from dubai,manus: this is bloomberg daybreak. sink ashina stocks mainland markets reopened. slashing rates and pledging ample liquidity. this comes after the philippines reports the first death outside of china. china's iron ore contract down almost 6% on oil.

the demand has dropped 20% on virus concerns. union begineuropean their talks over a trade deal today. sterling weekend in the asia session. nejra: as we assess the continuing fallout on corporate's and the economy, airlines are very much front and center. profitsthird quarter after tax coming in at 88 million euros versus a 66 million-year-old lost. that is a surprise to the upside.

it is keeping its outlook. it is delayed its 200 million passenger target on boeing max delays. this is something we will no doubt want to discuss. coming in at 96%. estimate was 95.9. third quarter passengers, in a little better than expected. third quarter revenue also comes in at a beat at 1.91 billion euros. it also looks to extend the buyback program until the end of july. some positive headlines. course,questions, of coronavirus and other matters. the ceobe speaking to shortly. indeed, the first set of baer, they are

going for it. the longer the matter of cost -- of growth at any cost. this is going to involve shifting the margins. they are going to drop their net new money target, which traditionally under the previous leadership was 4-6 percent. taking immediate action. versus will be pursued all-out growth. cost cuts of 200 million swiss francs. new targets. you have 67%. some were saying this would involve job cuts. a readjustment of the business scenario. a paradigm shift in negative rates affecting the whole world of banking. we speak to the chief executive julius baer just after half

past 10. ed morse is going to defend his huge call a little bit later on. have a look at the oil markets. city slashing the q1 price target. energy executives telling us demand for oil and china is being decimated by 20%. this is the biggest shock to oil 11, 2001.ce september let's have a look at the bond market. flight to quality. what you are seeing is a reaction in the market. to the bond market, that flight to quality takes you within smelling distance of 1.5. a quick snap back, one piece of news will shift the narrative.

let's have a look at 10 year government bond yields and dollar-yen. we saw three straight days of rally in yen. bank of japan will avoid any excessive moves on the end. that is a warning shot. nejra: you are pointing to the difference between chinese and u.s. equities. stocks on the csi 300 dropping for the daily limit. s&p futures on the front foot after we did see a down day on erasedthat saudi s&p 500 again. 2% forld dropped below the first time since october. some of the questions we will be talking about with our guest. let's stick with our top story.

.hinese markets plunging you have just seen the numbers, beijing is despite unveiling a raft of measures. the pboc pledged 150 billion yuan in liquidity to calm nerves. the measures mostly target the immediate problems facing the economy and markets. joining us for the hour, our guest host, chief strategist at hsbc. you are neutral on china, or you were before we got the coronavirus outbreak it -- outbreak. how is your view changed? youor the longer term, would be even more bullish. when we look at investing in china, it is very much focused on the longer-term story. for instance, the health care demands for a more aging population.

in the short-term, we are not yet buyers. we think there is too much uncertainty at this point in time. whether you look at the west or look at china, part of the correction is correction from the excessive rally in december and january, and an economic cycle where people were looking for a rebound, that is no longer the case. to 2007. reflect back this is the worst opening for china since 2007. when you see the policy response this morning in terms of cuts,ity and short repo give me a sense of your reaction to that level of stimulus that has been pumped in today.

>> we believe we will clearly have an impact on gdp growth in the fourth quarter. but we still need to learn much more to see whether that is going to have an impact on the second as well. that being said, it really depends whether you take the longer or shorter term view. it did not really pay to buy the cheaper stuff. it is very important to look at the fundamentals. i don't think people will start to bottom fish very quickly. they will take it with a little bit more caution. our whole strategy for 2020 already was how do you manage the high valuation with all the uncertainty you are going to have. is not one magic formula. but diversification, gold important in the portfolio. nejra: we have seen the yuan

stronger than seven per dollar today. we might have to question when the state funds will step in. if you are not bottom fishing, what are you watching for potential opportunities, even as it is difficult to talk about opportunities of course with a human crisis like this. >> the u.s. is doing something very different than china with the stock market. in the commodities market, with demands being significantly driven by chinese factors. the commodities market has reacted. whether there will be any response in terms of production cuts. you look and oil stocks, they should be trading with the whole curve. contracts notnger moving that much because there

is a supply response, that could be an opportunity. upvolatility starts to lift from a longer-term perspective, there will be opportunities. always looking to sell volatility from a longer-term perspective. manus: u.s. equity volatility at up by 40% to start the year. can i carry that concept forward? my guest andsing the last hour said, high yield spreads pop by 50 basis points or investing great by 20 basis points, then those might present opportunities for the medium-term. is that something you could countenance? volatility, the longer ones,

not yet. the market is saying there will be a temporary impact. rightly or wrongly, that is what the market is looking at. i yields is not just sold off because of the vix, but also the oil prices. again, it comes back to that view, if they are going to production cuts that support the oil prices as well. there is obviously a very significant demand related to anything related to the trade. are in a low for longer environment. there will be a buying opportunity there. nothis point in time, maybe catching the falling knife unless you are very underweight on that market. , hsbc privateou

banking with his views on the market. the virus in china, the death toll continues to rise. let's get the latest with our north asia correspondent stephen engle. the tragedy unfolds and the policy reaction is mounting. stephen: we have been talking of course all morning about the market response coming out of the holiday. but keep in mind, throughout the middle part of china, 14 provinces have extended their luminaire holiday by another week. this is a part of china that contributesan, but 69% of gdp, 90% of copper smelting. they are going to be on holiday for another week. the productivity at the factories will most likely be limited for another week. cutaw the oil shock, demand

by 20% of output. is then the personal toll climbing. the death toll has increased by 69% from the numbers i had on friday. 96% of the deaths are from the epicenter. the number of cases has soared --17,000, an increase of increase from friday. nejra: stephen engle, bloomberg's chief north asia correspondent, and hong kong. coming up, ryanair posted a said it probably won't kick in for a year. this is bloomberg. ♪

bloombergs is "daybreak: europe." posted thirdr is quarter profits. profit up 8 million euros. was -- lucrative last-minute bookings over the christmas and new year holidays. the biggest low-cost airline also reiterated first year profit after raising the guidelines earlier this month. that is a good cheery news on the numbers. .e have the cfo, neil sorahan we will come straight to the numbers at a moment but we need to get your assessment. the world is grappling with the coronavirus. we are trying to understand if there has been any impact on businesses that will play out. he when i lived through sars.

any change in the booking changes are numbers in the past 10 days in europe? neil: no. in fact, our bookings are ahead of last year. , the sars virus in the past, the experience at this time was that people tend to stay close to home. heading as farof afield as asia and elsewhere. if it were to continue, i think it would be big similar trend of people holidaying in europe rather than further afield. have stoppedes service to mainland china. the u.s. has begun limiting the entry of travelers from china. of dealprepared to kind

with that your number of passengers? carry 154 million passengers this year, 156 million next year. the number of aircraft we can take, most of our growth this the max delays. well-prepared. delaysyou talk about the from the delivery on the max plane. let's try to understand what that really means. take capacityule, out. what kind of capacity might you be forced to be taking out in the summer and where are those routes going to be most at risk? neil: as things stand, it looks

like we will receive our first max until september or october. we had hoped to have 10 of them. our colleagues are reviewing the schedule. we will still grow by 2% this year. i think it is likely we will have limited based closures. and itrcises underway will be a couple of weeks before we finalize that our objective is to minimize whatever comes out. growth will be down to our airbus fleet. we will continue to push that hard. we have good confidence at this point in time that the management team at boeing will deliver the first aircraft in september or october. bit --talk to me little

talk to us a little about the balance. could you see yourself placing a more major airbus deal? neil: we are big fans of boeing. them in theof fleet. when max finally turns out, that will be phenomenal allograft. burn, more seats, less noise. we are beginning to get to know the aircraft better. he gives them great stability on their portfolio. fulls's order books are for the next few years but i would have a conversation with them. manus: are they coming to you with aggressive new price deals? neil: they don't have to at this

time. their books are full. i have met them a couple of times. knowledge,ing a good with the fleet growing up to 38. you can never rule out a possibility at some time that we wouldn't do a deal with airbus, conscious forre what we play -- for what we pay for our aircraft. nejra: we start negotiations between the u.k. and eu on a trade deal. any changes you are seeing in behavior? any frontloading of bookings leading up to january 31? neil: no. i think the biggest issue we had last year was people were not sure what would happen with

brexit. seen moreion, we have confidence concern -- more confidence return to the u.k. economy and consumer. there is a lot of capacity this delays due to the failures of thomas cook and other airlines. i think there will be a lot of demand chasing supply this summer. manus: i started the show talking about the oil prices, the effects on jet fuel, etc. talk me through any impact or ability you have the sort of ine advantage of this swoon jet fuel prices. neil: as things stand at the moment, we have been taking advantage of the dips in the price. for fy 21,90% hedged

lower levels than the current financial year. we have locked in at least 100 million of saving. fywill start looking into 22. we can get good headlines from our counterparty banks that allow us to go 12, 18 months on our jet fuel. nejra: finally, how are you preparing if you are able for any decline in passenger numbers about fears with flight shaming? last year, flight shame within the media and we carried more customers than ever before. co2 perhas the lowest passenger kilometer that any airline in europe.

have -- can half co2 by flying ryanair versus legacy carriers. we are allowing common offsets. 35'sge proportion of under and german customers are doing so. people want to fly, but they want to do it in fuel-efficient aircraft. they recognize that first-class and long-haul burns up additional co2, as do connecting flights. nejra: coming up, as the coronavirus squeezes chinese oil demand, city cuts forecast. this is bloomberg. ♪ ♪

manus: it is bloomberg "daybreak: europe." in china hasmand

reportedly dropped by about 20% as the coronavirus squeezes the economy. here with a chart that matters is annmarie hordern. >> 20% or 3 million barrels per day. 20 day moving average, you can see it collapsing at the end. this is from a bloombergs, citing someone with knowledge in the energy -- in the energy industry. since we have had the coronavirus start to pick up around january 20, rent has dropped more than 10%. estimatedropped their to $54 a barrel on brent from 69. if you are a minister at opec you are wondering what to do.

the group will have a technical meeting and those representatives will report back to their ministers. yet to be seen whether we have a full manus, don't pack your bags just yet. nejra: today on bloomberg radio, the citigroup call. this is bloomberg. ♪

good morning. from bloomberg european at quarters in the city of london, i am nejra cehic. stocks sink as mainland markets reopened. the pboc moves to contain the fallout from the coronavirus. slashing rates, liquidity. the philippines report the first death outside china. commodities take a and with iron ore indexrk

down 6%. 20% onsent to drop by the coronavirus. u.k. begin their battle over the trade deal today. with negotiating positions. ♪ nejra: chinese equities and the yuan really bearing the brunt of risk off. u.s. futures higher. friday, it raised its 2020 gain. edging up after the 30 yield dropped below. we get all the market action around the world. manus: those bond markets are

moving. fed's rhetoric. juliette saly in singapore. in singapore as well dani burger is in london. are back iners their seats. they have a massive stimulus into the market. juliette: we were expecting a huge selloff in mainland china. trade resumed for the first time since the lunar new year break. perhaps not quite the 9% plunge. as you mentioned, we did have that stimulus coming through --m the sea, and also arough the pboc, and also rate cut. stocks falling by

the daily 10% limit. theodity producers and onshore you one had its biggest drop since august. a lot of people in the market have not been through situations like today, and you cannot blame people for wanting cash when like their health is at risk. manus: thank you very much. where should we go? i am always torn between the board. connors, let's take it to you? we have the stimulus, commodities markets reacting, fx markets reacting. what do you think is the most important prism to keep an eye on? is at thisnk it

stage to distinguish what is happening in china and elsewhere. the virus situation is becoming increasingly a china-centric story. today, only one new case in asia next china, showing that the measures taken by china are containing the virus. damage maye china not be over yet. on the other hand, globally, we are getting to that stage where we are getting a pickup and panic and fear. this week is when i first are looking for an opportunity to turn positive globally. -- dani, you are looking at commodities getting bashed. dani: the futures market having

to play a little bit of catch-up. a lot of these commodities falling by 8%, everything from metal, energy, agriculture. oil, and steel. the concern, will the coronavirus sap demand? we had that story about demand in china for oil falling 20%. china is one of the biggest producers of copper and steel. a lot of these raw material for rmss areaterial fi seeing a delay to start operations. nejra: thank you so much to all of you. now let's get to the first word news. plungedoil demand has by about 20%. executives privately describe

concern of a demand shock. the drop by about 3 million barrels a day is the largest the market has suffered since the financial crisis. in iowa, macrina candidate bernie sanders -- democratic candidate bernie sanders is leading a new poll. voter whose favorite candidate does not get 50% can pick a fallback choice and about one third of caucus-goers say they could still change allegiance. the chiefs have defeated the 49ers to win the super bowl. it was kansas city's first victory in 50 years. 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. let's get back to our top story. chinese markets plunging as they

return from the lunar new year holiday. beijing unveiling a raft of measures to aid country -- 28 companies had the out. outompanies hit by the rake. the measures mostly target the immediate areas hit. us, portfolio manager at e spring investments. great to have you on the show. dipsou looking to buy the right now? >> we are. i think this is an exciting opportunity for investors to get into the market. selloffts indiscriminately like they have, it is time to go shopping do our

downside what kind of is priced in. i woke up this morning to a number of trade alerts in my inbox. the action is happening. manus: finally, we want -- we find a fund manager who wants to put their name and money on the line. we have seen one of the worst months since august of last year. central bank ready for action. pressure in hung saying. seng.hang that: it is very clear china is driving the market we weakness.rket contrarianbe investors, we like to buy

quality when others are selling it. we have been having the opposite problems because the stocks we wanted to buy got away from us because the british. -- the price shot up. in toe are able to get the stocks. some areas we are looking at, goods.like people will still need a .icrowave or comer refrigerator people need to feed their babies. drive their car. these parts of life will not go away. environment, what

sort of themes or sex there's stand out to you -- themes or se ctors stand out to you? willem: quality as well. education, health care. is doingg online better than the offline. those are the interesting opportunities. that being said, in terms of earnings forecast, have not yet seen the analyst community changing the forecast. that is something that needs to happen before i would get more confident. very selectively, there is an opportunity. one we look at the exile janice -- when we look at the ex

shock, disruption in copper, and some of the base metals, how does that play out with the aggressive demand disruption with pricing. been underweight on materials. we were not forecasting this to happen. basically it was on the view that we would have a slow economy, that the u.s.-china trade deal was not solving everything, that we are still of the view that we can have positive to slow growth. that we get central bank support, maybe even more so. there should be support for the market. notrly, at this time, it is the right time.

-- we are a bit little bit cynical in the u.s.. nejra: on the question of central banks, you say that in disasters like this, the economic impact is relatively short and limited. does that mean you expect the pboc to hold off on rock based -- on broad-based measures? sarah: i think the targeted measures will be what we see. i think beijing wants to be very careful with how they manage this. typically, we have seen more targeted stimulus out of the pboc in the past so i would not expect that to change much. commodity the price

and the risk of china exporting a deflationary shot to the world. we are seeing repricing in these markets. is that a risk in the first entrance -- the first instance for you? i'm going to grab a charge. sarah: we are underweight the materials and energy areas. our equity products are typically valuation driven. upsidenot seeing the that we want in those areas. we think the consumer opportunities show better value and have more long-term drivers. 80%u gaming, revenues down from this time last year.

we don't think macau is going away. hospitality,sm, that has been front and center. this test of chinese citizens have a passport. ok, team, stay with us. more breaking news coming through from julius bar. moveew ceo is making his controlling costs. will go ins 300 jobs 2020. the ceo is talking about stabilizing margins in the short to medium-term. on the expects decision location of the footprint to

come in the first half of the year. this is a significant stepping up to the plate. we will have a conversation with the ceo, philipp rickenbacher, at 10:30 a.m. this morning london time/ . ♪

nejra: this is bloomberg "daybreak: europe." manus: let's get our viewers up to speed with the business flash. theng and regulators say 737 fax does not need the wiring fixed. that is according to the wall street journal. european officials had wanted the wires moved to reduce the risk of short-circuits.

bank says lender west it will defend against class-action lawsuits in the u.s. allegations of 23 million breaches of money laundering laws including failing to detect payments linked to child abuse. new chiefs named a executive. bringing on board real estate investment to turnaround the struggling startup. the company had been run by co-ceos since the founder adam neumann stepped down. overhauling the board of directors in a bid to avoid group c. chapter 11iled for protection last year. wildfires were

pg&e's equipment. china has atory, raft of measures over the weekend to aid companies hit by the coronavirus. have they done enough? socgen thinks the pboc has done enough to stabilize the yen. they point out that there is a risk of panic selling amid the coronavirus outbreak. otherwise, this fresh liquidity should support the dollar-yen at about 108 spot 30. theays that seeing coronavirus spread beyond china, the pace of the outbreak is relatively contained.

a lot of the dollar-yen does depend on whether the selloff in chinese stocks is more of a need your reaction -- or of a knee-jerk reaction. nejra: thank you. strategy your equity you like high dividend stocks. in your fixed income strategy, you have been underweight dm sovereign bonds. have you attempted to tactically by treasury? 145em: we are expecting hundred 70 or so. simply toeight is ponder the overweight on credit. there are so many people looking for that carry trade. volatility,pread

you can get and. of two, an approach three year paper. manus: sarah, my guest this morning was saying the biggest opportunities are potentially in high-yield and investment-grade. it was suggested that maybe 50 best points, where the opportunities in credit? we still like high-yield bonds. we have been very active in the property space. selloff, withthe fixed income and equities with the coronavirus, there is a tremendous buying opportunity. we like real estate for a number of reasons.

we think it is defensible. steady and stable earnings. a lot of consolidation among developers. on -- therelusively are thousands of developers in china. we focus on the top 100. we think there are good opportunities there and have seen a lot of interest throughout a good article last year, a lot of interest in plans looking at something more defensible. in aill think we are moderate growth environment with some short-term headwinds. thank you very much. willem is from hsbc private banking.

coming up, boris johnson threatens to collapse trade talks with the eu. he will set out his vision for a trade deal later today. this is bloomberg. ♪

bloombergs is "daybreak: europe." let's talk about china. agendait dominates our in terms of the morning note. flooding into the box, china updating a raft of measures over the weekend. let's just reset everything. that is me going back in time. dani burger takes us forward with a little bit of a look at

brexit. ok. you know what, let's get out to maria tadeo. boris johnson, we are waiting stand itpeech today to is going to be all battle hard. maria: it will be. one speech will be by the prime minister and the other will be the man leading the negotiation. we know that the prime minister will say that the u.k. wants a big, broad trade deal. they are thinking that canada might be the best model for the u.k.. he also warns that the united kingdom will not rule taker of european rules. today, michel

barnier, will put out those red lights from the european union. manus: maria, thank you very much. this is bloomberg. ♪ amazon prime video is on xfinity x1.

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>> welcome to "bloomberg markets the european open." i'm anna edwards alongside matt miller in berlin. don't look down. chinese markets are smashed from stocks to ethics and commodities as well. -- fx and commodities as well. cash trade is less than an hour away.