Pandemic data. Primea recovering minister johnson. Give us an update of the tension of the Prime Minister and his government with the people of london. Francine a couple of things broadly. He is recovering but does seem to be in better form. There are conspiracy theories that he did not get the virus, that are not verified. , a lot ofr you see conspiracy theories have come to the forefront which gives you a sense of the mood of the and finally the u. K. Government say they trust one test two test antibodies. To test antibodies. At least 5 of the population would have gotten covid so far. Tom this is so important, and featuring an article of a little bit evening forward in the medicine and moving a little bit forward in the medicine and therapy of this pandemic. Ritika President Trump is publicly disagreeing with the Infectious Diseases chief, accusing him of wanting to play sides play all sides of the equation. He said that reopening the country too soon could lead to a coronavirus flareup and warned on the impact on students. President trump called that comment unacceptable. Has seized the cell phone of richard byrd according. Hise Los Angeles Times office has denied any wrongdoing. Boris johnson is facing more pressure of his handling of the coronavirus crisis. The chancellor of the exchequer warns the country faces a recession. Johnson was criticized over the spread of the disease and care homes where over 800,000 people have died the International Energy agency sees the oil , saying demandg is stronger than expected and demand rained and by a griddle n by atal reined i brutal price crash. 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. Gupta. Tika this is bloomberg. Tom equities, bonds, currencies, commodities, a little bit of a lift today. It gave way with a vengeance off the chairmans comments. Green on the screen, a little bit of a move. Yields come in and there has been curve flattening. Gold up 10. Francine i would also note what gold is doing. Pound, a bit of movement. European stocks are dropping and , em futures fluctuating gaining. Tom there have been a number of voices at the institutional level and one of those institutions is the United States government. You are going to see, this is going to be a pretty bad quarter but then we will recovery and have a sequence of better quarters. Our expectation is we will kill this virus and next year be back to having a great economy. The economic response has been timely and appropriately large. It may not be the final chapter given the path ahead is subject to significant downside risks. Uncertainorecasts are in the best of times and the virus raises a new set of questions. Mostcall him my mip, improved player. I think he has done a very good job. I disagree with him on one thing, negative rates. The committees view on negative rates has not changed. This is not something we are looking at. Tom and there we are, the president managing the different voices that are out there. Joining us now, Ebrahim Rahbari of citigroup. Really quite good on european dynamics. We will get to that in a moment. Let me take the work of dana onerson and Catherine Mann the u. S. Economy. We are seeing other shops make bold adjustments, mostly boulder mostly grim or in there u. S. Call er in there u. S. Their u. S. Call. Ebrahim we have incorporated forecast that the recession, unheard of for many decades, and the price to the u. S. As well, well they are less affected than other parts of the world including the eurozone, so the recession we forecast is very 10 declinear the we have for the eurozone this year. Tom it is interesting to see. We are working on getting this banner up for you. This is an important statement from fox Business News that President Trump is looking at the Chinese Companies listed on the New York Stock Exchange and the nasdaq that is a nasdaq. That is a real change in the goingic of the president , after Chinese Investment within portfolios versus outside outright listings. We will have to follow that through the morning. That comes up to the tensions which you and Catherine Mann our expert on and let me fold that into global trade and what it means for the u. S. Economy. Do you still see a dampening of dampenings imports, a of world trade . Ebrahim absolutely. One of the implications of this past few years of globalization on the back foot, that will be reinforced. These u. S. China tensions are one of the factors, but many economies learned from this crisis that having the capacity to produce onshore can be quite valuable, and that applies obviously to the health care actor but more broadly to range of strategic industries. We think global trade will for cyclical reasons. Contractto significantly in inflation, but it will take a hit in these issues linked to supply chains tightening and reshoring. Francine what kind of recovery are you expecting . Ofahim we see signs activity is bottoming right around now. Maybe mobility metrics, highfrequency metrics bottomed in countries outside of asia right in the first two weeks of april. That means with a broad brush, if you have a one third decline in gdp in q2, we should be expecting a significant rebound from these extreme low levels of activity as low as q3. Lets call it with a broad brush around 25 or so. We think from then onward, the recovery will be slow and uneven for the next six to 12 months so even though we will see drops in the record levels of high unemployment, we will not be back to full employment in the ,. S. Until maybe late next year certainly possibly beyond there. We do think even though these are unusual circumstances, in the end it will look like a relatively conventional recession that is quite persistent in a few months from now. Francine do you think the fed will have to go into negative rates . Ebrahim no, i dont think so. We have done lots of work on negative rates over the years and two things that are clear is that locally, the view on negative rates has shifted and for all practical purposes, most Central Banks are lower bound. Some are still a little more ambivalent like new zealand, but in the u. S. Specifically, the view on negative rates has always been much more negative, partly for operational regions reasons, the state of the money market funds, etc. , but also the concern of negative sentiment is widespread. I was not surprised by chair powell pushing back strongly. That being said, from a market perspective it does not put this issue to bed entirely, partly because it does not rule out the option overall, but because longterm negative longterm market rates can be negative even if the fed policy rate isnt. For the shape of the curve, the argument is still very important. Tom this is very good, Ebrahim Rahbari. The president is speaking to his Favorite Television network, which is fine. We have Ebrahim Rahbari, one of the worlds experts on dollar dynamics so we will come back and speak of a strong u. S. Dollar that the president sees. In the 8 00 hour, an important update from Michael Wilson with morgan stanley. This is bloomberg. Bloomberg surveillance, good morning. What i want to do is what surveillance does best the president does best. The president with his favorite network, fox news. Good morning to Ebrahim Rahbari, reacting to the president s statement of a strong dollar. Down the road from me 40 blocks at the plaza hotel there was a point where the dollar was too strong. Are we anywhere near close to the distortions of a strong dollar that we saw in that 1980s decade . ,brahim tom, i dont think so but you point to an interesting development. President trump has meaningfully shifted his tone on Dollar Strength over the last couple of weeks, and we think it is for a reason. We think in the past, he was able to point to record low unemployment and the record high stock market as projecting the performance of the u. S. Economy and no longer has these, so now Dollar Strength is coming in useful for him, for the purposes of the upcoming campaign. That also changes investors views of the u. S. Dollar and takes away the asymmetry and fear of u. S. Policy intervention to weaken the dollar. That has allowed for some up side some upside in the trajectory of the u. S. Dollar. Tom i will look at the work of m. I. T. And onto vice chairman fisher with a shout out to ken rogoff as well because things are different. Back then when we had strong dollar it was within a fixed regime with more stickiness in the system. Now it is everyone for themselves. Are we better off now, are our viewers better off now with Foreign Currency Exchange payers . Brush, theth a broad answer is yes. Exchange rates can be potentially shock absorbers and at present, we are going there for a fundal mental fundamental shift on the emerging market. Many economies and currencies that were managed quite carefully are being given a lot of room to adjust, partly ,ecause there are few levers which has meant sharp depreciation in emergingmarket currencies. In london, people pay more attention to brazil, but the policy universe has discovered that the Exchange Rate can be very useful as a shock absorber. I dont expect any return to discovering that stability will be of higher value. Within the g10, universe, the idea of competitive depreciation is still a concern. We touched on deglobalization and u. S. China trade tensions and there is a point it could enter into those issues. We used to talk about currency wars and in a tense climate, these issues are never far from the surface. Francine what do you do with euro . There is a lot of talk of lack of solidarity or euro bonds, or some countries may need a bailout at the end of this and want to break out from euro. Ebrahim intense interest in prospects for the eurozone and eurobonds among investors. Downsideiew is the pressure on the Exchange Rate will persist but the disintegration risks remain contained despite the fact that we had the shock ruling from the germinal Constitutional Court german Constitutional Court. The perspective on the euro is negative for three reasons. The combined monetary fiscal stimulus is significantly smaller than elsewhere, particularly on the fiscal side, somewhere around one third lower than the u. S. Wth is less likely to grow bounceback soon. We have political disintegration concerns in the north as well as in the south. Mentioned theady new normal may be less open in that of mobilization and may hold back open economies like the eurozone. We do have concerns, but that being said we have a backstop, the ecb and that will prevent some of the worst fears on the eurozone. We think even though it wont be elegant, the German Court Ruling can be navigated. It is more in the direction of the downside drift in the euro Exchange Rate rather than a sharp incline. Decline. Francine Ebrahim Rahbari of citi. Later on, we speak to narayana kocherlakota. He will have a thing or two to say about the dollar, at 2 30 p. M. New york, 7 30 p. M. London. This is bloomberg. Ritika this is bloomberg surveillance. France says it is unacceptable that sanofi would give the u. S. Priority if it develops a coronavirus vaccine, telling bloomberg the u. S. Will likely be first in line because they financed the research. They are partnering with gsk. Has filed for bankruptcy as part of a plan to raise cash for a uverse u. S. Government auction. Almostbe able to collect 5 billion for giving up control of airways to be used for the new 5g mobile services. Airbus is preparing for permanent job cut, warning labor unions in germany, france, and spain that it needs to rein in production. The number of jobs to be cut has not been decided. The coronavirus has scaled killed demand for planes. This is what markets are doing right now, a bit of fluctuation on european stocks and u. S. Futures. European stocks are still in the red. The focus will be on the jobless data in the u. S. Treasuries are gaining with the up acrude oil ticking little bit from the drop yesterday. We were just speaking to Ebrahim Rahbari of citi, the dollar edging higher than most currencies. Tom about fluctuation, almost slighty, that is what it feels like in the equity market. But may be green on the screen in 20 minutes, all based off the information flow out there now that is extraordinary. It is important that you stay with us to get a snapshot of how we are going to consume out of this pandemic. No one is Better Qualified than stephen sadove, always affiliated with saks fifth avenue. We will talk about this thing right now, let me cut to the chase, the death of the Department Store. , coming up. Ve 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. Everyone,morning, bloomberg surveillance. In london and new york, we are looking at the economy, the jobless claims number we will see here in two hours. The claims numbers will be extremely important. To lookress to do at what we do with 70 of our money in the economy, we consume. One of the landmarks for luxury goods is the Department Store and culturally, a huge deal, you harrodse elevators in and you have the statues and the egyptian motive, or maybe the escalators going down at bergdorf which are narrow and claustrophobic, or the wooden escalators at macys. Then there is the danger of saks fifth avenue. Did withhen sadove saks fifth avenue as you would go down there wide, glorious escalators and there would be a turning to the next escalator where steve sadove would get you to buy more stuff when you see what is on the floor. For many, he has invented modern saks fifthling at avenue and for the Retail Federation as well. The romance was great, saks fifth avenue, and all of your competitors. Is it done . It isn i dont know if done but it is certainly changing, and a different world for luxury and all retail. Occurring that were before the pandemic are acceleration accelerating, and you will see more consolidations and bankruptcy, but you will see some survive. There is still the opportunity to thrive in this environment. Tom how will retail amend, given the new rules . Stephen they will have to look at what they offer, the experience they offered to the consumer. The consumer has clearly moved to an omnichannel world and may not want to go into the store at the same time as other people so you are doing curbside a cup, hourur pick up, off shopping. They want to be catered to and want that chanel or Louis Vuitton product but they want it on their own terms, and the retailers have to understand how to meet those terms. Francine how much of luxury items are bought online, and will that trend accelerate significantly . Stephen it is clearly accelerating. You are seeing the marketplaces, brands going online. Brands are creating their own stores. Gucci, they are probably 80 their own stores at this point and online role become a great part of the experience. , 50 market and Saks Neiman Marcus and saks, 50 of their business is online. Francine we are not impartial to luxury but we are oversaturated with companies. Will some have to go bust . Stephen i say that about all retail. In the u. S. , you have three to four times per capita the retail you have in europe and there will have to be collaboration. You see the bankruptcy at neiman marcus, j. Crew, jcpenney is on the verge. Leverage is not the friend of anybody in a pandemic like this. Path of every the purchase, and you are worldfamous, how we actually go about doing a purchase. We see an item in a magazine and decide to buy it, and there is a whole emotional process. Can jeff bezos expert at that process . Can amazon learn the way that we acquire the acquisition items we want to acquire . Stephen i think they already are. Amazon is doing a remarkable job of tracking the consumer and understanding them, looking at their marketplace, what is selling and not selling, and creating the amazon basics. How you track that Consumer Behavior and appeal to them is changing. It used to be National Television advertising or media print and now it is social media, analytics, artificial intelligence. Media has changed retail has changed, not just in the luxury sector. You will see people marketplaces. You will see marketplaces emerge at luxury, they are may not be amazon, but others at play. Those competing beneath the surface, is there enough wiggle room in the workout process of leases, what they pay for rent, to allow them to survive . Stephen it is a great question. Bankruptcy will allow renegotiation of leases and closing of stores. The real question is do you have a business model, a reason for being that is different enough that will allow you to survive in the future . Companies come out of bankruptcy and go into bankruptcy again because they have not fundamentally changed the model. The jury is out as to whether or not there model will be serve their model will be surviving. They might be better served consolidating or liquidating going away, but im not convinced all of these will be, lets close a few stores, renegotiate rents, and it will be b