>> good morning from london, this is dubai, bloomberg day break europe. tronger than expected china p.m.i. as u.s. stock future turn negative. 18-year low as the market comes to a close. coronavirus ys the outbreak in europe may be approaching its peak, italy

set containment measures until at least easter. 16% ork city reports a ncrease in deaths in six hours as the white house and congress onsider a full ground of stimulus, hopes for a vaccine. break europe, i wonder how optimistic investors to be about the chinese dates, better than expected for manufacturing and p.m.i., cturing ultimately china firms saying the business was better than the where we had the worst contraction since 2005, of chopper water still ahead, new export orders till in contraction with the irus going global and employment. > you need the rest of the

world to open up to drive those exports, to drive that in china. the question for marketing is no. coming in, na date o you begin to debate not v haped or u shaped or almosted sharoned recovers. r. wilson says the roses are unlikely and the radiation phase going to happen. of reselling tend 2018.me, but it didn't in hat's the basis of the theory we'll debt later on. he saw global . we're not today, seeing the same risk on, you're seeing red on the screen and

a caveat, of nd course, we have month and quarter and rebalancing. japan, year-end rebalancing. again andin the doing a little bit of weakness in then. is the worst global for global entities since 2008. >> head towards its worst quarter, manus. let's talk about the latest in the u.s., president trump has at idered a national stay home order and decided against it because some of the parts of in it at all.en't his administration will continue discussions. president trump: we have talked about it. obviously there are? parts of the country that are in others.ler trouble than >> if we do that, i'll let you know. pretty unlikely at this time. manus: let's get to new york.

ann mary, so some startling and for new y sad numbers york in terms of the latest numbers. >> new york state and city are the epicenters of the pandemic in the united states. not supposed to see the two weeks. of this lld right in coronavirus deaths. increase in just six hours. coming out numbers off new york. center open bbiot p, it's lucial a lot of conferences. -- the last time comfort was here in new york

responders on 9/11. 1,000 beds on the comfort and idea of opening up all hospitals is to make them comfort so they can focus patients.ronavirus you can see it's very desperately needed given the of these hours we're seeing. the white house and congress sureth round for a of stimulus. >> no timing just yet. we only just had the $2 trillion legislation.into they are discuss it. ose nose said they are collecting information a. total will be about $600 billion. financialr state aid, instruments, the mortgage market another tially

direction. get rid of ove to he limit on state and local production. likely there is going to be a debate on what is in the phase 4 era. yesterday, again, we see the president talking about, fine.of the country are in terms ink we need of the lock-off. at the doing different podium. is s president donald trump talking the entire country doesn't need a huge lockout,

huge country. we had the governors of maryland nd virginia order statewide lockdowns which means you can always leave your house in ou're going to the grocery store, essential worker, the idea is to stay home. is the entire premises of these lockdowns. trump is trying to say, we have seen this, enact at a nationwide level. they obviously are considering. e saw president trump really in t-- he et hots back listened to dr. fauci, that is happening. this is something that they're probably still going to consider. on the table yet. so much.you joining us is the global wealth st at p.k.

management. great to have you with us. can we go back to the china p.m.i. data for a moment which sat data point we had overnight. should the rest of the world as at this data from china a sign of the potential recovery e could see from the virus whenever that comes? you look into the signs are cau causeness. those t.m.i.s how are athleticed and what answered to being and they are being done better than they were before and index is written like we could see some point.

so what it tells us, there is sort of normalization, we indicators and we manufacturing sector, it's a learning situation, but given what is happening in the rest of the world, you could see some relapse. could face some short team our normefore we go to situation. -- closedown, ee month i ask you are they underpinned, recovery for us. they're j.b. any, days point.[rao]

that basket of policy tell me what would be the policy mechanism and mix post-impact in china. >> i think it's a mix of both. that's correct. is one of those countries face.there is 5% of gdp already in pal more es, changes and the dog tiv at the local level. you couldsee more and see more waiver. in could see more particular. on the monetary side as well. e have seen recently some targeted and liquidity support. china, target both measures to those companies and needed.ds that are

that's the reason we are easonably optimistic about the outcome for china. > is most of the bad news priced into equity markets now? would say so on some -- metrics, we start to see revisions in terms of earnings and valuation and other metrics we could see some, but has to turn it into much lowers earnings expectations. fundamentals, i'm not sure that those fundamentals matter other factor, liquidity position, some mention as as you well, end quarter rebalancing, those more technical factors and we stay cautious

on that or clarity especially as you said as well, is , the outlook challenging, europe, china, necessarily yet in other countries, on the fundamentals and technicals, we to see more clarity. >> we'll discuss more of that in a moment. thank you so much. now let's get to the first word news. coronavirus outbreak in italy and spain may be that's the a peak, hope of the world health stabilization, the lowest number in two weeks. the u.k. government is facing up wed pressure to speed virus testing. there was confusion after testsg a target of 10,000 a day. a statistic showed 7,000 people them.lly received people were being tested twice.

falling behind its european peers in testing for the violence. to rule by right decree indefinitely, it puts the his sole command as the coronavirus hits europe. no rules to democracy, of nents disagree, erosion the rule of law. crisis will reshape investors psychology and habits, he added companies are re-evaluating the supply chains and reliance on travel. i have never experienced anything like this. hours a day on journalistsby 2,700 and analysts in over 120 countries. coming up on the show, the worst run on record for stocks plunged the most since the financial crisis, we have the numbers behind the

that shook the world. that's up next. this is bloomberg.

manus: this is bloomberg day break in dubai and london. speed with some of the markets. we're really trying to reassess from the world health organization that we're hitting peak, the superlatives fly 2008 for global equities, european stocks come views on that. let's have a look at 10-year

yields, it's d interesting, we'll hear about the unemployment rate in the next quarter. return to a rocking economy. there is aas i said, bit of a squeeze for dollars and mr. trump called mr. putin, they're talking. an amazing deal between the u.s. and russia on oil markets? to the economic freeze brought global pandemic, the collapses on oil prices, nflicted damage in the markets this year. most een one of the destructive quarters since the great financial crisis. you it into focus. > the numbers are certainly staggering, the past quarter wiped $20 ties trillion of value off the market. cases of corona

with the growing distress in markets. even worse, the worst quarter since 1987. it should be no surprise that sectors of energy was hardest hit, it wasn't just but supply as well, engaging in a price war, the for oil rter on record as prices continue to dip. march e vix in early brought with it the highest level on record. volatility loop of selling brought with it more us the biggestng record.ke per quarter on we saw treasury volatility. to havenz in this quarter, the only safe bet was dollar, gold and treasuries for cash rs rushed trying to make margin calls and

getting close to the ground. april bring now that the quarter is over and done agreement, is no strategists say the bottom is in while the asset management worst is ay that the still yet to come, manus. context, thank you so much. well says the u.s. can afford adding trillions of dollars in coronavirus relief and won't hamper the country's ability to grow in the future. exclusively to bloomberg. james: i did want to see relief, i don't want to call it stimulus, pandemic relief. what i interpret the program trying to do is stabilize as we and businesses work our way through this investment in our national the next couple of months here. we do have aoyment

blog on this, if you read the see that ully, you'll bind the way to unemployment rate, somewhere and the upper bond is 42%. identifying vulnerable workers in this environment and what's going to those workers, some of those workers are going to have to seek relief so that their bills through this period, so we're expecting spike, mployment rate to but let's call that pandemic relief. then they can pay their bills. once the virus goes away, then we'll be able to return to normal. if this all works smoothly and a lot in the legislation as well, we'll be out on the other side and get the economy rocking again. anus: that was james bullard speaking to bloomberg

exclusively. the u.s. side to europe, the its could be approaching peak, the world health organization said there are of some stabilization in the european outbreak, that's as the hardest hit italy reported smallest number of new cases in almost two weeks. number of other european nations aren't moving toward public estrictions, cypress tria and following its own measures, trying ng by a record, to calm the financial markets covid-19.rom look atext, frederic, i your twitter account, if i look billion, a , $40 smattering of commercial paper $15 billion of p.e.p. loading, go big

scale y at home, so the of what you're seeing, just give me your assessment of that scale and can it endure? rederik: absolutely it's been massive, because of the number ou mentioned on the emergency program, it was two days, $16 out of a huge number the 760 billion that they're planning to spend this year. means two things. they are sending a strong markets, it's usually front king and they are loading assets was probably a flex ability. we don't have the details yet, but the bull markets over the the spreads have compressed, but the volatility reduced radically. still some volatility in

equities, in high yield bond on.ket and so forth and so i think it's a huge success and money where its mouth is. money speaking of putting where their mouth is, let's talk about the potential process o.m.t. which was never used during the debt crisis. twitter a good point on that many people picked up on, because there were no issue there might not be much point actually in o.m.t., the discussion around credit lines and how that may lead to o.m.t. goes on, will it happen and will it have a big on the market or is just the discussion around it enough european bull arkets, particularly in the periphery?

frederik: there are limits still that you can spend on the o.m. t. the matures one to three years. do.'s as much as we can the discussion is moving on and actually quite fast, again, this morning, we have another news netherlands, here and there is now a new crisis, some e plan.f martial the european response needs to we have than anything seen before. o.m.t., the that small credit lines, maximum is appropriate response. we need something much bigger.

anus: pretty stunning response mechanisms. we'll pursue that conversation in just a moment, coronavirus that agenda.of frederik. what else do we got? of e speak to the chairman the supervisory board about bank dividends. at 8:00 a.m. u.k. time. hina's manufacturing activity slashes expectations and hitting a record low last month, the lowest economy on the way to full capacity, we'll discuss. this is bloomberg.

>> this is bloomberg day break. i'm nejra cehic in london with

manus cranny in dubai. we're seeing red on the screen for a lot of asia. u.s. futures on the back. the 10-year yield slips. coming up we'll talk about that. ♪

manus: good morning from dubai. i'm manus cranny. nejra cehic in london. day break europe. your top stories. china p.m.i. beats estimates. a mixed picture for asian stocks and mixed futures. crude oil at an 18-year low and a volatile quarter comes to a close. the w.h.o. stays coronavirus outbreak in europe may be approaching a peak. italy looks set to extend easures until at least easter.

new york city has reported a 16% increase in deaths in six hours. e white house and congress consider forced stimulus. johnson & johnson shares surge on hopes of a vaccine. there is a number of moving parts that we have to try and consider here. one is the chinese data. does it give any veracity to you that is the question. nejra: we have been seeing u.s. futures fluctuate overnight. in the green and then the red and now pretty much flat. we have seen a better than expected number on manufacturing and nonmanufacturing p.m.i. really chinese firms have asked whether things have improved since the last reading when it was at the worst since 2005.

are choppy waters ahead? the u.s. and others are still in ockdown. construction still contracting as well, manus. manus: morgan stanley said the s&p down .2%. a retreat to the lows is unlikely. liquidation risk probably. you be see another phase of that. 3.5% higher. larry fink thinks it is not without risk and suggested the market has reached a bottom. there is a couple of different views there. the dollar. you have more dollars to take you through next quarter. you look at libor, again, let's see what happens there.

the bloomberg commodity index, i think my favorite -- throughout the carolina sadge this is down 35% on the quarter. you are looking at some relief for those importing nations on the commodity front. nejra, we have to talk about mr. trump, haven't we? nejra: yes. let's talk about the latest in the u.s. president trump saying he considered a national stay at home order but decided against it because some parts of the country are not in trouble at all. he said his administration will continue discussions. president trump: we have talked about it. obviously there are some parts of the country that are in far deeper trouble than others. if we do that, we will let you know but it is pretty unlikely, i would think at this time. nejra: in europe the virus could be approaching its peak. the world health organization said there are siverpbes stabilization in europe's outbreak as hardest hit italy

reported its smallest number in almost two weeks. there are a record number of applications asking for financial support. paul thompson spoke to bloomberg about the state of the economy and the i.m.f. response to the pandemic. >> bonds is unway of providing a european response. -- one way of providing a european response. fiscal policy. what are the implications from that. we know that as you said, the e.c.b. has to write a very powerful response. and european leaders. to work on the -- to have a european response. that's one way of doing it. i think what is important is that there will be also a european -- in addition to the

national response. if there is one thing we have learned from the crisis eight to 10 years ago is don't estimate the europeans. they will take whatever actions are required. >> the managing director said more than 18 countries have asked for assistance. a couple dozen of those middle income countries. have any european countries asked for actual assistance? >> yes, the ones we are focused on now. in particular, the smaller countries in eastern and central europe outside the e.u. the countries inside the e.u., the advanced countries, they generally have the policies that is required to act forcefully. if you get outside the e.u., you have a number of countries in shallow financial markets. it will policy space is more limited.

-- the policy space is more limited. manus: half the euro area's largest lenders have announced their delay. scrapping dividend payments on 2019 earnings. commerzbank joins the growing list of lenders. joining us now on the phone is the global head of bank research at citi. great to have you on with myself this morning. ing, unicredit, kbc. so the scale of retention. can you put that in context with us? is that a temporary retention and does that all go to capital buffers? how do i look at this from the e.c.b.? >> sure. all or most eurozone banks will not pay a dividend for the first

half of 2020. for the full year 19, it depends if you have your h.e.m. or not. most banks don't have it. most blanks listen to the recommend tation of their regulator, the e.c.b. some have their h.e.m. legally they have agreed to pay out money. i don't know what will happen to some of those panks. most banks are suspend their full-year dividend in the eurozone and will suspend their first half dividend. the swiss and the brits, taking a different approach. the brits we don't know yet. the swiss a slightly different approach. nejra: great to have you on the show. in terms to have the banks under the jurisdiction over the e.c.b., has the market always discounted the suspension of dividends? >> that is a really good question. dividends being suspended will add to capital buffers.

it probably adds about 50 basis points or so to capital, but the really big question right now for bank investors in the eurozone and globally is how deep is this recession going to be and how long will it last? the biggest problem that the eurozone banks face is that they go into this recession with low profitability. balance sheets are much stronger than 10 years ago. loads more capital. lots more liquidity. the problem is earnings. income ratios are high. margins are already low. you're going into this recession in the second quarter, economists are talking about being down 13%, 14% year-on-year. that's way deeper than what we're going to see in asia and the u.s. they have a particularly different macro economic challenge and business model challenges of low profitability.

manus: one of those challenges is going to be potentially defaults and credit losses. you have an interest rate mpression at perhaps rolling defaults. take those two facets and tell me what you're projecting at the moment, if it is a short sharp slowdown and some kind of recovery in the bag quarter? >> yeah, yeah. so the margins won't be that great because rates are already so low. so the european banks, we have trimmed the estimates to n.i.i., net interest income, about 5% so far in the last month reflecting the tougher environment. we have made much bigger cuts in the u.s. and asia where n.i.i. is going to fall faster because of margin pressure. low losses, credit losses,

particularly the difference this time around that makes it so different than previous crisis, in previous crisis, you could look at the effect and say what is my exposure to energy or airlines. actually it is the broad economy. you're asking the question is what is my exposure to the economy, particularly the s.m.e.'s. when you're talking about double digit g.d.p. declines, you're going to see big increases in loan losses. four to six weeks ago, we were forecasting loan loss provisions. 45 basis points. in a stressed environment, if 2018,ok at the e.e.a. for you could get losses triple compared to our base case. that we had four to six weeks ago. depending if it is a u or an l, this could be higher or lower.

nejra: should investors be reducing their exposure to eurozone banks versus swiss and u.s. banks right now? >> the big advantage of the u.s. banks and to some extent swiss banks is the strength of that business and the business mix. the u.s. banks have also suspended -- they have suspended buy-backs. the u.s. banks going into this down home run in relatively strong health. in particular, we're talking about all the downside. there will be some pretty good numbers on the trading and the capital markets businesses and the fixed income businesses in the third quarter. the u.s. banks are generally better placed to capture that. trading, some of the jpmorgan and others. i don't know how much that will reada cross the the eurozone banks. the swiss hopefully will

benefit. credit swiss is one of our top six. hopeful they will benefit from this trend. tronger capital markets. will: with that arbitrage, that differential widen, socgen, b.n.p. paribas and the other ore are you going to see differentials? > you want to avoid the s.m.e. of the strength in trading, the american and asian banks and to some extent the swiss banks that are strong in asia and the capital markets give you that. if you look at aen i talian bank or a eurozone bank, you'll get a

lot of exposure. economics how long the downtown lasts. policy makers are giving huge amounts of forbearance capital relief to the banks. it is kind of downturning a lot but we expect eurozone to be the eaker link in the global context. nejra: our guest stays with us. coming up, we'll speak about bank dividends. don't miss that interview at 8:00 a.m. u.k. time. let's get to the first word news. the u.k. government is facing renewed pressure to speed up virus testing. there was confusing news they hit the target of 10,000 tests per day. -- gary's parliament

--gary's parliament degrees, the white house and congressional democrats preparing for a fourth round of timulus. $600 billion in proposals including more state aid. global news 24 hours a day and on air. powered by more than 2700 journalists and analysts in more than 120 countries. otes -- ♪ manus: we're going to dig a little bit deeper into theecommerce story, the winners and losers. ebay. what are they doing to stop sellers? we hear from their vice president for the u.k. this is bloomberg. joe torre

♪ ♪

nejra: this is bloomberg daybreak europe. i'm nejra cehic in london. manus cranny in dubai. hand sanitizer and toilet paper have cleared supermarket shelves. for many online shopping has become the only way to find items. joining us now is the vice president ofebay u.k. great to have you on the show. thanks for joining us. good morning. it is known as price gauging. unreason brooklyn late ining prices. you are cracking down on this atebay u.k. how are you

cracking down on this? >> we don't want this practice on the platform. none of our buyers and sellers in our community want it either. the ve doubled the size of team that inspect it. they work 24/7. we took action last week to restrict the sales of masks and hand sanitizers to a small list of sellers to make sure we keep nappies check and for and toilet roll and hand sanitizer, we have restricted consumer selling. only businesses that register with us sell. we think that will stop opportunistic sellers trying to take advantage of the current situation. we continue to monitor it. we have taken down half a million that violate policies.

and sellers in the process. manus: it is good to see and to hear that you're taking action at a time of pressure for all of us. just give me a sense in terms over the business, apart from a rush of online groceries. i'm trying to buy some fitness equipment. ratcheting in prices all over every platform that i look at. there are some that will naturally do better. what are the data showing you in terms of the spikes? >> there is a massive shift in how consumers are shopping. the things that we deem as essential changed. as we get used to working at home, what that means in terms of lockdown. things like home fitness. home computing. office firnture for the home have all become things that we need very, very desperately and

we're seeing huge growth in that. the interesting thing about the plaverage, we have seen a downturn in other categories like clothing and decor. we have this new way of working in lockdown. nejra: in terms of the spikes in demand or declines in demand, how does the u.k. compare with the rest of the world? >> very similar. across europe, a very, very similar pattern. our business in asia has started to recover already. we have starting to see that change. similar patterns across the world. manus: can i ask you in terms of -- in times of crises, the marketing department or the -- step back from spending.

in times of crisis, we are so much more focused, which parts of the business world are spending more to -- in this time of crisis? >> i think it is about doing the right thing at the moment. what we're doing, where we're ending our money is on operating our platform and to weather the storm as best we can. accurate measures are being put into small business in the u.k. --,000 that trade on theebay the ebay platform. e have -- in fees. if you're running a small business, a small shop, you have been shuttered.

we are letting you come on the platform and trade on ebay for free. i think it is a question of doing the right thing. ry to help businesses sustain. nejra: have you been overwhelmed by the demand of businesses wanting to list online with you? >> not overwhelmed but we have seen an uptick. it has more than tripled. wee see a big growth in the number of businesses. they seek new opportunities. a way of sustaining cash flow in their business. atebay we try to give them the tool kit to do that. 180 million customers shop on ebay worldwide. ejra: great to have you with

us. coming up, we have your morning call next. this is bloomberg. ♪

manus: this is bloomberg zpay break europe. i'm manus cranny in dubai. nejra cehic in london. according to goldman sachs, plenty of companies are likely to buck the trend. financials and banks make it into this. our guest, the global head of bank research at citi. one of the names on that list. does this split in the dividend story really -- is it really going to be a driver in the

second half? >> yeah. i think the biggest driver is going to be what happens to the macro and earnings rather than dividends to be honest. in america, don't forget most of the capital return comes from buybacks. not dividends. and in europe, it is the opposite. more like 80 or 90 dividends. in europe dividends matter way ore for banks than in the u.s. nejra: but a buy back is a risk as well. >> oh, yeah. the big banks have already voluntarily stepped back from buybacks for the next couple of quarters. that already got asnounsed. that was a good move for the big banks in the u.s. to do that. it gets them ahead of the story rather than what you're seeing in europe now. the banks and the regulators are talking about it.

the eurozone recommending strongly scrap your dividends and buybacks. the u.s. kind of moved a little bit ahead of the story. nejra: thanks so much for oining us. this is bloomberg. ♪ oomberg. ♪

>> good morning. welcome to bloomberg marks. the european open. we're live from our european headquarters in london. i'm anna edwards alongside matt miller. matt: good morning. the markets hope for the best. today marks the end of the worst quarter for european stocks since 1987. investors prepare for more volatility but hope that stocks go higher.

the