The bloomberg terminal back to work. Italy starts seeing its lockdown ease, france follow suit. Boris johnson returns to his post today. Adidas revenue slumps 19 in the First Quarter, but bayer catches oost with adjusted epic. Ebita. Surprise. Ish Deutsche Bank says that expects to post a profit for the First Quarter, but as it is unlikely to meet its leverage ratio in 2020. We are just under an hour away from the start of cash equity trading in europe. Let us take a look at futures as they trade across europe this morning. Looking at gains on futures of 2. 3 for the euro stoxx 50 bluechip european benchmark index. Ftse futures up 1. 5 . They have risen a full percent in the last hour. Dax futures are also up. In terms of the u. S. We see 1 gains across the major equity indexes in terms of futures. S p futures, dow jones, and nasdaq futures. Let us get the bloomberg first word news. In place a plan to start easing lockdown measures on may 4. Manufacturing and construction set to restart next week. Prime minister Giuseppe Conte is morning and second wave of infections would cause a resurgence in deaths, doing, quote, he reversible damage to the economy. Eusu is recovering the Recovery Fund should be worth 1. 5 trillion euros according to the former italian Prime Minister. He says the funds will need to be available by midseptember. Eu leaders are inching toward a deal. Yesterday, new yorks coronavirus deaths dropped to the lowest in a month. Setting andrew cuomo is a phase three opening to begin with disruption in manufacturing. It could start as soon as may 15 and probably will begin in upstate new york before moving to the city. Cuomo says as long as we act prudently, the worst should be over. In the u. K. , Boris Johnson is set to return to work today. Fter two weeks recuperating the Prime Ministers official country house. He plans to chair the government s monday morning meeting to coordinate efforts to tackle the virus with talk of easing , heswn and other nations under pressure to explain the next steps for britain. Global news 24 hours a day on air and at quicktake on twitter. Anna lets talk about markets this morning. We have global stocks in weekly gains. Bankidual stocks, deutsche calls a significantly higher at the start of the trading day with europe. Amid signs of positive development in the fight against coronavirus and a boost to stimulus measures from the bank of japan. Deutsche bank and lufthansa expected to go higher. U. S. Futures reversed earlier losses. European contract pushing up. Bring into the conversation our markets life managing editor from singapore, who is mark cudmore. Good to speak to you. How much is the strength we are seeing in the Asian Session to do with the boj . Is that all about the underlying debt data coming out of europe and new york . I think it is more about the positive perception on the virus rather than the boj. Everything about the boj is expected. Dollaryen is lower today, which shows despite the fact the boj brought out the bazooka, of course it helps sentiment. Japan, a country with externally mulus, was still governments and Central Banks and policymakers are not at the limit of what they can do. Fact italy washe not downgraded. Really the message, some economies are trying to reopen. Australia is looking to reopen. These stories are driving positivity at the moment. The price action is positive given that we started today a little bit negative. Matt we are getting breaking headlines right now from volkswagen. He ceo speaking they are reopening factories all over the place. He says a swift decision is needed to bring back demand. Hes talking about basically a cash for clunkers redux. Hes calling for state backed incentives to buy the car sales. It has been a common theme over the last week or so in germany. Do you think we are going to see cash for clunkers here or globally in order to bring back car sales . To them not as close german issue as you would be. I will say we cannot rule out any action in this environment. A month or so ago, the idea of the fed would support the bond market were crazy. Here we have the example of capital markets, free markets, and we have no sense of free markets at all. The Central Banks, in america, they have no limits to what they will do. There is no idea anything is sank or saint. Sacrosanct. Central banks will do what they can to manipulate these markets higher. Whether they will go to cash for clunkers, i expect some form will be the case. So we cant take anything off the table, not even inflation, it would seem. It seems phenomenal given the oil prices we have been talking about and the negative oil prices. We still see inflation references, looking at the pboc talking about how to aggressive macro stimulus may bring inflation risk. I know that on the markets life team markets live team you have been asking the question, how long before inflation hurts assets . Why the focus on inflation despite what we are seeing . Hard one. S a really the much bigger threat is deflation. Or is it really inflation . Many companies are gaining Pricing Power. One of the dynamics of this crisis, the banks that survive will have Pricing Power at a time when consumers will have pentup demand and savings. When we come out of this crisis, we are not expecting many of these businesses that might be struggling right now to offer discounts. A good example is in the Airline Industries or Restaurant Industries or shops. It is unlikely they are going to offer discounts when they have such massive Pricing Power with a consumer that not only has extra savings, has mass stimulus coming through. That implies inflation might be a risk. Of course you have policymakers doing so much to stimulate the economy, so much money pumped into the system. That is a traditional spear point for inflation. Hyperinflation is the big worry. Its why gold started that massive move. We are seeing fiat currencies undermined. I think actually inflation is more of a risk than it was in 2009. I never believed in inflation risk than. Im still suspicious now, but i think the argument, the risk of severe inflation, for the first time in the last 10, 12 years, finally there are valid risks. The pricing given power and liquidity in the system. Matt i can understand you know, the theory is clear and that is something that would be something of an assumption, but if you look at the gl seo, the global commodity prices, we are seeing 30 yeartodate drops in sugar, 30 in cattle. 15 in copper and aluminum. Obviously you have the oil crash. Things like zinc, platinum, palladium. They have all taken a huge step down. Wouldnt that make inflation difficult if all of these Raw Materials drive prices so low . The only thing i can see higher is gold, frankly, on the screen. Mark that is a very valid argument. It is why the idea of inflation is not definite, it is a risk. The reason not to read into those prices now is the fact that what we are seeing is no one wants food. The lower demand for food, the lower demand for metals, the lower demand for every hard commodity of the moment, at some point, when we get a natural disaster, we will resume normal Economic Activity again and demand will come back south. In the interim we will not have new mines. People will not plant new crops. We know oil wells are being shut. What we are seeing at the moment is a very very large supply destruction. We are also seeing demand destruction. The supply destruction is short term, which is why we see prices come down. The demand will come back and that quickly. In the future we are going to see a higher commodity prices. That does not mean it feeds threw two and cpi. The difference in the Consumer Price inflation basket is not a straight link, but there is a valid risk inflation may be a threat. Maybe it is early next year, not soon, though. Anna thanks as always. Mark cudmore from our markets live team. You can get involved on the what you think about inflation and what we are seeing in commodities. Bloomberg. On your get in touch with us. Next, we will dive further into that central banking decision and ask what other Central Banks we will hear from this week. More on central banking next. Bloombergome back to markets. This is the european open. We are 45 minutes from the start of cash equities trading. Futures are pointing higher. Investors are buying bonds in italy. We see italian bonds rising right now, pushing the yield down nine basis points because of the ratings affirmation. Italy was not downgraded to junk over theed at triple b weekend. As a result of ecb action, italy gets a little bit of a save savings in ratings and investors by those bonds. Lets get the Bloomberg Business flash. Here are todays top corporate stories off the terminal. Deutsche bank generated more revenue than expected this First Quarter. The german lender posted a surprise profit of just over 200 million euros, but says it will temporarily slip below a key target for financial strength. Ratio. Its cte1 the bank may have benefited from a surge of client trading amid market volatility. Airbus is warning employees the plane maker is bleeding cash. Their chief executive says it needs to quickly cut costs to adapt to a radical shrinking radically shrinking Aerospace IndustryAirline Customers fighting to survive and unable to accept new deliveries. Airbus is reassessing its has planned to slash production by a third may not be the worst case scenario. That is your Bloomberg Business flash. It is a big week for Central Banks. Let us talk about what we have seen today, what is delta come. The boj ramped up its Stimulus Program, lifting the cap on corporate holdings. On wednesday, the fed kicks off its Monetary Policy meeting. On holde seen staying after emergency cuts last month. On thursday, the ecb is not expecting to move either, but Christine Lagarde could step up the Asset Purchase Program from the European Central bank. Chiefg us now, we have economist at ubs. We will talk about fiscal plans, but starting with the monetary side of things, how did these measures the boj has taken can the boj move the dial here for is the market expectation really more of a fiscal nature . I dont think it moves the dial. Under yield curve control, they effectively have commitment to buy an unlimited amount to the yield curve target. They would have to buy substantially less because they are so much of the market. Much, ity have done so is difficult through Forward Guidance to really get the market to move even more. Obviously this does not hurt. It aligns them with other Central Banks, but i do not think it matters. Matt what do you expect from the ecb and the fed coming up . Are they going to do more or is it now time to really allow fiscal action to take hold . Ecb, the possibility we get a tweak on their tie ring mechanism because they have been increasing texas liquidity, so they may accept more deposits from their threshold. Thats possible at this meeting. It is also possible they delayed until june, but that is possible. Other than that, there is not much to expect. The focus of the ecb is going to be around Christine Lagardes comments about the growth rate for europe, which is worse than anybody is forecasting. That is relatively uneventful. The fed likewise is still in emergency mode. Theyre going to make some significant changes, probably at the june meeting, where they moved to the form of yield curve control as well, they change the Community Program and roll out some new Forward Guidance, but i think it is early for that. This meeting is focused on dramatically changing the statement. You recall the last statement of the labor market was in good shape. That is no longer the case. The press conference and the meeting will focus on what they have done. Explaining it. Anna what do you expect from Unemployment Rates in europe . The preexisting protections are working differently in parts of the euro zone than the united states. Do you expect Unemployment Rates in europe to get as high as the u. S. . What is your expectation . Nothing like that. We think the european Unemployment Rate maybe goes up like 10. 5 . A 2. 5 percentage point increase. In the u. S. We think we are going to peak at 16. 7. Completely different employment outlooks. What that is reflecting is the Job Retention scheme, which in europe seems to be working. Just for germany, france, and spain, we have 28 million workers in those shortterm schemes, the furlough schemes in the u. K. , which are not part of that, but it is like that. There are more people to have entered those schemes that have been laid off in the u. S. I think that is positive on a relative basis, at least, for the european employment outlook. We are going to keep you with us. We have more talk about with the chief economist at ubs, Arend Kapteyn stays with us. Coming up, whether governments are doing enough to protect the economy. Some research on this with interesting conclusions. This is bloomberg. Anna 35 minutes until the start of european trading day. It looks like it will be positive. Inter news on death rates europe and new york. Forook to a better session european equities as well. Governments around the world are dedicating more than 8 trillion to fighting the coronavirus pandemic. In the u. S. , stimulus spending has been 3 trillion after President Trump signed the latest package to help Small Businesses on friday. In europe, countries like germany and italy have allocated more than 30 of gdp to direct spending, bank guarantees, and loan injections, before eu members reached an agreement on a block wide Stimulus Program in the future. Arend kapteyns chief economist at ubs and is still with us. Stimulus is probably not the right word. Protection is more apt given the makeup of the Government Spending we are seeing at the moment. I think thats right. And incomeacement edition. A lot of what is happening is Job Retention schemes. Governments are trying to. Eplace income it is not traditional quote unquote fiscal stimulus. There is almost no public investment, infrastructure spending. There is very little in the way of tax cuts. In 2008, a third of stimulus was public spending. Now it is 5 . The nature is very different, very focused on q2, focused on liquidity lines to keep firms afloat and avoid the on employment spike. We will have to see if it works. Matt is europe doing better at avoiding the unemployment spike then the u. S. . All i hear on this side of the atlantic is how well the programs around the continent are working. What i hear from my friends and colleagues in the u. S. Is that no small and Medium Enterprises are able to access loans because the funds just disappear instantly. The europeank schemes clearly are working. They are going to have unemployment increase of a couple hundred basis points, but for spain, france, and germany, we think we have 27 Million People or so in shortterm schemes. That is more people than the u. S. Has managed to lay off the past five weeks. It is clear they are working. In the u. K. , we will see. We are confident that relief is working. Scheme isthe ppp bigger now that it has been scaled up than any of the european programs, and i think there is some evidence it is starting to work. You cannot see that in the initial claims data, but you can see it in continuing claims data, which has started to deviate from the initial base data. There is some sign that because these schemes are retroactive, some people who were laid off are starting to be pulled back into the labor force. The reason it was not initially effective is partly it was a bit circumscribed to very small firms. It partly was not big enough. It was a new scheme. It was slow to get off the ground. It came a little too late to avoid the initial spike, but even in the u. S. There is so much money being spent. It should have an impact. Matt we will have to end on that optimistic note. Really appreciate you joining us. Anna welcome back to the European Market open. Half an hour to go. Futures suggest it could be up to percent on some European Equity markets. Tos look ahead to what expect from this week. Its going to be busy. The European Bank earnings season gets into full swing tuesday. Hsbc and ubs are the first to report results for the First Quarter in the european region. On wednesday, the return of automakers. Earnings from volkswagen, daimler, and tesla will show the extent of the damage from the pandemic and how it is shaping their plans. Wednesday is also a big day on the economic front. U. S. Ll get a reading of firstquarter gdp, expected to drop for the first time in six years and on the same day the fed will hold its first Monetary Policy meeting since january. Europet our attention to , where the ecb will announce its latest policy decision. Is expected to leave rates on hold, it could boost its bond buying program. Matt