Austrias chancellor tells us shared debt is not the answer to the coronavirus crisis. Meanwhile, chancellor merrickle here in germany has a workaround for the dispute over e. C. B. Bond buying. Testing times. President trump says the u. S. Has prevailed in the battle to boost coronaVirus Testing to capacity. This as Boris Johnson is forced to water down his plans for rebooting the u. K. Economy. Plus, the fed dips into credit on the corporate side. Today marks the opening of a much anticipated facility to buy corporate debt e. T. F. , a key part of the Central Banks coronavirus strategy. Just you said an hour away from the start of cash equity trading in europe and the u. K. Lets take a look at futures here. Ftse n see that we have futures it is changed. Futures across the board are not moving very much, although at least in europe we see some direction. Everything moving to the down side. And more so when you look at the da x, the ibex and the ftse down a third right now. Take a look at u. S. Futures. You see bigger red arrows there on the dow and sp, each down half a pacific. Ascar futures off. 1 . Anna matt, we have breaking news coming through. Lets start with the aviation sector. Ryan air will restore 40 of flights from the 1st of july. Given the big cutbacks we have seen from the aviation giants, this would be a substantial ramp up, restores 40 of scheduled flights from the first of july. Crew and passengers will wear face masks and pass temperature checks. We have seen such things taking place in many asian airports and imagery of people on planes already wearing masks. But this is coming through from ryan air. We are interested to see how the u. K. Manage the quarantine rules that have come in. Much criticized. Havent come in but will come in from the u. K. Uch criticized by the aviation entry in the u. K. Ryanair is a part of that. There is a common travel area across that irish border. We will have to see how that plays out and what that means for the u. K. s ability to implement some kind of uarantine. We are getting news from the tell come. The divens sent is nine euros. They didnt see a need to cut the divens deployed to get through the difficulties. They say the Economic Impact of covid19 is likely to be significant. Perhaps that is a little more depressive language than some analyst have been looking for. They also say they are not able to provide adjusted guidance for full year 2021. Ey do see adjusted fda for 2021 may be flat to slightly down, and cash flow prespectrum to be at least five billion euros. They are giving us this metric. The organic Services Revenue up by 1. 6 in the fourth quarter. That is better than was estimated, but it is perhaps a little backward looking at that quarter. It runs from january to march. Matt . Matt lets get the bloomberg first word news. Todays top stories off of the terminal. In the u. K. , there is confusion over prm Boris Johnsons plan to get people back to work for a second day in a row. Londons chamber of commerce is telling businesses not to change their plans until there is more information on how to keep staff safe. Companies are also asking for guidelines on what protective equipment to buy. The government is promising to outpipeline arrangements to public transport today, which i believe the prm recommended no one use. The u. S. Has won the battle to ramp up its Virus Testing capacity that. Is according to president donald trump. More than 300,000 daily tests are being conducted as of thursday according to the covid tracking project. But his News Conference also saw a Testy Exchange with reporters. That is nothing new for this president. Deaths in the u. S. Have now topped 80,000. Ferm reserve efficiency are pushing back on the Federal Reserve efficiency are pushing back on the view that rates may go negative. Boston and atlanta dont see the tool being used in the u. S. It comes as the Central Bank Says it will start buying corporate debt in the form of e. T. F. s starting today. The program is coming online as part of the feds mergery coronavirus response. Global news, 24 hours a day on air and a quick day by bloomberg powered by 2700 journalists and analyst in over 120 country. Anna lets get the conversation of the markets. Mark moore joins us from singapore. We have a lackluster session taking place in asia, and that seems to lead to some lackluster futures in the europe and u. S. U. S. Futuring down more. We have recouped about half our losses since the march 23 low, but are we due for another pull back . Goldman sachs saying weekend lose 209 in the next three months. Do you hear people talking about the need for another pullback a lot all . I think we are still in the same situation we have been in the last couple of weeks. What has been interesting is we rebound sod powerfully, so quickly from the march lows that actually the last couple of weeks we have gone nowhere. We have been trading within a couple of of these levels for a couple of weeks. That is strange because normally when you never bear markets, and even if we bounced out it, you experience these volatility clusters. You dont expect to get this massive deadline in the market and sudden stability. I am suspicious if this stability is sustainable. I would have sympathy for Goldman Sachs view. One of the weird things is we have paused at this level where many people expected to the rebound to get to. Which means that neither side can their a victory. The bulls are in a stronger hand cant but they are not up on the european. The market market is down on the year. The market weighted average is down on the year. So bulls cant declare victory, but bears are a little nervous. We are stuck in that nomans land. I still think the next 20 move is more likely to the down side. Matt we are going to talk with jeff henrik son. He is a behavioral economist at the university of axford. Says people really arent looking at the amount of stimulus that is at play here and really not pricing in how much money federal governments and Central Banks are going to use to bring this economy back. What do you think about that view . Mark i have defendant hi heard that perspective out there. I dont think the people arent looking at it i think the people are struggling to understand quite exactly what the real economy impact will be and then also how this means you should trade an commit mamblingt. It is everything that people are looking a lot. It is just that we have never, as far as i know, traded in history, traded equity markets off a slugs ee division. We trade them on earnings and that is relate the to the economy. What they have done is disconnect the the equity market from the economy. We know that we are now trading on some new equation based on stimulus. But what is that equation . What amount of stimulus means what multiple for the equity markets . It is very hard 0 for anyone to say con cluesively based on this new way, it is expensive or cheap. It doesnt matter if you are a bull or a bear, you cant say that con cluesively. Everyone is looking at that. It is naive to say people arent looking at it i think people are struggling to make do a good job of it. Perhaps they are much further ahead on how to analyze that relationship. Matt mark, thank you for joining us. Managing editor. Remember that you, too, can join the debate on the question of the gay. Today they are asking will u. S. , asia or europe stocks do best . Reach out to the team by typing ib plus tv gone on your bloomberg terminal. Coming up, open borders are key to jumpstarting growth. Austrias chancellor spoke to economy eopening the and what he thinks is most important to an economic revival. This is bloomberg. There is a corporation on the european level to support countries like italy, france and spain so that the package of more than 500 billion euros to support these countries, and i hope this will be helpful. Do you think that will be enough, or will there need to be some sort of shared fiscal union in europe to help your second biggest trading partner . Well, i think that this package is good, but we are not in favor of ideas like corona zation debt. Al even if it costs members . How important to you is the member ship of other e. U. Countries like italy . Well, there is no debate about the membership of italy in the European Union. There is a good cooperation, and i think that we will manage this crisis, and we will also be able to manage the economic situation. But of course, it will be an enormous difficult year. Austria, germany, the netherlands, all of these countries were well prepared before the crisis hit, but there are other European Countries like italy and spain which were already in a bad fiscal situation. How much are you prepared to pay in order to keep the European Union together, in order to save those countries that were hit so much harder . Well, it is clear for us that we want to support them and that we want to show solidarity. I think it is good that the ministers for finance agreed on this 500 billion euros package to support these countries. Of course on a european level among the heads of states we are also in a discussion if more help is needed. Do you think it is possible the austerity thaw practiced put you in a good position now. But your second biggest trading partner, italy, has 158 debt to g. D. P. Is it possible for them to get out of that kind of debt trap . How would they possibly do it without some form of Debt Forgiveness or shared debt . Well, they wouldnt be able to handle the cigarette without the help of the European Union and countries like austria, but i dont think that the idea of shared debt is the right answer. How long do you think, mr. Chancellor, it is going to take for economies like the austrian economy to get back to precrisis levels . Now that youve earmarked 38 billion euros, you have more measures to come. When do you see yourselves getting back to precrisis levels . Well, at the moment it is difficult to say because we are quite dependent on tourism. 15 of our g. D. P. In austria is from tourism. There are some Industries Like automotive which has always been hit. So it is difficult to say now, but this year, 2020, will be a very, very difficult year. But we hope that next year in 2021 there will be a positive development again. But probably it could take us a few years. I northwest that you are already preparing measures like tax cuts, possibly infrastructure investment, reopening borders with your neighbors. What do you think is going to be the most important move to revive the economy on the post corona side of the crisis . For us, for sure the reopening of the borders is most important. We need the Single Market of the European Union. We are an exporter country, and that was mentioned before, also tourism plays an Important Role n our country. For the economy in general, but for tourism in particular, reopening the borders is very important. Matt that was the austrian chancellor speaking exclusively to me earlier. He gave us a standard answer on italy. Yes, he encourages solidarity, they have got a 500 billion euro package, and there is no need for shared debt. But the surprising thing, i think, is that he says opening the borders is the most important aspect for revival of the economy. You have to think that not just for austria, but for all European Countries, it is really key to get these borders back open again to really improve trade and get the money flowing . Anna yes. That reliance on tourism is surely a big issue the further south you go in europe. But indeed in austria as you discussed in that conversation. I find it interesting that the narrative around solidarity and shared doesnt seem to have moved that far with northern states versus southern states. It is an imperfect approximation of the debate over coronavirus bondser or other kinds of museumization. It doesnt seems to have moved very far. The spanish minister said we dont need to tap the e. S. M. They are fine raising money on their markets on their own. I wonder if that is not the same. Coming up on the program, we are going to be talking about what the fed is doing. The fed jumped into the e. T. F. Credit market today. We have been waiting for them to get involved in that market. We will talk about what that means for corporate debt. This is bloomberg. Anna welcome back. We are 40 minutes away from the start of the erne equity trading day. Looking lackluster. Is it around trade or evaluations, or is it the fact that stocks have rallied a rot off their lows . Lets talk about what is going on with the fed and the position that they are buying. Today marks the start of the much anticipated move from the fed. The central bank will start buying corporate death e. T. F. It is a big part of the coronavirus lending program. Steen jakobsen jackson us from saxobank. Some people are saying you just need a strategy now that buys what Central Banks are are doing. I am sure it is more complicated in your view . Absolutely. One thing being they are now entering into the junk bond market, and that cascading default effect that will come is going to be interesting to follow six to nine months down the road. But today is the start of the pie program, but it is not the start of the market having bought this already. If you look at the proxy for this, it is trading middle range from precovid and up from the middle of where it was at the low he said of it. So the market is already anticipates this. For me it is clearly more about what the Federal Reserve is going to do with negative interest. I am going to be following this credit element from the cascading sort of the investment credit into the junk bond move and how much the fed s going to end up with for the treasury in the u. S. Matt what do you expect the fed to really move the needle on then, steen . I think first is the control. The amount of issuance we see in the treasure write market indicates that we have a yield steepening going on, which is the market reprising the amount of issuance that is coming from the treasury. Part of that ultimately could lead to a slightly negative view in the 10year sector, which i think will force the Federal Reserve to a control inside the space this year. They will move to control. On the issue of negative Interest Rates, i see a the leadoff the fed governors have been pushing back, but it is kind of i will remember avant. If the market pushes them to negative Interest Rate, the fed will follow them. The fed is not the pragmatist in terms of what it does. If you look at the curve right now, we are trading negative Interest Rates somewhere between december of 2020 and march of 2021. So it will be as it always is. It will be when the market takes fed into negative Interest Rate that will take tate this move. Anna so your think the mark can push the fed in that direction. We have steen the record auction in treasuries, a lot of that coming this week. What will cause volatility in these objection auctions or around treasury markets at this point . There is so much focus on supply. Will we get some volatility around that . It really depends on the officers ability to want to by. Dont forget, we had over the last 48 hours another escalation in the chinau. S. Rhetoric. China has been vague. Another customer has been the g. C. C. As you saw with saudi arabias desperate move on the budget size, they clearly dont have excess funds to play with. Down the line we are in an ok position in terms of the market taking the issuance. But as it pins to be forthcoming, i think the overseas market will take less and lesson this, which pull pit it on the mark to be the domestic savers. They are not famous for having a high saving rate. Matt no. It is true in my case as well. I try and spend just a little more than i make at all times. I wonder what you think about buying u. S. Stokes versus buying i try and focus on europe since i am here, but we just dont have an apple, an amazon, a google, a microsoft. European stocks just dopets have these mega caps. True. And of course it is hurting, and that is what all the outperformance is. A friend of mine has started calling the s p 500 the s p five which is a good analogy to your question. The five names is really everything. I still think if the stock market is really driven by a number of factors, one being that the left curve has been taken out by the Federal Reserve, at least in the short term and the amount of liquidity. But dont forget the Federal Reserve can create liquidity, but they cant create demand in the economy. Anna i think we had a problem with steeps line there. Thank you so much. We are just coming to the end of our conversation. Steen jakobsen, c. Ism o. Of saxobank. Coming up, we we will talk about the u. K. s response. Barry johnson waters down his reopening of the economy plan. They say the work places are not covid secure. We hear a change in tone from the Prime Minister. We will talk about the u. K. Returning to work next. This is bloomberg. These days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Matt we are getting breaking aaramco. Saudi they are publishing profits. We can see the First Quarter reals right 48 now. Revenue in the quarter, 225. 57 billion. So profit in dollar terms, which may be a little bit easier for you to digest, 16 billion. That is what they made in the First Quarter in dollars terms. The dividend also publis