francine revisions cloud the picture. 0 additionals 40 coronavirus. germany avoids contraction. economists worry it is ill-prepared for continued trade uncertainty in the virus threat. and changes at the top. ubs begins its search for a successor for the chief executive. this west bank is said to be considering internal and store i external candidates. ♪ : welcome to bloomberg surveillance.

sift through some contracting data, trying to figure out the impact of the coronavirus. the stoxx 600 for to much flat. u.s. 10 year yield kind of holding steady and we look at europe as we are having quite a lot of data today. germany not as bad as it could have been but we are expecting gdp for the eurozone as a whole. coming up, we speak with the cleveland fed president. that is an exclusive interview at 5:30 p.m. u.k. time. that's get to the first word news in new york city. >viviana: we begin with a chinese province of the epicenter of the coronavirus outbreak. it has reported almost 5000 more cases. confirming the nearly 15,000 reported yesterday which appears to be a one-off situation due to a new method of counting infections. china's revisions to the data is making it more difficult to gauge the true scope of the outbreak. the death toll was lowered by more than 100 to account for

double counting. it is right now at 1380. here in the u.s., one of donald trump's most trusted cap members -- attorney general attorney barr says trump's tweets and public comments about the justice department makes his job impossible. he spoke to abc news. >> i cannot do my job here at constanttment with background commentary that undercuts me. viviana: we had with the u.s. government's latest 30 year bond sale. it has drawn a record low yield. the treasury is borrowing at 2.061% after a debt rally spurred by the coronavirus helped drive rates to multi-month lows. global news 20 for hours a day on air and a quick take by bloomberg. i'm viviana ortado. this is bloomberg. francine: thank you.

china's new method of spotting coronavirus infections. hubei province reported nearly 5000 additional cases. this comes after nearly 15,000 reported a day earlier was a one-off situation due to new methodology. the latest figures as the roughly double what the province was reporting daily. the death toll has risen to nearly 1400. u.s. officials escalated chris's him of china's response of the outbreak. >> we thought there was going to be more transparency but we are a bit disappointed. we were more than willing to work with the u.n., who on this, and they won't let us. i don't know what their motives are. i do know that apparently more and more people are suffering over there and that is not a good day. markete: our china anchored tom mackenzie joins us from beijing. president trump lauded china

further handling of the disease but the tone has changed. has and it has changed pretty sharply. an erosion of trust essentially. you are seeing that here on the ground in china between the chinese people and the government. now we are seeing it happen in d.c. kudlow expressing that change in tone. from president trump supported tweets to what we are hearing from kudlow. at this december point, there was potentially something as a cover-up by chinese authorities in the city of wuhan. there was a lack of accounting from many patients that could not get the treatment they needed. we know that has been happening. then you have the change in methodology which has led to additional confusion. yes, experts say it is more realistic take on how many cases there are, but it did add question marks about how much and to what extent the chinese authorities have an idea on the virus. the chinese are yet to welcome

in the u.s. exports -- experts, i should say. china has yet to give the green light to those health experts and you have to get on the ground. we are seeing the effects in china but also regionally as well. focused on hong kong and singapore which outside of china and the case of this cruise liner in japan had the highest numbers of infections. we are seeing cautionary nose from the likes of the prime minister of singapore who suggested it could push that city state into recession. the same risk applies to hong kong. vietnam had to close down 300 factories as a result of this virus outbreak. the cases continue, 5000 additional cases. the total death count above that 1300 level. total 63,000 infections globally. if we are looking for any potential optimism -- i do want to downplay the deaths -- you have had three deaths outside of china, philippines, hong kong

experts signaling it will be relatively well contained but the focus is what is happening in hong kong where people remain quarantined and singapore. we are seeing alibaba saying this will fundamentally impact consumers in the domestic consumption market in china. pboc said they will potentially relax some of the loan quotas on the real estate sector. that makes up depending on what you are looking at potentially 10%, 20% of gdp. the pboc easing up on some of the loan quotas to kickstart the real estate sector. a number of measures, officials in beijing pushing through to support the economy as a number of cases continue to grow. francine: tom in beijing. patrick.s for more is that was a full round up, with all the implications and different angles. there's only one question.

is this getting worse or getting better? is that the only thing that markets -- how do markets measure it and is that the only thing that really care about? they care about the impact of the economy and the initial reports of yields moving lower. that provokes potentially more dovish policies. you saw from the bank of japan, powell indicated it can be something that changes policy. you are seeing a melt up of all assets. you have bond rally, equity rally, gold rally because of the nature of these things. we have not changed our positioning dramatically. we expect the last three quarters to see an uptick in improving global trade. i'm not an expert in viruses by any means but i compare it to traditional influenza which kills half a million people every year. other people get influenza, a little over 1% die. this coronavirus is a little over 2% if the statistics are to be believed. 10% turn into pneumonia.

it is a very strong influenza is how i am characterizing it. it is a wildcard, very unpredictable. francine: does it change the view that you have on china? patrick: china gdp is going to be hit very hard. you cannot trust the numbers on the virus, the numbers on gdp but i expect it will be a 2% hit in the first quarter. if it gets contained, you will see a sharp rebound in the second quarter. some spending will never happen. a lot of it will be pent up demand. francine: when you look at the ramifications, were you surprised that are larry kudlow comes up and says i trade war could be back on? patrick: antagonistic relationship and a little bit -- when you can do a one-upsmanship kind of thing. a bit of an antagonistic nature between them right now. they have made the phase one deal, but there are still a lot of things to be ironed out. i don't think there's much meaning in it, other than that.

francine: overall, if this were to turn -- you are not changing your forecast. if this were to turn ugly, would you look at sectors or regions? patrick: we have shorted carnival cruise lines which will be impacted, but we have kept our aig, british airways holding which is impacted as well. there arenly changing definitely companies that will have big impacts from this. our view is supply chain disruptions are manageable. if companies cannot produce the goods and meet the earnings targets because that will change their view on a broad range of sectors. right now, it is a wildcard. francine: that is aig. any other ones? cathay pacific has seen quite a fall in demand. francine: definitely. patrick: the question is is a temporary, can we look through it? hotels, airlines, cruise ships, retail sales in the asian whole

region are definitely going to be impacted. the question is do you see them rebound? our view is british airways, it is not recreational travel necessarily, whereas carnival cruise lines is all recreational almost. those are the things that can be put off, whereas if there is a containment, it will get the quick rebound in business travel. francine: how do you look at havens? gold is definitely big. treasuries -- patrick: we like gold better than bonds right now. we think bonds are pricing in a recession to near certainty. we don't think it should be pricing in recession near certainty. gold is a great alternative to yielding assets in europe. buying platinum as well, another precious metal. that is not based so much on gold. palladium is $2300 an ounce. beennum has historically more but catalytic converter demand and supplies t shortages. auto companies get a 500 all the

differential are incentivized to change colletti them to platinum for catalytic converters. francine: patrick armstrong stays with us. up next, more from an interview mary afterief katie the lender reported results. 20 minutes from now, it is time for etf iq europe, our guide to the region's one trillion euros market. that is coming up later. this is bloomberg. ♪

francine: economics, finance, politics -- this is bloomberg surveillance. let's get to the bloomberg business flash. viviana: we begin with renault.

it is reporting its first net loss in a decade. this comes a day after its partner nissan totally scrapped its year-end payout. renaud sales declining after 15 months of upheaval. it began with the departure of ceo carlos ghosn after his arrest on charges of financial wrongdoing. a strong investment bank performance boosting credit agricole numbers in the fourth quarter. jumping more than 50%. it helped revenue beat estimates. the bank also reporting record inflows at its asset management unit. we end with tesla. it is raising money again. the electric carmaker selling at least $2 billion of shares weeks after ceo elon musk said investors did not make sense. the company's recent stock surge seemed to have changed his mind.he will use the proceeds to shore up tesla's balance sheet and fund his seemingly endless aspirations.

francine? francine: rbs is growing in for rate rebrand as the bank is changing its name to net west group. that is state control entered looks to put its past behind it. the new chief executive is also embarking on more cost-cutting in her first earnings since taking over last september. the chief financial officer katie murray said there are more challenges ahead. katie: we are clearly going to incur some losses in terms of the resizing upnatwest markets. the yield curve still going in this direction and we in our own economics are anticipating it will have another yield curve cut. those things make income harder, particularly for banks. francine: ubs is searching for its new chief executive. sources say the bank is searching internal and external candidates. his plans to step down this year.

from rivaln october credit suisse may not be among the front runners to take the top role given his relatively brief tenure. let's get back to patrick armstrong. there's a number of changes at the head of a lot of these european banks. some rebranding in the u.k. is there any value in european banks? patrick: i don't like them basically. they are cheap, on value, dividend yield. returns on capital employed targets even are very low. i characterize the more as utilities. for further bonds to the banks of this point. i think with the negative interest rates margins -- i will become bullish on the banks when there is a prospect for zero interest rates. when ecb gets interest rates back toward zero, i will start look at the banks again. francine: how far away are we from that? patrick: it is hard to predict because it is too far out. there is no plan to do it. the economy is not showing any need to do it.

i think the default is negative interest rates for the foreseeable future. it is very difficult to see any outside gains for the bank. francine: how do you choose the banks that you would want to own? business models, management, consolidation possibilities? patrick: the swiss banks look reasonable. a greater focus on the private banking, wealth management, recurring revenue. they are passing on the negative interest rates to their customers a little bit so that is improving their margins. we don't own them but the dividend yield to get there versus the negative interest rates and bond yields and touch really look reasonably -- in switzerland look reasonably attractive. francine: where would you stay away from? patrick: we are short bank of scotland, the u.k. banks as a whole do not look great to us. but none of them look too terrible to us either. it is something we wouldn't know. dividend yields are attractive. you can get well past the 10% yield so that might be a strategy to employ because i don't think there is much upside.

they are cheap. i think you will see a slow, gradual depreciation. francine: does your take on the u.k. change at all because of the reshuffling yesterday? people, at least markets are pricing in some trump style a massive stimulus package. patrick: we have seen yields yesterday of into corporate bonds and that was the catalyst. we were thinking about doing it anyway. i think the plan is for some spending where there will be no pushback and that is how i read what happened yesterday. francine: thank you so much. patrick armstrong stays with us. coming up, we talk europe as the german economy stagnates at the end of 2019, capping a poor performance to the continent's biggest economy. that is coming up next and this is bloomberg. ♪

francine: this is bloomberg surveillance. i'm francine lacqua and london. the german economy stagnated leaving in a weakened state even before the emergence of a new coronavirus threat. the performance caps a year for the economy, with oblique overall growth. we are back with patrick armstrong. we were talking about the reshuffling in the u.k. and you put that against a pretty weakening eurozone with germany he was meant to be the heartbeat of all this, going through a difficult phase. how worried about germany are you? patrick: there is no growth at

all. the government does not seem to mind running no deficit at all. i am not completely worried it is falling off a cliff but we are in the midst of a global manufacturing recession. germany is at the epicenter of that. they are reliant on global trade which is slowing as well. a lot of global headwinds impacting germany. they've got obviously a huge amount of physical ability if they start to use it. francine: will they start to use it? patrick: i don't know when. at some point, if the model is working and you see the economic numbers with huge deficits. german is taking the other side of things and that comes back to haunt you. the u.k. is moving in that direction as well. if other countries see success from these models, there may be a political push for. hard to understand that for the german culture. francine: will that come in little -- too little, too late? patrick: it is a stagnating

economy. it is not a recession, probably not, but no growth at all. if anything does happen, it is going to be slow. it will have to be driven by a populist strategy in the german electorate, and that is still years off. francine: when you look at the ecb and christine lagarde's biggest headache, is it just that? patrick: if she can change one thing, that would be it. she would want more fiscal stimulus from the north which is germany and that would complement her monetary policy. it would be the right decision, i think. that is one thing if she could change that, that would be the thing. francine: what will we see from the ecb reviews? is that something you watch out for or is it tinkering at the margins? patrick: right now, i don't think there's going to be much changes. there won't be any shocking. the council did not really like the extension of qe. qe is going to stay.

there is no growth in the economy. the longer this goes on, the more questionable the benefits of these policies will be. eventually, there will be a pushback against it but i don't think it is coming up soon. francine: do you see any value in europe or do you look to emerging markets? patrick: in europe, there is some value. what we have been biking europe is actually esg companies. aree are companies that trading at 20, 25 times alreadys but getting benefits on the top line, the bottom line from increased turbine demand. just as important, investors want that as well. you are benefiting the company's fundamentals. shareholders want to own esg companies. retail investors want to own the companies as well. when valuations does not matter, you want a benefit and equity. francine: you believe people are generously interested? a lot of the criticism is big

asset managers say one thing but then don't follow through. patrick: i see it from our clients, meetings, pension funds. they want to make sure they don't have as much benchmark esg and move it and increase it. that is moving the dial right now and incremental demand, let's move towards esg. there is investor appetite. francine: patrick armstrong. iq:ext, it is time for "etf europe." your guide to the region's one trillion euros market. that is coming up shortly. a quick look at the markets. figuring out the virus threats difficult for any market which is why we are seeing flatlining in european stocks. ♪

welcome to bloomberg etf iq. over the next 30 minutes, we will be your guide to the region's one trillion you're a market in exchange traded funds. everything you need to know about the funds.

♪ francine: back in the game. competition heats up and the asset managers entering the european etf market seven years after its exit. fromtors weigh the risk the coronavirus. more than 3 billion euros have flowed into an etf in europe this month. of passivethe rise exchange traded funds in zombie fighter markets -- we will debate that later. exited the after it markets, they are getting back in the game converting three of the index funds into etf's which will trade on the deutsche's warsaw