The ecb today likely in some time,ust merely to mark there may be some tweaks in terms of determining will it have an impact, but it will not be major. The ecb is waiting for more data. The ecb is also waiting for meetingnd the council which will determine this rescue plan, 750 billion euro rescue plan, and everybody is waiting to see what happens there. Yousef a medical meeting today tom medical meeting today, first do no harm. Right now with first word news in new york city come here is ritika gupta. Ritika President Trump is shaking up his struggling reelection campaign, replacing manager brad pascal. Pascal has been under fire for some time, coming less than a month after the residents sparsely attended rally in tulsa. The twitter accounts of some of the most prominent american political and Business Leaders have been hacked, amongst them, barack obama, joe biden, elon musk, jeff bezos, and warren buffett, an apparent attempts to promote a bitcoin scam, sending out tweets promising to double the money of anyone sending funds via bitcoin in 20 minutes. It is investigating. The coronavirus outbreak has gone worse in texas. The biggest number of daily cases, almost 10,800. California had its second worst day with more than 11,000 infections. San francisco and sacramento have become the latest cities to announce that Public School students will not return to classrooms when the new term begins. Chinas economy returns to growth in the second quarter, an important milestone in the struggle to climb out of the slump caused by the coronavirus. Chinas g to be expanded 3. 2 from a year earlier. Industrial output rebounded but consumer demand is still weak. Retail sales continue to fall. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is bloomberg. Guy . Tom . Tom a little bit of a risk of feel. I dont want to oversell it, but nevertheless, a little bit of weight two days in a row. , 29. 10. It in the vix futures negative, dow futures negative, to 26 right now. Yield, out toar two decimal points, and that is a little bit of sargon is there. Other than that, pretty quiet. Guy we are waiting to see what happens with the ecb, waiting to see what happens with the Council Meeting friday, tom. One week implied volatility for the euro, now with a onemonth high. There is not a lot of kind of fear surrounding what is happening here. There is a sense may be that if the council would agree on something friday into the we can, we have a little bit of time to fix this. Nevertheless, a little bit of wind coming in, Dollar Strength in the market. European stocks falling following what we saw with the stoxx 600. The retail number has spooked investors, as has the chinese authoritys decision to criticize one of the Biggest Companies in china, criticizing the idea that alcohol prices are too high, and that has been taken as a signal to the authorities concerned about the very strong rally. Another interesting indicator in terms of the risk off sentiment. One point about 1394, tom. Divot coal joins us now. What is your chart david cole joins us now. David the ecb plays a role, but much more important is really how fast e. U. Leaders will come up with this recovery fund. We think at one point they will agree on this recovery fund. The logic is there. With that, the longerterm, gold can go higher. Thending how quick compromise has been achieved. How quick shift from Monetary Policy, which had been the main support driver here, goes to fiscal policy. This is usually a Good Environment for currency. Guy can we sustain ourselves at those kinds of levels . If we get a deal done, if we reduce denomination risk, is that a rating of the euro that will be sticky . David we think so. The ecb in some space will go further up. With more of a focus on fiscal the currency has to be viewed in a different way. So it is not more as risky when it comes to the cohesion risk in the euro zone. This helps on one hand side with negative rates that is the head for every currency. Tonka david, i want to dive into the european economy. Lost the script there. How much is the labor economy driving the debate in europe. 9 ,s ago it was appalling, 10 , 11 unemployment. Dynamic partment of the discussion at the ecb and part of the discussion with these leaders . On thenot so much Monetary Policy side. The big advantage with the European Union and lots of European Countries in the current crisis, they have automatic stabilizers which support the labor market. You dont have to put this in place. The stabilizers are basically made for such a crisis, which we observe right now, which is not ane it is made from exogenous event. You dont have to think about whether they are in place. And that is why Monetary Policy is quite relaxed when it comes to the labor market, because the fiscal side has put in place already some measures here to stabilize the labor market and to stabilize these dynamics. The emphasis of the stabilizers . Do they diminish Economic Growth . David they do when used in a normal recession. Somely near to clear out imbalances in the economy. Right now i would be less pessimistic that this automatic stabilizer would depress productivity because right now we dont go in a recession because of imbalances. We go into a recession or we went into a recession because of the shutdown of the economy. The usual negative effects, side effects when it comes to productivity. Christine lagarde is going to want to lean on the idea, mario draghi leaning on a great deal, that fiscal policy needs to do more, and that could potentially be the case this time. Nevertheless, what can she signal in terms of the ecbs ability to deliver further shots to boost the economy . She is going to want to make very clear that she is not out of ammunition. How is she going to do that today . David the most important instrument ecb still has in this situation of negative or zero Interest Rates is basically forward guidance. Therefore, the communication is really key here for the ecb. This is there instrument which way which they will use. It is basically how much they signal and the coordination of fiscal and Monetary Policy. So when we have fiscal policy, how committed the ecb is to prevent any increase in Interest Rates. When the economy picks up, when Interest Rates go up, when spreads are widening. This is basically the area where the ecb will do probably more when it is necessary. We will do more in terms of volume. Much more important in terms of flexibility, basically to go away from the static support in terms of volumes, but go in the direction of we will compress spreads wherever we see them, and this is basically the instruments, also that the ecb can work with. Guy david, i was surprised to hear the chief economist at the ecb talk about the fact that he has no particular view on spreads. Did that surprise you as well . David that is i would say the usual ecb rhetoric which we are hearing since basically they have started to introduce they have their legal limits. So the ecb is basically with his policy and the compressing spreads, but they never confess, they never say this is our target. So what they talk about is usually, they say we want to improve financial conditions, and we all know that you improve financial conditions by compressing spreads. This is the measure we target to come and therefore the ecb is split with its communication. Because of the Legal Framework they are operating in. I think it is off the radar, this meeting, and there are distractions because of the out there, what it seems banking is under a new strain with chronic persistent negative Interest Rates. I think it is fair to ask this question. Is a negative Interest Rate experiment done . David we hope so. It is indeed for our business, as a measure not the best environment to operate in. But we think that Central Banks have learned that going into negative Interest Rates, it is only in very special circumstances, the good strategy take for example the Swiss National bank for them. It is probably the only strategy to avoid here, over appreciation of the Exchange Rates. For the ecb, there has to be more in room more room to maneuver. The coronation of fiscal and Monetary Policy is something that will allow the ecb to move away negative Interest Rates similar to what we have seen for the bank in sweden, which has moved away from this route of stimulating or trying to estimate late the economy. Tom we are continuing this kohl,ssion with david and we will have full coverage of the ecb announcement in a press conference. Always some interest there. But interest is american banking, and particularly the success of james gorman of Morgan Stanley in the broader sphere of asset management. It has been truly a decade of excellence. In the 9 00 hour this morning. Stay with us this morning. This is bloomberg. Tom good morning, everyone. Bloomberg surveillance. Im tom keene in new york. Interesting stuff going on here, with an ecb meeting, and of course all the other market activity as well. Dow 30, dell futures futures we are speaking with ohl,icult david k who is more than qualified to continue the discussion on negative rates. I want you to talk, david, about negative rates to the public money market funds and shortterm paper. Bankst understand how the withove forward day today these Interest Rates. David we have seen because there is an in normas amount of revenue with the money market funds, they are quite low. So in terms of Interest Rates basically making these kinds of Asset Classes less attractive, and from the ecb part, perspective, this is exactly what you want to achieve, you lessto make risk attractive. It is a measure, and experiment, to push money more into risk advances out of the money market fund. Of this goes to the heart julius baer. , just very simply, if there are challenges in asset management, how will julius baer attack that . Why do you adapt to that . Why do you position your accounts with the stresses of negative Interest Rates . David of course we try to accompany our clients to shift duties more risky segments. This is key to clients, when they risk when they join more risky segments, that they understand the risks, and then you can go with usual conservative clients into more risky segments. Assets is how we as managers deal with these challenging environments of negative Interest Rates. Pick up on the issue of negative Interest Rates. Lets talk about what is happening in the u. K. The u. K. Twoyear is pricing the fact that we are likely to see negative rates for the bank of england. We have seen disappointing jobs data out of the u. K. Is it your expectation we will see the bank of england joining the ecb in the realm of negative rates, and what does that mean for u. K. Assets . That the bank of england will be quite reluctant to join this experiment of negative Interest Rates, and why . The reason is the benefit is usually very low. It is the highest benefit you get from negative Interest Rates when you are a small open economy, and really depends on the level of your exchange. When the exchange is at a level which you need to steer the economy, avoiding some downside. In this respect, this will be the u. K. Is not a typical country which relies on the chief Interest Rates, on the chief Exchange Rate to stimulate the economy. So we would doubt that the bank of england really goes in this direction of negative Interest Rates, simply because the benefits are probably too small, and have a draw down to the negative, the costs are too high, so rather we have seen the to stick to purchasing policy. In with what is happening germany right now, we are seeing data out of china that indicates the industrial part of the economy is doing relatively well. Is that good news for germany . Is that likely to be a stimulus for germany . David well, i would say good news. I wouldnt go so far to say when you drill down in the industrial part of the chinese economy, it is still again the investment buys, which is more domestic driven, which is more real estate driven, which is more infrastructure driven, and there is thelly same gearing toward the same leverage, the same as the manufacturing side. Manufacturing has to be ok, but it is not the recovering germany would need to wait longer. When this part also kicks in and na, and then dont forget again, you see it more on Retail Business side. Auto sales has been down in china. So the German Economy could get a better number, actually come on china, then we have seen so far. Tom david cole, thank you so much. , thank you so much. We will continue the discussion on european in economics. For more, and Economics Discussion with the representative of the United States to the International Monetary fund, in the 7 00 hour. Stay with us. This is bloomberg. Futures 27. Ritika this is bloomberg surveillance. Lets get the Bloomberg Business flash. The European Union top court has struck down the u. S. Data transfer agreement known as the privacy shield, meaning facebook and thousands of other countries that shipped commercial data across the atlantic face turmoil. The court says e. U. Systems data is not safe because u. S. Authorities are able to survey it. The court did approve another system to transfer data. 25,000irlines will workers could lose their jobs. That is about 25 of the u. S. Workforce. The cuts are needed because the pandemic is still battering demand for flights. Dell is exploring a potential spinoff for its potential ownership of vmware. Dells personal computer and server revenue has see sought in recent years. That is the Bloomberg Business flash. Tom thank you so much. Data is at stasis here. The ecb meeting, in and of itself, is quiet. Negative 2. 30. I am going to call that midrange right now. Got . Guy . Guy as you say, tom, a big focus not only on the ecb with the Council Meeting friday, the euro is a little weaker this morning. Saw backthe spike we in march, so that is a key level to keep your eye on stop the overnight is really quite important. Csi6 4516 is where the data closed. Retelling china is the retail area where the market focused on weak data there. S the chinese authorities european stocks are at session lows. At the moment it looks as if the nasdaq is going to open flat, the s p opening significantly lower. Where back to the place where we were days earlier. We will speak with Johnson Johnsons cfo. York, 3 30 p. M. In london. This is bloomberg. Guy good morning. Guy in london, tom keene in new york, back in the office. Lets talk twitter. The twitter accounts of some of the worlds most prominent people in both political and business arenas have been hacked. Among them, barack obama, joe biden, elon musk, jeff bezos and warren buffett. Bloomberg europe tech editor joining us to discuss. How did this happen . At the moment, it was most likely caused by social engineering or human error, and essentially an outside party was able to gain access to internal tools used by twitter in order to basically post these messages , essentially simultaneously across a wide range of accounts. Twitter has not come out and said stepbystep what has taken place. What it did do was try and prevent worsening impacts of what happened, which was unprecedented, in that it actually stopped the ability of anyone who had a verified twitter profile from tweeting anything for several hours. Once things came back under control, those restrictions were lifted. Guy what does this mean for twitters credibility . What does this mean for the mediumterm . Nate for the mediumterm it is very poor because all eyes are on upcoming elections. With that in mind, the ability of twitter to just switch off the tweeting potential of people with verified accounts is going to be significant, given that those accounts are where people look for uptodate and Accurate Information about political events and other things. It is notable that President Trumps account did not seem to be compromised at all in this instance. It was Business Leaders in broadly tech people. That is going to be a question twitter is going to have to answer in the coming days, as to whether that will be prevented from potentially happening later in the year. Tom we should mention that one of the accounts compromised was michael bloomberg, the founder of bloomberg lp and its television and radio operation as well. Nate, that is all fine and well. I have had my account shut down before by previous hacks. How have the people who lost money how will the money who lost money how will the people who lost money be made whole . Nate they have from a blue lost money. One of the problems with bitcoin, the cryptocurrency, is it is very difficult to track. It is extremely difficult, near upon near impossible to appeal any kind of loss because it is not controlled by any Central Organization or agency. As we have se