guy: can you hear me? i hope you can. tom: the endless echo of silence, a glimmer of good news as new york city -- europe, too, but not tokyo. japan considers emergency action against the virus. markets surge, yet the dollar resilient. when mo stressed emerging market economies call on the world bank and the imf? and it is cocktail hour in washington as the president goes in search of a malarial cure. in london, the prime minister is grievously ill in dublin.

a doctor returns to the hospital. good morning, everyone. tom keene in new york, guy johnson in for francine lacqua and london. we say good morning to all of you. it has been an extraordinary come historic we can. the queen's speech, the prime minister hospitalized as well. tell us about london. tell us about the mood monday morning in london. guy: let's talk first of all about what is happening with the prime minister. under u.k. rules, there is no vice president, there is no vice prime minister. so what is happening here is -- heominic raab has been will chair today's cobra meeting, the emergency cobra meeting, and he is effectively in charge of the government. boris johnson is still in charge of the government, but with him hospitalized, there are growing calls that the prime minister

needs to take a step back. the understanding is that he has been put into hospital for precautionary reasons, but we will wait to see the exact details. there is no new information be on the news that he has been hospitalized, tom. tom: all of surveillance today will be looking at the markets, about various economic issues that are out there. japan front and center as they consider some fortis -- form of state of emergency. with first word news is viviana hurtado. viviana: we begin with the trump administration saying there are signs the u.s. coronavirus outbreak is starting to stabilize. president trump and vice president pence pointing to a day by day reduction in deaths in new york state. the surgeon general's warning americans to brace themselves for tragedy. he said this week will be the hardest and saddest of most americans' lives. hit hardestntries by coronavirus all reporting the

pace of deaths declined, and that suggests the lockdowns that are keeping millions people away from work and each other is hoping to flatten the disease's curve. now to the u.k. prime minister boris johnson was in the hospital for the coronavirus. illness was originally described as mild and there is no sign it is getting worse. his doctors suggested he be in hospital because the symptoms have not cleared up. negotiators are trying to stem the historic christ -- rice crash. -- the historic price crash. one obstacle is that russia and u.s.i arabia want the to join, but donald trump has shown little willingness to do so. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries, i'm viviana hurtado. this is bloomberg. guy? tom?

viviana, thank you so much. let me get to the data. we are having some audio issues this morning, folks. we will try to get those straightened out. equities, bonds, currencies, churn toes -- a nice the market. after the surge we saw on friday, it continues today. mostly i would suggest off a better picture of the rate of growth of deaths in new york. no question about that. and also maybe a little bit about europe, including germany, with some better news as well. churn isnd market, a what i am going to call it, the curve steepening a little bit. writing about a resilient for a strongerl dollar. we see that now particularly against the mexican peso. guy johnson? guy: it is interesting, the

fed's actions do seem to be working. lily working with a little bit of a lag as we have seen the pound actually a little higher against the dollar. it was none earlier on the back of what is happening with boris johnson. but i think you're right, there is this belief in the market that once you start to see maybe the peak of cases coming insight, that is the time may be to step back in and buy equities. up two point 5%. we are up 2.5%. seet, we are waiting to what happens with opec, opec-plus global effort to stabilize the oil market. ds off by two basis points with some movement in the market. we are seeing the periphery widening out a little bit. let's continue the conversation. joining us now is john normand to give us his take. john, there is kind of a growing

belief that once you start to see the peak in the number of cases, it may be starting to come into view. that is the time to step in and buy the equity market. what is your thought on that? john: equities are not the first thing i would buy because infection rates are slowing down the around the world. the first thing i would buy are the spread credit because there is a backstop over the next few weeks while we wait for curves to flatten out completely. markets in europe have that backstop right now. i feel like that is the safer way back into these markets. eight for d's going to be on the equities that someone with -- if it is going to be only equities that someone wants to buy, you can do that in two to three months time, but the path will be much more erratic. guy: just in terms of how that will work there, either you

start at the top, with the credit, and then you work your way back down, effectively the credit hierarchy. i wonder where equities fit in in that structure. you are currently safer in terms of what happens with higher grade credit. once you start to get to the height -- to the ig high-yield situation, i'm curious as to where equities fall in. john: to me, equities are first-tier. the -- -- our second tier. high quality credits. the second tier is equities because they gotten cheap with the crisis and they do not have these direct central-bank support. identify whateven the backstop is for those economies unless they receive funding over the next couple of months. there are three categories and equities are in the middle.

tom: let me be honest here, the first one i am asking today, about the immediacy -- forget about esm in europe -- about the immediacy of helping emerging markets. i looked at the 10 year yields, even some of the shorter yields, some of the really distressed frontier economists -- economies and em economies. the gauge monday morning is, how close are we to a real crisis sense involving world bank and imf action? do you have any idea on that? this is really a country-specific call, not an em-wide call. the vulnerability is that a number of countries have large financing burdens and they do not have the means to address that. it is really something that applies to the frontier markets, the block smaller emerging markets, turkey and south africa as well. it does not really apply to

asia. i think it is wrong to really say that this is -- i think it is for a handful of countries and some of those are fairly large. but for those countries that do not have access to external financing from the private sector, the investors will need some sort of imf credit line. with us, john normand of jp morgan. we are thrilled that all of you are with us today and we will drive forward the conversation with john normand. many guess will join us later, terrific work on analyzing -- many guests will join us later, terrific work on analyzing the virus. and we will speak with the finance minister of austria. look for that. it is an important conversation, particularly considering europe and esm is a more generalized crisis. stay with us. guy johnson and tom keene. this is bloomberg. ♪

everyone,morning, bloomberg surveillance in new york and london. another week of these great challenges refinance, investment, and societies around the world. tomjohnson in london, i am keene in new york. francine lacqua is fine, off today with a much-deserved they all. guy johnson helping out "bloomberg surveillance." we greatly appreciate that. john normand publishing a wide array this morning. this week and we spoke with joyce chang this week, head of economic research. don, dovetail in the economic forecasting that -- john,

dovetail in the economic forecasting that jp morgan is doing with how blind you are flying in analyzing markets. you feel like you have a confidence in observing markets, or are you making it up as you go? have a moderate amount of confidence about analyzing markets, both what we can observe in hard data and real-time data. it is the greatest economic collapse since the global financial crisis. we have seen that has had impact on financial markets that are taking them to levels of almost extreme -- of almost as extreme as they reached in the gse. even though the crises are not equivalent, the size of the market move, the economic move, that is why you can apply a few patterns and identify some things that are quite cheap, like credit. i think we have also witnessed, through a range of crises and recessions, that central-bank actions matter if they are big enough, if they are without

limit, and if they are also very specific to certain asset classes. because a lot of those pieces are converging around supporting things on spread markets, i think you can have some confidence in how that is going to play out over the next couple of months. once you move into markets that do not have that backstop, i think it is harder. going tore going to be the austrian finance minister here in a bit, and basically it seems like it is the netherlands, germany, and against somely form of pan-european bond issuance versus a more traditional, already funded esm theory. of course mr. eggeling and all -- we have talked to him many different times as well. can they affect an esm strategy right now? esm could start operating today if the country wanted to tap it. although i do think this whole

debate is beside the point in the sense that you have had every country in europe announced a meaningful fiscal support package in the past couple of weeks. you have had the ecb commit more buying power to this through the pet programs. there was already the sense that the ecb was going to finance whatever governments want to put on the market. you do not need to have a corona bond to finance this. i feel like this is a bit of a red herring in terms of getting through the crisis, but it would be the opportunity to prove that europe is willing to make some step toward debt mutual is asian. they should use this crisis -- mutualization.ual is asia the esm is not sufficient for in terms of capacity for that.

guy: john, do you think that comes with conditionality? do you think that if a country enters the esm at this point, the stigma attached to that is great? how do you get around that? how do you protect countries ultimately from kind of what market reaction would likely be if it were -- if a country were to enter the program? john: i don't think there is stigma at this stage, i think because the europeans for the past few years have shown so much leniency in the way they the fiscal side, they could reach any throwaway of goals when it comes to fiscal stability, but i don't think you would have a market reaction like that. i think the main point is that now countries have a range of financing can-isms that would come through the ash financing mechanisms that would come through the pet program. between those two, you would

contain bond yields and spreads, even as the fiscal position is deteriorating. john, stick with us. thank you for your time. we greatly appreciate it. john normand is going to stay with us. tv is the function on your bloomberg. this is bloomberg. ♪

guy: guy johnson in london, tom

keene in new york. this is "surveillance." let's get back to our conversation with john morgan of that john normand of jp morgan -- john normand of jp morgan. we are wondering what type of shape we will be in in terms of coronavirus and have -- and the impact it will have on the economy. will it be a that are you or v? my best guess is a sharp incline out. give me what you are using to model what kind of recovery we are likely to see here. john: the historical precedent but that the economy, response to a markets do, meaning six out of the last seven recessions, the recovery has been as sharp as the move down into recession. but looking how equities, credit, commodities, currencies, bonds paved after that, there is so much variance that i don't

think you can use as a starting point. what will the economy do and therefore what will the markets do? you have to keep taking these on its own merit. we know that pretty much every country except china is going to go for a very gradualist approach in terms of the opening economy. that is why you are going to get a much shallower move back to normal growth than what you have seen in the past. when you look at what that will mean for markets, i think equities are going to trace a u, meaning they will go up, but a slower pace than they went down. credit will likely trace at a b because central banks are buying that and companies are reducing buybacks and dividends, all the kinds of things that can give you more momentum in the credit market then you will have in the equity markets. and bonds i think are going to trace a l, meaning the yields will go down and stay down because central banks are implicitly saying they want to cap, make it much easier for

companies -- for countries to like buyingngs government bonds. the shape will vary a lot across markets going forward. guy: john, stick with us. thank you very much indeed for your time this morning. we really do appreciate it. of normand, jp morgan, head cross asset strategies. i want to turn our attention to what is happening in austria. the austrian finance minister joins us now online. mornings been news this that austria is looking to maybe reopen its economy. the date as to when we will start to see the retail sector coming up. austria planning to reopen small stores, shops from april 14 and other shops by early may. how do you have the ability right now to be able to do that? the planningll,

case, the infection rate keeps dropping down as it appears to be in the last days. if this is the case, that we have established a plan. can step-by-step reopen the certain go back to a extent to normal life, but always under the condition that the virus is reducing. clearly one of the factors that is going to reduce the virus is people staying at home, and getting that balance right is going to be incredibly difficult. italy has certainly learned that the hard way in the way that it rolls out its restrictions. can i take a step forward now? we are going to see a year of takinginisters group place tomorrow. there is expectation that the currencies -- that the focus will be put on the currencies with respect to esm. do you think that access to the esm will come with some degree of conditionality? gernot: first of all, let me say

that in this difficult time for the whole of europe, we have to keep up solidarity, especially with the countries that have fiscal problems and that have high debt ratios compared to the gdp, and we have to take measures that those countries are still able to finance themselves on the capital market, because otherwise it will be a disaster for the whole euro area. within the european union, we have different instruments, different measures that we can take to enable those countries to keep up with capital markets. one of them is the european stability mechanism, and within enhancedyou have credit condition lines, and those are a possibility for small or let's say more flexible conditions to be able to help with those countries.

coming along with may be the possibility of the ecb -- with maybe the possibility of the ecb to use -- they are able to buy more bonds from countries that are in trouble. mr. finance minister, please, please stay with us. he is the austrian finance industry, there are no blue mall. we are thrilled that he is with us today. let me look at the data right now. i really want to look at the resilient daughter -- dollar but againstat euro a decidedly weaker japanese yen. please stay with us. this is "bloomberg surveillance. good morning. ♪

> good morning. i am tom keene.

all sorts ofg out stories including prime minister johnson in st. thomas hospital in london. he is resting there. this is one of the ancient hospitals of london, timed back to the 12th century. in the 21st century, the prime minister rest there this morning. we continue with the austrian finance minister. we are thrilled he could join us. there is major tension over using already versus thepaper issuance of an all-encompassing european bond. this is a heated debate. minister, i guess it is germany, the netherlands and austria against everyone else, but that is too simplistic. give us the divide you perceive versus those that want to use the esm and those who want an

issuance of a new fixed income instruments. goal is to uphold the euro system to help each other if needed. this can be achieved by the instruments and measures we have already in place. therefore, i consider europe bonds -- let's say not so serious. everyone knows he would have to change the fundamentals. this is not easily done, it takes a long time. never be in place at the right time to fight the crisis. considered a -- debate. what we are in favor of doing is to help countries that are in problems -- in troubles on the

capital markets because of the high debt ratios. we have to help them to stabilize the euro. by using different mechanisms we already have established after the financial crisis years ago. one of them is the european stability mechanism, but there are other ones like the european investment bank and other measures. behave enough measures to able to help each other if needed. esm bew quickly can the utilized to provide relief? estimate overnight. credit,ake an enhanced it would be possible to decide -- let's say in the evening. the next day, you can draft the mou and it would be able to have this credit line in place. tom: to come back to what you

, id in the previous answer assume therefore that you do not believe that the french proposal for joint insurance -- joint issuance of recover any debts recovery bonds. let's call them krona bonds, you don't think that would work? >> it depends what you mean by those bonds. bonds,alk about europe it is from a technical perspective the mutual is asian of debt -- this is not allowed within the european framework right now. possibilities to issue bonds over a certain institution, for example the esm. coronawould call that bonds, why not. why not call them krona bonds. also other possibilities.

you have to differentiate what you mean by corona bonds. tom: anything that includes joint issuance but it does not agency issued will not work from your perspective. i think we are probably there now in your position. in terms of what happens after the crisis, we are going to potentially end up in a situation where once again we have countries with data that potentially is not sustainable. a you worry we could see repeat of the 2000 7-2008 crisis where two years after that we becausero zone crisis countries like italy and greece had debts that was not sustainable and we ended up trying to find situations where work? tom: i think we have to learn a lot from the last crisis. -- >> europe did its homework on this issue.

we have instated mechanisms that enable those countries that have problems on the capital markets to be sustainable. for example, the european stability mechanism. if you look at the debt ratio of all of the countries in europe, some of them have already reached -- before the corona of the-- a debt level crisis 10 years ago. austria came down from approximately 85% ratio to under 70%. reinstatingay of those groups and agreed mechanisms. best to try to get down debt ratio. to keep up ae growing economy, that is one of the main reasons why at that moment all the different states

and countries in the european union tried to take all the measures they can to save as many companies and employees as they can. going to leave it there. we appreciate your time. minister,an finance gernot blumel. going to talke with goldman sachs head of industry research. this is bloomberg. ♪

♪ tom: good morning everyone. we welcome all of you.

seeingof relief, we are fewer deaths than what we have seen recently, the same for germany. not nearly as difficult as spain. all going on in the united kingdom, the queens speech, the prime minister is in st. thomas hospital in london as well. much more going on. a lot going on right now. withon ferro spoke lawrence kudlow friday. one of the themes was russia, saudi arabia, the united states and oil. >> the president has been in with nbs andphone saudi arabia and putin and russia. he has been on the phone several times. other people in the administration have been talking to their counterparts in both of

those countries. independently, we don't have to go to the opec meeting. yesterday,nt told me and he did subsequently tweet this, he believes that russia and saudi arabia will move away and willr argument allow market forces to dominate. instead of loading up the markets that are already oversupplied, they will pull back. we will see how that turns out. the president said that oil prices have gone up quite a bit since that statement. i see no reason why these discussions with president trump and putin will not bear fruit. i think they will. i think flooding the market with oil on top of the pandemic which has crushed aggregate demand was a poor decision by both of those countries. i think the president's

negotiations will bear fruit. [indiscernible] >> we don't dictate oil policies to oil and gas sectors. they are smart businesses. the u.s. is still the number one energy producer in the world and we expect to remain so. a number of policies to open the door and permit that to happen. guess, oild companies seeing a decline in price are going to pull back. businesshat is common sense, but we don't dictate those decisions. >> final question, i know you have got to run. on a day when those small business loans are going down, where americans are struggling to pay bills, can you communicate to a broader audience as to why there is such a big focus on the oil market?

first of all, i am looking forward to the meetings today. i myself have been on a number of conference calls with oil and energy sectors. let me insert this, the degree of public and private -- government and private partnership here is unparalleled. we have worked with every industry. seen them in has person or done conference calls. the rest of us have done conference calls. two, energy is a key part of our economy. part of the tremendous economic growth we had in recent years. it is important. who gets, people

heating fuel, gasoline prices, all of that is key parts of american life. we take an interest. attempts any collusion by other countries in or out of opec that seem to be doing damage to american interests is something that president trump will get engaged with right away. that is what we are doing here. talk about paycheck protection for small businesses to avoid layoffs, this is just general economic energy. we have to stand up for american interests. that is what the president has done. to me, it is an american operation. larry kudlow speaking to bloomberg's jon ferro friday. joining us now on the phone, michele dellavigna. goldman sachs head of industry

research. what are you expecting this week in terms of the opec plus ?eeting, managing this market there is an element of complex diplomacy going on. i think the actual outcome will be difficult to predict but there is no doubt it would be in the interests of opec to tax production and to avoid -- for this is a reason that country who sell on the stock market. [indiscernible] >> other companies can head forward at better prices. the interest is in

of opec-plus to come back together and to try to -- to build up inventories. given the extraordinary scale of the demand shock. if storage runs outcome of the market is going to affect this problem pretty quickly. how much supply needs to be taken out? do you think at this point it could go some way towards balancing the market? marketsnk balancing the on a month-to-month basis in the middle of coronavirus is an almost impossible task. we believe at the peak this month we could have demand around 20 million barrels a day. moderate a build up inventory so that we don't reach --

[indiscernible] variableould be a very -- [no audio] i thought tom was going to jump in. in terms of this idea that the u.s. wants to protect its oil patchclearly the is suffering stateside with low prices. speculation that may be the united states looks to put paris on crude. saudi crude may be. do you see that as being a realistic option if opec-plus doesn't get its act together? >> it is certainly an option. i believe it may prove to be unnecessary.

i believe ability in price and energy investment is important not just opec. it is important to the global economy. that's why i think the u.s. is so focused on trying to find some stability in oil prices at a level that justify shale into deep water. going to have to leave it there. thank you for your time. michele dellavigna, goldman sachs head of industry research. up next, our exclusive conversation with mark schneider. ♪

♪ guy johnson in london, this is surveillance. tom, with the global supply , nestle food products has an important role to play. we spoke to the chief executive of the world food company mark schneider of nestle about the

impact the virus is having. it is a bloomberg exclusive. >> this is an unprecedented time. we have seen strong demand for some of our essential food and beverage products. communitiesn those and countries that have been hard-hit. priorities in this period, first as the health and safety of employees. stay healthy all we can make a positive contribution. plus, continuity. even under adverse conditions we are trying to maintain manufacture of our products. in 100 87 countries, it is important to us to get a helping dutyover the call of around the world where we are present. business the continuity, do you have all of your raw material supply guaranteed? >> the minute we saw this crisis

spread, we were trying to improve inventory levels at all levels of manufacturing. also finished goods. obviously there was very little time. flexibility is what is required right now. we have logistics constraints, sometimes you need to resort to airfreight. sometimes that take longer -- sometimes that takes longer. it is tightknit this crisis. this is what our teams are focused on. see coronavirus changing consumer behavior in the long term? >> long-term, probably a bit far out right now. we are very short-term focused at the moment to meet demand where we can. i think this is the most

essential service we can provide to consumers. what we are seeing from china for example where there is some improvement, even in the aftermath there is strong demand for value products and quality products. may be a bit less on premium. in a recessionary environment, it is safe as we emerge from the immediate crisis. >> in the short term based on the sort of demand you are seeing for various products, are you stockpiling? have you increased production of certain products like water, coffee? togenerally we are trying produce flat out in the face of strong demand, but keep in mind with logistics limitations and lower employee presents as a result of illness or precautionary measures, and also enhance safety protocol we

run our plants, we are not always able to give it 100% capacity you would have under normal circumstances. we are working extra shifts where we can. we are trying to ramp up manufacturing where we can, but this is a challenging moment. just getting to the normal levels of manufacturing is an outstanding achievement right now. mark schneider of nestle. -- theto gauge the pass path forward for the giant goods maker. and i are guy johnson going to process the data and set you up to the next hour. dow futures up 800. risk on correlation across all markets with higher yields -- steeper yield curve. oil still elevated particularly, guy johnson, with the headlines

we sought of mr. putin in the kremlin. >> absolutely. oil is going to be critical this week. trying to get an understanding of how russia and saudi arabia are going to get on the same page. stocks in europe, we are up by nearly 3%. definitely a -- once we start to see the curve flattening out, people want to buy stocks. john norman is little cautious on that idea. the pound is in his -- the pound is an as well, but -- 10 year is up with three basis points. despite a disappointing day. >> interesting. the cyclicals coming off to the bottom as well. lots of different opinions out there, it no greater different opinion than dollar dynamics. the idea of resilience or a

stronger dollar, there were limits there on what the dollar could new. the consensus called looking for a weaker dollar. all of the dynamics we are following forward. in our next hour, we are he hasd to bring you -- a really devoted team toward covering this crisis, really thinking about the mathematics and statistics involves in the crisis. we certainly heard that overnight here in new york. i can't convey how silent the streets, day and night the constant sound of sirens below us. we continue. stay with us. this is bloomberg. ♪ these days you need faster internet that does all you

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this morning, amid the endless echo of sirens, a glimmer of good news. tokyo, japan. -- japan considers emergency action against the virus. markets search risk on but the dollar resilient. when will stressed economy's the upon the world bank, international monetary fund. cocktail hour in washington as the president goes in search of a malarial cure for the virus. meanwhile in london, the prime minister is ill. in dublin, dr. -- returns to his hospital. good morning everyone. we are saying good morning to you worldwide. good morning coast-to-coast. guy johnson with us in london.