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 trying to defend things domestically.

we look at dollar strength and yields moving. taylor: if you blink, you missed it yesterday we had the fourth halt on the s&p 500. down&p fell 7% and it shut for 15 minutes or so. we were able to close off of the lower bound. the bloomberg dollar strength also hitting a record. cash is king. francine: we will talk a lot more about that. it's get straight to the bloomberg first word news. senate passings. the second major coronavirus relief bill, president trump signed any it into law -- signing it into law. lawmakers are rushing to come up with phase three, a comprehensive rescue plan the administration estimates could cause -- cost $1.3 billion.

the u.s. federal reserve and a dramatic late night step to help funds havets, the been under pressure because people are rushing into cash. a surprise move from the european central bank, launching dollargency 820 billion bond buying program to battle the coronavirus outbreak it will allow the ecb to focus purchases on italy and other struggling governments. in the u.k., boris johnson is shutting down schools and threatening to impose strict restrictions on those in london if necessary. critics say he should have taken stronger measures sooner. 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. much.ne: thank you so the markets are trying to take it all in, the stimulus and packages, ands -- the lockdown. that is why we are seeing volatility and on top of that story with oil cratering. dollar extending its rally. european stocks climbing a touch after the ecb announced a boost in its effort to stabilize the economy. also looking at high-yield bonds in europe dropping from a seven-year high. ands get to sovereign bonds german and french ones. they are soaring after the central bank stepped in and they seems to be on the market a

belief that the ecb will do whatever it takes to make that spread not widen. the yen often a haven expresses a slumping in an extraordinary sign for dollar. taylor: i will do something i rarely do, talk about the dow jones. we closed below the 20,000 mark for the first time since 2017, the first time in 2, 3 years that you are seeing the dow which is a price weighted index drop below that key level. the s&p market, we have hit the trading limit and the futures market does not look any better this morning. we talked about the bloomberg dollar strength and that index hit a record high yesterday. gains extend further. in the gold market, we are seeing a little selloff. investors digest that cash is

all that they want and they want it now. , we were the ecb saying, launched a 750 billion euro bond buying program. christine lagarde said " extraordinary times require extraordinary actions." joining us is jay bryson, wells fargo acting to for economist. does ecb action help the u.s. economy? it: it does in this sense of starts to calm the financial system down in europe. it has direct effects on the united states. u.s. exports to europe, we are talking to percent to 3% of gdp, pretty small, but there is a lot of tension in markets, people moving into dollars. anything the ecb can do to calm

financial markets has an indirect benefit on the united states. francine: how quickly will we see a recession in the u.s.? i don't know if you think there is a chance of avoiding it, but what is the timeline and what would it look like? jay: we very well may be in one right now in march or april. we will see how this plays out. what we may see starting today with jobless claims, they will move higher. what we have is a. inthe economy -- a full stop the economy. what does it look like going forward? it depends on how the outbreak progresses. if in six or eight weeks we have peaked out in terms of new confirmed cases and we are not locked down anymore and hotels are filling up, then we will

come out of it in the summertime , but if in july we are still locked down, that is a different story. it depends on how it progresses from here, but the near-term looks like economic activity will take a huge hit. taylor: i also want to bring in jack albin for his analysis. as you take a look at all of this volatility, how much is debt,cal, margin calls on or a deterioration in fundamentals? both i think it is some of , but a lot of the violent action we are seeing, which is certainly nerve-racking, is a lot of the technicals. the fact that there are institutional players who are forced to sell. volatility rises as markets fall. it does tend to feed on itself.

talkingwe have been about central-bank action and how that is contributing to volatility. you mentioned the need for dollars. ecb, but lot about the everyone wanting to get their hands on dollars sort of making us wonder if jay powell is more of a central banker to the world. jay: in a sense, they are because the dollar remains the world's premier reserve currency. institutions around the world borrow and lend in dollars, so this is what these swap lines with central banks are about. germany, younk in are lending in dollars, so you need dollars. the ecb does not have a good way to get dollars, so what the fed

is doing is by lending to the ecb and other central banks, --ugh central banks lend those central banks lend directly to counterparts. in some sense, the central -- the federal reserve is the world's central bank. at what: if you look the central banks have done so off ofe they based financial crisis or is it too soon to tell? jack: they have done a lot so far. the emergency move the federal reserve made overnight rattled markets, the equity markets, but i think that they need to keep liquidity flowing, need to keep dollars in the hands of those that need it. from that perspective, they are doing the right thing. jay powell himself said monetary

policy will not solve the pandemic and we need a coordinated effort on fiscal. i do like the fact now that we are starting to see a global coordinated move, not just in monetary but on fiscal at the same time. francine: how do you model the economy in the u.s. now? do you look at the number of cases? how do you look at the data? jay: it is almost impossible to model. we have never seen anything like this before. there are things we will be keeping an eye on, high-frequency indicators like jobless claims, retail sales on a weekly basis.

we will be keeping an eye on those. guessnow, it is anyone's how bad the contraction in the second quarter will be and we do not have a model for this. we will keep an eye on new and confirmed cases as we go forward , but there will be a lot of volatility in financial markets, and in the weeks and months ahead in terms of the economic data. -- taylor:ard about you have heard about difficulties and modeling. what does it mean about modeling earnings and growth? companies are pulling their forward guidance. motto whatmonitor -- this means for earnings? seen is awe have variety of forecast, 5% earnings growth which seems a little

stale for me, to essentially zero. if you take the market where it and carve it around 13, 14 times, how low can we go, i can use the financial crisis. we got to around 11 and a half times, so from that perspective it appears historically speaking we are probably somewhere between 5% and 10% from the bottom in terms of extreme selling. modeling earnings is difficult. i think the other thing is investors need to take in mind that equity investing is not a one-year proposition. provides seveng years to get the certainty that you will make money. say at context, i would four-month or a

--tdown of the economy will we will feel it near-term but in the long term at looks like a speedbump. francine: jack ablin and jay bryson both stay with us. we talk oil and the crazy ride oil has had. yesterday was quite brutal. coming up on bloomberg "surveillance." ♪

viviana: you are watching themberg "surveillance." coronavirus pandemic taking a growing toll on u.k. fashion bands -- brands. burberry saying sales have fallen by about half. 40% of the stores are closed. german business confidence is in freefall, sentiment plunging the most since 1991. it is chilling evidence germany may be headed for its worst recession since the global financial crisis. an offer reminiscent of world war ii, general motors and tesla have offered to make hospital ventilators. there is expected to be a shortage of the devices. says the gm ceo mary barra floated the idea the automaker could help.

that is your bloomberg business flash. francine: your markets, we are staying on top of them because there is a lot of volatility. equities fluctuating but europe holding onto gains. a lot of people linking it as a bazooka. the linkage to the european stocks had a little bit of a turnaround which links back to what we are seeing in sovereign bonds soaring from france to italy. taylor: further deterioration within the u.s. equity markets, s&p futures down about 2%. it does not seem like yesterday's losses are helping us find a floor, but we have continued to talk about the strength of the dollar, jay powell being the banker to the world. record dollar strength, extending gains. go to cash.

selling out of a lot of the commodities we are seeing and all just going to cash. yields have been all over the place, and we will bring you updated on all of the latest market news. if you have a bloomberg, check out tv to watch all of our live interviews and events. just go to tv . this is bloomberg. ♪

♪ welcome back to oomberg "surveiance," taylor and francine. michel barnier, the chief brexit sa her has pat -- tested positive for covid-19. he says "i am doing well and in good spirits, and following all ecommendations we will get through this together." probably a comfort to people at home. we are back with jack ablin and jay bryson. when you look at some of the modern monetary theory policies, this is something that was 20 or 10s pretty nuts

years ago. are we going to start talking about these kinds of theories again, mmt? jack: i think so, because quantitative easing was also similarly derided early on and proved pretty successful in achieving the fed's goals. i think modern monetary theory is the next step. money, building bridges, building hospitals, whatever is out there on the fiscal side. i do think that is next and part of the reason perhaps we are seeing intermediate and longer term treasury yields rise as shorter dated treasuries fall. francine: do you think we will get a lot more talk? will we get some form of mmt? jay: it depends on exactly what

we are talking about. does the united states and other countries around the world have fiscal space? the answer is clearly yes if you look at the yield on the 10 year treasury. is there a big fiscal response from the u.s. government? yes. could it continue for a while? yes. if we are talking 10 years of big emphasis, sooner or later there will be consequences. in the short-term, next you years, we have fiscal space to bring out bigger spending programs, but i'm skeptical in a long run sense. taylor: the senate overnight approved a third emergency program over the money market usual funds to provide some -- mutual funds to provide some liquidity and stability. has liquidity improved?

jay: i do not have any real-time indicators on that, but if you go back and look 10 years ago, 11 years ago when these programs first rolled out, it definitely helped. in, lenderstepping of last resort to the banking system and the overall financial system. in the financial crisis it worked and it will probably work this time around. the fed was very creative. it has a toolbox and will continue to bring back programs like this as the lender of last resort to the financial system. taylor: with this lack of liquidity we have been talking about there has been some talk of perhaps set -- shutting down the markets. because of ther

5% swings, does that mean the market is not functioning correctly? jack: i would be hesitant to shut down the markets. liquidity albeit difficult, is probably better than not. where we could parse a little bit would be in some of the high-frequency trading and perhaps imposing a penny tax on shares or something like that could help slow some of the volumes down, but i would not be in favor of shutting the markets down. francine: thank you both, jack and j. coming up next, we talk about the market. ♪

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at home, taylor in studio in new york. a lot of bankers coming out for foreca for oil. crashk about an oil because of the saudi-russia fight and because of loss of demand from the virus. no one better to speak to one oil than harry tchilinguirian. always good to speak to you, especially on days where we do not know where we see a floor on oil. if you look at the dynamics, will saudi and russia blink or are they in this for the long-term because they want market share and could oil go to $10? harry: the possibility of having oil prices dip further is there. steadfastia appears to provide oil at the maximum

capacity. this as demand estimates continue to revise lower, so there is downside risk in oil from here. oil, like other risky assets, becomes sensitive to government measures to support the economy. yesterday we had the ecb announcement for a sizable qe and the u.s. past the phase 24 ssed the phase two, it is going to be difficult. francine: what will make it stop? demand is being taken out because we are looking at recession and economies on halt and russia-saudi flooding the market. will they continue to flood until they have market share, until we see shale going bust in the u.s.?

what is the endgame? that is the most interesting question, what is the endgame of saudi arabia. there is a battle for market share and we will have fallouts in terms of price and closure of u.s. production that has not been hedged for 2020. at the current juncture, both saudi arabia and russia remain intent on pursuing their supply policy of increasing production, which means in order to find the bottom we will have to have production shut down elsewhere like in u.s. shale, or have response in terms of demand, and that response in terms of demand depends on government measures to stimulate and support the economy. central banks have done their best. now it is governments and the fiscal measures they put in place, and we will see how the

markets react to those as a means of stabilizing the economy. this dynamic right now, saudi arabia and russia bent on producing additional supply which means the oil price will have to shut down large supply production in the united states and demand will -- it will have to come on the demand side. taylor: how quickly can u.s. and even cut capex look at a breakeven at $22, $23 a barrel? shale the nature of supply is called short cycles by, very sensitive to price and can react quickly. stopping production in this nonconventional supply is a lot quicker then sure deep drilling. -- than shore deep drilling.

it could come in a matter of months and then we can see production decline as a result. taylor: how much more do they need to cut in capex? question,ifficult because that depends on the company itself. making a blanket statement is difficult in terms of how much further they have to go. a lot of reports we had from 20%anies, they are slashing 2020 so itapex for depends on the company. taylor: harry tchilinguirian, bnp paribas on all things in this volatile oil market. i want to get an update on the first word news. viviana: the u.s. senate is to -- turning to the giant coronavirus release bill -- relief bill that could cost $1.3

trillion. late yesterday, donald trump signing into law the second relief bill passed by congress, paid sick leave and coronavirus testing. "extraordinary times require extraordinary measures," from christine lagarde, the ecb launching an emergency bond buying program worth $820 billion in an attempt to calm the markets. government bonds surging and yields plummeting. the new york stock exchange will temporarily shut its trading floors on monday. an employee and person who worked on the flooroth tested positive to the coronavirus and the floor will move to fully electronic trading. no word on how long it will be closed. global news 24 hours a day, on air and @quicktake on twitter, wered by more than 2700

journalists and analysts in more than 120 countries. hurta.viana this is bloomberg. francine:hank you so much. questions swirling around whether we should shut the markets are not. we heard from chief executives of the nasdaq and euro. >> it is critically important that the markets stay open as opposed to trying to take breaks in the middle. that will push off the situation a little bit, but could create other pent-up issues if you close the market. >> there is no reason whatsoever to close market. markets need to be open because they are efficiently functioning and because we make appropriate withtments when needed compliance and regulators. francine: we are delighted to be by robert ophele.

thank you for joining us. you have taken a number of measures to make sure markets operate in a smooth way. for at just shut them time? robert: it is clear that targets suspension is legitimate -- market suspension is legitimate when there is a -- and perhaps due to the absence of traders, but it is obviously not the case the equity market. we have a high volume of transactions despite high volatility which has triggered the appropriate circuit breakers. suspensiontances of without any clear deadline of reopening would be highly counterproductive. shifting the transaction from some suspended regulatory

platforms to the otc market, and shifting the selling floors from the equity market to other asset classes which are experiencing stress. the philippine stock market closing and reopening indicates the danger of such extent. it is not the case now. we do not intend to spend markets. -- suspend markets. francine: it is clear why you are against it, when the markets are functioning. do you have any people asking you to shut it? it is: it is fair to say an ongoing discussion. that itso fair to say is clear, without operational failure there is no case for

market suspension. there could be cases for adapting some elements of the market functions, to some extent. we shortselling ban implemented yesterday as part of the story. do you want me to elaborate? -- iine: the selling ban wanted to ask you if the shortselling ban is useful, what could it do and how will it change dynamics? robert: we will see. there are two lines of reasoning. market circumstances are extraordinary. and pressure are also unprecedented. in normal market circumstances, short-sellers are a very useful contribution to the price

confirmation but values are low or negative in the current circumstances with high volatility, do not want pressure on prices. markets are exempted from the ban i do not think this could harm market functioning. ban,ine: the shortselling aren't prices just going down aren't prices -- going down because people are worried about a recession? it is not hedge funds going short that is exacerbating it. robert: to be fair, we have not observed a sharp increase in short positions in the past few weeks and the drop cannot be attributed to short-sellers. it is a possible future increase of their activity which would be

detrimental to the market. in order to keep the market open, i consider it rude to mitigate this risk by introduce -- prudent to mitigate this risk by introducing a ban. perhaps you have seen the governor yesterday in an interview, and i cane, "anybody who says i ,ake a lot of money by shorting just stop doing what you are doing." the parliament will never accept that at a time when we all suffer from the pandemic, some will gain from this disaster by shorting the value of the economy. that andtent to avoid it is our social responsibility to use that and trigger the ban that is what we did yesterday.

francine: would you be in favor or is there talk to shorten the trading day? not shut the markets but just shave off couple of hoursike they are thinking of in the u.s.? robert: it could be a solution, but let me mention that this issue has beenaised before the pandemic. it could be legitimate in itself. it is also clear that in the current circumstances, there is a case to be reviewed with all the stakeholders, meaning the traders and the trade platforms and so on and so on. francine: thank you so much for , andng us, robert ophele that was an exclusive conversation. i know a lot of you worldwide will want to know what happens to the markets. we speak more about the ecb and

the big zucca they announced -- bazooka they announced last night, to a former general in the ecb, and about italian bonds. this is bloomberg. ♪

♪ in new i am taylor riggs york with francine lacqua in london. theu.s. senate cleared second major bill in response to the pandemic. mitch mcconnell said the body would stay in session to work on the $1.3 trillion plan. joining us is kevin cirilli. we are waiting for phase three. what can we expect from the next

stimulus bill? kevin: mitch mcconnell said the senate will have to be on close standby as phase three of the economic stimulus makes its way through. ofs is a $1.3 trillion piece economic stimulus that would provide immediate economic relief in the first week of may or the end of april for a host of families. it also comes at a time when there are serious questions they will be able to vote. congress tested positive for coronavirus and are under quarantine, other members of congress saying they will self-quarantine. and chuck schumer have not -- mitch mcconnell have not indicated that there will be voting.

taylor: what does this mean for joe biden and donald trump election? trump campaign has rebranded its campaign efforts as a wartime president, trying to combat the coronavirus pandemic. the former vice president joe biden, sources say they are recalibrating. behind the scenes, they are preparing for a november general election but in the short-term they are having to recalibrate what this will mean for them as primaries are postponed and the convention will likely be downsized, and fundraising efforts will have to stall. taylor: kevin cirilli, think he was always for joining us. coming -- thank you for joining us. bloomberg radio, an interview with french hill. this is bloomberg.

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♪ good morning, good afternoon, good evening.

taylor and francine from london and new york. european credit rallying after the ecb's fresh stimulus. whos speak to a man intimately knows the ecb, francesco papadia. if you look at what they did yesterday, is there any doubt the ecb will do whatever it takes to keep spreads under control? francesco: the short answer is no. big show of determination, big ammo for the ecb. francine: do you worry about liquidity? when you look at the faultlines and how you can suspend the economy because of covid-19, but what questions

would you ask of central banks to make sure there is ample liquidity and the people whose suffer the most -- who suffer the most will be protected? francesco: what the ecb has done opens up opportunities to deal with liquidity. the announcement was generic. we don't know exactly what they will do, but it opens up the opportunity to open up different parts of the sentiment of dealing with the liquidity issue which is one of the critical issues. francine: is there a limit to what central banks can do from now on, or do you think central banks around the world as long as there is the threat of recession because of covid-19 will continue to print money? francesco: there is no limit in enoughse that there is size what they can do.

there is enough size from the effect. a companyr this is that appears to be by fiscal measures. what the ecb has done is open up at the european stability mechanism would come in with gete iuance so it could to a full government without conditions. with there you happy communication of the ecb? christine lagarde was under spreade when the italian flew out and she said it was not her job to deal with credit spreads. are you happy with the communication we are getting? francesco: with regard for madame lagarde, it was serious but i would not over dramatize it. i think it was a dire situation for the ecb to come out much

more clearly than at the press conference, and they also reprimanded one governing council member that monetary policy could not do anything more. yes, from a communication point of view, this is a big improvement. taylor: doesn't help in this case having -- does it help in this case with christine lagarde not having a formal economic background? francesco: i am not sure about that. -- lagarde has more of a legal background than an economic background. what she said from a legal background was correct but totally wrong from an economic ground. the economic stance did not help her on that occasion, but i would not over dramatize that

this has been changed by the action yesterday night. francine: this is something i am sure that people will look back on and say how much of a turning point that is. will we see helicopter money? where you think helicopter money is the only solution worldwide? francesco: helicopter money may come eventually. i don't think the time is right now in europe. we hear this may be the case in the united states. what i see coming before helicopter money is the esm coming out with the implicit support of the ecb, issuing large amounts of money, distributing it to governments, all governments, not only italy or those in trouble, basically without conditionality in order to support a big european fiscal

program. ,rancine: mr. francesco papadia thank you was always for dialing into bloomberg "valent." -- "surveillance." we saw a huge move on the curve on the european bonds after the bazooka from the ecb. sovereign bonds still soaring in germany, italy, and france after the ecb stabilize measures to boost the economy. stocks were up, a little bit down. bloomberg "surveillance" continues on radio. ♪

♪ sink.the ecb's kitchen

expanded balance sheet i 750 billion euros. other central banks step up. the dollar' spikes. rush for cash and funding issues push the dollar higher while business confidence plunges. and the market gets the first real high-frequency economic data point with initial jobless claims as jp morgan announced 4% u.s. growth in the second quarter. welcome to "blooerg daybreak" on this thursday, march 19th. i'm alix steel. i ha a market check for you right off the top. you can look at where all the action is when it comes to the ecb. the move in bond yields is unreal. you e seeing bond yields lower in italy by 72 basis points. at one point, the greece tenure yield was down -- 10 year yield was down.