♪ francine: president trump of hard times ahead as u.s. officials estimate 240,000 americans die. ,urther to fall for investors warning that asset prices could go much lower. jeffrey gundlach says expect panic to return. british banks take another hit after scrapping evidence and buybacks urged on by u.k. regulators. good morning, this is "bloomberg

surveillance." a bit of a different "bloomberg surveillance." it has been 10 days that we have -- foroadcasting from all of our technical operators around the world. arefocus is on what we seeing in terms of data. is the euro area. it will give us an indication of exactly what the economy is facing. euro area preliminary -- actually, it's not preliminary. anything below 50 indicates a contraction. let's get onto your markets quickly. thee is a lot of focus on banks after regulators have pushed a lot of u.k. banks.

european stocks are down. i'm also looking at treasuries. let's get straight to bloomberg news in new york city. >> died from coronavirus. fatalities top 1000 confirmed cases in new york state. they have surpassed those in china's hubei province sticking with president trump, he said to announce the deferral of some payments. bloomberg has learned he has announced a proposal to the late some levees for six months. this would not apply to tariffs the white house has imposed as a result of action on chinese goods. topto the u.k., where

officials accept the country has not done enough to test for coronavirus. the prime minister blamed a shortage of chemical components. experts struggled to agree on what to do next. the health department says that this weekend, the first new ventilators will be delivered to the nhs. number ofthe new cases leveled off, hitting a two week low. it's assigned the outbreak in europe may finally coming under control, but spain suffered its deadliest day at. -- yet. there are a record number of for tallies in france and the u.k.. stocks have further to fall below march lows according to jeffrey gundlach. he says that it won't match highs for a long time. projections of a quick recovery are too optimistic. quote feeling of

panic will return to markets in mid april. global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thanks so much. first of all, british petroleum is seeing capital spending 25% below prior guidance. there are a number of companies coming out and saying they either have to forgo their guidance or give out dividends. hilary clark is working on a great chart we will get to you on the program. let's talk more about the markets and what kind of recovery will see. ludovic, thank you for giving us a little bit of your time. you -- what kind of models are you looking at for the economy? ludovic: markets are worried

about longer confinement and dumped no what they will be experiencing. like many analysts looking at the markets, we expect many of these outcomes could last for two quarters, but then we expect some kind of rebound. this is an overshoot because we see a large number being transferred onto the public sector. see, we see risk of infection. it's something the markets will try very differently. it means that as long as the u.s. is not out of the woods, you won't see this recovery in europe or in states.

francine: i don't know whether you call it a recession. i know a number of central banks have said it's an extension of the economy, but how bad will it get for it gets better? ludovic: with two months of confinement, global gdp will contract. have -22% in the second quarter. you just take one month confinement, they will avoid the recession for two years. germany,country like 2020 and -5%8% in recession for two months confinement. is what is actually priced in and what the activity numbers give us today.

francine: when do you start seeing a damage to the economy? where does it show first? italy because they were hit first? unemployment? problem. exactly the the second wave of issuance will come from unemployment and bankruptcy. they have taken an insurance policy by announcing trillions in the united states, something to the tune of 150 billion for germany. is we seeoblem partial unemployment and liquidity issues. policymakers are trying to mitigate the recession and prevent the impact on the crisis by making sure we can restart the economy. i fear we might see some of these long-run effect because of

of prevalence of the crisis retail or construction. only theion is not policy measures we are taking now but the measures we will take in nine months to make sure we restart the engine. whenine: how do you know or who has the best plan to put the economy back to work? it depends on if you are a governor, politician, or european. it is a very good question. people were looking at how to manage the crisis. i think a lot of people are economic andsing

health impact, which i think is a sad trade of. will have to rely on mass trust building and we may have to choose to rewire parts of the economy to avoid that policy it will be 20% of gdp. really tracked it yet but we see good examples in and thatf confinement we see isolation is working in germany to protect the number of casualties. i think we will need another couple of months to see where the right policy choices are made. right now, it's all about managing trust and making sure we don't completely put the economy on restart.

the u.s., and i know because we have's spoken about this before, the u.s. economy moves at its different case or time in the cycle. but the u.s. is focused on getting cash to consumers. in europe, it is different. which one works better? indeed cashu have versus credit. the u.s. has given a lot of credit through the fed and treasury department. if you look at europe one of the differences is we have a strong safety net in one of the you can see unemployment transfers given to the most vulnerable instead of

sending checks to everybody like president trump. those are the biggest differences. one is relying on the existing network of social security's and the other is improvising. temporary transfers versus cash is a big issue. first is a credit response, the next is protecting households and companies and thirdly, boosting aggregate demand. it is a move to really protect income to households in the u.s.. they do that because one of the big differences in europe and ,he u.s. is that, in the u.s. job losses are actually increasing, whereas in europe, the choices have been made.

there will be no bankruptcy caused by covid-19. it is to say they will protect their employees from being fired because of the coronavirus. help companies keep food on the table. that is the biggest difference in the european and european response -- and u.s. response, which tries to cleat -- keep employees as long as they can't so they don't have to be on social support. francine: ludovic from allianz stays with us. coming up, we talked dividends and buybacks that may not happen. bill winters of standard anrtered joins us for exclusive conversation. this is a bloomberg -- this is bloomberg. ♪

francine: this is "bloomberg surveillance." we are just getting breaking news out of the ecb. a minister from the ecb headset the eu debt crisis -- the eu risks a debt crisis if there is no common action. we will have more on that throughout the day. i know that has been more than a fight on corona bonds. let's get straight to bloomberg first word news in new york city. u.k. banks have agreed to scrap dividends this year. it follows similar announcements by european peers. they are asking them to cancel payments, them they expect --

asking them not to pay any bonuses to senior staff. xerox is dropping its hostile takeover bid for hp, citing uncertainty from the coronavirus pandemic. it marks a blowout to the efforts, though they may revisit the deal in the future. , going toh airlines burn through as much as $51 million in the second quarter. revenue is set to crater by 53% during the time. they are urging the government is $35x rules buys much billion in cash refunds. 35 billionmuch as dollars -- relax rules by as much as as $35 billion.

still with us is ludovic subran. channel,ke german saying they need corona bonds and more support from germany. germany is pushing back. is this a make or break situation for the eu? >> i think this is the ultimate litmus test for the validity of the european union and the euro zone. either we let it continue to the national government or we find some type of institution. bond, we do a corona which as we discussed, i think it could work but it has to be longer by all the countries. luxembourg and france of the world have to ask for this.

they would need to discuss the what instead of the how. not's istion we have fiscal transfers. we have to use one of these options. it is economically sound but a political nightmare because it goes back to how much risk sharing we except within the euro area. that is probably the most difficult question to answer. does it need to be answered now? ludovic: i think we have to do something, yeah. it does not have to be so political. the ecb already put the cart before the horses by announcing the debt trades.

i think what is really difficult is the absenceon of any kind of support from international institutions. if you want to be the europe of health, it has to me now. it is activated in crisis like this because it takes quote two years to do something that resembles a corona bond. this is unacceptable and we absently have to handle it now. in 2018, 12, and 14. it will be a political nightmare because people will remember that europe did not step up to the plate when they had to. the u.s. is having this moment and we need it in europe. discuss that not other states are more effective because they have fiscal

transfers. try some afford not to of what they are proposing. maybe it will be aaa rating and maybe it can actually bite to the back door so that it does not risk credit sprint risk. -- credit spread risk. not trying it is criminal. something.try just looking at the direction, it will be at 250% at the end of this year. want to indent the rate of italy, but how long can we sustain these high debt to gdp ratios? i don't know, and i think if we don't do anything, the european

commission is quite silent. the government has come together to fight this and this will be sticking in peoples mind and be a very bad crisis. thank you so much, ludovic subran, allianz chief economic. later, we speak to the bank of america chief executive at 5 p.m. london time. this is bloomberg. ♪

>> write it out and think of it as the flu. but it's not the flu. and as experts are predicting, as a lot of us are thinking, we will start to see some real light at the end of the tunnel, but this is going to be a very painful two weeks. >> when the increase in new cases begins to level off, the secondary effect is less hospitalization. less intensive care, and then less debts. -- deaths. care, and thee hospitalization always lag behind the early indication that there are less cases in a day. that's what we saw in italy, and what we are likely seeing right now in new york.

so we have got to brace ourselves. in the next several days to a week or so, we are going to continue to see things go up. we cannot be discouraged by that, as mitigation is actually working. francine: that was president trump and dr. anthony fauci updating the nation on the pandemic, warning of more pain ahead in the next two weeks. coming up, tomorrow, an interview we will have all been looking forward to. we speak to the standard chartered executive at 9 a.m. london time tomorrow. we talked dividends, payouts, and loans. ♪ [ "one more time" by daft punk ]

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president trump warns of hard times ahead as u.s. officials estimate that 240,000 americans could die. further to fall for markets -- a course of investors from howard marks to jim rogers warns that asset prices could go much lower. jeffrey gundlach expects the panic of march to return. and dividends dumped -- shares in british banks take another hit after scrapping dividends and buybacks urged on by the u.k. supply regulators. well, good morning, good afternoon, good evening, everyone. depending on where you are in the world. i am francine lacqua in london, and this is "bloomberg surveillance." let's get straight to bloomberg first word news in new york with viviana hurtado. viviana: we begin with president trump, warning of -- as the u.s. faces a tough two weeks. as many as 240,000 americans could die from coronavirus.

fatalities in new york city confirmed cases. sticking with president donald trump, he is calling for $2 trillion in infrastructure spending. he wants investment in the nation's roads, bridges, and tunnels. he is seizing on low interest rates to chiefly finance the plan. he says none of the money should go toward the green initiative. the democrats are calling for. planning to.s. -- be with saudi arabia and russia amid the plunge in oil prices. early march, both countries are vowing to flood the market with millions of barrels of oil in a battle over market share. and we end in the u.k., where top officials now say the country has not done enough to

test for coronavirus. the prime minister 17 blaming the global shortage. meanwhile, the u.k. health department says the first ventilators will be delivered to the nhs on the weekend. 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. we are getting a little bit of data out of the u.k. this is for the month of march, pmi coming in a touch lower than expected. anything below 50 means it is a contraction. that is u.k. march manufactory pmi. in italy, the number of new coronavirus cases have leveled off, hitting a two-week low. officials say the nation has hit

a plateau. it is a side that the outbreak at the epicenter is getting better. spain has had its worst day yet. professor, thank you for joining us. if you look at how the european model has worked, and italy and what kind of recession we will see, how difficult is it at this point to model in out? i think we have just lost the professor, so we will get back to him in a second. this happens when you work from home sometimes, even if our great technical team are on it. sometimes you lose connections. we are getting some news out of oil. russia is saying it is not ornning to boost oil output, russia is not planning to boost oil output amid the over supply. we will also speak with rita fan

on oil dynamics. ,e will speak with javier blas just at a time when demand for oil is going down because of coronavirus. it is having an impact because there is a price war between saudi arabia and russia. staying with that theme, there is a prediction that airlines will burn through $61 billion worldwide in the second quarter. that threatens the very survival of carriers. the director general told bloomberg that the industry needs more support. here he is. >> we estimate that the airlines in twon out of cash months, two or three months. so it means that in two or three months, if nothing is done, we could see bankruptcies for half of our airlines. the point is that the government has reacted very strongly. they have put together a very -- they have put together

significant stimulus packages, and we urge the money to be put on the table, to be injected into the balance sheet of the airlines. this veryvercome difficult period. otherwise it will be difficult for many of us. >> you are saying the money needs to be put on the table. are you suggesting the governments are putting out fine words but the actions are not backing them up? do we need to see the money coming through quickly? -- more quickly? : first of all, we are very grateful to the government. they have done a very good job putting together these very significant packages. but now that the announcements are made, the efforts have been done, we need urgently money. aboute publish a figure

the $16 billion of cash flow in the second quarter, it means that we desperately need cash, and urgently. government, please, now implement the fantastic policies. that you have announced. guy: in terms of how this is going to work its way through the system, we clearly have an urgent need for cash right now for the aviation sector in the united states and europe and globally. but there is a danger that what we see happening is the current actions being taken by government to contain the virus working. we then ca return to normal life. see ath nc -- but we then return of the virus later in this year. at that point airlines would have had their aid, they would have gone back to normal working conditions, and then we get hit

again. hereis the long-term plan if we do see a return of this virus, if we do see problems reasserting themselves later on this year? how much patience do you think governments are going to have? is this a one shot for the carriers to put themselves back into a stable position, and if they don't come is there a danger we see it returning later this year? : it is a matter of being able to overcome a crisis in one way, we hope, it will last only for a few months and that is all. and then a second wave, nobody can be held responsible for that, and we hope that withnments will come back cash.onal packages for

we cannot say that anyone is responsible for that. we have to fight against the coronavirus. we have to overcome the different ways. there are several. one, hopefully, and these are the second again. we will ask for help. but -- and we think that governments will understand that. it is not the fault of anybody. that was the iata director speaking with guy johnson. we go back to the professor. we had a bit of technical difficulty. just moments ago. talk to me about the model you are using for italy's economics in the next six to nine months. model, after some doubt in the beginning, has been completely locked down, and we

see the results. that was the third week of complete lockdown what i think is a relevant number, which is admissions to hospital. number,the only hard the number of contagion many people have been directed to stay home and you cannot count that. units --ntensive care it is going down. this is important because the strain of crossing the virus is in intensive care units and we have to turn that around. francine: what kind of recession are we seeing? i don't know if we should talk or u-shaped or l-shaped. is it too soon to talk about getting the economy back to

work? francesco: it is too early to tell. this is not the 2008, 2009 crisis where the financial system was broke, and when it is broke it takes a long time to repair it. here all the factories are there , it's just that you have to turn on the light so that the workers can go back and work again. consumption.ing you have to stop the revenue of those who are no longer working because otherwise you have a shock on consumption. important is if firms go bankrupt. if a firm goes bankrupt, you can no longer turn on the lights. the policy can make it a v-shaped recovery.

on one sidesumption and liquidity to firms on the other. in thee: many people italian government, including the prime minister, think italy has been let down by europe. that the ecd -- that the ecb has done a bit but that germany will not allow corona bonds to happen. are you of the same view, or would an esm type program be enough to shore up the finances of italy? truth is that what the ecb has done is more than enough. i think that the italian fromnment will increase 2%, which was the estimate before the virus, to somewhere around 9% or 10%. the whole additional borrowing thene financed by the ecb the new program announced 10 days ago. there will be no effect on spread and options because the

ecb can buy the beer it -- can buy b. -- can buy. actions in terms of the health system -- for bondsce, having europe will make it easier, but in the short term option, that is not necessary. if needed, can the ecb do more for italy? said, if the i 2.29%, thes to fraction of the bonds in italy's capital, which is 13%, that is enough to finance it. i think that narrower -- that could beeurope -- they

asked to do it directly through euro bonds -- probably yes, but in terms of the effect on the market, the ecb is probably past confidence, and that could happen through esm. francine: thank you so much for your time. economics professor. we have more of a conversation on oil coming up, after we had the headline from the bloomberg terminal about russia not willing to actually do anything to look at prices. we talk oil. that is coming up shortly, and this is bloomberg. ♪

francine: this is "bloomberg surveillance." we had the headline from russia not planning to boost oil output admitted the -- amid the oil supply, according to governor -- government officials. to have a full round up of oil price, let's get to the chief oil analyst and cofounder of energy analysts -- always great to speak to you after a headlined like this from russia this person close to the negotiations or close to the discussions is saying that for the moment russia is not holding talks with saudi arabia, but they never ruled them out. what will it take to get them to the table to talk? think they are coming to the table to talk yet because to both sides, it would require a significant step down, and i do not think we are there yet. we have just started to see prices get to levels that --

russia has been talking for a while about wanting to shut down saudi and i do think that arabia will be forced to cut back production. the finery's -- the refineries we know are pushing back against any seasonal oil production. the headlines that we are , there about production is no demand for that oil. so they will have to come back, but i don't think they are ready to talk yet. president trump has weighed in significantly. he has already talked about it, but at the moment he is saying please do something to revive oil prices. does that make a difference? it hasn't so far. will someone be listening if he puts further pressure? amrita: i think it will depend on what the u.s. is offering to both sides.

it is a bit tricky, and i think some people -- opec has come under criticism when they have cut output, they are coming under criticism when they are raising output. this is very much -- this has been less about market forces. everybody use whatever you can. i do appreciate there are a lot of senators putting pressure on trump, but ultimately i think we should remember that trump does like the oil prices, and i don't think the pressure on saudi arabia or russia from the u.s. is material just yet. i'm not saying it does not necessarily get there, that we have not detected that yet. there are conversations going on. i think there will be more pressure on trump to save texas and the oil industry, but i think the wheels are already in motion with marilyn -- with millions of barrels of oil

production in the u.s. francine: we had a note from goldman sachs saying that the u.s. shale industry could at the end of the day the -- could be at the end of the day the oil crash winner. any truth to that? amrita: even before the price crash, shale was turning a corner. december, january production fell. the biggest driver of shale, more than the price, is money. private equity has been pulling out because shale companies have not been profitable. but if you look at prices right in, the differentials are single digits. there are prices that traded at three dollars yesterday. it is hard to see how shale comes back. it does not mean shale is going to go to zero. be $13ot going to

million. francine: where do you see the price of oil going from here? ever lower, or does it at some point have a floor? amrita: it will have a floor, but we are not there yet. the next two weeks will be more the downside to prices because the digital -- the market is already in the single digits. ofe we hit the limit storage, which we think is going to happen some time in may, then the supply response is going to be enormous. -- that is when you start the rebalancing process, but that is going to take months. but for the next few weeks, through the course of april, there is more downside to prices, particularly coming on wti but also on brent. francine: where does the price go in 5, 10 years? i know it is difficult because

we don't even know what the economy will be restarted at this point. there is a lack of investment. is it like worst case scenario, we go to $10 now, than the economy restarts, lack of investment, and it shoots back up to 60? is that far-fetched or a scenario we need to be worried about. amrita: i would say that we could go back to triple digit $100 oil in a year's time. with the loss of projects right now, one thing we need to be wary about, we have never seen this kind before. the reservoir damage, we do not know how bad it is going to be. we need to keep an eye out. once the economy restarts -- clearly unemployment is going to be very high, but let's say two time, wee, three years will see very, very high oil prices because of the damage

being done to the supply side. and radius -- francine: and rita send, thank you very much. coming up tomorrow, and exclusive interview with bill winters, chief executive of standard chartered. this is as a number of banks have payout or suspended dividends. we will have plenty more on banks. this is bloomberg. ♪

pres. trump: they are very sobering. when you see 100,000 people, and that is a minimum number -- a lot of people have thought about it, just write it out and think of it as the flu. but it is not the flu. it is vicious. francine: that is president trump speaking yesterday. we are used to these press conferences daily. he was flanked yesterday by dr. fauci. the markets are, i would suggest, a bit in a holding pattern as we try to figure out when the re--- when the economy will be restarted.

they are also looking at individual cases and countries. hillary clark did a fantastic chart. i will show you in the next hour. but it basically looks like the companies that have suspended dividends and share buybacks. looking at stocks overall falling in europe, as is because overtors take worry coronavirus figures, also trying to figure out the impact of profits and dividends. the dollar climate with treasuries, and i am also looking at stocks in japan on session lows. later on, an exclusive with brian moynihan. this is bloomberg. ♪

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