And even bigger move at the front end of the italian, and the euro as well bouncing. Up by another 1 . Basically is really intensifying its response to the covid19 crisis and the Economic Impact that it is having on the global economy. Christine lagarde delivering that 600 billion and extending the benefits put forward by the governing council over the last few weeks, making them last a little bit longer. Lets listen to what she has to say. We judged that it was necessary to increase the price and i can assure you that there view and theus governing council that action had to be taken. In the face of that inflation outlook, and given our mandated price ability, action had to be taken. How big a day was it for europe . That ecb decision and Angela Merkel, bob diamond, Capital Funding partner and ceo, joining us now. What do you make of what Christine Lagarde has done, what do you make of what Angela Merkel has done . How big of an impact will it have on the european economy . Fromch a series of actions the announcement earlier as well, and the recovery fund, 750 billion. Germany today talking about 130 billion in fiscal stimulus. To the monetary programs announced by president lagarde this morning. All of them unequivocally positive. I would come back particularly to the fiscal measures. I know president lagarde has been calling for fiscal measures as many people have, it has been a little bit like waiting for the doubt waiting for gadot. Came, andgo, the euro the dream of a big cap low Market Capital market similar to the dollar market or the u. S. Market. For the first time, were seeing some real action around fiscal movements. The recovery, 750 billion from the recovery fund, and then today, germany announcing 130 billion for germany, these are very positive. Guy you seem to be implying that we are finally starting down the road of some sort of pulling of responsibility and risk here in europe. Armany clearly has had domestic moment here, angela a domestic moment here, Angela Merkel in the backend of her career as chancellor. Once the germans have moved, the pulling of risk is possible, and that dream of that unified european eurozone response is actually possible. It, it is a bit like waiting for gadot. We also have to keep in mind that for final approval of that 750 billion, it takes a positive vote from each and every one of the 27 states. This is an incredibly important moment, its a start, but what an incredibly positive start in this trying time of covid19, but also, europe was hit earlier than the u. S. , their economy was hit earlier. They bought up a little bit earlier, their recovery has been very tempted and president and president id lagarde has been calling for actions like this since the beginning. This fiscalt reaction from the 27 countries on an integrated basis, and keep in mind, the financing for the 750 billion will be through e. U. Bonds, so it really is one for all. Complete on this, it is unequivocally positive. Alix full disclosure, waiting for gadot is my least favorite on the planet, so i would want to run from that. But does this make you want investments in europe in a different way . Does this up the ante of what you are looking into . Interesting, particularly when you look at the Financial Services sector. One could argue that maybe some of the u. S. Financial institutions are stronger, healthier, better capitalized versus some of the europeans. On the other hand, when you look at valuations, the valuations in europe are so low in the case of and in other areas in terms of the earnings, europe provides a significant opportunity. In a recently invested parisbased brokerdealer. And they are showing that there are ways for european institutions, in this case, not a bank holding company, not a deposittaking institution, but and isrk with banks competing with the u. S. , both firms and European Equity, sales, trading, execution, research. There are models that can work effectively. But i do think this will encourage us to look for more opportunities in europe, yes. Alix so how do you understand, then, that thesis versus the headline were seeing that Christine Lagarde did not seem positive about inflation or growth. Unrest, look at the u. S. The markets literally dont seem to care. Is that all Central Banks . Is that Christine Lagarde, is that what they are doing . Lets keep in mind that as i said, europe, the economy was probably hit a little earlier and it is unequivocally positive for president lagarde to be adding 600 billion to the 750 they already announced, and extending it for a year. The truth is that absolutely pales in comparison to what the fed has done. Both in terms of speed, the fed has moved much more quickly. In terms of size, the fed has really put no caps, the bank of japan has put no caps. And also the breadth of the action. If you are taking a balanced look at the fed actions, japans actions, while they are unequivocally positive, they are probably also lagging some of the other economies and i would expect there to be a continued spread between the economic recovery in europe versus that in the u. S. Because of the fed and the fiscal actions. In terms of their speed and size. Just picking up on part of is it ok that, Financial Markets are rallying in the way that they are at the moment . Given what is happening in the real world. Be it covid19 or the race riots taking place in the United States . Does this reflect well on the Financial Sector . We can all understand the logic behind it, markets are not moral creations, but nevertheless, the gap between reality and Financial Markets seems to be growing every day. Is that ok . I would say it this way. All of us are struggling to try and figure out the answer to that. The way i think about it is this. Is a as a former trader myself, one always learns to follow the fed. What the fed is doing is having a huge impact on the Financial Markets. Lets step away from the Financial Markets and think about the underlying economy. Inre are so many numbers unemployment, it can drive people crazy. But the simplicity of it to me is in april, there were 20 million fewer people employed in the United States than in march. 20 million fewer people. Addition, subtraction, simple. The biggest month prior to that was less than one million. And in may, its going to be another 5 million to 10 million. This 25 million to 30 million net jobs lost in the u. S. , these people are not going to have jobs next month or the month after. This is going to take a while for this to work itself out. As those actions, both on a monetary and fiscal side, are, we do have to deal with the reality that we are going to have 25 million to 30 million fewer people employed in the u. S. Than in march. Guy and do you think Financial Markets are reflecting that . Economick that the will be in the u. S. Clearly, positively impacted by what the fed is doing and what the treasury is doing, but i think the recovery will take longer, the more jagged, be more selective be more jagged, be more selective. And i cant imagine we are not going to struggle to get the Unemployment Rate back to more normalized levels. Vhink the thought of a shaped recovery is just not credible. Bob, the longer it takes, the more the fed is going to be involved. Many think that they are exacerbating and creating the massive inequality we are seeing also play out in the race riots in the u. S. Is this a vicious circle . The more they are in it, the worse it gets . Time a Financial Services expert, so i will relate it to Financial Services. One of the things were seeing in the u. S. Is with all of these activities, the large institutions, Insurance Companies and thanks, are becoming more interconnected and more intertwined with their governments. And it could be the implementation of fed programs. If the willingness of the regulators to raise capital when times are good, or to reduce capital when they have Public Policy initiatives that one access to the markets. And im not making a value judgment of whether its right or wrong, its clearly necessary right now. But these things never reversed themselves completely. The larger Financial Institutions have much more of a concentration of risk than theyve ever had before, and the largest Financial Institutions in the u. S. Have more of a correlation of risk the underlying economy. And that a little bit of a potential for all chips on black. If theres more of a correlation of risk, then as the economy goes it will go. I do think these things have unintended consequences, and one of the unintended consequences weve seen this in france for a while. Weve certainly seen it across europe since the financial crisis in 2008 and 2009. The large Financial Institutions have become more interconnected and more intertwined with the government. Alix really interesting perspective. Always good to catch up with you. Coming up, we are going to break down more on the ecb decision with longview economic ceo and chief market strategist. This is bloomberg. Im alix steel, this is the european close. For a long time, Central Banks were the only game in town asking to support the economy when fiscal policy could not. We want to break it down even more, lets turn it to Bloomberg Markets senior editor. Some people are finally say that we are seeing it from the ecb, this ability to step up is as you know, it has an accused of being behind the curve are so long. Lots of talk, but election reluctance to take action. Lagarde adding 600 billion euros to the pandemic emergency purchase program. I had seen estimates as low as 250 billion euros. The consensus was 500 billion euros. When you look at a market reaction, the euro spiked above 1. 13 and has now gained or percent gained 4 . Seen yields for italian bonds, greek bonds plummet. Clearly, they needed to go big because the outlook is so grim. Revisede lagarde forecast Going Forward and they have a lot of room in the Balance Sheet to do it relative to other Central Banks. Theourse, some would say ecb have learned their lesson from 20082009 when they didnt go all in. Learned thattainly lesson and delivered on it today. Lets talk about what is coming up. We have seen the feds openended qe, a dollar negative. Im a bit confused here. Why wouldnt the program be negative, too . In theory, qe should be currency negative. Explain. And the ecb is, probably hoping that it will be eventually but weve seen this rally in the euro from below 109 top of 113, tracking the rebound in european stocks. Fiscal policy makers are starting to step up, making a uturn by getting the German Government to agree to a bigger than expected stimulus package. Of course, the e. U. Proposing recovery fund, which of course, is not finalized, but in theory and in concept sounds good. But the ecb is definitely keeping a close eye on the euro. A weaker euro would be stimulating for the region and the economy and we know mario often pushed back at euro straits. Down the road, look for jobstine lagarde to perhaps a bit lower down the road if the euro continues to levitate. Guy we are going to leave it there. Thank you very much. We are going to carry on with the coverage of what is happening here in just a moment. This is bloomberg. From london, im guy johnson. This is the european close on bloomberg. This figure out what is happening. We have the classic trade coming in today, the dollar is weakening, sixth straight day. A massive moves in btp. During this more, longviews economic ceo. People are talking about it being a bazooka, some people were saying that they wouldnt go anywhere near as far as he did. What do you make of that . Theres clearly a bit under and itde in the market, was more than people expected. It was another big bazooka. I dont know how many big bazookas one can produce, but it seems they pulled another one out today, in the market is certainly reacting that way. Guy in terms of what is more important here, weve seen Angela Merkel come out with a big fiscal package and Christine Lagarde come out with a big monetary package. Europe has grown largely due to these big military packages as you allude to. The fact that germany is not going to spend serious money, how big a game changer is that . Do you think these are the more Important News for the last 24 hours . Thats far more important in my opinion. The whole push toward fiscal two,t in the last month or but also the whole push toward the idea of that neutralization is a game changer. There, wills still it be loans or will it be grants . But the whole idea that you might have a fiscal spend from the you that neutralizes some from the e. U. That neutralizes in order to get along with spain is a real game changer in terms of getting a proper fiscal, political union. Andanys behavior won pushed toward debt neutralization. The world is awash with liquidity. A bit more in terms of Financial Markets, but really, the real game changer is just what happened on the fiscal side. Guy and the fact that germany have come back for another bite at the cherry is really a sign of their intent. Alix no kidding. Lets talk about the u. S. , new york citys phase two reopening with Outdoor Dining targeted for july. I feel like weve seen a reopening trade happening with the rotation in financials, a steepening of the yield curve. Do you play that . What do you make of it . I think this rally is getting close to attend, probably a little bit more. Weve seen that move into trades and the reopening trades over the last really since midmay. Its got two or three weeks behind it. I still cant get away from the fact that we are in a bear market. If i think about the incremental news flow over the last couple of months, its to the downside, not the upside. I know that reopening is good news and infection rates lowering is good news, but the fact that restaurants are going to be at half capacity and sports stadiums may not have people in them for several months, these are really bad things that are happening in the global economy. Some significant damage, i think, further down the line. Love with it,l in and i wouldnt plan for too long. Alix are you falling in love with steepeners and higher yields in the long run, or no . Know, this is a bit of a squeeze at the moment, a bit of momentum and a bit of fomo. I dont think this is a genuine six to 12 month move, this is a shortterm move. Guy how out of position do you think markets are right now . You say it is driven by fomo, how big is that spread between markets and reality . I think its wide. Markets,with bear thats normal. Almost 10 years of mentality being put to work, that is because of enormous liquidity from the fed and a normal stimulus program. I think the disconnect is quite significant. It strikes me that the supply shock weve had in q2 was going to turn into a demand shock further down the line later this year after we get out of the reopening euphoria. I think there is a large disconnect. Guy ok. We are going to leave it there. Thanks very much. Markets, the close next. You say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. We are seconds away from regular trading in europe. Let me show you what the numbers look like. The session in europe more negative than we been used to. We are down. 8 . We hit our lows about two hours ago, as you can see. We climbed off that. We are mid range right now. A negative session being delivered. The European Equity markets are more than 8, even that in percentage terms. I want to show you the broader array of assets as well. This is what we are focusing on as we think about what is happening in europe. Equity markets relatively muted compared to some of the moves we are seeing elsewhere. The euro catching a strong bid. We were hearing about that earlier on. A big move in btp as well. That is something worth focusing on, particularly in the front end. Certainly we see spreads tightening, btp to bunds. That has been worth focusing on. There are the three assets weve been working on. A 15 basis point move at the front end of the italian curve. A sharp move. In terms of the individual equity market, this is what we look like. You have the ftse 100, you have the dax, and the cac 40 down. The ftse 100 down. 7 . Germany dustry in the economy got a big push from Angela Merkel overnight. Now this much bigger than dissipated fiscal plan. You can see the cac 40 flirting with the 5000 level. In terms of the sector breakdown , heres a look at what is been happening over the last few days. Using some of the most being up stocks and sectors starting to rally. Today everything is negative territory. It is the car sector, the travel sector, and the bottom end of the market has been strongly bid over last few days. Easythe last 24 hours, aerospace and Airline Stocks doing well. Today airbus is catching a reasonably positive bid. Remy coin