the earnings season is more than halfway through in europe and many executives have had to address disruptions brought on by the coronavirus. >> the world is certainly starting to look nervous as the coronavirus impact creeps its way into corporate earnings estimates. >> good morning from london, i'm i have a focus on the forward-looking etf's because this is a global supply chain issue. nejra jh. this is bloomberg "daybreak: europe." topthese are today's as deutsche bank points out, stories. there's been a clear divide china's coronavirus death toll between cyclical and defensive passes 2000. sectors. beijing unveils measures for the earnings outlook is improving and things like health consumption and hong kong heads care. for its first back-to-back angle estimates absolutely recession. getting crushed. earnings estimates for the live at the symposium in riyadh. entirety of europe since a beginning of the earnings season have dropped by about .5%. so this picture is starting to throw in question whether 2020 and i'm with the cycle, turkey had stored it six straight rate will be the year of the earnings rebound. nejra: dani burger, thank you so cut amid rising inflation and the slumping live rep. the focus on wall street will much.

jub is still with us. turn to the release of january fed minutes. we're seeing resilience in ♪ equities because of what we heard from apple yesterday, but already today we are bouncing back. then you look at corporate yield nejra: welcome to "daybreak: spreads, those have been tumbling toward all-time lows david is this complacency? europe." headlineou look at the we've got numbers taking the tape from deutsche telekom. adjusted ebitda is index levels, it looks like there hasn't been much of an impact at all from the virus. some of the subcomponents rising, that's what we're getting from deutsche telekom between health care and autos, looking through some of the there has been a meaningful details for you. divergence of performance, so i we might come back to these later as they come through on the tape but at the moment we would say that the market is not just got a couple of lines coming through, the mainland panicking over the virus impact, that it sees 2020 adjusted but it is trying to be quite ebitda rising to 25 billion specific about where we should rise more risk premium and has euros. that warning on revenue from been in those cyclical sectors. apple, the curve flattening, these are the places that given that china has such a dominant futures in the u.s. pointing to source of demand in those

a positive open today on a lot sectors, 50% of commodities of the asian equities. imports, those sectors are towarday we saw it head feeling the pain the most. the record august low. but in terms of the headline the 10 year yield steady, index, that is also a function of the fact that monetary policy switching up the board, a bit of is increasingly supportive and the fact that there is more a retreat in the yen, the euros steady after dropping below insert year-round this virus and interest rates are lower, that 108th for the first time since supports headline equities and 2017 yesterday. goal stabilizing, above 1600. spreads as well. brent also on its seventh in 2019 did not look great straight day of gains. locally last -- globally. the shift is turning to the longest run of gains in more ofwas primarily a function than a year. monetary policy that continues let's get back to the corona to be supportive as we go into this year as well. virus because some of the nejra: you noted that below the sentiment in the market has to do with speculation about more surface you're starting to see support from china. that concern. are you seeing that in credit markets as well? jub: you are seeing similar death toll from the 2004, russiaeached trends in the credit market. seeing triple sees, so temporarily banned the chinese

from entry. those sectors toward the weaker end of the fundamental spectrum hong kong has also reported a that might be most impacted by the virus, there are those second death from the coronavirus. the city is bracing for its pockets of weakness. third back-to-back annual credit investors are little more recession. focused on the balance sheet and selena, great to have you the income statement. insomuch as the investors are with us. treating it as a rebound in q2, wrap it all together for us there has been less sensitivity because we've got the latest numbers in terms of cases at the to other parts of the equity market. nejra: your best cases for eight death toll but also some signs of support from china for many cycle recovery. what would make you start to consumers after some withdrawals question that? of liquidity yesterday. thehe government tally of this it just that you make it or?ugh q1 situation is pointing to some what is it not as much stimulus stabilization with the number of new infections in china staying days.2004 two consecutive as you expect from china? jub: we have to be quite humble china reporting the lowest number of new cases since china about our ability to model the changed its method of counting infections last week. impacts of this virus. as you mention, the death toll so it is a case of watching the has broken past 2000 and the incoming data as it is delivered.

number of people infected what would make us more worldwide has pushed past concerned is if we didn't see 75,000. hong kong reporting it second these travel restrictions are totality from virus. the containment measures within china. say thisril we would but the world health organization providing some updates on the aggressive .uarantine efforts is dragon on longer than we had the organization saying the envisaged. lockdown has delayed the spread on a medium-term view, in a of the virus inside china. we have aebound, it baltic countries a bit of time to prepare themselves for number of factors that markets the virus. are dealing with in 20 19, you're seeing more increasing stop theo try to whether the impact of china deleveraging that we spoke -- that we talked about previously, outbreak including opening new isolation centers, mandating the hangover from tighter monetary policy from 2018. temperature checks and house to those drivers look better this house searches for people with symptoms. year. and using some surveillance get not a boomld powers to investigate anyone who bought fever or cough medicine i any stretch of the to try to account for any imagination, but certainly a remaining unidentified coronavirus cases. more positive economic scenario than what we were used to in in addition to broad monetary 2019. long: you are running and fiscal stimulus, the government has been trying to

industries trying to dollar positions against the taiwanese dollar and the korean won. is that something you would look to reverse if you get more consider measures such as direct convinced about the recovery, or cash infusions and mergers to does it have more to do with bailout the airline industry. u.s.-chinalike the one proposal involves allowing the country's largest carriers that are controlled by the state trade which has been put to the side with the coronavirus? jub: we think the conflict to absorb the smaller one set of been hit the hardest by the lack between the u.s. and china is of travel to china. you soselina wang, thank structural. running those positions that work in that trade war scenario we think has some merit. much. joining us is a portfolio it's the same story for the u.s. manager, good to see you. in many ways. you have global growth shocks that the u.s. is more focused on how is the market going to interpret this, is it simply domestic consumption and less reliant on trade. a subtle --s not you compare that to an economy of taiwanese30% psychologically important level for the pboc? right.ink that's gdp is exports to china. these economies are exposed to this type of shock where the it's another pressure valve the authorities will try to use to u.s. is relatively resilient. offset some of the economic impacts of the virus. were seeing lower interest rates, cuts to the benchmark rate and on the physical side

were seeing acceleration in local government bond issuance if the timing aspect is not playing out like we expected we and also targeted measures to would expect more reform. try to impact the businesses and nejra: that's get the bloomberg regions most directly impacted by the virus. so were getting a quite business flash. theu.s. has sanctioned comprehensive policy response to this and that is encouraging markets. nejra: we did have some state run oil company, marking and escalation in u.s. efforts withdrawal of liquidity yesterday, leading some to to oust president maduro. question whether the stock rally russia said it will not affect has much further to go. its international relations with in terms of how you would trade this right now, if the venezuela or any other country. assumption in the market is that goldman sachs is planning a hiring freeze but it got a there will be a v-shaped recovery, do you put on tactical trades to reflect that? reminder this week that it is >> the v-shaped recovery is not alone. teams of advisors overseeing $10 billion of assets are leading where most economists have this scenario. its rivals. spacex will fly up to four there are some major differences paying customers aboard it but the concept that we should shipped that the company uses to get a pretty healthy rebound from this as we concentrate to fly astronauts into space under one quarter and the consumption an agreement that opens way for private space tourism, but there will ultimately rebound. that's a pretty robust is no price tag yet for the orbital flight. investors to make but

just getting the headlines from deutsche telekom, the red headline was that adjusted are unsure about the depth of the drawdown and the timing ebitda rising to 25 point 5 around it. this are of economic impact is difficult to model. we don't know how much it has billion euros. fourth-quarter revenue came in a little better than expected. spread outside of china into other regions like the u.s. and fourth quarter adjusted ebitda the rest of asia. until we get a better handle on that, it's going to be difficult has beaten the estimate. to know exactly what the impact will be. the broader context here, expects operating income to rise if you look at where interest , those thatading again this year as the country is edging closer to the wireless deal for its u.s. unit. are more cyclically exposed like energy and commodity markets, they are still pricing in a quarterly sales beat estimates and fiber investments are reasonable amount of downside. helping the company to deal with nejra: we see that in rates with competitive threats. -- rates with curve flattening the ceo later. yesterday and also globally. robert kaplan is the latest to it is firmly on hold. the 10 year yield coming under pressure. in the rates market, is the way to trade this long duration of

-- alongside curve flattening? this is bloomberg. has the impact duration ♪ been quite large. is coming at a time in the global economy was already quite fragile. investors were looking for q1 to be where we would turn the corner. starting to see a little bit more positive data globally in the first couple of months of the year. gethink that if we do improving sentiment around the virus, the extent to which it comes back up is probably limited by the fact that we're in a relatively anemic state of growth and it is too early to get too much confidence in that cyclical rebound. unlikely it will go back to it is still early days in the recovery to talk about the concept that the fed would be open to cutting rates at all.

ae u.s. stands out from global perspective, primarily because you have a lot of room to cut, if the economy does worsen a lot from here. the u.s. clearly has the highest apology rates within the g10 and also the highest real rates. you're getting paid much better to be invested in u.s. treasuries here than other markets in europe where you have deeply negative real yields. from portfolio construction perspective, if you looking for bonds to be in a protected position, u.s. treasuries are still the best place to be invested. singapore, the deputy prime minister and finance industry says the country has enough firepower to deal with the economic slowdown resulting from the coronavirus. inexpects the global economy his country do have a negative impact from the outbreak. it depends very much on the

duration and severity of the outbreak. the supply chains are a lot more degraded. isrybody thinks that what happening in china will have a critical effect on the rest of us. itt wide is -- that is why nejra: this is bloomberg is important to stabilize the "daybreak: europe." economy. are you concerned at all singapore will post's biggest budget deficit since 1997 to tackle immediate headwinds from about the fiscal prudence you the coronavirus outbreak as well may be sending across to as broader growth risk. spokeputy prime minister investors if it comes to that? of fiscalcause to bloomberg's haslinda amin. >> is because of our fiscal prudence that we have this large reserve that we can use, and at prudence that we had these large the same time, we also have our reserves come into use in this past reserves if we ever have to current government, and at the call on it. same time we also had our past the government has reserves if we ever had to call on it, in which case we would been very productive in the need the approval of the president. but forthe government has first part of our term. been very prudent in the first >> singapore cut its close few years of our term.

projection to a contraction of dallas fed president .5%. robert kaplan is the latest to budget youthe hese rates -- say that announce yesterday, how confident are you that the worst ?s over, that a contraction expects rates to stay where they are through 2020, despite risk ? posed by the coronavirus. would be good >> we will have the get fresh clues when positive growth this year, and the budget will provide a large fed minutes are released later. the market is not going to take fiscal boost to the economy. up all the pricing for rate cuts to your firstget over the next year from the fed. if things get worse, how much word news. in the u.k. the government will could the market bring forward in what it calls the the prospect of fed cuts? government's dependence on cheap unskilled labor. question. workers must prove they can forfirst cut is priced out speak english. they will also need an offer for heob paying at least when september. 5600 pounds. this is part of the government's pledge to in freedom of movement it drags on beyond q1, which we know we will be weak, it after brexit. could be brought forward and we

could see easing sooner. the extraordinary summit will nail down a seven your spending so far the idea that the fed is plan, but no time limit has been set. on hold is a pretty valid one. negotiations could drag on powell has been clear to say we through the weekend. would need a material shifting it will either need to be filled the outlook in other directions or cut. to hike or cut rates. the reason we don't think that hong kong is headed for its is likely, if you take out the first back-to-back annual recession as the coronavirus pricing even in a more positive cripples an economy already scenario is that the fed has a battered by political unrest. asymmetric reaction function. their incentive to hike is a 1.2%action follows extremely low, given the stage decline for 2019. in the recovery we are currently it will mark a slower recovery at. but they will likely be quick to than that from the sars cut if we see more economic outbreak. downside. that's why rates are going to be somewhat range bound that global news, 24 hours a day, on air and on quicktake by bounded by the two kinds of bloomberg, powered by more than 2700 outcomes. journalists and analysts in more than 120 countries. but it is certainly possible the markets have that the fed will need to adapt whipsawed since the start of 2020. the earnings outlook and europe to how the data comes through in is beginning to weaken. more on that next. q1. the range is wide at this time. this is bloomberg. ♪ u.s. sanctionsp, over ties to venezuela.

oil pushes higher for seven today. more on that next. this is bloomberg. ♪ when it comes to using data,

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nejra: good morning from london, i'm nejra cehic. this is bloomberg "daybreak: europe." and these are today's top stories. china's death toll passes 2000. beijing unveils measures to increase consumption and hong kong heads for its first back-to-back annual recessions. .ent pushes higher we're live at the opec symposium and on with the cycle, turkey had stored it six straight rate cut my it amid rising inflation.

a bounceback and wrist sentiment today after apple's warnings around coronavirus reverberated through market yesterday. you're seeing green on the screen with asian equities. usn european futures positive. back above 2% today. the teen year yield is steady, gold is steady, the yuan retreats and the your also stable after dropping to its lowest since 2017 yesterday. all the market action from around the world. joining us or juliette saly in singapore and dani burger london. great to see you all. juliet, you're looking at a surgeon alternative their teeth thelternative therapy amid coronavirus outbreak. that theywe heard have started to test

centuries-old chinese medicine on about half those who have the coronavirus. it will be interesting to see some of the stocks listed in hong kong, taking up your to date. msci chinarise in health care index and a 2% drop of the hang seng. 22 hundred tcm workers have been sent as they scramble to find any kind of relief for this deadly virus. nejra: thank you so much. line senior sees have been in talks with aramco to sell a minority stake but it looks like a deal may happen sooner than anticipated. keep us up-to-date on the story. >> good morning to you and everybody else. for the last 20 or 25 days, people in india have been

speculating on how the deal might go. itomberg yesterday learned may actually be at a faster clip and they are going through the final details right now. the fact that there's a change from the popular sentiment on considering that purchase, itmart would be the second largest deal ever. so very important deal may be on the fast track right now. nejra: thank you so much. i been watching you on after move.eaker you're looking at sterling? , what are you seeing? >> the -- there has been so much

drama but a lot of interesting things have been happening. specifically, strategist and trade are more strength to come in sterling. options traders are the most bullish on the currency since 2009. this is way before the brexit referendum vote. riskis a six-month reversal. we had strong employment numbers yesterday and the prospect of perhaps more government spending. that means the boe looks like is not going to give us any sort of cut next month, leading to starting strength. nejra: thank you so much. crude oil climbing above $52 a barrel shifting the focus away from virus driven demand concerns. with theng times venezuelan oil company.

there was a shipping hold and suspension of cease-fire talks. russia's energy minister discussed the situation in the oil market and cooperation within opec plus. it all comes as pressure rises to deepen production cuts in response to global supply risk. joint energyng a meeting. great to see you, where are we on those deeper cuts? is pressure on board? -- is russia on board? >> we know that the saudi's have been pushing for even an emergency meeting. we are unsure what it means for russia. are they willing to cut deeper? the technical committee has recommended a 600,000 barrel a day cut. we don't know if we could see

more. obviously some of this is being priced in. coleman sex is already assuming a 500,000 barrel a day cut is going to happen. we've seen the saudi's ones to push for emergency meetings and urgent action but russia has been more reluctant. we've seen that pattern over the last three years since the opec alliance has begun. theat the symposium, coronavirus and demand story will likely be weighing on everyone's mind. obviously it is a short-term that is hitting the oil market and demand side of the story. lagging by about 30% due to the impact of the virus. the iea already said that for this quarter oil consumption will decline. the first time in more than a decade. it is what is weighing on the mind of the prince as he sets to arrive here in riyadh.

thank you so much. is still with us. seven days of gains for brent, heading for its longest run in almost a year. how much longer can the oil market stay supportive? jub: in the short term as you discussed, it's all about the virus. were still trending -- trading at relatively diverse levels in the oil market. that's really what the market will be looking for. the high-frequency data that investors are focused on our things like congestion data for china which you can get quite quickly. we haven't seen much of a rebound in that but we knew it was going to requite with that lunar new year. we expected to see a rebound if it wasn't for the virus, but that hasn't happened. medium-term, we think the environment for oil is somewhat supportive from these levels.

the market is pretty range bound over the next 12 months or so. to idea that we are likely get some cyclical support on the fiscal and monetary side, as the government's opec central-bank response to the current virus and the fact that consumption, whether domestic consumption of goods on things like tribe -- willtravel, it's -- people find a way to spend that money and take that holiday later in the year. it's unlikely this sort of impact will cause a permanent increase in saving rates in china, for example. that's where we get confidence on that v-shaped recovery. how do you take opportunities from that view? commodityit by currencies? ? or high-yield in the u.s. jub: things like em effects have been

beaten up quite badly in this selloff. as you mentioned a the parts of the high-yield market, energy unloved sectorst within the high-yield space over the last 12 months. a wide range of fundamental policy within the u.s. energy market. we still think there are attractive opportunities there. nejra: how much more resilience to we see in gold this year? gold is likely to remain supported in this environment.

monetary policy, risk aversion are the major drivers of the gold price. we think really the u.s. continues to be well supported. there aren't really that many other safe havens that look particularly attractive for multi-strategy investors. gold stands out as one in this environment that looks pretty attractive. obviously it has done very well, but we expect the monetary policy in burma to force investors find of the ways outside of intra-trades to try to protect capital. is likely to play a role in that context. nejra: gold has been supported even with the stronger dollar. is your central case that we do see dollar weakness in 2020? it has been a painful tray for anyone betting on that, two-state -- to say the least. jub: a lot of investors came in expecting a weaker dollar.

there is still scope for that to happen but it's going to be pushed to the back end of the year. in the short-term as it relates to the dollar versus the g10, is likely to be supported. other currencies by a more growthve to non-u.s. stemming from the virus impacts. in the short-term the dollar is a difficult currency to be. nejra: you mention real rights a couple of times. pretty sure yesterday we saw the 30 year yield rate turned negative and we've recently seen that on the tenure as well. do you see that turning around? jub: that's the world we are in a global fixed income at the moment. it looks attractive on a global basis.

the u.s. looks relatively attractive. bonds have done extremely well over the last 12 months. relative to where we were at the start of 2019, rates were a lot higher. they don't look as attractive now but on a global basis, the u.s. stands out as a relatively high-yield economy. nejra: that's get to the first word news. the death toll from the coronavirus has topped 2000. the number of people infected worldwide has risen above 75,000, as hong kong reports the second death from the outbreak. the number of patients discharged from the hospital is now rising, now over 4000. direct cashulling injections and mergers. some of the nation's biggest carriers might absorb smaller ones suffering the most from the collapse of travel. singapore's budget will provide a fairly large fiscal boost to the economy as it works to counter the impact of the

coronavirus, according to the country's deputy prime minister and finance minister. he said he still expects and positive growth this year but it all depends on the global economy and the virus outbreak. >> i think the economy is already feeling the effects of the global slowdown. and the virus outbreak will fairly negative impacts on the global economy and the singapore economy. nejra: gtake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. coming up, turkey heads toward it six straight rate cut. we are live in istanbul next. this is bloomberg. ♪

nejra: this is bloomberg "daybreak: europe." here's what you need to know today.

turkey central bank is set to deliver a rate decision today and economists are split over whether we will see a six straight cut or is the central bank will hold. investor appetite could start to wane. great to see you, what are we hearing ahead of this decision? bloombergng to a survey, some economists expect a rate cut of around 75 basis points and others expect the central bank to stay put. of course the central bank has embarked on aggressive rate cuts since july, but this time around the economic conditions may not warrant it. inflation is decelerating as the turkish lira is depreciating. the central bank has president erdogan in its ear. the president has been pressuring potential -- central banks to cut rates to single

digits this year. lira fell to a nine-month low against the dollar just yesterday and it is down 3% this month. this is somewhat due to global conditions, but also to political tensions, especially between turkey and syria. we will see what the central bank decides to do in a few hours time. nejra: thank you so much for joining us. if seen the split consensus. what do you expect the central bank to do today? jub: there has clearly been an ongoing desire for lower rates. we expect further easing from here. we think expectations seem reasonable. the reason there is a bit more hesitation among economists and investors is that inflation has bounced a little bit from here. we don't think it's enough to change the picture that central

banks want lower interest rates to get them to single digits. when we think about the evolution turkey has gone through, in 2018 there was a bit of a vicious cycle between currency weakness and higher rates. that was a function of what was going on domestically at also the global economic environment. less of an appetite for emerging markets. we are just in a very different world at this point. the domestic cycle looks a little more nine relative to so itwe were back then, is still low. lira weakness argument for not cutting rates further, it's important to look at the real rate, look at the charts. and that has really collapsed as of late.

are there many bullish arguments to be made for the lira right now? been on aira has gradual depreciating trend over the last 12 months or so. for the central bank, they will be somewhat comforted by that. it has been relatively low, so it has been depreciating, but we haven't had these big blowups in turkey. i think the central bank will see that as a little bit of a win, given that you have reduced rates down to 11. i would think currency weakness is not necessarily going to hinder the central bank from cutting interest rates further. nejra: we've been talking about the fact that you are running long exposure to fixed income risk assets because you see this

many cycle recovery. you have em hard currency. attractive in the em space? jub: we don't think it is particularly attractive here. it has been a market that has been supported by a little bit of stabilization in global growth but primarily monetary policy regime. has performed extremely well in that environment. at these levels we don't think ,t offers an attractive model it's not tied to any benchmarks so you are not naturally exposed to those sort of issues. we will talk more about those opportunities in a moment. highan sachs is planning a -- it got a reminder that it is

not alone. teams of advisors overseen $10 billion in assets are leaving the bank for rivals including ubs and first republic permit a potential new problem for boeing. discovered debris such as tools and rags left in the fuel tanks of several newly built craft. the safety checks are not likely to create a new delay as boeing wants it ready to fly by midyear. spacex is under an agreement that opens the way to private -- private space tourism but there is no price tag yet for the orbital flight. at your bloomberg business flash. we've got your morning call next. this is bloomberg. ♪

nejra: this is bloomberg "daybreak: europe." the severity and duration of the coronavirus outbreak may be unknown, but ubs strategies are confident that chinese industry will be back up and running by the second quarter. >> the overriding message from ubs is simply don't count out base metal miners yet. that's because they say china will come back on the map in the second quarter and when it does it will be a sharp rebound. by then they said that thinking is that the coronavirus will have mostly washed out and with the chinese stimulus there will be a big boost to industry. and the biggest in a fishery will be base metals like copper and iron oh -- iron or. bhp and rio tinto over some of the pure play companies like fortescue. nejra: dani burger, thank you so much. jub is still with us.

alarmed at this call? jub: you would look at the markets that are beaten up the most hopeful are and point .oward more cyclical assets the problem we have is that the visibility on the timing of when we get the rebound has been pretty low at this point. so running a balanced portfolio is right way to approach things. what could give you comfort in terms of adding some of those more risky positions him if you feel the other positions in your portfolio it can offset losses if we don't get that rebound or if the economy does get worse. we think itrebound .ill be relatively range bound having the balance in the portfolio alongside other more cyclical positions works quite well. nejra: on the risky side, where

are you seeing the best opportunities and where will you get the best opportunities if we see that best case scenario? jub: you're looking for some components of markets that have fundamental strengths but have been impacted happily by the virus. if you think about the ruble, that carries well, real rates are attractive, but those are the markets you can look to. within the credit space, the high-yield parts of the market, u.s. high-yield, given the energy exposure in u.s. high-yield that underperformed, we think there is value there. so it does pay to be a little more aggressive in terms of risk allocations. nejra: great to have you with us today, thank you so much. that's it for bloomberg "daybreak: europe."

the european open is up next, looking a lot more positive with futures moving higher and yields steady. this is bloomberg. ♪

matt: good wednesday morning. welcome to bloomberg markets. this is the european open. i'm matt miller live at our european headquarters in london. the cash trade is just under an hour away. ♪ matt: coronavirus deaths in china past 2000. beijing considers offering more support to the economy, boosting european and u.s. equity futures. supply risks, the u.s. sanctions a