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tom: we see that within our data. yields lower, curve flattening. but i really note the commodities ace that the commodity space, the linkage to em, the faction yesterday, all

of those tied together. one of the great barometers is west texas intermediate, trading , at a $20 price. francine? francine: i have a similar data check. taking a tumble after regulators pushed to access payouts. no payouts, no dividends. stocks falling in europe. investors are looking at the worsening america coronavirus figures, pretty horrific numbers that we heard from dr. fauci and president trump yesterday, and they are trying to assess the impact of the pandemic on corporate profits and dividends. the dollar climate with treasuries. i am looking at a couple of other things. withe dollar climbing treasuries. i am looking at couple of other things. economists are becoming less convinced about the potential for a strong snap back and growth. saudi aramco -- you were

mentioning it -- the oil supply surging above 12 million barrels a day, according to an industry official. that comes on the back of russia saying they could be willing to talk, but they are not doing it yet, tom. tom: very good. we welcome all of you again worldwide, a very early morning in america. what we are trying to do is give you conversation, yes, cross economics, finance, investment. but we will also look at some of the social issues of this crisis through all of "bloomberg surveillance." we begin with the depths of the market. a huge depth of the major currencies, the dollar, the euro, the yen, but also the seenesting things to be in a triangulation between the --or currencies and the more with us to give us good interpretation, jane foley of rabobank.

jane, how strong is the dollar now? is it a stronger dollar even if it does not break out to record strengths? jane: that depends on who you are measuring it against an which currency you are measuring it against. one of the winners in my view of this crisis against dollar strength has been the euro. the euro has played its hand well. at 1.0944.ing now yes, we are talking about a strong dollar, but if we look at a one-month view, the euro has outperformed a bunch of other currencies, including all of those commodity currencies -- canada, norway really vulnerable to the oil price. we saw the fed act yesterday. in my script for the next hour, i call the central bank -- the central banker to the world, thank you bill rhodes for that, a book title from years ago.

which em currencies do you use to gauge the tension in em? jane: i think the south african rand really does come to remind -- come to mind. a moody's downgrade last week did not really move the south african rand too much because many people expected that was coming. but the rand is looking vulnerable. it is fundamentally looking really vulnerable before this all started. and certainly it will continue to look really quite sour. if you consider there is a lot of people with underlying health conditions -- i think i read this morning about 7.7 million people are living with hiv -- at the best of times the health system is completely stressed anyway, and with the economic activity before. china slowing, south african can be vulnerable to that. but a number of other countries come to mind, too. there are countries such as

nigeria, algeria. they are very dependent -- and when you look at the price of oil, too. like,go to india, if you they are yet to potentially see the real human impact of this crisis, even though they are already beginning to see the economic impact. india growth was already slowing down quite aggressively into this crisis, so again, they are going to be very vulnerable to this news as well. francine: jane, do you assume it -- for havens? if you look at concerns for the u.s. economy, which seems to have turned in the last 24 hours. jane: this is quite interesting and it might reflect the comments tom was referring to earlier on about donald trump. donald trump. donald trump indicating the next two weeks will be a very painful two weeks.

potentially with the news of up to 250,000 people who could die in the u.s. i think from a mental point of view, this does perhaps make some people think, what other safe havens are there? if the u.s. is going to be hit so hard, the yen is the obvious one, the more traditional safe haven. the yen and the swiss bank -- the yen and the swiss franc. they have been intervening quite heavily in the market. because of that, maybe some investors would rather go into the yen as a safe haven. there have been questions in the japanese press last week about the huge amount of debt that is already carried in japan. that of course is going to be significantly worsened. we have heard a this morning talk about -- we have heard abe this morning talk about putting together the boldest ever stimulus plan. some investors in japan are saying if this is what finally breaks the back in terms of confidence in the japanese economy, if they continue to

pilot the budget deficit, continue to pilot the debt -- now, that clearly has not but it is an interesting outlook now. francine: i wanted to talk about central banks. how much more can central banks do because they have a balance gdp, as thentage to bank of japan has? jane: i think it is still going to be all eyes on the fed. and this concept about the fed being the world's -- the global central bank i think is becoming more to fruition. this is because of the use of the dollar as a transactional currency. this has been something which has been going on since the 1970's, really since the dollar became really important in the oil world, since the deals back then. growth ofly, with the emerging markets, it is more and more a transactional currency. i read a while ago and the bank

of england report that even in ,he u.k., that dollar invoices around 30% of the total. that is sterling. if you go into emerging markets, i think we can all assume that a far greater percentage of invoices are going up and oilers -- dollars has emerging markets. this avoids the potential market volatility that emerging-market half. this is why the dollar is so important, and i think this is why when you look at the growth of emerging markets over the last decade, if not the last 20 years, this is why this with demographics the dollar has become far more important, and this is why it is the fed and what the fed does which is far more dominant in terms of the world's banking or the world's money market system. yesterday we had the fema facility. that facility will be more banktant, the em central getting their hand on more

dollars. they will be able to use this facility and said -- instead, so that is important. that in terms of the enormous stresses, the fed cannot do everything and some will have to resort to the imf as the consequences of the fallout of this economic crisis. tom: we are going to continue here, lots of good conversation. olivia blunt chart scheduled to be with us today. an exceptionally important essay from the peterson institute. speaking of essays, william dudley, a former president of the new york fed, very closely associated with the theory, the thinking, the application of fed policy in this crisis. bill dudley will join us later as well. stay with us from london, from new york, and worldwide, this is bloomberg. ♪

tom: bloomberg surveillance. francine lacqua from new york and london. this is what i am living on. this is the fabulous bloomberg terminal on cell phone, and i can have a chart here, pretty fancy, they be not what i can do on the terminal, but pretty close. and over here, you cannot see it. it is a spike down. that spike down is strong yen, week euro. this is what the -- weak euro. this is what the pros look at.

they take the dollar out of the equation and look at euro-yen. this is a good time to look at this with jane foley from rabobank. talk about the grudging yen strengths we are seeing versus the euro. the yen is a well-established safe haven, so this is really why the yen remains quite strong. if we look at the one-month view, the yen is the second-best currency after the u.s. dollar, so there it is with it safe haven. even so, i think the euro will be a really interesting currency over the next few months. and has held up relatively well during this crisis. the eurozone does have a very significant surplus, and i would imagine over the last month, the euro-based funds perhaps liquidating risky positions, maybe in central and eastern european markets coming back there and happens next? i think for the euro, this is going to become very political.

we had this discussion on thursday about -- between the euro zone leaders about corona bonds come about euro bonds. they could not agree. what happens from here on in? coming from the ecb officials this morning, warning that they -- there are risks to the e.u. of a new debt crisis if there is no common action. so again, a lot of focus will be on the politics of the eurozone in the next few months, and that i think will determine the outlook of the euro. tom: thank you so much for mentioning this, jane. it is nice if you to write the show. i was taken aback by the comments of the gentleman from the netherlands. i just absolutely -- just absolutely extraordinary to see the netherlands stake the high ground with huge domestic debate over coming to the rescue of beleaguered southern european economies, including italy. how much company does he have? is germany supporting the netherlands and saying, no, we

do want business as usual? jane: again, germany and the netherlands are together on this. this could be quite an interesting political game because what we know is that it would be deeply unpopular in germany if the politicians were going to come and share this liability. they do not want to do that. of view,litical point from a politician's point of view, if he or she were to agree to go down the line of corona bonds immediately, there could be a domestic political backlash. downey do eventually go the lines of corona bonds, these politicians in the netherlands and germany, etc., cannot do it without a fight first. have to say, no, no, no. in typical european style, they will say yes on the 11th hour. we have seen reactions like this. but for now, they have to say they do not want to do it because they have to speak to their domestic audience. but it is going to be very

fascinating over the next days to see which way it goes. francine: and this has turned soap nickel. leaving the -- this has become so political. toving -- do you have achieve corona bonds, or do pretty much the same thing with esm? jane: i think the esm will be the first stage of this. that will i think be a test. i don't think anybody really knows at this stage what the economic cost of this crisis is going to be, how effective the amount of stimulus, the amount of -- and therefore what is going to be needed further down the line. certainly i think the esm will be brought into line before they go down the line of corona bonds, but it is going to be something that just develops. and how deep will this crisis be? we just don't know.

statistic we first need to look at to determine that is the human cost. the fertility's and when this is becoming the leveling off. we got to see that in italy perhaps, but it is too early to be confident. but we are certainly not there yet in terms of france and spain. the next two weeks could be crucial in giving us that sort of data, and giving economists something a little bit more -- giving economists and bit more of a framework about the assumptions of the globe economy impact. francine: jane, thank you so much for your wisdom. jane foley there of rabobank. if you are a terminal user -- and we hope you are -- check out the function tv type tv onto your bloomberg and you can also ask questions to our guests through tom and i. click on the video screen where it says ask the guests a

question. go to tv . this is bloomberg. ♪

viviana: you are watching bloomberg surveillance. the photocopier and print or company hp blaming uncertainty stemming from the coronavirus pandemic. hp says the $35 billion offer undervalues a personal computer maker.

now to shares of british banks. today they are lower at the urging of regulators, the lenders scrapping dividends and buybacks. the banks are trying to bolster their capital levels as the fallout from the coronavirus deepens. we end with general electric. it finalized a 21 point $4 billion sale of its biofarma business, and that brings in much-needed cash. it also bolsters ceo larry culp's experts -- efforts to chip away at a massive debt load. that is your bloomberg business flash. tom: thank you so much per to we want to frame the data and i want to emphasize with all the other stories going on, we could do data checks for all of "bloomberg surveillance. it is that nuance. we go into the labor economy reports of america. right now there is no question. it is about global slowdown. what you need to know is em currencies break out the new weakness.

turkish lira, obviously idiosyncratic. but many others buttressed up as well. yields lower, curves flatter. francine? francine: i am also looking at what you are saying with treasuries, looking at dollar. europe, i tookin time to look at the banking sector, hsb shares -- hsbc shares falling. standard chartered down 6%. if you have a bank's board, this is because a lot of u.k. regulators are pushing banks and other companies x payouts. that is filtering through to banks that have said they will do it. coming up, we look at oil, after we had a headline from russia. ♪ these days you need faster internet that does all you

expect and way more. that's xfinity xfi. get powerful wifi coverage that leaves no room behind with xfi pods. and now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device that's connected is protected. that's a $72 a year value. no one else offers this.

faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. can your internet do that? >> from the coronavirus, we were going to be globally oversupplied on energy to begin with, and the russia-saudi disk you -- dispute and desire to

pump even more makes the oversupply worse. significantly,wn 15 million barrels to 20 million barrels over the next you weeks which will contribute -- next few weeks which will contribute year.5 billion decline a >> you will see some restructuring failures and challenges in the permian basin. we think the basin will shrink this year. >> we were guiding capital spending in the permian at over $4 billion and have reduce that by $2 billion. >> we need, if not the coronavirus epidemic, the prices could go back to about $45, it may dollars per barrel, which is sufficient for the russian economy.

>> it is a question for many of us and it is too early to say how this will unfold. were just aose couple of our guests discussing what the price of oil does next and what it means for the economy, oil prices having their erodeduarter as virus demand. then you have a price war for market share with saudi arabia and russia, and president trump getting quite involved. read a couple of notes from banks saying at the end of this price war, the big winner could be u.s. shale. is there any truth in that? how would that happen? martin: that is one of many possible outcomes. i would have to say we would not be quite of that school of thought ultimately, we are

entering a period in the market where the total amount of future oil markets there will ever be is a finite number. with that, the total amount of oil demand looks somewhat finite. in a market like that, market share becomes fundamentally more important and when marketshare is fundamentally more important, then you expect the local producers to be far less willing to score prices at levels that allow others to gain market share. in that scenario, you typically expect countries like saudi arabia, russia to fundamentally protect that market share and they sit low on the cost curve. we are living in unprecedented times and we should consider many things that seem unusual a

couple of months ago. our reading is the true local producers will defend their positions for some time to come. francine: where do you see the price of oil going? is there a danger it goes to 10 or single digit and then spikes back to 100 in two years? martin: we draw the same conclusion that many others have drawn, the supply is weak. whether you model 50 million billion --ay or 20 15 million barrels a day or 20 million barrels a day, it does not matter. we end up with a forecast that would lead to a filling up of all oil inventory capacity we have globally sometime in may or early june.

the only way to balance the oil back it to such a low level that it acts out of physical supply, and the u.s. industry is capital against this but very light and operating costs. the price that you would need for people to shut in for fields is exceedingly low, and you end up with price realizations that need to fall towards $10 a barrel for brief periods, maybe even lower. in the near term, it looks very weak. you went right: to where i want to go, the partial dynamics and what it means for price. globally ofe path how we get to $19, how we get to

$17, how we get to $15 a barrel. are those conditions based on stabler are they pathways based on the micro economics of supply and demand? mechanic toway you get to those lower prices -- mechanically get to those lower prices go something like this. when we fill up storage progressively, we will need more expensive sources of storage. we fill up jeep storage first and -- cheap storage first and then storage costs start to rise. floating oil tankers used to store oil, and as we pump out more oil we will need more storage offshore. it is likely tanker rates will go up. the cost of storage gets higher and higher. quite a technical

discussion about the forward curve. storage, the cost of needs to fall to lower and two hedge forward -- lower and lower to hedge forward. that is how you get to these very low stock prices. tom: that was a clinic in the dynamics of oil. that was out sending. let's carry it forward. if we get storage up to our eyeballs in oil, why don't people just stop producing this stuff? martin: ultimately we will need to get to that situation, but it is of course very frustrating when you have invested billions of dollars in terms of capital

expenditure in oilfield development some time ago, and , to stop are producing producing you will not cover the capital expenditures in the past. production cost, there is about 7 billion -- 7 million barrels a day that has marginal cast caught -- cash cost of more than $10 a barrel. looks,ow the outlook quite a lot of that 7 million barrels a day will be forced to shut for a while, and therefore you need to get a price that is below people's short run margin cash goals to force them to stop producing. when storage is full, storage is full and someone needs to stop producing. in turn, it looks like we will get there. tom: so many forget that oil is what we call a tangible asset.

that was a tangible conversation with martin rat of morgan stanley -- martin rats of morgan stanley. somebodyhout out to research,s university john byrne murdoch with the wonderful chart. he has front and center spain and catalonia, spanish viruses still drifting up here and the deaths as well. we are thrilled to bring you robin niblett of chatham house. a challenging day for the market. stay with us. this is bloomberg. good morning. ♪

♪ >> very sobering when you see 100,000 people, and that is a minimum number. a lot of people have said, ride it out and think of it as the flu, but it is not the flu. it is vicious. as the experts are predicting, as a lot of us are predicting, we will start seeing some real light at the end of theas the e, but this will be a very painful, very, very painful. begins -- new cases when the level of new cases begins to level off, less hospitalizations, less intensive care, and less deaths. , intensive care, and

hospitalizations always lag behind the information that there are less new cases per day. we saw in italy and we are likely seeing -- we are seeing little inklings of this right now in new york. we have to brace ourselves. in the next several days we will week or so, we will see things continue to go up. we cannot be discouraged by that because the mitigation is actually working. warnings from president donald trump and dr. anthony fouts he, updating the nation -- dr. anthony found she -- fauci updating the nation on the coronavirus. donald trump was simply telling the nation the coronavirus would go away but is now telling the u.s. to brace for painful weeks ahead. it could kill as many as 240,000 americans. $81 billion in rent payments are

coming due. many renters warned they will not pay which has property owners and regulators looking for solutions. most agree the pain will spread. joe biden skeptical the democratic national convention will go on as scheduled. he said the party should listen to scientists about the coronavirus being contained in time. it is set for july 13 through 16th in milwaukee. 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. tom: thank you so much. greatly appreciated, really cannot they enough about our new steam, michael barr, viviana hurtado, and all of them led by jim morris. they collated in all of these different themes and trends.

for our european and united kingdom body and, i want to mention -- united kingdom audience, i want to mention that it is april 1 and the rent is due in every single family -- do ands nation is every single family across this rentn is dealing with that is due. sun is a nation, as the rises in america, that doesn't know where the next rent payment is coming from. francine: there was an outstanding bloomberg article i was reading. the u.s. is different because you have 320 million people and the u.k. is about 67 million. what struck me as from landlord to wall street traders, people are fretting about today, what happens when u.s. rents are due?

it is around $81 billion so a lot of questions over the u.s. real estate industry as payments come due today. i don't know if we will find out something today or tomorrow, but something to say whether the safeguarding mechanisms put in place are working. let's go straight to robin niblett from chatham house with perspective on what the pandemic means for formulations and the economy. great to have you on bloomberg "surveillance." is the template of what is happening in china with a --kdown robin: clearly it is the template that people think is the best possible outcome. it will be difficult to

replicate in other parts of the world given how covid-19 plays out. each country will be so deeply interconnected to their political and economic structures and systems. in the u.s., the federated federal system, roles of governors, very differentiated access to health care with millions of people without health care insurance, malley -- many millions more without confidence they can access their health insurance without being subject to huge bills, that is the you -- u.s. problem. in europe, you have aging populations that are vulnerable. china is the best case model any of us can expect now and i would be expect if we are able to get things turned around as quickly as the chinese seem to be turning them around. we have to be careful with the chinese numbers.

we don't really know how many people were test did and -- tested. we have a long way to go in the west. francine: this is one of the things tom has been exploring, whether we can trust chinese numbers, but what do we know about resource and information sharing? is china working with u.s. and europe to figure out the best response, not economically, but drugs or testing that work? data: we know the early about the disease itself was shared quickly through the world health organization by chinese officials, who were very transparent. i will not claim to be an expert on this but i saw one report there was a joint effort between u.s., chinese,a

and european company. china has got to be enormously careful. it is running a knife edge because of china comes out of this crisis relatively quickly with relatively low numbers of death, but those mortality rate ramp-up globally which appears to be doing in europe and the united states, there will be a backlash down the line against china as the originating country of this virus. some of the disinformation effort that were put out briefly , i would argue, from what i can see by parts of the chinese government, have created a potential underlying backlash and the chinese have to manage this carefully. their instinct is to share this keepch as they can and their shareholder --

tom: so important the rhetoric. we have a senator from louisiana the other day on the cable news wasram, and speaker pelosi to the left of lenin. to take that emotion, are we all going to end up a little bit more socialistic after this crisis and will we learn there will be a tinge of lenin in our future? robin: lennon is -- whether parallel,he best creators of the great welfare's pushpush -- welfare state that came in after the second world war across europe, the reliance on government, the importance of government for huge economic bailouts that are taking place, but as arbiters of the economy with debt levels

being built up, with the risk and likelihood of new big government rescue packages that will go beyond the second there's they were targeted at -- sectors they were targeted at in 2008 and 2010, i don't know that the u.s. can resist this. we have seen this on the democratic campaign about the need for a bigger state. andpe, it is a given countries like china are able to tamp the crisis down, and singapore. the rest of the world is appreciating the value of big government. , and ie final question say this with great respect for the academics and the heritage of chatham house -- what is the first thing you will read today? what is the first chatham house

needs to curiosity read today? robin: the thing being pushed out is the global spread. we saw this as a china story and then it goes into being europe and now the united date. the u.s. and china -- the united states. the u.s. and china are the global drivers. chatham house is trying to figure out what is happening in individual countries and when you have countries the size of indonesia, india, nigeria going into lockdown, it is really the spillover to countries that will not have necessarily the resilience to manage the crisis the way that china and the united states hopefully will, with the material resources, and parts of europe have done. it is the second wave into

countries, moving into middle income status, these countries could be knocked back by a decade if we are not careful. that is what we are trying to keep an eye on that chatham house. tom: thank you so much. please stay with us from london and new york. this is bloomberg. ♪

♪ this is bloomberg "surveillance." as always, from london and new york, francine and tom. in europe, stocks are down, movement in treasuries and yen. a clear move to the safety. i wanted to show you what banks are doing, banks leading the decline on the stoxx 600 after lenders including hsbc and standard chartered hard -- halted dividends and buybacks president trump warning of a painful two weeks ahead with the country grappling to get the outbreak under control that is impacting the outlook for

market. tom: i would focus on emerging market, extraordinary what we are seeing, the fragility of the emerging-market. as the fed acted yesterday, you wonder what form of crisis they will be handling at the international monetary fund. what we have been trying to do good to guest is give you conversation to assist you in this pandemic and this crisis. the firstt hour for half-hour, abby joseph cohen. much more to come this morning. this is bloomberg. ♪

♪ tom: this morning, there is

nothing funny about this april fools' day. for millions, the rent is due and the check is not in the mail. america goes in search of direct income substitution. across the nation, it is not there. new york city like barcelona, ever-increasing deaths. the president is grim as dr. f auci whispers of 240,000 deaths. dr. hotez of the medical community as they race to find a vaccine. the central banker to the world act yesterday when will the internet -- acts yesterday. when will the international monetary fund need to act? this is bloomberg "surveillance." francine lacqua in her