Smaller Banks to face this crisis . Jean pierre i think what is important is to offer a strong channel of operation, and for Smaller Banks which might not have been investing yet fully into the channel, internet, core centers, it might be a little bit more difficult to get up to speed. But i think all the banks today and i spoke with my clients we are fully dedicated to support. ,o there is no specific issue the process has to be francine when you look at the debate on corona bonds, do we need the corona bonds to make sure that europe is united and together on this . Jean pierre i think we need to from europe, on the political side, that europe is united in helping the Different Countries. Difficult, andis the decisions are difficult. There might be other solutions as well, but on the political demonstrate to all the countries that we work as one europe to support everybody. That is of critical importance. Francine do you think this is actually a make or break moment for europe if they do not come together and figure something out, that is, corona bonds or something similar . Jean pierre i think it will be an important moment for europe. I would not go so far as to say make or break, but progress in terms of different crisis, i have no doubts that the Political Leadership will not take over from the monetary side to make sure that europe works as one. Francine final question on italy given the ferocity at wish there corona at which coronavirus has hit italy, its productivity, how the country is in lockdown, do you expect it to recover sooner, or will it be left behind . Jean pierre i think it is important for italy that the measures in place by the government are properly or intimate properly implemented. All, what has been implemented and additional measures so that we have a very consistent approach between europe and the Different Countries in terms of support for the economy, the measures in. Erms of the guarantees to make sure that we dont uncompetitive or unlevel playing field. Francine jeanpierre mustier, thank you very much. We will check on the spread between the german bund and italian ttps. Coming up, another conversation you do not want to miss, james bullard. He joins bloomberg to discuss the package, the 2 trillion stimulus package, and the impact of coronavirus. Do not miss that exclusive interview, 1 30 p. M. In london. This is bloomberg. Francine this is bloomberg surveillance. Lets get to the Bloomberg Business flash in new york city with vic. With viviana hurtado. The second to withdraw for the broadcaster the market meltdown because of the virus pandemic. It follows a hit for softbank iter a satellite operator invested in files for bankruptcy after raising 3. 3 billion in Debt Equities financing, oneweb making the filing. Shareholders include softbank, erb apps airbus, at least one billion of that coming from softbank the japanese conglomerate declined to give a total amount. Easyjet is grounding its entire fleet. This after completing the Repatriation Flight there the airline says it is looking for ways to increase its cash. Ushion when it restarts according to the discount carrier, it will depend on government restrictions and demand. That is your Bloomberg Business flash. Francine . Francine thank you so much. Lets get back to the markets. The markets fluctuating a little bit. If you look at european stocks, they are down 2. 2 . In the u. S. , they are fluctuating there it a lot of the focus is the number of horrific deaths we saw over the weekend, with in the u. S. And and in your in europe, put to what policymakers are doing. I have been looking at the dollar more than usual. . S it the reserve currency yeah, the currency some of the world instruments are dominated are denominated in dollars offshore of the u. S. , that we have this natural tendency that when we have a contagion across risky assets, we see the dollar spiking. That is erased by the fed to get ahead of that. I think what we have seen is that the dollar is sort of retraced is strength to a slightly larger degree than we have seen in many places, then we have seen overall Risk Appetites. That suggests we have done a lot to avoid the dollar spike risk. That is a key question from here, has the dollar tops, have they done enough . Has the dollar top two . The dollar attracts also sovereign Credit Rating cuts of other countries. Yeah, that is going to be a key question. If we look back at the 20082009 experience, i dont think its a quince in ans that the dollar peaked at the same time we saw the u. S. Equity market bottoming out, and global Risk Appetite also bottoming out. To answer the dollar question, i think it will be one big key in answering the whole cycle question. Out,sentiment has bottomed we will look at it. We have to keep the economy, the Global Economy reflate it in dollar terms, so it is an existential question that if not the fed, the u. S. Treasury has to do whatever it takes to keep the dollar from becoming what we have called a killer dollar, inacting global asset prices the credit squeeze even further. You doe john, what do with yen right now . John we favor the yen stronger here. What we think is interesting right now is especially over the questions arising once again over the existential situation. There has been a lot of traction on that surprisingly, surprisingly sideways here. The dollar is certainly lower. We have seen u. S. Yields crushed from much higher levels to compression yield spreads. It is just time for dollaryen to go back to where it came from 105 to 100 asow well. Of the carryhe end trade. We see some further yen strength from here. Maybe a little bit more selective because it has already, long way in some of the moves against riskier currencies. Francine pound has been bouncing quite a lot. See what isult to happening in terms of coronavirus. We have heard from governor bailey that this is an open economy, it has a large current account deficit. It is difficult currency. John it is difficult currency, and i think the extreme volatility is simply part of the it is the difficulty with liquidity. It is rather high beta2 risk on risk off, such an incredible downswing aggravated by positioning getting caught the wrong way around when we saw sterling versus the dollar, all the way to 1. 15. I am liking starting against the approachike the u. K. To doing fiscal, it is a bit more straightforward and direct. I would hope it would be less volatile than sterling versus the dollar. Once we get to the other side of this, i think the sterling will reveal itself. Francine john hardy, head of fx strategy. We will have a full round up of your main stock movers at europe. They were down, now pretty much turning flat. This is bloomberg. Francine this is bloomberg surveillance, economics, finance and politics. He was Annmarie Hordern. Annmarie good morning. The ones i am looking at this morning, big moves to the downside. I want to start with easyjet. They are grounding their entire fleet, as they look to preserve more cash. The timing of when they will start to reschedule these flights is uncertain. A lot of that will depend on government restrictions. A very fluid situation. Sky news reported that the easyjet founder is threatening to remove the board if it does billionel a 4. 5 aircraft order from airbus. Down this morning, with a First Quarter loss. They are also postponing their dividend. We saw a lot of banks do that today and i am sure we will see a lot more. So much, thank you Annmarie Hordern with main stock movers. We had a conversation with the unicredit chief executive, and we will have much more on the banking sector, two sectors you need to watch out for. One is of course some of these banks and the other is oil majors, which i also note that annemarie is following closely. This is what the markets are saying. We did have a bit of a reversal. European stocks down, but down by less than they were earlier, down by less than 1 . Also had a great conversation dynamics. Hardy about tom keene is back in new york, and we are on together, next. Francine america is closed until may. President trump says social distancing will continue until at least april 30. Medical experts say u. S. Deaths could reach at least 200,000. Spain,ite in italy and spain recording 17,000 deaths as coronavirus continues. And the markets are overwhelmed by cratering demand and a booming surplus of crude. Good morning, good afternoon, good evening, depending on where you are in the world. Tom, if you look at the markets in europe, we were down to 2. 5 , now we are back up a touch, still in the red but only losing 1 . I think the focus and this is what is extremely hard for markets across the world they look at stimulus, measures to support the economy, and then they look at the horrific numbers of deaths around the world and the