♪ ♪ ♪ ♪ >> good morning from london. i am they rotated -- nejra cehic. asian markets and u.s. futures rise as the fed unveils unprecedented measures, jumping over congress as they continue arguing over stimulus. president trump says the u.s. isn't built to be shut down. the u.k. becomes the latest to go under lockdown. germany is ready to back a rescue plan to help italy fight the pandemic fallout.

milan has seen a slowdown in new cases as wuhan prepares to lift its lockdown. ♪ nejra: welcome to "daybreak europe." we have a lockdown in the u.k. the wuhan lockdown taken for the first time since january 23, and the fed pulls out all the stops, extending its corporate lending program. the fiscal stimulus package from the u.s. the movement from the fed brings a little life back to risk assets, some green on the screen in u.s. and european futures. we see gold extending gains. goldman sachs says there's an inflection point after the selloff, and it is time to maybe move into gold. they are talking about the move from the fed easing the liquidity crisis that caused the

selloff in the first place. oil rising as well. the u.k. is in lockdown after prime minister boris johnson ordered sweeping measures to stop people leaving their homes for at least three weeks. police will break up gatherings and have the power to fine individuals who break the new laws. >> i must give the british people a very simple instruction. you must stay-at-home. because the critical thing you must do to stop the disease spreading between households, that is why people will only be allowed to leave their homes for the following, very limited purposes. shopping for basic necessities, as infrequently as possible. one form of exercise a day. for example, a run, walk or cycle, alone or with members of your household. any medical need, to provide care or help a vulnerable person. and traveling to and from work, but only where this is

absolutely necessary and cannot be done from home. that's all. these are the only reasons you should leave your home. nejra: joining us for the hour, the chief global strategist at nordia. andreas, what impact could this imposition of the lockdown, with lay, will have on the u.k. economy? positive for the economy. we have seen this, in china, italy. it will lead to a recession, if you can call it that, a political decision to close. but we can get out of the woods within 4-6 weeks, that's probably the best case when we look to china. nejra: we see investors selling the pound. one reason, dollar strength is

the other, the u.k.'s laissez-f aire attitude until now. what would you take around the pound now? andreas: i would sell it. arguably sterling is better poised to deal with rising credit risk. what happens right now, a lot credit risks are being transferred from the private sector to the public sector in terms of lockdowns, and one way to reflect that is to sell the underlying currency. there is no real credit risk associated, but investors reflect that by selling sterling. the massive issuance should be expected by the u.k. and would lead to a selloff in sterling, and i would expect that to continue. nejra: andreas stays with us. great to have you on the show today. let's go to maria tadeo, who joins us from brussels. give us the latest. the u.k. delaying imposing these

measures compared to the rest of europe. what's the outlook now? a complete u-turn from everything we heard until now from boris johnson, who at the beginning i am sure you remember saying he did not want to shut down the u.k., that he did not feel going the italian lockdown,erence to a would be appropriate. yesterday night, if you look at those measures, essentially telling people do not go out in the street unless you need food or medicine, very similar to what was done in italy at the start of the crisis, and now in france, germany. politically, it is seen, as a huge u-turn and the question at this point is why did it take so long? the only measures in place last week, closing schools, restaurants and pubs, only put in place four days ago. yesterday, we had a sweeping range of measures coming in.

what it does suggest is the curve was not improving, that perhaps the numbers the government was working with did not look good, and economically if you take italy has perhaps a benchmark of what could possibly happen, we know this will not be good for the economy, shutting down business. nejra: it's interesting. sweden is still one country in europe taking a laissez-fair attitude, no big lockdowns, allowing gatherings, shops open, things like that. but you point to italy and spain as perhaps indication of what happens to the u.k. next. any sign of inflection points? maria: spain is running behind italy about two weeks. we still see numbers increasing, but the government said it clearly, this will probably be the most painful we get. -- yet.

but when you look at italy, it's dramatic, cases have top 60,000, big numbers still. but when you look at increases day-to-day in the north of italy, we now see the smallest increase on a daily basis for the second straight day yesterday. that is perhaps a signal we are getting close to the peak, and peak, numbers would start to go down. that is good news for italy, but also of course for the rest of europe, because that would signal where the end could be for the rest keeping in mind everyone is a little behind. nejra: maria tadeo in brussels. great to have you with us. u.s., house speaker nancy pelosi has come out with her own $2.5 trillion stimulus plan, an attempt to influence negotiations in the senate. it would grant a temporary reprieve for payments of mortgages, cars and credit card

bills and would include aid to the airline industry. annmarie hordern joins us from new york. where are we with the stimulus stalemate? rie: another day that they were not able to agree on the stimulus relief bill in washington, d.c. the latest from politico, senator chuck schumer said likely, according to people familiar, we would see a bill on tuesday, and what is included in that, one thing the democrats have really pushed for, significant oversight on the $500 billion, the stabilization fund, and how corporations will use that money. we saw that in nancy pelosi's bill, it's really being used as leverage, no house numbers will come back and vote on that, but using it as leverage to get their point into the senate. on top of all this, we see the, this really implicating the markets. yesterday, u.s. equities ended

the day lower on this. there's been a lot of pressure to get this done, and more and more states are continuing to lock down. yesterday we had massachusetts, indiana order shut downs. all the while, it's clear the administration is having concerns and frustrations with this. president donald trump yesterday said that america was not built to shut down and it will not last 3-4 months, and then we heard james bullard calling for the economy to be shut down for three months. obviously it's becoming very frustrating and controversial, you might say, in washington. nejra: annmarie hordern, thank you so much. the dollar weakness we see in today's session after 10 straight gains. some optimism around stimulus, but mainly to do with the fed. fedpresident said he called chair jerome powell to thank him for his efforts to fight slowdown by the coronavirus at

break. the fed offered to directly finance u.s. companies, jumping ahead of the government which is still struggling to produce a support package for american businesses and families. in a press conference, the u.s. president said the country is not built to be shut down. >> i am not looking at months. i can tell you right now. we will be opening up our country. we will be watching certain areas. we will be practicing everything deborah is referring to. we will be watching this closely. but you can't keep it closed for the next, for years, ok? this is going away. we are going to win the battle, but we also, we have tremendous responsibility. the hourining us for is andreas, chief strategist at nordea. have we seen the last of the funding crisis and is the dollar

strength we have seen behind us for the moment? andreas: i don't really think so. obviously, the fed, it's obvious qe- want to go ahead with ternity, expanding the balance sheet to take steam out of the dollar. i'm not convinced yet. everywhere i look, the dollar looks expensive on other measures. s, the yen, in the libor dollar looks expensive everywhere. i look and i am not convinced they fed have done enough. what we need for dollar strength see economies back on track worldwide. as long as economies are in lockdowns, i'd assume the dollar remains strong, simply due to a lot of debt worldwide

denominated in dollars. nejra: how can governments then perhaps offset the negative economic effects of lockdowns? that's becoming a discussion now, something president trump had been considering this week as well, perhaps alleviating the lockdown in the u.s. to limit economic damage? andreas: i essentially think it's impossible. if we look at bullard's plan proposed yesterday, he essentially said you need to do some sort of temporary universal basic income, close to the income level of employees in the economy, for at least three months. that is one way to mitigate the crisis, but it comes with large losses for capital owners, and that's essentially what we see across the board in asset markets these days. so it is not possible to mitigate the economic crisis unless you open the economy again, and i think that's why trump is looking to open the economy again, because he knows it will boost his election in november -- he knows he will

lose his election in november if he doesn't open the economy in a couple weeks from now. larsenandreas steno stays with us for the hour. first word news. china is lifting the lockdown on the epidemic's center of wuhan. transportation restrictions will be lifted and people will be allowed to enter and leave the province. the international monetary fund says to expect a global recession this year, but the imf thinks that will be followed by recovery in 2021. nearly 80 countries have asked the fund for emergency financing. the idea of a joint u.s.-saudi oil alliance is under consideration to stabilize oil prices, according to the u.s. energy secretary. this suggestion comes as crude prices slumped amid the coronavirus pandemic and price were between -- price war

between russia and saudi arabia. coming up, ackman betys on a u.. recovery. the billionaire investor says he's upping positions in several american companies. the story you need to know, next on bloomberg. ♪

nejra: it's "bloomberg daybreak: europe." here's what you need to know. bill ackman is betting on a economic recovery in the u.s., telling bloomberg pershing square covered its shorts and has reinvested in certain companies. >> we had a very large short in the credit markets. 97% of that was gone as of this morning, and we took the rest off earlier in the morning. we are all long. no shorts. betting on the country. here with more is my colleague, manus cranny.

good to see you. tell us more about ackman's u.s. recovery bet. manus: it was interesting that he lifted all his hedges. you think of the doom and gloom and despair from him last week and here we are, i am ripping off my hedges in the credit market, they are gone, and he is bet.n, a $2.5 billion the nature of the bet is quite u.s. centered. lowe's, berkshire hathaway, starbucks. the argument at the core here is these companies are fundamentally torn apart in valuation, that cash flow will return. he no longer has the short position. what's interesting, when you lo minard, pre the

fed announcement he said that bottom fishing is the most rldensive sport in the woi and went on to expand, may be capitulation had not happened. when you look at the different views, it is about what the fed is doing. is it radical? is it innovative? perhaps the answer would be no, it is not, but when you look at the debate it is this. waking up this morning, we have the fed narrative but also the political procrastination and prevarication on the fiscal side, and weigh that against the other aspect, the narrative coming from the u.s. podium. so you have two powerful drawdowns on the market versus a powerful alpha. the question, will the alpha be drowned out by the other two procrastinators? that's the issue for markets. ackman is all-in, hedges are gone and the names are quite interesting in terms of position

. im saying the fed, pg markets starting to feel a tsunami of liquidity, but jp morgan saying it may not be enough if the outlook worsens. in italy, the number of new coronavirus cases and deaths has fallen for a second day as germany seems ready to back a rescue plan. berlin's preferred option would be an enhanced credit line. they are not yet on board with the idea of jointly issued credit bonds. andreas steno larsen is still with us. let's first talk about the credit line via the esm, which could be a precursor to actually ich was never used during the crisis. do you see that is the next logical step for europe? andreas: it probably is, but not the optimal solution. eurobond would be a solution, but it's a tough seven

germany. it's typical of germany to try the first option here, with the program. i think it's likely we see the esm in play over the coming it's not the optimal solution. common burden sharing is necessary in this situation. nejra: what would it mean for investing in europe if the landscape shifted that way? credit: price in more risk. that's the move over the last five, six trading days. have to take on more risk than the rest of the euro area in a bond situation. nejra: earlier, talking about the fed, you said they need to

do more. what more do you expect to see from the fed? some people out there say it may not be enough if the crisis gets ey've, but other say th throwing everything at this. andreas: my suggestion would be buy commodity futures. that's one way to prop up expectations of inflation in addition to dollar liquidity. it's a good way to get dollars flowing around the global system globally, buying commodity futures. i know it sounds far-fetched, but so did a 0% policy rates just a couple weeks back. so i guess that is my guess for the next step. nejra: you have a great note out, talking about the fact of the new realities of getting use to modern monetary theory and universal basic income. the landscape will shift in ways perhaps some of us can't imagine. week,oking at pmi's this what are you expecting to see

out of europe? andreas: basically the worst figures since 2008. italy's pmi will likely look like china's from february, under 35. in germany, i'd expect 40 readings, even worse than in 2011, 2012 in the debt crisis. so we will get a big test of whether we will get weaker pmi's than post-lehman, 2008. nejra: andreas steno larsen, markets, great to have you with us. there is risk appetite coming back into equity markets. talking about a bear market. a low,equities hit dollar weakness dominating markets. we see oil gaining, gold

extending. coming up, pressure piles on as worsens.s in iran the u.s. being blamed for blocking aid to the islamic republic. more on that next. ♪

cehic in am nejra london. the fed pulls out all the stops, equities and futures gain, and the dollar loses king status at least for the day and gold and oil are rallying. another impact from the coronavirus crisis, iran. the humanitarian crisis the coronavirus outbreak has caused is increasing pressure on the u.s. to ease sanctions. the republic leaders and some aid groups say the u.s. maximum

pressure campaign is worsening the disaster, while the u.s. says it is ready to help and blames the country's mismanagement. is there a prospect we could see sanctionssed on -- eased on iran as a result of the crisis? >> right now the rhetoric, if you can call it that, coming from the white house and secretary of state mike pompeo, has been very strong. he sounds is still quite determined to make sure the maximum pressure strategy the trump administration has been using against iran continues, and said a couple weeks ago they will continue doing that with sustained pressure. at the same time, in iran we had up until yesterday president hassan rouhani say they will not accept any aid or assistance from the united states. the rationale from the point of view of the government in tehran is that they don't want to accept something from the united

states while the united states is kind of collectively punishing the country. that's how they see it. he likened it to the trump administration offering a single glass of muddy water to the iranian people, while keeping them from accessing a free-flowing well of freshwater the rest of the world can access. so they don't see it as a genuine offer of help. they find it from their perspective, they think it is a very dishonest gesture, because they are still sanctioning iran, applying sanctions until last week. nejra: briefly, golnar, as russia, china and european countries have been urging easing of penalties, what does all this mean for the leadership in iran? golnar: they are under a huge amount of pressure, as most countries are in the world, to face this thing. iran's relationship with china has been extremely important and key here.

unfortunately, it's also been one of the reasons the coronavirus entered iran in the first place. motevalli, thank you so much. up next, the u.k. on lockdown for three weeks. we look at the impact on business. this is bloomberg. ♪

nejra: good morning from london, i am nejra cehic. asian equities and u.s. futures rise as the fed unveils unprecedented measures jumping ahead of congress as a government continues to argue over stimulus. president trump says the u.s. is not built for a shutdown. the u.k. becomes the latest to put its citizens under lockdown. germany is ready to follow -- ready to help italy.

and wuhan prepares to lift its lockdown. to "daybreak europe peter carr lockdown whilets the u.k. becomes the latest. the crisis causing countries to take unprecedented measures. we are seeing a little risk on coming into the markets as a result of that. gains in u.s. futures. a rebound from 2016 low in equities. crucial, dollar weakness. feeling a tsunami of liquidity. jp morgan morning the measures may not be enough. gold also continuing its rally. goldman saying now is an inflection point and now is the time to purchase gold.

willentral bank says it dip its toe into the nearly $200 billion credit market. here is dani burger with the details. david: this was by far one of the biggest market reactions we saw after the fed's announcement. we saw these funds search -- surge in price. acted as a key release foul for the market. investors sold these hard and we saw these etf's falling more than the blue bonds that they track. .his was a strange dislocation a lot of market players were worried about this odd difference. made itsfed announcement yesterday, and a billion dollars flood into the markets and it looks like the fed's stepping in fixes the

dislocation. another key announcement was that any corporate using their plan to do for interest or principal payments would not be able to issue buybacks or dividends. this is a big hit to the buyback binge that companies have been going on in the last couple of years. one thing to note is that the buyback binge is expected to end and liquidity as the number one priority for companies. we see a lot of dividends and buybacks hold from the market in the last 24 hours including coca-cola, boeing, best buy, across the board. why is this important? 730 billion dollars in buybacks were issued in the u.s. market. about a 3% yield equivalent. if we don't get that this year, that is a huge source of return set to evaporate from the market. nejra: thank you so much, dani burger.

let us turn back to the u.k. -- the latest to go into full lockdown. ordering sweeping measures to stop people leaving home for at least three weeks. people will be allowed out of their homes to take one form of exercise per day, travel to work that cannot be avoided, medical care, or to help a vulnerable person. joining us now is jasmine whitbread, ceo of london 1st. great to have you with us. was this the last move -- was is the right move from boris johnson? businesses had sent their people home some time ago. the impact will be significant on london. it will be very severe. london is a big chunk of the u.k. economy and it is a very service-based economy. but i think companies are ready for it. nejra: you say companies are

ready for it, jasmine, but over the weekend, i who live in london saw restaurants and cafes still open for take away. presumably a lot of them will have to shut down completely along with perhaps other businesses like bookshops or anything nonessential. how many defaults do you expect out of this? how many companies do you expect not to be able to recover? i think the government and the bank of england is throwing everything it has at this. believe they are willing to do more. writing support for the wages, supporting companies to be able to retain their people and to support their supply chains. deferment.

there are a lot of other sectors though that we have not heard so much about including construction, higher education and these are all areas that the government is now looking at. it is totally open to suggestions about what would make a difference. clearly, time is of the essence. that restaurant owners hearing from the head of u.k. hospitality. it is a very severe impact we expect on london. earlier this month, there was an estimate done by the center for economics and business research that estimated for every day of shutdown, which we have effectively gotten into, would cost the london economy 495 million. and over a month, that would be over 10 million.

london is a quarter of the u.k. economy, nearly. it is significant not just for the capital buffer the country. nejra: in which sectors do you expect to see the most job losses in london? has been a lot of focus on hospitality, retail, and leisure. we have already begun to see job losses there. there is a lot of focus at the ingent on the freelance community. theaters to people working on construction sites. it is going to be important to support those people as well. i think it will be across the board. some businesses are well set up to have their employees work from home. we know a number of the members here at london 1st have thousands of people working very

effectively using technology available now from home. side that willd drop off. our economy is going to be hedge. nejra: from -- our economy is going to be hit. nejra: what are you peering from your members in terms of cash flow issues? how confident are you that these will be resolved? you said a lot of members -- you said a lot of measures had been put into place. jasmine: after employee health, cash flow has been injuring there is liquidity, has been the number one priority for businesses large and small across the capital. some are really going to struggle. the good thing is that businesses are helping each other as well. larger businesses are reaching across their site -- across their supply chain to smaller

businesses. this is night and day to the support they are seeing from their banks. compared to the financial crisis a decade ago. landlords as well are behaving -- our members are reasonable and dealing with, for example, retail and commercial monthly -- they are being negotiated on a case-by-case basis. there is a lot of support coming forward but you are right, there will definitely be an impact. it cannot be avoided. nejra: this is the first lockdown. what if we get more? jasmine: that is what everyone is thinking, of course. we are told it is three weeks and then under review. i don't think everyone is expected everything to -- i don't think everyone is expecting everything to be resolved in three weeks.

not in the medium-term, the longer-term. there is also an eye on the recovery. we don't know when we will get back to a slightly more normal situation but we know the current situation will lend. -- will end. most businesses have a plan in place around their cash and people have an ion the future. london has been hit many times before. it has many of the attributes needed to survived the eye of the storm. with: great to have you us. thank you for joining us, jasmine whitbread, ceo of london 1st. it says that china is starting to make a gradual recovery.

up next, we will be talking commodities. seeing a rally in gold and oil. seeing the inflection point in gold.

nejra: this is "bloomberg daybreak: europe." for aoil is rallying second day following the sweeping set of measures to support the world's largest economy. investors are looking at a new saudi-u.s. alliance. it is one idea under consideration. he's been to us exclusively. >> -- he spoke to us exclusively. ideas that ofany floated around the policy space. i don't know if it will be presented in a formal way. nejra: let us get more from my

, fromor, manus cranny dubai. some relief in oil? how long could that last? manus: if there is any veracity to what he said -- can you imagine the u.s. and saudi arabia coming together? stranger things have happened. if you look at the rally we have seen in the last 24 hours, in part it is due to the fed and stimulus but has anything structurally changed on the demand side? comingtoric of the u.s. they said beut prepared for a 20% drop in terms of demand for the first half of the year. we know everyone is trying to reach for market share. i want to show you what the nigerians have done. this is about the discount that nigeria has gone for in terms of what they are offering their oil

for to the market. you see this reach for market share from saudi arabia, from , from nigeria. what is most important is that as we see this rush to the bottom, in other words, how much can you discount your crude by to share your market share? 1985, 1986, the 1988, 1989 crisis, it was the african producers that disemboweled the market. this is the risk. they go head-to-head with brent in the north see and that is where the real -- in the north that is where the real pain as. reason why is storage is filling up.

66% of the storage around the world is filling out. in the exclusive conversation with dan brouillette, stranger things have happened. do not discount the possibility of a u.s.-saudi alliance of some form. nejra, good morning. nejra: a very strange world. i think it is the first time we have heard you understate something since i've known you. andreas, what is your strategy around the norwegian krone? >> it is a really tricky one to trade these days. intraday volatility of 5%-10%. manus said on what on the oil side, i think you need to focus on the demand side. if you focus too much on the supply side, you will almost

always get it wrong. on the demand side, would you bet on more or less lockdowns worldwide? i know what i would bet on. that means more bad news for the oil price. if russia and saudi arabia canceled all production in the next month, we would still have an oversupply of oil worldwide. the demand side is the important side to watch and it is not looking good. the spills over into norwegian krone and that is not positive for the story. nejra: we keep talking about whether markets are recession risk or not? risks are i guess priced into dollar markets. we have not seen anything like 20-30 years.t it has been a massive move.

in that sense, of course, the dollar market looks elevated but it is still unprecedented. we have never closed down more or less the entire global economy simultaneously. that is a bad story for oil and so we cannot use history to judge what is going on here. nejra: let us talk about gold as well. sachs is basically saying it sees an inflection point after the selloff. they say the reaction from the fed will quell the selling pressure. would you agree that we are at an inflection point for gold right now particularly if you take the dollar side into account? >> i think we are getting there. i am not really ready to call this for gold.

the next move we need to see, i think, for gold to move higher is the federal reserve -- i think they are slowly getting there. . don't rule out they have not told us yet outside of a few speeches -- they said the yield curve could be the ultimate end to a recession toll. once we get closer to the yield curve, you should buy gold. nejra: what is your outlook for inflation? does that feed into your view that you should buy gold? >> it does. right now, inflation expectations are falling off a cliff. call, itight on my oil will still be true for the next month or two. ultimately, with all of the

dollars printed in the euros printed and the yen printed, you have to bet on higher inflation down the road. let us assume we open up the .conomies in a couple of months we should start focusing on the supply side again and then we will likely see some constraints once the demand side opens up again. that is also an inflationary story. on the other side of all of this turmoil, there is some massive reflationary stories in store for us. the 12goldman reaffirmed month target for gold to get to $1800. near-term and long-term outlooks are constructive. action is looking constructive for equities with the fed pulling out all of the stocks. u.s. and european futures heading up. we might see a rebound. .he dollar taking a hit in the 10 year treasury yield edging higher.

coming up come your morning call . j.p. morgan says nearly a trillion dollars is waiting to flow back into the stock market. we have your morning call next. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." may soon rescue turbulent markets according to j.p. morgan. nearly a trillion dollars waiting to rush back into the stock market. here is dani burger. call from is a bulls j.p. morgan. the force of selling is over. over the last few weeks, volatility has risen and you have systematic investors volatility.d to it looks like the volatility

picture is stable. what is going to take its place is 158 billion dollars of rebalancing flows. this is common sense. if you have all of these investors with market mandates and you need to have different allocations for certain assets, they will need to rebalance. if you are a real money investor, you have a 60-40 or folio, you will need to rebalance and move back into stocks. real money is underweight risk and overweight bonds. u.s. pensions. they would have to buy about $400 billion worth of stocks to get back to their normal allocation. j.p. morgan says timing is unsure. nejra: bloombergs dani burger. andreas, it seems markets are struggling to price in how long the recession is going to

continue. everyone says a recession is a certainty but when you look at the 10 year treasury yield, 50 basis points above a record low and global equities at a 2016 low. these are not markets pricing a depression. should they be? >> they should price in the larger risk than what we have priced in right now. essentially, if you look at the outlook, it is impossible to look 14 days forward. we have no clue whether the economy will open up again. it is not an environment to buy anything. my point is that if we look at the pmi's which we will get out today, they will look quite reminiscent of what we saw in 2008. we are not there yet on equities. even though i get the calculations from j.p. morgan, i think you need to look further ahead than the technicalities with rebounds. nejra: what would be your top trade in the next two weeks if

that is the visibility we have? be to buy theould long end of the dollar curve. the fed will do whatever it takes to bring interest rates closer to zero all the way out. i still think that is a decent risk to watch for. buy long bonds. nejra: thank you so much for joining us. the chief global strategist. we are seeing some inflows into equities in today's session both in the asian session but also u.s. and european futures getting a bounce after global activities -- global equities hit a 2016 low. the dollar has taken a hit. the funding crisis is not over yet. im. yei

oil and gold catching a bid as well. that is it for "bloomberg daybreak: europe." the european open is up next. this is bloomberg. ♪

>> good morning and welcome to "bloomberg markets." this is the european open. i am matt miller. risk appetite rebound. u.s. and european equity futures follow asian stocks higher after the fed announces a sweeping rescue plan. congress fails to agree over its