29. 89. Areie in the u. S. We getting a bounce because fundamentals have not been in sync for a long time. The s p 500 looking to finish the week higher. Points, well above the 2200 mark right now. Energy companys with a better week for crude. Up to. 5 . We are back down to 64 basis points on the 10 year. The jolt we got from the quarterly refunding announcements seems to be pricing itself out of the market. We will see about options next week and what that does to volatility in treasuries. The dollar index showing weakness today, at 99. 48, to the benefit of the likes of sterling. As you mentioned, 1. 2452 right now. Guy . Guy lets get back to the payrolls number. Larry kudlow speaking to jon ferro on bloomberg earlier on, trying to frame the april jobs anort after employers cut unprecedented 25 million jobs, triple the Unemployment Rate to nearly 15 . Larry this jobs report today is full of heartbreak, is full of hardship. I believe that it will prove to be temporary. The second half is going to have very significant bounceback in economic growth, and that will head into 2021, which could be a fantastic economic recovery here. Guy 20. 5 million jobs, 20. 5 million people. We are joined by the head of fx strategy. John, as larry kudlow says, these are heartbreaking numbers, looking past it, already pricing that the dollar is down a little bit but stocks are trading higher. On the back of this data. Larry, talking about this very strong bounceback. That is what the market is trying to handicap right now. Do we just ignore current data given the fact that we are so much there is so much variance about what the bounceback will look like . Pretty the market is trying to price the shape of the recovery. I think of course there will be that ion of the bounce, think markets are trading on the critically now. On expectations for recovery. There are solvency issues that are happening now, and history shows when we go through a see iton, we could again, the small vshaped portion of the recovery as people simply exit the lockdown. The times will also be greater go ahead. Sorry, we are probably overestimating the liquidity factor at the moment, underestimating the solvency factor. As you say, it is going to be tougher a lot of these jobs to come back, at least in the short term. Uncle mickey was talking about a w shaped recovery Michael Mckee was talking about a w shaped recovery. Coming off a little bit and then going back up again. In that kind of scenario, you believe that actually we are still in for tough times going forward. Do i get back into the dollar . Is the dollar the place i continue to hide out . John that is the ultimate question here. The market is trying to decide now. We have seen the dollar coiling in sort of a shrinking range in broad terms, for the longterm implications. I tend to believe we may see one more reasonably large surge because at some point the fed cannot put the entire world on its Balance Sheet. Be it bit more of a credit crunch to the dollar side. That is just my view. There is the possibility this market is reflecting fundamentals, john, and i cannot remember the last time it did that. John that is a very good point. Aur student to talk about bubble in the the solvency issues in the corporate debt markets that is my scenario, that we would see another surge in the dollar. At least one more. To have to going leave it there. We are having a few issues with your line. You are cutting in and out. We will try and fix that and come back to you. Lets go to taylor riggs, talking about what is happening more broadly in the markets. Taylor i wanted to talk about the broader major averages. This is one of the first few days where tech is not the big outperform. Big outperform her. Today it is slightly behind the dow and the s p 500, and this does, on a day of some pretty bad economic data. But this is a theme we continue to see come on days where there are poor economic numbers, the market continues to rally. The market is looking through a lot of that data and looking to the future. Thinking that the worst might be behind us. I want to flip up the board and dive into some of the more economic numbers that we have been seeing this week. Factory orders down more than 10 . Ism Services Index well into contractionary territory with the 41. 8 reading. The payrolls report, as we know this money, showing 20 million jobs are lost. Having in an employment rate of 14. 7 . I want to flip up the board because we were talking a lot about the nasdaq and the typical outperformance that we have seen. The nasdaq has turned positive for the year. This happened yesterday at the close, and the gains of more than 1 today continue that theme. A lot of what i am hearing is tech, what we are using when we are at home. So it makes sense that tech and the Technology Stocks are leading here. You do also have the qqq. The nasdaq etf crossing that 100 billion mark for the first time ever. Individual movers because we are wrapping up earnings season. They reported the largest volume point quarter in the companys history. Zillow going back to resuming their practice of home flipping. They are reporting that people are indeed searching for new homes. New score posting a 1 billion loss. But berdych will be giving up his bonus to help stem some of those lost but murdoch will be giving up his bonus to help stem some of those losses. Noble energy here is up after the company said they have some pretty good economics, around 40 a barrel for oil, and they should be able to restart most of their wells over time, so you are getting some movement here within the earnings stocks here. Thank you to taylor riggs with our market deep dive. Still ahead on jobs day, the Ecbs Christine Lagarde pushes back against the German Court Ruling that challenged the legality of the central bank on purchase plan. It was a very interesting statement sent out by the ecj earlier on. A short couple of paragraphs, but very to the point. We will dive in and just a moment. This is bloomberg. Guy fromlondon, im guy johnson in new york. Lets catch up with the bloomberg first word news with mark crumpton. Mark the top trade negotiators to the United States and china have agreed to cooperate on the trade deal. It is the first time they have spoken since the agreement was signed in january. So far china has run behind the pace for buying more american products. The uncertainty caused by the coronavirus outbreak could hurt beijings ability to meet the targets. President trump told fox news that he was having a very hard time with china. As we have been reporting, it is the biggest downturn for American Workers in history. Employers cut 20. 5 million jobs in april, and the unappointed rate more than tripled to 14. 7 percent. That is the biggest since just after the Great Depression of the 1930s. The losses erased roughly all the jobs the economy had added in the past decade. Germany, the number of new coronavirus cases rose the most in a week, the days after the government that the government declared the first phase of the pandemic to be over. Germany is planning to reopen hotels and all shops. British government is trying to dampen expectations that the coronavirus lockdown will be significantly rollback. Sunday Prime MinisterBoris Johnson will set out a plan for how restrictions will be eased. Bloomberg has learned there may not be a major change until june. The u. K. s infection rate has crept up in recent days. 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, mark this is bloomberg. Crumpton. This is bloomberg. Vonnie thank you, mark crumpton. Bank head of fx strategy, i want to read the statement by the European Court of justice. The court of justice alone has jurisdiction to rule that an act of any you institution is contrary to e. U. Law. It goes on to say that like other authorities of the Member States, National Courts are required to ensure that e. U. Law takes full effect. This is effectively the ecj telling the German Constitutional Court thanks for the opinion but it is not relevant. You still have to allow the ecb to do what it is going to do. Is that right, john . John yeah, it does appear that the european institutions, both the court of justice and the ecb are simple he going to throw their weight around, and more or less say we have established what the right thing to do here is, and whether it fits in the treaty. It is a question about the long fuse issue of the existential question, which i think will not go away until we have mutual debt. For now we can tap this down and maybe it will come up again. We can tap this down and maybe it will come up again. What ites not receive feels is a satisfactory answer from the ecb, etc. , but i just the long long fuse, slow burn issue of the existential question, which does not seem to be going in the right direction in the longer arc of things. Vonnie that said, there is at least a definite directive. A rip on this after the ecb cannot byebye buy bonds or whatever it wants to do . Don i guess they are saying that this is not a john i guess they are not saying the most annual framework for the budget shapes of, how that will be funded and what does theirs do . Fallout intentions across europe from that, so the bigger focus seen false start in terms of the Market Pricing risks before on this institution. John, a fewpeak, things coming out of the e. U. , the executive announcing external border closures for 30 mostdays, to prolong the travel into the block until june 15. It will be a slow and gradual recovery we are likely to get in terms of the opening up of travel, which is a fact of airlines in europe and around the world. Talk about what is going to be coming down the pike toward italy. We have another rating review coming up in an hour or sos moodys coming out with its rating. If moodys downgrades italy into junk territory or even if it puts it on negative watch, how would you respect the euro to react to that if at all . How would you expect the euro to react to that, if at all . . First i would see how the the ecb is going to backs up this in practical terms. It has already indicated by its new purchase programs that it can tilt its purchase more than it could in the past toward peripheral debt. I think the market just takes us as further evidence of the , is aerm question critical event risk in the near term. These two things are starting to interplay now. We have question marks being asked about the ecbs ability to act, and this is the longterm program we are talking about, the longterm programs, and the proportionality about that, potentially being pushed into junk status, which causes questions about the ecbs , wearing on the greek crisis. That thea danger markets kind of reasonably relaxed attitude at the moment starts to spin out of control as it did back in the euro zone crisis . Can we go from zero to 100 miles per hour, and how quickly can we do it . I think you pinpointed it exactly. I think the ecb can keep things technically propped up and sort of market equality market liquidity ad infinitum, but as it does so it becomes political, and it is up to the Political Leadership of europe to decide this is the ultimate crisis to decide whether europe can do it or not. It is around the multiannual framework, how much is loans, how much is grants, how that is all figured out. To me the science is just not promising. I cannot tell you the time to this. The first indication was that recent council meeting. Lets wait and see. The other thing that could happen is something sudden on the political front domestically in italy that could point toward a new election, etc. It is a wait and see, but i agree that there is a trigger risk out there. Guy just getting more and more symbols of the division that exists, the divisions that exist within the euro zone. John, thank you very much indeed for joining us today. U. K. And denmark having holidays today. John hardy joining us from saxo bank. This is bloomberg. Vonnie live from new york, im vonnie quinn along with guy in london. This is the european on bloomberg markets. Lets focus on europes economy. Christine lagarde spoke today at an online event where she defended the Central Banks purchase plan. Germanys Constitutional Court put out a statement to the effect that any other opinion did not count. It has the jurisdiction on this one. Lets bring in maria tadeo in brussels. How much is this binding . It is a statement and at the end of the statement it actually says this is not a court ruling, this is a statement. Maria this all goes back to the ruling from the German Constitutional Court at the start of the week, which said that the old program, not the one that is currently dealing with the pandemic, constitution, and there are two months to fix it, and i mean the European Central bank. It is not clear the ecb should actually allow the German Central Bank to deal with this, but fundamentally, you are seeing two reactions. The European Central bank is taking note of this, but the independence of the central bank is above any of this. To turn thisant into a nasty fight between the ecb and the german court, so what is unclear at this point is whether they will do anything at all or delay the action. Almost saying this is something you have to do with, it is not our response ability. Secondly, you are seeing Strong Language between the german ecj, the european aurt, saying that this is not place for the court to intervene, and it sent a resident it set a precedent that we are starting to question on rulings. And you are allowing members of the European Union saying i dont like this, im going to take it to court and perhaps not even follow. I will have guidance coming from the court, being institutionally above them. Guy the problem with all of this is that ultimately german politicians answer to the german people. You have only got to look at the front pages of the german newspapers at the moment to appreciate the growing concern about what is happening here. Views areman courts to be ignored, ultimately that fire ofow fuel on the german public opinion. How problematic could this fight become for the european politicians . A deep division already exists, maria. This is only going to make it worse. Maria i think you nailed it. The problem here is that there are two things. One is that the german public opinion, they could say this is a fiscally conservative country, a country that already questioned whether the amount of stimulus that was being put out not so much with Christine Lagarde but like mario draghi in the past was even appropriate, the president of the german Central Banks always took a very hawkish line. On the one hand you have this perception where the german public, that something here is not fully working and now you have the biggest court saying this is against our constitution, which, if you can imagine, many germans do appreciate and love, but also you have a big awkward moment now, a difficult situation for the German Central Bank because on the one hand they have to respond to the European Central bank, they are part of the euro system and it would be unprecedented for them to take any action with a tremendous impact on the market, but they also do not want to be seen as operating outside of that if that is with you german court is saying. Vonnie we got headlines a few moments ago that the European Commission is inviting Member States to extend the research and on nonessential travel to the e. U. Until june 15, so this is essentially all of the european states within the schengen passport free zone. It is asking them to then act on the travel ban until june 15. How is that working . Have people been staying home and not traveling to Different Countries . Maria yes, and it is likely now that Member States will say we will accept that accommodation and we will extend a ban into the European Union that into traveling into the European Union for another month. It was supposed to come to an end on they 15, but it is likely that will be extended further. There is the question whether there will be any summer for europe, whether we will see tourists coming to europe. This is a key sector for many countries. Looking to greece, 20 of the nations gdp comes from tourism, so this really does have a lot of economic implications and repercussions for the european states. But also Industry Leaders are airplanes,get airlines, all of this. You can see that affecting things for a very long time. We are going to leave it there. Lufthansa saying early on it will service 116 destinations with 160 planes from june. I want to take us back to what is happening in the u. K. Here. We are watching obviously the celebrations of the e day victory in europe of ve day, three in europe day. The london market is closed as a result of that. We are counting you down to the end of trading for the other markets. This is bloomberg. The 30 seconds to go until end of trading for european net cap equities. Europe victory in friday, the london market is closed, so there is no trading on the ftse. Let us show you what is happening in terms of how the markets is progressing. We have seen the german markets trading higher and we see them being pushed towards the back end of the session as we have their payroll number coming through. We saw a positive response in equity markets and the dac is trading up 1. 5 . We were talking to joe a little bit earlier on from siemens, but in terms of the breakdown, it is important to think about how we traded on the week. It has been a mixed week for european equities. That me show you these other stories we have developing let me show you these ot