this is daybreak: europe. stocks push higher as a global spending bill adds a global support against the coronavirus. the imf managing director tells bloomberg is providing $50 billion combat virus. we speak with james bullard. he does not assume another cut in two weeks. >> we got the policy rate to the right place for now, given the --ormation we have now heard

now. against the possibility this will cause a growth slowdown in the u.s.. nejra: division in vienna. disagreement over cuts. delegates look to counter the impact of the coronavirus. we are live on the ground at a crucial meeting. ♪ welcome to "bloomberg daybreak: europe." let's kick it off with opec ministers in vienna. the first meeting saw saudi arabia and russia split over the prospect of deeper cuts as the coronavirus weakened daily demand. manus, great to see you. can they come to an agreement? nus: my next guest says it is

kabuki theater. it's painted faces. it's about shock and. shock and awe. where will they meet, which road will they travel? will it be one million of cuts? three months ago, i was here and they agreed a 2 million barrel a day cut. so what does it take to put a floor under this market? highness left last night, promising a wonderful recommendation and he wanted to keep us in suspense. they can take us out of the building because of the virus, but they can't stop us from speaking. but what does saudi need to do to bring the russians on board

to join in and show a cohesive response? it's not just of the fed that can do things in large size and scale. these andns, m.r.i. iranians are all then there -- emirati and iranians are all in their. nejra: we look him back to manus later in the hour. for now, let's look at the markets. a much better response to the congress spending bill than what we saw from the fed. jumped, futures are slightly on the back foot. a divergence to european futures and the asian stocks. of the retraced 6% losses on the u.s. benchmark. the 10 year yield continues to slide and we have seen curves a deepening for nine days. we are seeing money move into the yen that safe haven bid come

through even as equities are gaining. front foot and gold is coming back a bit after weakness yesterday. as i was saying, the u.s. house passed a spending bill to fund a response to the outbreak. the bill is over triple the amount proposed last week. available $50ing billion, including billions and it -- without interest for the poorest nations. tell us more about the house emergency spending measures. >> you said it. officials are approving $8 billion to help fund the government response. you have a 100 cases that have been confirmed, 11 dead in california, which has a huge

population. keep in mind this is all happening just two days after the fed jumped in and cut rates. what is interesting is this is happening in an election year. the criticism to the trump administration is that it is trying to downplay the impact of the virus because of that reason. but the president says that the coronavirus is still not a huge issue. but i should point out that may be to do with testing. , the moreou test likely you are to find cases. we have got a lot of updates. travel,curbing microsoft pressuring staff to work from home. give us details about italian measures. >> yesterday was a bad day for

italy because you saw an increase of almost 500 cases. governmenting the put into place draconian measures. schools have been shut down and there are speculations the government is working on another decree that would ban all public events. it would be a huge blow for the consumer and italian services industry. officials in brussels are already warning there is a high risk this economy will fall into a technical recession in the first half. they are citing falling tourism numbers and the virus impacting the north of the country. gdp.accounts for 30% of warningission here is that this is probably going to lead to a recession for the italian economy.

nejra: thank you so much. to give you a bit of the asian perspective, deaths from the coronavirus have surpassed 3000 in china. there was also progress in south korea, cases have dropped three days in a. -- in a row. joining us is peter. u.s. futures looked to get back some of the gains they saw, but does that tell us risk assets are likely to respond better to fiscal measures? peter: it needs to be a multifaceted response. monetary response , and without that, it would have been worse. but it is not a sufficient condition. the more prevalent response is not only the fiscal spending,

but what are we going to do with all that money? that's what the markets are responding to. it is the whole basket of measures. nejra: i believe we talked about the fact that you think global bond yields should be moving higher. what is your outlook for the treasury yield? when we talked back in the day, the underlying assumption was a rebound in the economy. that was shortly after the trade deal was signed. there is not going to be any rebound. when you try to put some numbers to it, it's very difficult to get to anything in the first half that looks positive. when you look at these numbers in the outlook for bonds as a is just to that, it

hard to see the bond market getting back to the gains we currently have. nejra: we talk about a supply seem, but the markets do to be pricing for the demand shock but certainly no rise in inflation. reckon we will get some inflation in some parts of the economy. currently, we see it only in facemasks, but there will be some shortage of the supply. but if the economy goes down substantially, it's very difficult to see how that can be inflationary as a whole. how have you changed your peter: it isshort in this marke. nejra: a redhead line coming

through that japan is the quarantine all arrivals from china. of course, we are still in earnings season and we have numbers coming through. affectis assuming a -1% on net sales from the coronavirus. growth, butc assuming the -1% affect. in terms of full-year adjusted better cavemen a little -- came in a little better than expected. coming up an interview. let's get to first word news. haveina, around 52,000 recovered and been released from the coronavirus. globally what the number of concerned cases is reaching 95,000 and the number of cases

seems to be slowing. imf says the global outlook has darkened and uncertainty will remain high as the duration of the virus remains unknown. the vendor is making billions available to help countries hit by the buyers. -- virus. >> this will allow countries to tap into financial resources immediately. countries can draw on this money if they need it right away. for poor countries, with zero interest rates. nejra: opec plus is again stuck on the issue of output cuts. saudi arabia is looking for curbs as large as 1.5 million barrels to offset the huge hit in demand. the full ministerial meeting takes place in vienna today. u.s., allies of bernie sanders and elizabeth warren are discussing warren leaving the

campaign. cashmes after a porsche or poor showing for the center. bloomberg is the founder and majority owner of bloomberg lp. global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. coming up, as opec plus holds an emergency meeting, speak to the goldman sachs head of global commodity research. cut mayng up, the next be the deepest. we look at the pricing of central banks around the world. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." mixed signals from markets if we look at the risk radar.

asian equities are extending the gain and global stocks. stock 50 futures are showing we could get a fourth day of gains. meanwhile, money is moving into the yen and we are seeing gains in oil as we see opec plus stuck on any agreement about opec cuts we have seen central banks around the world cut rates and now the market is pricing more. annmarie hordern is here with a chart that matters. annmarie: cuts may deepen. we have heard from central banks cutting deeper but the market wants more. and theee the fed reserve bank of new zealand in pink and purple there, the market is pricing in more than 25 basis point cuts for these markets. james bullard spoke to us in an inclusive interview and says it

is a very fluid situation and the markets should not be prejudging. but look at what the market is pricing in. they are certainly calling the fed out and judging this meeting. fed,: speaking of the central banks grapple with the impact of the virus president trump is calling for more cuts james bullard says policy is in the right place. he spoke exclusively to kathleen hays. powell did a great job in his press conference in elucidating the details around this. risingks, obviously, are into the coronavirus could be more severe than we were previously thinking. the sentiment for me was that we were probably going to have to move at march meeting anyway. we might as well move that

we also got the policy rate to the right place for now given the information we have. took up some insurance against the possibility this will cause a growth slowdown in the u.s.. >> you say it's at the right level for now. donald trump is the only person calling for more rate cuts. a lot of traders are saying the fed will move again at the march meeting. >> i don't think you should prejudge that meeting. meeting and we have moved the policy rate where we thought it should be. it's a fluid situation and we are keeping track of things. it's unlikely we are going to have that much different information when we you get --

when you get to the march meeting. we certainly can keep our options open, but since we pulled that decision forward, not sure you should put a lot of weight on the meeting. we could meet in the meeting anyway. i just would not want to put a tremendous amount of focus on this march meeting. it won't be a lot of new information except on how the virus is progressing. nejra: that was james bullard. peter shaffer is still with us. how will markets respond if we don't get anything new? is saying we won't have new information. he had better hope because we might have information she does not like. asked,ack to what you

there is obviously a big divide in observers and market participants. look at the reality of what the fed is doing, if the worse and the indications for the economy gets worse, we know the fed typically responds. nejra: the curve is the steepest it months and we have had nine days of steepening. marketsresume if the tell the fed they are expecting qe? peter: it could happen, but we are not there yet. as the front long and can move there is space for the front-end to move, the curve is typically steepening. we are currently in that space. has room totheory,

move. the curve will likely stay in the environment. nejra: what is the impact of equities and credit to more cuts from the fed? peter: starting at credit, that is interesting. widened inads have contrast to markets where the front and right cannot move. you see the absolute yields of credit are still coming down and that is a key thing to keep in mind. what is it the fed wants to do? as long as funding costs are coming down, even if the relative cost goes up, that is helpful. therefore, monetary authorities have leverage over the market still. equity market concerns are a different story. the fed can move the discount

function, but when you really think about it, all of these nonmonetary measures to contain this thing tend to be bad for the economy and hence bad for earnings. i can understand why the market is not responding directly to the fed. nejra: we did see a dollar weakness. is that likely to continue? peter: for the time being. saw the fed was on hold. but now that the fed is an if you play it and think policy rates are converging to ecb levels, that's not what we are forecasting, but if you spend that forward, it's

difficult to see how the dollar can stay strong at least in that phase later on, we will have to see. we could see more weakness. call a spade a spade. the weakness we have seen is relatively minor compared to the weakness we have had. nejra: peter stays with us. this british airline has gone into administration after the failure of talks on a bailout. it comes amidst the coronavirus air brake, leaving the carrier with little choice. the company is no longer able to fly or take bookings. airbus is considering a cut in production of its jets, that's as the biggest customer is deferring deliveries due to the coronavirus outbreak. the plan maker is reviewing plans and may make a decision this month.

general electric is standing by annual forecasts that may drag operating profits down by $300 million. the forecast is not include impact be on this quarter and says it is too early to assess long-term effects. >> we have 18,000 people in china. all of our major businesses have significant footprints. we are open for business. does not mean we are at full ramping andt we are our facilities are at 75-80%, depending on the day. nejra: that is your bloomberg business flash. coming up, vladimir putin and edrogan try to patch things up later today. that story is next. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." erdogan willn and try to patch up their relationship in moscow today after the deadliest fight yet. isning us from istanbul seven -- simon. what is the disagreement about and what can we expect? >> tensions are putting the turkish president and his russian counterpart at odds. leaders back opposing sides in the syrian war. tensions grew significantly last week after more than 30 turkish troops were killed in a turkish province. erdogan will be going to moscow to convince putin to rein in the

syrian regime and allow turkey to create a safe zone in northern syria. erdogan is keen to stop another exodus of syrian refugees coming to turkey. the two leaders have agreed on measures for in syria, but nothing sustainable. nejra: thank you so much. there is big money at stake here, because economic ties between russia and turkey have deepened. theng, goldman sachs warns next head of the boe will coordinate its response with the treasury. we saw gilt yields drop. we discussed that next. this is as we see a little risk come back to equity markets. foot,utures on the back

the 10 year yield slides. this is bloomberg.

[ fast-paced drumming ] [ fast-paced drumming ] nejra: good morning from london.

i am a nejra chain pitch. -- cehic. u.s. stocks push higher as a spending bill adds a global support. this is as california declares a state of emergency. the imf tells bloomberg is providing $50 billion to combat the virus. we spoke exclusively with james bullard. assume another cut in two weeks. rate to thee policy right place for now. we don't expect more cuts and have taken insurance against the

possibility this will cause a growth slowdown. nejra: division in vienna. agreement over cuts proves elusive. ground at aon the crucial meeting. ♪ a 4% jump in u.s. equities shows the equity market liked the congress spending bill better than fed rate cuts. u.s. futures are on the back foot and european futures are pointing higher while the 10 year yield slides. we have got the rate cut from the bank of canada. let's get global market coverage from around the world.

great to see you all. we are seeing green in asia. our asian equities just playing catch-up? when you saw that 4% gain, it was likely we were going to move higher. are back at levels we have not seen since the middle of january. we have seen the index respond quite strongly as the fed rate cut puts the stimulus back in china's hands. lower i is likely to another 10 basis points. fred newman says the outbreak requires the fed and china to deliver stimulus. see the msiyou will 300 having another very solid session. nejra: the rupee is hovering

around its lowest levels. what is driving the decline? seen nervousness shaping sentiment. the indian markets were behaving slightly off. they started lower. because of a bailout package being readied. there is a bit of an upsurge in asian equities, but otherwise, equity markets have been lower for the last few days in the last hour, markets have turned bit. yields hit record lows yesterday.

what are you watching this morning? annmarie: i am watching german boones -- bunds. people are talking about yields staying lower for longer. they are saying they could fall to all-time lows. investors are expecting a record low to be tested. , theyf the ecb holds off are piling into europe's safest debt. nejra: thank you very much. we have got headlines coming through from hugo boss. what we are seeing here is significant short-term revenue impact of the virus. that's the main headline. it says the expansion will affect business especially in china. full-year that,

estimates come in a little light. is aull-year dividend little better than expected. at estimates of 307.8. but it is the coronavirus that is likely to attract attention. atspeak to the hugo boss ceo 7:30 a.m. london time. andrew bailey says the central bank will work with the treasury to help the economy withstand fallout from the coronavirus. discussed has already how to ensure coordination with authorities. we are collectively going to have to provide some form of supply chain finance in the not very distant future to ensure that the effects of this are not damaging.

nejra: traders now speculate the boe a follow the fed. hsbc and nomura are expected to move. meanwhile, officials are inspected to move lower with the virus expected to push the u.k. economy to the edge of recession. peter is still with us. what are you expecting this month? peter: we changed our call in light of this. we think they will only cut 25 basis points because they will want to hold back. maybe as the situation gets out , certainly a premeeting cut. nejra: what would be the impact on gilt yields?

if we got cuts coordinated with fiscal action, where do gilt yields go? know: as long as we don't where the downside or bottom for the economy is. and keep in mind, we talk about coordinated fiscal intervention. all of these can really try to mitigate some of the economic impact to come. when you think about what we see in china and italy, most of the measures you put in place are economically damaging. all of the fiscal stimulus in the world cannot prevent that. as long as we don't see the bottom, the market will continue to price more action. we heard andrew bailey thinks 10 basis points is the potential new low. reticent andry calling for a low in longer-term yields for the time being.

nejra: what about german yields? some are saying yields could easily get to record lows regardless of whether the ecb cuts were not. peter: we will have to see. lows,ime it was at record the market was pricing roughly the same amount of easing. moves and the market , therice more than that bund cannot follow. i'm not quite sure the bond can go lower than that but nothing is impossible. i think it is currently predicated on whether rates will move or not. nejra: the whole of the german curve is negative. if we talk about loosening

financial conditions, is the reason you are not expecting the ecb to move is because you think a rate cut will not actually be effective? peter: yes, in a way. where we can see a glimpse of that thinking is in the short statement ecb put out where they spoke about a targeted response. lower whengetting risky assets are losing and credit spreads are widening. right --it spreads rising.ields are aboutally have to think how low you bring bond yields to mitigate credit spread widening. it would be much more powerful

if they spent directly. rather than bringing everything down, trying to keep the spread widening at a minimum. nejra: when we see global bond yields fall day by day to new records, what is the best way to navigate this? recommendationa on the gilt/bund spread. how are you thinking? peter: in the environment we have where the thrust is rate , you can try to play around funny strategies but the core must be long or not. aren't, chances are you are going to be caught out. settles, all sorts of strategies come into play.

it is theme being, duration call that matters the most. nejra: is that because you have brought forward your expectation of a recession? calling a global recession is a tough call. but for those countries that have been impacted, the quarter butthe quarter to come, -- for the quarter and the quarter to come, it is difficult to see. look at the numbers in china. you have the situation in italy. it's going to be very difficult for the economy to grow. as long as you are in an environment like that. the question is how long is it going to last. when you think about it, as long

as we don't have a cure for the and these restrictions on travel and activity, it's not going to be lifted like that. nejra: peter stays with us. over 3000 have died from the virus and over 52,000 have recovered or been released from hospital. and the growth of inflections -- infections seven korea is growing in the biggest outbreak outside of china. in the u.s., the house has passed an emergency spending bill to fund the government response to the outbreak. meanwhile, california has declared a state of emergency. closures announced the of schools and universities until march 15 as they double efforts to combat the virus

outbreak. milan, venice, at neighboring regions are already in lockdown. u.s., elizabeth warren is discussing exiting the campaign. it comes after a poor showing on super tuesday for the senator. michael bloomberg pulled out of the race, endorsing joe biden. a reminder, bloomberg is the founder and majority owner bloomberg lp. -- of bloomberg lp. global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. as opec plus meets, we join manus cranny in vienna. bloomberg -- is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." opec plus ministers are in vienna for talks on oil output. the first meeting saw saudi arabia and russia split is the coronavirus weakens global demand. manus cranny is in vienna for that meeting. manus: we have the head of research and energy aspect. maybe she can make sense of the two positions. let's ask her. we have the russians in pretend mode, i would say, i would say come and the saudi's who want sh ock and awe. what is the right number? the number needs to be big, over one million barrels of -- i

day. -- a day. the saudi's have been talking about 1.2 but it needs to be a credible number. nobody will believe they can deliver 2 billion. manus: break down a 1.2 number four me. -- for me. seeistically, you will 600,000 barrels a day from the saudi's. 300 and russia is about 200. is 200-300. manus: jean-claude juncker berated the g's -- lack of cohesion. >> cohesion is everything in the best of times and this is not

best of times for the market. we have not been here since the 2009 crisis when opec cut three times. i'm not saying we have to do that now, but this is the time to come together. this is why opec exists. i saw a writing about it this morning. what is an abyss-like scenario? forhave got demand growth 200,000. the only reason we have got growth is because we are expecting fiscal stimulus from china in the second half. if the virus is contained and spreads. we will get a demand decline. it's just nobody knows the number you will be testing $30,

if not lower. manus: in an optimistic scenario. that's go for that. containment. saucer-like recovery. what does that do to pricing in the market? elongated "u."n i think the point is the saudi's do have the right thing in mind. contained the stop bills and don't let the curve into entangle. recovery could be a lot quicker. two quarters is all. we took two quarters to run that down. they have done all the hard work -- undone all of that hard work. manus: this is about opec plus

at the heart of it. >> they have never had to deal with a demand shock before. shale production is falling anyways because private equity market money has gone out. manus: people keep saying shale is rolling over. you think this is a pivotal turn? >> i do. it's today with gas and shale prices. shale is never going to go away, it is the growth rate. manus: 13.1 million barrels a day was yesterday's number. demand but just supply implosion. >> completely. but don't believe the weaker -- weekly numbers because they always get revised down. production actually fell even though prices went up. you can see the pain producers are going through.

manus: i need a bid on a million dollars of extra cuts. where does my offer, on the upside? i think the saudi's will aim for that 1.2-1.5. the only thing is the russians sending out a signal they don't want to do it but i don't think that will happen. manus: i've got to show you this. we've got our own brand of energy sent has are hereby energyaspects -- here by aspects. nejra: the only one in europe able to get their hands on hand sanitizer. amazing. -- the imf is providing an eight package to help poor countries fight the coronavirus. commitment serious

to take action in a coordinated manner. mnuchin from secretary a strong emphasis on action. that has resonated across from everyone. particularly important is that central and finance ministers have shifted their attention to what can be done and we pair our ties -- prioritize that with a great degree of consistency. first, prioritizing systems to protect life and the well-being of people. second, fiscal measures that are targeted to ease the pain on affected businesses and households. quidditytention on the

so that we don't end up with a credit crunch. confidence that the financial system, having been built up since the financial crisis, is actually strong. my take from the call is that, in china, the governor of the people's bank of china gave us good news of production in chinese spending cuts and expectations in the next week to with the objective of recovery. nejra: that was the imf managing director. coming up, jeffries is giving up on the energy sector. we tell you why that. -- next. ♪

nejra: this is "bloomberg daybreak: europe."

let's get to your morning call. jeffries is giving up on the energy sector, saying it has lost 40% year-to-date. peter is still with us. i am going to pivot from energy to emerging markets because it looks like yields are coming to emerging markets. does this, kate rate cuts -- complicate rate cuts? peter: i don't think so. pretty much all the market have negative yields, so as long as normative rates can go -- be cut, rates can go lower. i argue that in times of low growth and additional shocks, going to real yields makes sense. nejra: how much sense does it make to go into gold? peter: gold is interesting. risks,nvironment with gold is typically in demand.

as interest rates are coming down, it is typically helpful for gold. nejra: peter, thank you so much. that's it for daybreak europe. the market open is next. ♪

anna: good morning and welcome

to bloomberg markets: european open. we are live from the city of london. matt: good morning. the markets say, start contingency planning. goldman sachs warns that the virus will take the u.k. to the edge of a recession as london based banks test backups. ♪ matt: worse than lehman.