>> no limit. the bond buying plan to soothe the markets. christine lagarde thursday for weight of the central bank behind the euro. and the number of coronavirus infections -- leptons grounds most of its fleet, banning

nonresident entry. d.c. -- ndc takes action -- and d.c. takes action, fiscal support over the virus source to $1.9 trillion. the fed steps in to support money market mutual funds. this is "bloomberg surveillance." i'm taylor riggs, stepping in for tom keene in new york. francine lacqua joining us from london shortly. we want to bring you the breaking as well. in the meantime, an update on the bloomberg -- we will get the mark out of there for german business confidence, coming in at about 87.7. you are seeing continued relief here into the ecb. translating over to a gain for some of the european stocks. in the meantime, i want to get a check on the bloomberg first word news with viviana hurtado. viviana: we begin with the

senate passing the major -- the second major coronavirus relief bill, president trump signing it provides paid sick leave and financial help for testing. lawmakers are rushing to come up with phase three. that is a comprehensive rescue plan that tops 1.3 trillion dollars that taylor was just referencing. it includes direct payments to americans for direct aid for struggling industries. ae federal reserve taking dramatic late-night step to help money market mutual funds. the central bank is agreeing to help meet the funds by households and other investors. people are rushing into cash. a surprise move from the european central bank. it is launching an emergency $820 million bond buying program. this to protect an economy battered by a coronavirus outbreak. the rules of the program will allow the ecb to focus purchases on italy and other struggling governments. we end in the u.k., where prime

minister boris johnson is shutting down schools. that begins tomorrow. he has threatened to impose strict controls on london and elsewhere if necessary. so far coronavirus has killed at least 104 people in the u.k. critics say johnson should have taken stronger measures. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. taylor? taylor: thank you, that the honor. i am going to do something here i have never done before, and that is talk about the dow jones industrial average. we do not talk about it often, a key floorthrough here yesterday. we take a look at the s&p 500. we hit a circuit breaker again yesterday at 1:00 p.m. that is the fourth time in the last eight trading days that we have hit a circuit breaker. not looking good. we are off about .4%. we are going over to the

bloomberg dollar index. we hit a record high yesterday, and you are continuing to see strength in the bloomberg dollar index. one notable risk-off trade that is not working for some is gold. you are seeing really a thrust to cash no matter what. so even typical safe havens like gold not catching a bit this morning. i do want to bring in my colleague over here from london. francine lacqua, how are you doing? i know that you are down there at home, francine. great to have you. your take on some of the european central bank story. what do you make of that? francine: taylor, look, first of all, it is more challenging working from home, so the team has been amazing at putting us up on the air through satellite. this is the magic of 2020. gains,lar is extending investors trying to figure out what the ecb action did.

we are trying -- there was a call to give some relief to the markets. bonds across the rows and definitely moving in sync, and a lot of questions, speaking to traders this morning, questions about how this will actually last. that's how long this will actually last. it is an effort to stabilize the economy and capital markets. let's get straight to erik nielsen, the unicredit chief economist. i am delighted to speak to him after such a big ecb day. it was late to the game, but will it now be enough? with the sort of circumstances, you would say that you would like it to be earlier. i think there is also something to be said about the communication early on that was a bit problematic even into last week, but then repaired very well by a number of these supporters that the ecb and

interviews and the blocks and all the rest of it. so with it now be enough? yeah, i think it will be enough. is whatevers done it takes, without the bureaucracy and the political stigma of the esm conditionality. untilay they will do this the end of the year. they have put a lot of flux ability, what to buy, when to buy, how to do it. buy, flexibility, want to when to buy, how to do it. and not to tolerate any risk to the smooth transition of monetary policy. that is a powerful statement. enoughe: is it powerful to deal with whatever is coming our way? i don't know what you are expecting in terms of recession. with back to normal minimal risk, or are we going to see the ecb doing a lot more? look, i is obviously --

don't know if they will -- i think this is enough to what the ecb can do this year. back and take it remember, this is a health crisis. the ecb cannot help on a health crisis. the reaction to the health down,, we have to shut which means that businesses and others will simply not function for a while because of these importantcritically and necessary steps to shut down the economy. the ecb will not be able to keep gdp rolling along at good numbers, but what they can do is they can, number one, make sure things will continue to function. and they will be able to help the banking system to keep small enterprises and households afloat so that once we get through, hopefully soon this

health crisis, then we have not lost a lot of businesses in households that otherwise should stay alive. this is all the ecb can do. the central bank cannot solve or makeup crisis completely for the drop in gdp. taylor: what does the bond buying program in the ecb mean for greek and italian debt? pcp: i think we have seen spreads drop, so massive moves this morning. and the same things in greece. the important thing here, greece was not involved, as you know, in the previous app program, the original qe, but they are in this one here. so this is very important for greece, and absolutely right. i think we have heard enough about the need for solidarity in europe. i think this is a clear sign of this also. so this is important. there is so think

much flexibility in this in terms of -- they do not say this explosively, but it -- david -- -- they do not say this explicitly, but they would need to bring it on late down the line. taylor: i have been hearing more and more that there is divergence between western europe and some of the peripheral european debt that is weaker. are you starting to see that divergence, or is this enough to bring the e.u. and the eurozone, both peripheral and european debt together? you mean in terms of a common debt? , inor: like trading levels terms of trading levels. erik: sure, that's what i meant by the collapse, or near collapse in the spread for the ecb and the peripherals. this is a very clear sign that the peripherals that started to drift away, particularly after

making this unfortunate kitten complete statement on thursday that this is not their concern, corrected -- this unfortunate incomplete statement on thursday that this is not their concern, corrected. they clarified that they will not -- and this is why they put they note in -- they will not the smoothy risk to transmission of its monetary policy or to the euro area. that is a clear and explicit statement that they will not accept diversions that you talked about and that has been in place for some time now. francine: eric, if you look at what central banks have done around the world, how much more can they do? do theyat circumstances do it? is it as the pandemic gets worse, if money markets freeze up? have they staved off any kind of financial risk that could lead to some kind of financial crisis?

that is a very good question. i am not completely sure, but i the --rgue that to take leading an economic crisis to a functioning financial market, and therefore a risk to the financial system that could become a financial crisis. i think what you're saying with the fed and the ecb, the risk of the financial crisis has now declined very substantially. of until we know the quality sme's's and how well guarantee schemes and other measures to cushion those most hit by this insis, until we know that more detail, we will not be sure how deep the impact would be on the balance sheets of the banks. this is a massive, massive move in the right direction, for sure.

needed, erik, and i know this was a bazooka on the market side -- what else can central banks do? erik: they can do more. the austrian governor came out with some bizarre statement that even the ecb had to correct and now we cannot do anymore. bankntral bank, a central never runs out of firepower, by definition. they can print money. so this is absolutely critical to understand. the constraints of a central banks up a firepower are twofold number one is sort of their political assessment of what is acceptable. think about how long the ecb hesitated for too long with qe because it was considered unacceptable in germany and other countries, until they changed their mind, and it became acceptable. the other constraint is the ' own analysis or

assessment of the situation. the political constraints and their own assessment -- whatever central bank changes over time, you can do -- you have the printing machine in the basement, you never run out of firepower. it is only a matter of if you want to do it. nothing like having a printing machine in the basement here here is eric neri's and that he is erik nielsen. coming up a conversation that you -- coming up, the conversation you do not want to miss. with 90g markets speak calvino. -- with nadia look for that interview at 10:30 am in new york, 2:30 p.m. in london, and that is tomorrow. ♪

taylor: i'm taylor riggs in new york with francine lacqua in london. we have been talking about all morning the ecb making big moves overnight. the european bonds scoring everywhere from italy -- this is of course after the ecb marched its 750 billion euro program. jim.t to bring in in your world of credit strategy, tie in what the moves from the ecb means. is it enough to support some of the credit markets that you have been looking at? a margineftly provides for credit that was not there over the last -- it definitely provides a margin for credit that was not there over the last two or three weeks. it is a one-way market, so the market was looking desperately

for a marginal buyer. this will put a marginal buyer in investment grade. it will help markets. it is not the end of the story. we are not out of the woods, but it certainly put some two-wei tan in. it will be well received today. taylor: what more would you like to see? jim: unfortunately, i am not sure what the central banks are about since the virus locked in. that is the big problem for companies, individuals. none of us know the duration of the lockdowns. imperial column paper that the u.k. has provided, it is not impossible for we will be in lockdown 18 months. if that is the case, businesses are going to struggle, and no amount of liquidity can help for that. but for today, this is a very good move.

francine: what do markets actually want to hear from central banks? is it the bazooka or the idea that the ecb will throw everything at it? this is something they did not hear with a press conference when madame lagarde was talking. is that what they needed to hear? jim: my problem with the press conference was the comment that the ecb is not there to close spreads, when effectively central banks around the world have forced investors into spread products in the last decade, so to turn around and say that it is not the ecb's job to close spreads was a policy miscommunication. i do not think any of us doubted that the ecb would be there to close spreads, but what we needed to hear from them is that they would, and this policy announcement -- i think we knew it was coming. the scale overnight is quite zone gdp. of the euro so this is a very big move.

and i think central banks have proved they are all in. i do not think we can ask much more of central banks. they will do more if need be, but at the end of the day, some but i needs to replace the lost activity in the economy to accept this crisis properly -- to assess this crisis properly. francine: is there a limit to what the ecb could do next? or the balance sheet can be as wide as they want, especially if you look at the example of japan. jim: i think in the short term with no inflation, they can do more. i mean, i would not set no limit, but they can do more if necessary. they have made that quite clear in that space. i suppose the problem comes later down the road. inflation could be a consequence of this crisis. this is a crisis for economies even if we get out of it. but for now, as inflation is

low, they can do more. taylor: jim reid of deutsche bank is going to be staying with us. if you have a bloomberg, check out the function tv . you can watch our interviews and live events. interact with us directly, including sending in those your questions. we will make sure to ask them of all about expert guests. just go to tv . this is bloomberg. ♪

viviana: you are watching "bloomberg surveillance."

let's get your bloomberg business flash. we begin with oil rebounding after plunging to the lowest level in 18 years. in new york, futures rising as much as 18%, the more -- the most in 11 years. the previous session, prices plunging to 24%, collapsing flood, and a supply hammering oil. stimulus measures are providing some relief. pandemic, coronavirus luxury label burberry saying sales have fallen by as much as half. this since late january. about 40% of its stores worldwide are closed. and we end with an offer reminiscent of detroit's contribution in world war ii. tesla has now joined general motors, offering to make hospital ventilators. this is happening with auto factories closing by the virus outbreak there there is expected to be a shortage of the devices. white house economic visor larry kudlow says gm ceo mary borrow floated the idea that the

automaker could help. that is the bloomberg business flash. francine? francine: thank you so much. this is what the markets are doing today. we are seeing a volatile session, certainly when it comes to stocks. but european stocks again fluctuating a little bit. this is what i am looking at overall. a lot of the focus -- not all of the focus in europe -- is on what the ecb did yesterday with that mass bazooka for the markets, and you can see depending on the region or depending on the country, actually there is a little bit of change. we are also looking at sovereign bonds, italy to germany, but also france soaring after announcing huge boosts to stabilize the market. i am also looking at a couple of things such as dollar extending gains, investors seeking havens still, while there is still questioning that while they are still questioned the rapidly extending battery of economic and financial support. and what kind of an economy we will be left with at the end. there is that the economy with

the stress market slumping, a sign of a store near demand for dollar. taylor: you are 100% right, francine. we were around yesterday afternoon when you had dollar strength at the record level for the bloomberg dollar index. i want to take a look now at what that means for this morning's trade. futures still lower. it does not seem like we have found a floor here yet, even though you are seen, like you said, as we continue to get some safe havens. gold selling off as people think that they just want to go cash with some of the traditional safe havens. some of them are not holding up the way they were. coming up next, we will speak with the energy assets chief oil analyst. this is bloomberg. ♪

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every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. taylor: i'm taylor riggs in new york with francine lacqua in london. you had crude at $20 a barrel.

hanging out to 22, 23 a barrel on crude. talking about all of the supply and demand dynamics here within the energy market spirit i want to bring in emery, the chief oil analyst. what are your thoughts of crude barrel?t at 22, 23 per can you hear me? annmarie: yeah, i can hear you just fine. taylor: go ahead. reasone: there is good -- we really thinkl brent crude tests $15. it a supplylor: is

shock or a demand issue? amrita: it is really a demand shock. saudi arabia is locked in a price war added time when demand has cratered. becauseunprecedented you have rising supply and decrease demand. taylor: what price point is painful enough that they are willing to talk? amrita: i think the critical thing for both of them is they believe they can outlast other producers. russia can probably last longer than saudi arabia, but saudi arabia is digging deep. the whole point is they are will causehigh cost them to blink. we are expecting significant shutdowns around the world. are the shutdowns

going to be put back on with notice or will we see shale producers go bust? amrita: that is the biggest question and the biggest difference between now and 2016 or 2014. shale was ramping up and today shale has been coming off. it started to come off even prior to the price fall because private equity money is coming out. there is no appetite to invest. once we see the bankruptcies we do not expect shale to come back to the same extent because nobody will buy those asset. francine: do you know if saudi arabia is targeting -- do they want it to drop to $10 or are they targeting $15? amrita: they are not targeting a specific price but they are

preparing for prices in the 20's. levels or these price any price level, that gets the high cost marginal producer out. francine: if this is a fight to gain market share, does whoever hold the market share when the economy picks up again? amrita: that is the idea. haveis going to make them lower prices for over a year or a year and a half given the amount of inventories they are building, but the hope is the and-term that the low cost will export higher volumes at a higher price. non-opec supplies right now, we down close to 2

million barrels a day next year and even more in 2022. the gap has to be filled by opec and russia. francine: let's get straight to the bloomberg first word news. viviana: we begin with u.s. senate turning to the giant coronavirus relief bill that could cost $1.3 billion, including checks to american households and aid to the airline industry. signingy, donald trump into law the second bill for paid sick leave and coronavirus testing. extraordinary times require extraordinary action, according to christine lagarde. the ecb launching a bond buying program worth $20 billion in the latest attempt to calm the

markets. yields plummeting. willew york stock exchange temporarily shut its trading floor on monday. flooron who works on the testing positive for the virus. they will move to fully electronic trading. new evidence from the u.s. and europe suggesting younger adults are not as immune to the coronavirus as originally thought, data from china showing elderly and others with health conditions were most at risk. the first cases range from 22 to 44. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. taylor: thank you.

norges bank is considering the need to intervene by buying the centralter we have seen banks, particularly from the europeans overnight trying to stabilize the currencies. this is norges bank considering the need to intervene by buying the krona after they have come out with 156,000 people have applied for jobless claims because of the virus, and deutsche bank says the virus could continue to weaken the crown. central-bank action continues. francine: it continues. a couple of markets are worried about that of central banks intervene with their currency you have a rate at the bottom. this is something we were looking at when the trade war started so it depends on whether

your currency is under significant pressure because it is a haven and people are buying it. the swiss national bank has said they could cut further rates if needed and talking about possibly having an intervention. taylor: i want to bring in jim reid from deutsche bank. we are getting a lot of your questions as everyone is trying to digest the markets and we were talking about the stabilization within the investment sector in europe, people writing in asking about stabilization in euro credit and more selling within u.s. investment grade, given the fact that the fed is not buying corporate bonds and the ecb is. fed cannot buyhe corporate bonds. in a crisis, a lot of things change so it would not be

-- would not be a surprise if the fed is buying corporate bond. was easier to naturally increase this and last night's move, while it did not give explicit numbers, it indicates there will be a lot of buying of european credit. european investment grade credit has outperformed u.s. investment grade credit. it is a welcome thing or the european investment rate market -- for the european investment grade market. francine: if you look at what norges just said, will we see banks intervening on their currency and is there a race to the bottom that is no good for anyone? jim: that is a minor story in the background. plummety issues and the

-- buturrency traders the race to the bottom is less important than trying to fix the plummet. francine: if you were to look ahead in the next six to seven days, i know it is something we need to look at with bracing ourselves because the markets have been so volatile, but a viewer question, does it make more sense just closing the markets? this person was arguing because countries are in lock down and liquidity is something we should still worry about, is it not better to have a moratorium? jim: we wrote about that last night, when it has been closed is whenry and the times you have natural disasters, terrorist events or war. i suppose i'm sympathetic for basically yout

are locking down whole economies around the world and keeping markets open, it is a one-way street. on the other hand, people say the market is still required for people to access funds, for liquidity, etc., so it is a difficult one. if you close the markets, it is a bit whack-a-mole because you have to provide liquidity to people. there is no right or wrong answer but is something that should be seriously considered. taylor: jim reid will be sticking with us. coming up, a conversation with leslie vinjamuri from chatham house about fiscal stimulus and what it means for the trump administration. this is bloomberg. ♪

taylor: i am taylor riggs in new york with francine lacqua in london. the head of the u.s. senate cleared the second page or bill responding to the pandemic. he said the body would stay in session to work on the $1.3 trillion plan. learning us now is leslie vinjamuri. are you surprised by the amount and rate at which congress is able to get this done for the beginning of the stimulus package? leslie: i think right now, there is very little surprise left amongst those of us watching because the global pandemic is so extraordinary so extraordinary measures are what we would expect, even with the government that has been so

partisan and divided, and not the government we would expect to be talking about cash -- cash payments to the tune of $5 billion. it is all a little surprising but given the global context it seems almost inevitable. taylor: as you look at the details of the stimulus package, what is most effective? bailout of airlines, small business loans, what is most effective to stave off what could be a deeper economic crisis? leslie: this is something that is being intensely debated. cash payments for many people across the united states will be essential, but there is a real need for unemployment insurance. we have seen some of that in the earlier package for sick pay, for testing. cash payments, of course the question is money will quickly

run out so those broader questions are critical. looking to shore up small and medium-sized as this is, the airline industry, there are questions of where that on he will go and how it will be -- where that money will go and how it will be distributed. the focus on sick pay, unemployment, testing, shoring up the health sector are absolutely vital because we need to think about the medium to long term since this is likely to run for quite some time. changee: how does this the election year? i imagine you stopped campaigning and there is not door-to-door canvassing. at what point do you stop talking about -- start talking about postponing things over the

summer? leslie: there are already primaries delayed. but turned out in the last three primaries was down, as we might expect. the numbers were still ok because there was early voting. candidates are radically rethinking how they communicate with the public, and there is a real concern as we move ahead about how this will affect possibly even going into the general election, how that election will take ways. -- take place. there't be the first time is an election in the time of crisis, but this pandemic is different because of the need for social distancing. election even just the , it is what is happening in congress and here in london. the house of lords met last night. we still have our legislative

branches meeting in person. risk bye populations at virtue of their age, so any number of clinical praecipe's will have to be dramatically -- political praecipes will have to be dramatically rethought. askinge: i struggle in this question because people are scared and there will be loss-of-life, but is this something donald trump could use to his advantage if he handles it correctly? i don't know it gives an advantage to the people or donald trump, this pandemic. it feels wrong talking about advantages, but what does it mean politically? leslie: everything is really tough to talk about. you know that more than anybody, but we have to consider the implications. generally, what we know from

history is people do not like to change leaders in the middle of a national or global crisis. at the same time, the economy is going to go into a very deep crisis. we are already there. that has an impact about how people feel about the president, so people will be watching the measures taken on a personal basis. up to a few weeks ago, people were denying the reality and seriousness of the coronavirus and covid-19 in the united states. numerous anecdotal stories of people saying, it wasn't so important, it is being politicized by the democrats. we are already in a different context and the people that were denying it, they were denying the significance as they were

going to the stores and buying more toilet paper in any number of goods. people will see this is not partisan. it doesn't differentiate between the wealthy and ordinary person in america, and they will be looking to see how the president and his team manages this response. a -- vice president biden clearly emerging as the candidate on the democratic side , has a plan and was talking to the nation. if there will be any transition at the level of the presidency, the fact that joe biden has dealt with as part of president , ebola andte house zika suggests there might be some confidence. people will wait to see how they are affected personally. analysis,ways a smart

leslie vinjamuri. thank you for joining us. coming up on bloomberg radio, a conversation with james trento -- this isiend jill bloomberg. ♪

♪ good morning, good afternoon, good evening. this is bloomberg "surveillance." we have seen quite a lot of market moves the last few weeks but overnight after the ecb pledged to do whatever it takes. that is moving sovereign bonds across the world. we are keeping an eye on that, and emerging markets and what kind of recession will take ways because of -- take place because of coronavirus. what happens to the u.s. yield? how low can it go and at what point does it mean that we are definitely not only in a recession but a depression?

subject to are change with policy moves, but there is probably a limit how low they can do as governments start spending and fortune on this -- spending a fortune on this. you will have huge wartime like deficits, probably over 10% in many countries, which will create government bonds flying. i imagine at some point after put acentral banks will cap on yields or it will buy bonds. i do not think the trip -- 10 year treasury goes negative. i think the market might get a bit scared of the fiscal spending so yields might go up, but central banks will buy an enormous amount of bonds and

effectively helicopter money. taylor: you talk about stimulus and the inflationary effects that could be having which is why you were getting a lift in yields along with concerns of a deficit. i want to look at this chart, the five-year five-year breakeven showing the inflation outlook falling to the lowest since 1999. what does that mean for the inflation dynamics? jim: at the moment, nobody will believe there is any inflation because the hit to growth will be very disinflationary in the short term. any repricing of bonds in the last seven days was purely in a real yield horizon rather than people's expectations on inflation. none of us quite know how this will go, but the thing we were thinking before this crisis is inflation is a policy choice and

what you need to get inflation is monetary and fiscal policy working together. if you just have monetary policy, you will not get inflation. if you have fiscal and monetary policy you can get inflation. longer-term, if this price is short but the policy moves -- i think it is slightly more biased toward the inflationary side at the moment. will get jim reid, we back to you maybe next week and talk about the possibility of a mentee. we have smart conversations on central banks. this is bloomberg. ♪

♪ no limit, the ecb

unveils a 700 for a billion euro bond buying plan -- 750 billion euro bond buying plan. -- tops china in the number of coronavirus infections. australia bans nonresident entry and 40 schools in underground nations will close. a lot going on in the markets. d.c. taking action, the senate passes an action. the fed stepped in to money market mutual funds. good morning, good afternoon, good evening. i am francine lacqua at home in london, taylor riggs in the studio in new york. on, one afteroing the other central banks looking at their currency and tro