Tragedy, and germany leading on trying some way to get back to normal. Francine germany is a good test, but if you look at the number of lockdowns and when it happened, various countries also have very different patterns. They are similar in some ways but depending on when you started the lockdown you will have a Different Number of infected. I have been looking at mathematic modeling and out of europe, the u. K. Comes up with the moats most deaths. We look to germany to see if there is a solution. Some setbacks, singapore having a tough go of it. The United States, you looked at , andectors of the pandemic massachusetts and california having a tough number of days. Right now, we need a news briefing. Viviana the u. S. House could vote on the pandemic measure as early as tomorrow. The Senate Passing a 484 billion release relief package, including money for the tapped out program to aid Small Businesses and aid for hospitals. Immigration and president donald trump, he announced he would halt two months green cards for permanent residency, stopping short on a ban for foreign workers. That will complicate planning for Companies Looking to rebound from coronavirus. In the u. K. , the finance minister says there are encouraging signs the outbreak is slowing. Yesterdays death toll was the slowest in two weeks and parliament is planning to use group denies planning to scrutinize how the Johnson Administration is handling the pandemic. , it fell inoil london to the lowest level in 21 years before rising, plunging to around 16 a barrel. The coronavirus outbreak has crushed demand and there are steueril will overwhelm storage capacity. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Equities, bonds, currencies, commodities, after the challenges of yesterday, a little better take. Curves fractionally stronger. Equity futures up. In oil, we have forgotten about the may futures. To junee been repriced in west texas intermediate and the numbers are shocking. Brent crude plummeting yesterday. I dont have it formally in the data check but it is something we will be watching, ethanol. Ethanol in america and brazil centers around corn and sugar, and they have plunged, corn and sugar testing multiyear lows. Looking atne way of this oil debacle may be to signal the hit to the Global Economy from the pandemic will be much deeper and longer than investors expected. This could have wider implications. Some countries are moving to laxer measures. We are still seeing a lift to european market, 1 higher, and treasuries up with the dollar. Tom he is the gentleman from istanbul and one of the major voices on the trillium. Petroleum. He is fatih birol. And we areo him thrilled he could join us to talk about this historic moment for oil. What would you expect will be the Institutional Response over the next 48 hours, to oil . Do we see opec plus plus . Is it every opec member for themselves or do you have an original iea formation . For having me. , indeed. Opments we talked last week and said this month will go in the apple and the black that is what i think we are seeing now. Opportunities that we can still look into in order to address the problem. Think it countries, i may be a good idea that those countries who made an announcement they will cut production may well reduce their production as soon as possible without waiting for the first of may, and may even consider further cuts to what they have announced. This may be one option we have in front of us. Another option could be, as some countries we have suggested, to buy oil to put in their reserves. I imagine the u. S. , for example, anda, and other countries, this morning i woke up confused that the Australian Government decided to take advantage of the oil prices to build up the oil reserves in the amount of 100 billion u. S. Dollars. This may be another option to put on the table. Those countries can cut production. Now withoutction waiting for the first of may. Tom it has a ring of 1986 but it is such a different world. Explain why this collapse in oil is not what we saw in february march of 1986. Fatih this is very different huge,986 because it is a huge decline story we are seeing. In our discussions in the media and so on, we are focusing on the production side because we are talking about the russia, but demanditics, will crash by almost 30 Million Barrels per day, one third. Recovers,the economy we may still see demand not the confinement measures are listed lifted. This is the biggest problem compared to 1986. Francine you say opec should cut. By how much . How much more cuts by opec less would make a difference . Opecplus would make a difference . ,atih a cut to all producers this may be a black april because those countries are countriesthose cutting agreement is for the first of may and i think they should cut sooner. We have adjusted the estimate of the iea and nonopecplus countries, we look at those countries that are not numbers of opecplus oil producers, we can discuss one month on this. Stopped,f production about 2 Million Barrels per day coming from the countries, u. S. , canada, and brazil, which is also very important. Francine part of the original deal, and all the countries that you named are part of it, the g20 would buy more oil and cut production. When will we find out what they are doing, the g20 countries . Fatih i told you, we just looked at some of those countries and we see only within the last one month production stopped. In those countries, there are about 2. 2 Million Barrels a day u. S. Andn by internal production is returning in a rapid way. So this is 2. 2 million coming from the g20 countries but in addition to that, it is cutstant that opecplus and make production cuts as soon as possible without waiting for may. Tom the president has a certain style. He politically, domestically is a huge representation and support from the states that make up energy america. What for you is the most effective plan or program or policy that President Trump can generate right now to help support the price of oil . With i think the dialogue the producers around the world is of critical importance. If the dialogue is important in general, today it is very, very important because in terms of all the producers but also consumers and the Global Economy , the United States and other countries come together to look at the different options they have on the table and through dialogue to solve this problem. No country can solve this problem alone. We will get a scale up of the problem. The United States is definitely in the driving seat but also saudi arabia and Oil ProducingCompanies Need to make an effort so that we are out of the black april with minimum damage for the Global Economy. That we saw an is there nof oil, downward limit anymore . Will we see 100 and see much more negative rises over the coming months . If no further measures or policies are put in place, such as some of the countries are cutting their production earlier than others, if the other countries do not follow the footsteps of australia, the u. S. , and others, we may well crisis. Her in the absence of the right policies until june, we have a difficult few months. Birol, we appreciate your visits with us over the last few months, from the iea. We are focused on oil and the ramifications worldwide. Futures elevated. This is bloomberg. Good morning, good afternoon, and good evening. This is bloomberg surveillance, tom and francine from london and new york. And getcus on assets straight to sebastien galy. You have a number of smart notes. One of the first things i read when i wake up and something that caught my attention was on north korea. Much,y we dont know dont know when the lockdowns will land and when the pandemic will end and when the pandemic is over. Sebastien when you focus on north korea, you have a strong man and potentially a Serious Health condition. When that comes out it is important because it is information that is well hidden. You could have a change of scene in north korea, a move by the military to take over and eventually over six to 12 months , a reopening of the economy toward south korea, a lessening of the tensions which will not be welcome by china which uses north korea as a buffer against the west and south korea. It is an interesting thing if things pan out as expected. Korea five years, north would open as a frontier market, an interesting development, particularly if you are a south korean manufacturer. Tom in the too short time we have at the today, the new analysis is a spread of a disinflationary or deflationary thrust. How important is that analysis now . Now if i am right you go to local stores everything is wellstocked, even in an economy that is very wellmanaged, strong government, strong central bank, there is still an element of unqualified fear. Basics of back to the hunter gatherers so they pile up on toilet paper and it becomes difficult to acquire. And you get these frictions a Strong Demand to deliver some of it, you could get a balance of inflation. We are not in 1920s germany france had the Manufacturing Base of germany and the central bank printed a lot of money. Inflation, you may have some pockets of it, fresh fruits and other elements in the United States, but not something allencompassing. Economyn a deflationary reinforced by oil prices. Tom what is your bet on dollar . It is a strategic call on dollar based on the collapse in oil. Sebastien we are focused on emerging markets. , and a mixbounding of a vshaped and you shape, and it will take emerging markets with it, eventually going down to brazil as it reaches for soft commodities and the likes. A great story for emerging market. They should perform outperform the dollar. What most Central Banks will do is intervene because the americans will start hitting on them in unofficial ways through local banks, commercial banks, and the likes to hide the activity of the Central Banks. You should see some appreciations of emergingmarket currencies and performance of emerging markets in general but on the currency side, limited. The dollar versus euro is not that exciting. Focusing on the United States as an exporter of energy, it is not helpful that oil prices are lower. Does anybody care . No, because we are in a riskaverse environment. , safe dollars, are very much in demand, and there is a scarcity of them. Francine what do you do with the haven currencies such as the swiss franc or yen . Sebastien the swiss franc is an interesting one. We do not trade it actively. If we focus on the swiss franc which is not part of the basket that we use on our Systematic Trading strategy, it becomes up to a point where the odds are that the Swiss National bank will go from negative interest rate. Curing the Swiss National bank to curate more bonds. It has a bit of emergingmarket bonds also. It is not too appealing. Negative Interest Rates may be appealing from a local perspective. The economy is robust and going through a shock but rebounding nicely and for the swiss franc, it means a bit of appreciation, not very much. Francine thank you so much. Later today, a conversation with the nasdaq chief executive. This is bloomberg. Bloomberg surveillance, good morning, everyone. I want to do a data check, framing on west texas an 11 handle, brent crude under 20. I guess there is stability after this historic move. Lower. Ower, corn futures higher. Pelosi. P later, speaker a motto of Newberger Berman. This is bloomberg. Bloomberg surveillance, greatly appreciate your attendance. From london, francine lacqua, and im tom keene. There are many on wall street that talk and few that do. Joseph amato did that it peabody at peabody and then went to lehman and created a miracle. He took them to the best on the street. He now holds court at Newberger Berman and we are thrilled we could get perspective from joseph amato. I have to go do your good analyst on oil. What have you learned on oil forward . Joseph good morning, tom and francine. Good to be with you. Certainly, markets have been remarkable over the last couple of days given the technical imbalances we saw. I think it comes down to a fairly straightforward apply demand imbalance. Supply demand imbalance. Millionmarket is a 100 isrel a day market and it down to about 75 Million Barrels. It is an enormous reduction in and supply has not caught up with that. Now, those shutins and reductions in production are not coming quick enough. Tom it goes to your true expertise which is highyield. What do you see for troubled Oil Companies in the highyield space . How difficult will it be . Joseph i think they will have a tough time. We see significant numbers of defaults in highyield. In the highyield market overall , you will probably be in the high single digit default rate but you will see a materially higher number than that. Quality producers can withstand the challenges of the past number of months and have durable enough Business Models to get through, but a significant portion will undoubtedly default. That has destabilized in the early part of the selloff, the highyield market, which has come back and stabilized a bit. Thatine is there a worry if too Many Companies go down, there is too much indebtedness that it becomes a systemic problem, and will this happen if there are too many shale producers in the u. S. Going down . Joseph there is certainly an element of that destabilizing the markets, so we think there is not necessarily risk of systemic issue. 2015ve gone back to wait and 2016, you had a significant decline in energy. The Energy Sector was a higher percentage of the highyield market and there were a number of challenges presented. The markets have been able to deal with that and it is a narrower problem today, to the system broadly. Sequiturs nergy sectors are a relatively tiny part of the s p 500. It is extraordinary when you see where was a decade ago. Francine when you look at what ,appened to the price of oil will this be a recurring theme . I dont know if there is any other asset class could touch. Some expected this, others didnt. Where can we see dislocations next . Joseph as often set about the oil market, the solution for high oilprices is prices and the solution for low oil prices is low oil prices so production cuts will bring it into better balance. I do not think it will be a recurring problem but it will take a while to work through the earliere we referred to given the differential between where demand is today and where supply is. You have to believe that those who have agreed to cut production, whether u. S. Producers, middle east, or other parts of the world will not adhere to that. That has always been a challenge , so we do not see oil prices having a huge amount of volatility. The forward curve is out to about 40 but we think it will be a grind and a slow walk to that level. Tom one final question if we cantor has talked about finding quality and staying with quality. Is to own reaction seven or eight stocks. We have never seen this concentration. What does it signal to our viewers and listeners that we see such a concentrated bid in the market . Joseph i think the market is telling you it is still very skeptical about a skip a cyclical recovery. It has moved up in quality narrowed to those stocks which have durable Business Models that can sustain a challenging economic environment. The s p the focus is on 500 and how it has declined and rallied back, and feels like it has moved ahead of itself. When you look below the surface where smallcap is or value, those sectors or segments of the market have not recovered, and certainly the cyclicals have been quite skeptical about this level of recovery. Aere is a move to quality and level of fear and uncertainty about the pace of this recovery. In our own minds, we have a wide range of outcomes as it comes to our base case versus the downside and upside. Uncertainty and fear, you have moved up in quality and price at aggressive priced at aggressive levels. Tom joseph amato from Newberger Berman, thrilled he could be with us. Right now, your first word news in new york city. Viviana the democrats got what they wanted and the 484 billion relief bill passed by the u. S. Senate, including money for the tapped out Small Business funding and also coronavirus testing and overwhelmed hospitals. Banld trumps immigration is not as wideranging as other had feared. Onordered a 60 day halt issuing green cards but backed away from plans to suspend guestworker programs. The president does hint there could be more restrictions. Donald trump does not know how kim jongun is doing. He told reporters he may reach out to the leader. U. S. Officials say they were told can was in Critical Condition after surgery last week, but south korea says he was conducting normal activities. The governor of tokyo considering new restrictions at grocery stores. Japan has avoided an explosive surge of coronavirus cases but in the last month a steady rise forcing the government to declare a state of emergency. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Francine thank you so much. We will have plenty more throughout the day on markets, and a conversation about the senate bill that has been passed and what that means for Small Busin