Analysis. Kit juckes this morning was smart, smart, smart. One calculation i saw was it was only 5 of gdp, and that is a squishy number. But that aint much. You really wonder, whether be a second deal if the slowdown in europe continues . Francine it is 5 but every country has to ask for it, so it wont go to everyone depending on whether they need it or not. The other thing is that he could be the first step toward more physical integration in europe. It is a path forward, and that is probably why it is being heralded by euro files as something of a great deal. Lets get straight to the bloomberg first word news in new york city with ritika gupta. Ritika as you were discussing, it is a done deal. European Union Leaders have agreed on a landmark 860 billion economic Recovery Fund. It is split almost equally between grants and low interest loans. It will unleash vital Financial Aid to the southern european economies it hardest by the coronavirus, and it is being paid for by hundreds of billion dollars of common debt. That is the first time e. U. Has done that. Steven mnuchin and nancy pelosi begin talks today on the next virus relief plan. Mnuchin says the next phase of jobselief will be kids and and vaccines. Republicans may push back on what has proposals forgetting schools reopened and business hiring. In the u. K. , there is more pressure on Boris Johnson to take a harder line on china. Mike pompeo meets today with senior members of parliament. Those lawmakers will want to see sanctions on china. They also won china cut from the u. K. s new their power program. 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. Francine . Tom . Thank you so much. Equities, bonds, currencies, commodities i want to take some time here because we are doing a lot across bloomberg surveillance this money. Itt a rally yesterday, and continues this morning. Futures up 23, dow futures up 1. 79. You see it in the vix, and it is absolutely extraordinary 23. 96. For those of you not part of global wall street, that is a huge deal. We have vaulted from 32 down to 23. 96. The longterm averages about 20. The glory days prepandemic were 14, 13. We have made some room there. The dow closing. 26,000. I know you will talk about the german spread. The german tenyear is put much stasis. Nots surprised, frankly, all that much move. Thecine i did not look at spread. I looked at it, but i decided not to put it in my did check because they moved yesterday. Yesterday we spoke to a couple of strategists who said it was already priced in fulltime if you are a political analyst, you could say that this is the first step to political integration. Europe got a deal. This is something more than we were expecting. But if you are a trader, you would have played it yesterday. Youre right, things are moving sideways. European stocks are priming a bit because of this Landmark Recovery plan, but the big move was yesterday after we were told that they would meet again. So it was already priced in. One thing i want to show you come which i dont think i have done this year in my data checks, extending gains above 20 an ounce for gold and silver. It is the third day of gains for silver. There are interesting dynamics when it comes to silver. To talk about the e. U. Recovery fund and what it means for the ,arket, turning us is geoff yu strategist three mea markets. Ray to speak with you. Noted, a lot of the feelgood factor on the markets because of the Recovery Fund was because they it was before they signed up with a deal. Is the market going to ignore the simmons plan . I dont think the market will be because they see some structural changes which europe has brought about in achieving this deal. So i think the good deal for markets will be for some time. Europe ishe fact that handling covid better on a relative basis and maybe can generate a smoother recovery, that will make a difference for asset allocation, especially in equities. Francine does it have an impact on euro at all . Geoff here is going to be the interesting one because if the Equity Investor goes in on the hedge and tried to benefit with some of the currency, the tailwind that we have seen, then it is possible. But at the same time, do you really want to chase the euro aggressively from these levels . That i am more cautious about because a lot the lack of export growth and the impact on inflation as well. The ecb might push back against it. But on the margins, asset allocations, europe will benefit. I just dont want to chase it too aggressively. Tom geoff yu, one of the great home what of the great metrics here is fiscal amount is a percentage of gdp. It has been 10 , 12 , 15 , 17 . One number was being carried of 5 on this deal. Is this an ittybitty deal . Geoff i dont think so. It is more about, what is the Multiplier Effect from a natural realized investment point of view, but also a sentiment point of view . There is where europe could actually be in good stead because if the result is more than savings, channeled into the south and actually lifting productivity, it lifts growth to something that is actually longer term sustainable and positive. Then i think the return is better. Tom i want you to be an engineer right now. Youre in the netherlands and you are not happy. Dr. Know got some comfort but not too much. You are going to provide direct stimulus to italy. Youre telling me it is going to have a Multiplier Effect. What is it going to go into in italy . Gondolas in venice . Geoff we know that italy does is looking at Infrastructure Improvements over the last few years, and there have been instances where that has proven to be necessary. If you are a dutch engineer, you should be submitting your bids, your rfps, saying how you can deliver the best in class, and that is how they should be looking at it. Where a rising tide should lift all boats. Francine what do you do with gold right now . Geoff gold i think will be seen as the quintessential inflation global centraln bankers, they seem determined to keep real rates down for as much as possible. People have been talking about the brain art speech. Let the economy run hot. In that only do well kind of environment. Francine thanks so much, geoff yu of bny mellon. We will have plenty more from him shortly. Coming up shortly, alexander stubb, we will talk about the Recovery Plan. York, 10 30 a. M. In london, and this is bloomberg. Tom bloomberg surveillance. Good morning around the world where europe changes. There is no other way to put it. This is a Historic Deal by all accounts. This is a huge, huge shift over the 63year history of the european the modern european experiment. Francine lacqua and london, im tom keene in new york. We continue with geoffrey yu. I have to go with prosaic matters like a surging stock market. I am going to go there. Why are stocks surging . Geoff two reasons. One, we have to acknowledge the policy element. Two, there is no reason for markets right now, despite seeing the covid headlines, to suspect a broader recovery trend is going to be disrupted. The question is always, will earnings deliver expectations and the reality is that clash might still come. For thet does it mean larger Multinational Companies in switzerland, in sweden, and all of europe . What does it signal, this day of fiscal union, and also a day of corporations adapting to reality, which leads to this guesstimate of a surge in 2021 . I think there are are quite ank there few things. I think in the south they are going to get the investment, but the funding costs to get the investment will start to come down, so they will have more resources on a marginal basis. For european companies, multinationals come if you are group worried about global decoupling and deglobalization, look closer to home. You can see a surge of demand from the immediate neighbors. You mention switzerland, absolutely. The second point is they probably dont have to worry about a sovereign shock for a long time now that there is a mechanism to redistribute. That is the key phrase, to redistribute the resources. This makes longterm planning much more viable. Are they going to increase their investment in the region, not just with customers but invest locally as well. That could be the list everyone is waiting for in europe. Francine where do you see the most value in europe . Do you break it down by companies or sectors, or are there country plays . Geoff i think if you look at some of the sectors which have been beaten down quite a bit in the last few months, consumer cyclicals, for example, that is where the Covid Recovery process improves, plus all the fiscal resources. Energy, probably given the state of global growth, that still might be a bit of a laggard. But the high value we are looking for new sources of growth, not just in china but elsewhere. Now in europe as well. They stand to benefit the most. That could be next years story if you look at the mechanism. Also king francine looking also at pictures coming out of brussels, frugal for leader the frugal four leader, i think the building over in brussels, when you look at the way that europe ridge differences between north and south and east and west, are we going to see a more integrated europe, where are we going to see the Franco German being notonveniently attacks but not listened to . Geoff well, i think that is where we need to caution our expectations somewhat, because lets bear in mind, this was a oneoff. The budget framework was always going to happen this year. If covid had not happened, will we have a part of the budget which would be financed by common bond insurance . I dont think so common bond issuance . I dont think so. Can the next budget process incorporates something along the lines of what we saw supporting framework . Ce gree i think that is when we can truly get the hamiltonian movement in seven years time. Tom i dont hear people today talking too much about a hamiltonian movement. We will talk about that in a bit. Geoffrey yu, a brilliant brief. To come. Much more we are going to look at these markets surging. Futures up 22, down futures up 164. Dow futures up 164. We will continue to focus on this historic moment for europe. He is thrilled again joining us, Wolfgang Munchau, coming up next. This is bloomberg. The stakes couldnt be higher. The differences remain very great, so i cant say we will reach an agreement here. 50 . Will say less say we have to be cautious. The majority of the Member States coming close to four countries, but they also need to make an effort. We have come up with a response to this arguably biggest crisis of the European Union. Today we have taken a historic step we can all be proud of. The conclusions reached as a result of this summit are truly historic. We sent a strong signal to europe. Francine european Union Leaders have agreed on a land mark stimulus package after four days of dramatic negotiations. For people on the ground in brussels, a brilliant story for the backstory, which basically said the leaders started off on friday on a sunlit terrace, drinking mineral water, finished in the early hours on monday with wine and potato chips. I thought that was a colorful image that encapsulates the tense negotiations that we saw. Joining us now to talk about this is Wolfgang Munchau, euro intelligence director. Ray to speak with you on a day like today. You are optimistic but a lot more cautious, and many other people out there than many other people out there. What do you worry about, given the deal that was mustered together. Wolfgang it is good is that france and germany have stayed together. This deal. Close at andthe actual money the acrimony that because, there was a lot that we wanted to do with the e. U. Budget that it cannot do. The Hungarian Prime Minister in particular got what he wanted. They also wanted to get rid of these budget rebates. You will member you will remember that the british asked for a rebate in the 1980s. We knew where that ended, and now britain is gone. The netherlands, austria, denmark, and sweden, are all thending rebates, and in case of austria, austria even doubled the rebate it got because of its difficult negotiating position. E. U. He third thing, if the transition tohe Climate Change research and development, much of that money was cut in order to leave enough space for the fiscal transfer. So basically this is not the kind of budget that you wanted. And weas sacrificed, have to ask the question, is this worthwhile . Recoveryy since the facility is not all that big. 0. 7 of gdp for three years running. That is not nothing, but it is thathis great fiscal force people had hoped for. Francine is it better than nothing, and a lot of the euro files say this is a first step toward integration. We were talking in the break that there is a chance, and i dont know how big that chance is, that Parliament Says it is not worth it. With the ever say that the path is toward keeping europe together . Wolfgang you cannot conclude from this package that this is the beginning of a process that will eventually lead to a neutralize fiscal policy or a neutralized debt instrument. You cannot say this because it is an exceptional thing based on laws that make business exceptional. You cannot make it on an exceptional law. That would be a contradiction in terms. They have to do it again. They have to change the treaty in order to institutionalize that. After what happened over the last five days, i see zero chance of the treaty change. Tom we are going to go back and talk about this, but this goes back to the heart of the matter about this, and the matter is strasburg. Explain to our global audience that this is not both people in brussels, brussels, brussels, and is strasburg at the European Parliament really matter, intricately on poland and hungary, are they going to tell brussels to go to hell . Wolfgang they will not use your words, but they may do so. What we have heard, what we have heard this morning, they are not happy with it. They are not happy based on the rule of law, so i am not happy with it either. They are not happy about the investment, and the commissioner proposed money for lots of good things. The most encouraging things about the budget. Also equity investments, rather than loads and grants, than loans and grants, most of it is gone. And they are not happy with it. What they might do and this is my expectation they are not going to vote it out, but they might say we want changes. The whole thing might go into another round, and one of the leaders, leader of the socialists, already said that he would like that she would like in another round he would like another that he would like it is goingound to be difficult. Tom we are going to come back with Wolfgang Munchau. We are squeezed her time on a superb show today as we are squeezed for time today on a superb show today. This is important what wolfgang is saying, that is not all happy, happy, happy on a tuesday money. You may get president ial Pandemic Press conferences this afternoon. Mr. Van of maryland. Look for him in the 8 00 hour mr. Van hollen dove maryland. Look for him of the 8 00 hour. Bluebird. Good morning. 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. More voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music Tom Bloomberg surveillance. Good morning, everyone. Historic day for london. We are trying to give you perspective ford, not the happy, happy. We can do that with Wolfgang Munchau. I miss of it im percent work over the years. Magnificent work over the years. They have to get this thing through. You have alluded to a redo. What is the power that Eastern Europe has right now. What is the spell that hungary, poland, and the rest have over the more diplomatic west . At this point they have a great power because what is needed for the budget. A secondoes into round, they could be to this. That is why he got away with what he did and said i will not accept a rule of law linkage. Whatever Parliament May say, there can be no budget without the complete ascent of every other country. So this has to be a compromise. At least that will compromise in the end. De was a dealmaking machine. This might go into a second round. Things that were taken away could be called back by parliament. That will be the procedure i expect the next few days. They say at this moment . I think some of them would have probably gone a different route. Many followers of the eu and euro files would have preferred a Smaller Group of countries to do this rather than getting this done as the whole of the eu, proceeding with a Smaller Group within having a bigger facility. For example, they could have where at least Nine Countries can gang up together and do whatever they want to do among themselves. They couldve had a much bigger budget. They could have done this, especially since germany and france hang together and italy and spain are on the same side. They could have basically done this among themselves with a few allies and wouldve had enough to get over the threshold of nine. In fact, they would have gone far over the threshold. The judge could have stayed outside. It would have been a check choice for the dutch on the austrians to stay on the outside. At the moment the dutch in the austrians phase no risk. Budget why the negotiation was so strong. In the negotiation, everyone has a veto. I know the voting rules are different, but there was the clear candidate for france and germany that wasnt voted on. Thathat a warning shot france and germany cannot rule europe . Close friends and germany alone cannot rule. France and germany cannot rule alone. The majorities are very narrow. You need coalitions. The reason they did not choose afterternative rule brexit, people are paranoid of the idea another country might leave. They value unity over pretty much anything else and that is why they were ready to make compromises that there probably would not have made under normal circumstances. The unity is the thing they prioritize. Ncine you calculated the will they need a second package . No, there cannot be a second package. That is the e. U. Package. In the political space in france and germany we have helped italy or help spain and that is the size. It will be over several percent grant the size of the element of the package. Tom ok, great. More for italy. Is it less for the netherlands . Yes. It is much less for belgium. The rearrangement of funds and they decided is is purely for political reasons. Everyone is afraid that the eurozone would break up and that is the reason for them to do that. Italy has a solvency problem. It needs the ecb to continue to buy instead to remain solvent. We are vulnerable to risk of inflation and vulnerable to italy,al developments in and to Political Developments in france. We dont know how that ends. There are number challenges ahead for the unity of eurozone and they wanted to take a first step. I welcome that element of the package. Recognize for the first time and germany record as for the first time that something is seriously adrift has not been in denial. Tom this has been an historic day and conversation. Sofgang munchau, thank you much. Decades of experience on these political events. Speaking of political events, policy matters Vice President a 775 billion i will rounded up to accommodate eight 800 billion plan for children and the elderly funded out of a tax. Im sure there will be much more on that through the day. First word news. Have agreedleaders on 860 billy dollar plan to rescue economies hit hard by the coronavirus 800 billion plan to rescue a kind was hit hard by the coronavirus. The Emergency Fund is a must equally fit between grants and lowinterest loans. Italy is likely to be the biggest beneficiary. It was original european epicenter of the pandemic. The Trump Administration has now come out and endorsed mark waring. President trump has long resisted covering his face but says it is patriotic wearing a face mask when you cannot social distance. The richest person in the world just got a whole lot richer. Billion toadded 13 his fortune yesterday. The largest single day job for an individual since the bloomberg billing error index was created in 2012 billionaire index was created in 2012. Amazon shares are almost a percent. His fortune is now worth more than 189 billion. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Francine thank you. Coming up, was been to the former and talk about the eu Recovery Plan and what happens with the parliament. This is bloomberg. This is bloomberg surveillance. Tom, we have been saying it all morning, cap talks but european leaders finally have agreed on a landmark stimulus package that will see some 750 billion euros of joint debt. The deal represents a victory for collective eu response to the crisis. Chance to comeg out stronger from the crisis. Today we have taken an historic step. Stepnother important remains ahead of us. Francine joining us now is alexander stubb. , thank you for giving us a bit of your time. We had a lot of optimists on tv saying this is great. Then we had a much needed reality check with Wolfgang Munchau saying, look, the parliament did not get the four criteria and actually wanted. Where are we on this . I guess a deal is better than no deal, but isnt the right deal . It is never the right deal. But i think the most important thing is there is a deal. It is unprecedented in terms of size and scope and timing. I guess people like Wolfgang Munchau, is a columnist in many ways come has to bring the negative. I bring the positives out of this. I think it is a great package. Does it mean if you look at the calculations, it is a very small percentage of gdp. Willoughby had enough will it be an upward is this to show political will of keeping europe together . A combination of the two. Remember the eu budgets are usually only about 1 of the gni of the whole area. This sort of doubles it up over a few years but i think the message to the market is that when there is need for Recovery Fund, when there is need for partial neutralization, when there is a need for a big deal, European Union can pull it. Esm comethe sam, into four years to put it together. This package took four months was. I think it is therefore a good package. Tom mr. Prime minister, good morning. I do note it is 17 hours, 41 minutes of sunlight today in your beautiful finland. Up before 5 00 a. M. And the sun going down after 10 00 p. M. It is not fair, folks. Mr. Prime minister, i look at the difference from helsinki to rome and it is way more than 1700 miles. It sounds to me like the distance from helsinki to warsaw or the distance from helsinki to budapest is far more tangible. What do you and others in the west of europe say to a fractious Eastern Europe . Well, first of all, i must say i travel that distance down to florence in absolutely no time. I think in negotiations, there is always going to be tension. This time it was on the level between the north and south, then on the conditionality of the value issue, it was between the east and the west. I think where everyone landed was somewhere smack in the middle. I feel quite comfortable with this package. Im happy about the outcome. Tom im very curious of your thoughts at this raging pandemic debate over the path taken by sweden. It is just a fascinating scandinavian experiment. From out the path from oslo to stockholm to helsinki about how you all treated this virus. It has been quite different. Sweden had a very what i would call a liberal and relaxed way of approaching it. Norway, did way, finland, partially in iceland we went into well, i would say locked down much immediately. The results can be seen. I we dont know enough about the virus enough at this stage. One thing i want to add is we as human beings have a tendency to present andze the underestimate the future. My take is it will take 10 years to know francine are we going to have more fiscal integration in europe or is the package just a oneoff . I think there will be more. My argument is always integration in what area to pressure to integrate in another one. The eu never wastes a good crisis. He did not have entered the financial crisis. There were advancements. I think this will lead more toward a fiscal unit. It will not be a full monty. It will not be 100 physical but it will be the next step toward fiscal. This package is more integration, not less to gratian. Not less integration. Francine substantial or will there be other fights . There will always be other fights. Remember, soon to be union, 27 member state. Youre always going to have 27 different views. At the end of the day, after a optimalcome up with the solution. That is what will happen in a few months and years. The thing i find so interesting and historic about this deal is, as i said earlier, the scope and size. I never believed the eu could pull this off. I give credit to the European Commission and especially to france and germany for pulling this rabbit out of the hat. It showed european unity. I think europe has been the best in dealing with this crisis. Tom will this deal be blocked by parliament . It will be blocked but im already getting messages for my friend in the European Parliament that this is not over you. First of element has budgetary powers, so there will be a backandforth and a conversation with European Parliament. Ther, and let European Parliament has a lot of power to negotiate this. There will be a few tweaks into this deal but i do not see the European Parliament blocking this deal because that would be to the detriment of the whole European Union. Tom absolutely fascinating. We are thrilled you could be with us today, alexander stubb, former Prime Minister finland, professor of european history. Folks, just amazing to get the map out as an ugly american with helsinki to the east of athens and really on a longitudinal line with istanbul. I did not know that. The sprawl of europe is just extraordinary. Oring up in the next hour, conventional economics. Futures up 23. A booming stock could but a fragile american economy. Ian shepherdson will join us with pantheon . Economics. This is bloomberg. Francine this is bloomberg surveillance. Coronavirus vaccine in development by oxford and astrazeneca showing promising early results. This comes as california, florida, and arizona all reported a slowdown in an increase of new cases. Joining us is oksana pyzik. Coming on. O much for these trials seem to be in fairly early stages. Does having an autumn immune response auto immune response mean we can get a vaccine . We dont know how long these responses last, the antibodies. Good, tom and francine. Newswe do have positive around this oxford trial. We have evidence of an immune response. The presence of antibodies in itself cannot prove it will actually prevent the disease. Also expect there will be the real test will be to see if theres going to be any possibility of reinfection, how long there is protection against the virus as well is unknown. Many questions remain, but the phase i phase ii is to identify if it is safe to continue and to get an idea we have that green line on that and we can now take it to the next step, which is really important. But we should not get ahead of ourselves and assume because there were antibodies present that this is going to in theively work population. That doesnt necessarily confirm an immuno response. While the Vaccine Research is evolving and accelerating, we estimate maybe october would be the earliest that the oxford could produce this. In that time, we still need to continue all of the Public Health tools at hand to suppress transmission in communities. This has been possible in other settings, with other viruses ranging from smallpox to polio and ebola. In that time, just around the too soon toay be pin all of our hopes on a vaccine. Francine if we do get a vaccine, how far away are we from it in terms of getting the trials in production and what are the chances we never get a vaccine . Are 23 vaccinere candidates in clinical development. So this particular vaccine, if it does not pan out, there are other strategies and techniques being used by various companies. Projecting oxford is a very optimistic timeline, even as early as this fall. Spend at will have to much wider test only about 1000 people participated in this one trial. Statistically, we need that at much higher numbers, 10,000, and also in diverse populations. We had healthy volunteers. We had volunteers between ages of 18 to 55. What we really need we know this virus is most dangerous for those who are elderly, for those that have Underlying Health conditions as well. So those are things to keep in mind. Tom i want to go to your pharmacology expertise out of canada and ucl as well. How are we going to distribute this vaccine through pharmacy . I dont mean the first glory days, but over the months, the quarters, the years . What will be the pharmacy approach to distribute in whichever vaccines are efficacious . Distribution may even the largest challenge that we are going to face with this particular vaccine. Especially when we look at the one coming out of the oxford trial because of the techniques used. There can be some variation in concentration in the final solution. When massproducing millions of doses. When it comes down to the pharmacy level, it will then have to come down to the government negotiations with the pharmaceutical companies. We have already seen moves for this vaccine from the u. K. Front and then that will channel toward the pharmacy distribution. Tom we have to go. Im sorry. We have to go. Thank you so much. Market is very interesting, futures up 23. D market, little risk 3. 99. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Tom this morning, lets make a deal. France have given route in the netherlands. Promises to the north. It was painful and regrettable. A new original fiscal union in europe. Stock markets continue to search this morning. Check out big tex surges. It is painful, regrettable for the bears. It is going to be painful and regrettable, whichever side of the aisle, it will be interesting. President ially press Conference Starting this afternoon with the masked one. Good morning, this is bloomberg surveillance. I am Tom Keene Francine lacqua. Thisine, your thoughts on historic moment for europe . Francine i think it is all in the detail. I have been following it pretty