morning, with the sirens of ambulances receding into the distance, new york city and new jersey record over 1000 deaths. there is a hopeful bending of .elected curve still, this pandemic claims old and young. andme support is too little too late. what can washington do? amid global contraction, the federal reserve and the international monetary fund will be lenders of first resort. good morning, everyone. on a thursday that feels like a friday, this is "bloomberg surveillance," from new york, from the edge of central park, and right next to the very brave people working at mount sinai hospital. guy johnson in london as well. the first-order of business must the better news

on prime minister johnson. guy: absolutely. sitting up in bed come interacting with the medical team. he has had a third night in the icu, which is may be of where we are still. yet there is some improvement. i think the country will breathe a sigh of relief once he is out. hopefully that happen soon, tom. , yesterday inon new york city was absolutely extraordinary, just the constant wailing of sirens. i actually walked down and noticed the emergency room effort of mount sinai and those brave people. give us an anecdote you see in the united kingdom. is happening here is that maybe there is a sense that the curve is flattening, and that is the sense we are getting from the medical officers and chief scientific officers. nevertheless, the mortality

count is likely to continue to rise, and the reason that is the case is that deaths get reported a relatively slow rate. the concern in the u.k. remains a lack of ppe for health-care workers, pharmacy workers. also for care home workers as well. this is a story that is growing in the u.k. at the moment. the care homes for the elderly, for dementia patients, there we are seeing quite serious outbreaks that are mainly going unreported at this point. certainly that is a story that is being refocused on. tom: a point of discussion for us today -- we will talk with an expert on nursing from on's hopkins university system. on -- from johns hopkins university system. with managingking director of the international monetary fund in the new york

9:00 hour. speaking of new york, with first word news is viviana hurtado. viviana: we begin with boris johnson. spent aust reported, he third night in intensive care, official saying his condition is improving. the national picture has turned bleecker. period, 900ur people died of coronavirus. officials say it is likely a nationwide lockdown that will be extended for weeks. president donald trump's health team is coming up with medical criteria for reopening the u.s. economy. -- the whiteisors house seems to be giving priority to health considerations over economic ones. policymakers seeing a need to start working on new programs, this to cushion the blow from the coronavirus

outbreak. they first cut the benchmark rate to near zero, and restarted a bond buying program. the world's biggest oil producers any closer to a deal to cut output. today the opec-plus coalition holding a virtual meeting. algeria's energy minister says the group will be discussed that will discuss a reduction that could -- will discuss a reduction that could total 10 million bills a day. 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? tom: viviana, thank you so much. those oil meetings are crucial today. we will have complete coverage of across the bloomberg world. the equity markets have lifted, you saw that yesterday and friday and monday as well. but a jumble to the data today. i would know. was strength -- i would note dollar strength. what are you seeing in the data? guy: we are going into a long

weekend. european equity markets are ,irmly off their session highs hit early on in the day in europe. volume is light relative to the last 30 days, but pretty much on track. you can take a a look at the 100-day average. the treasury in westminster has looked to increase its overdraft at the bank of england. the ways and means story is dominating. basically the u.k. government in need of short-term cash, and this is the way that it works. the 108.ar bid in meeting,ce ministers we are taking a look at crude, isn' the big story today, is that? tom and i are going to start a conversation with deutsche bank's head of global research.

towards, first of all, your tolerance for risk -- buy or sell the dollar at this point? guy: i don't think he heard that question. let me ask it again. buy or sell the dollar? george: hi, guy. my advice would be to sell the dollar over the coming months. what we have seen over the last few weeks is strong demand for the dollar as a safe haven asset. that a supermarket analogy we are seeing industries just as people are hoarding cans of food, corporate have been hoarding dollars because it is the invoice currency of choice. there is demand for maturing international loans and dollars. but if we are looking further out, we see the prospect of greater economic divergence between how quickly the u.s. is

going to be able to recover from this virus crisis due to the nature of the lockdowns as well as the nature of the economic response, as well as this huge shift in monetary policy across the world, which has led to a significant amount of convergence between the u.s. and the rest of the world in terms of yields. so our bias is for the dollar to be weaker by the end of the year, but there is still a demand for the dollar, if you will, as we go through the near term effects of this crisis. guy: we are waiting to see what comes out of the opec-plus meeting and whether or not a deal can be done on output. give us your sense of your anticipation going into this meeting. would you buy or sell? would you buy or sell dollar nokia at this point. george: with the oil meeting

today, we will have to distinguish between headlines and substance. while it is possible that you do see headlines of potentially promised cuts, there are two reasons for precaution. number one is enforcement. ,f the opec side is requesting you have similar cuts, and for non-opec producers, i am referencing the u.s. in particular, the shale industry, which does not have a single representative, nor is it able to coordinate cuts in the same fashion. do see the risks that if you get an announcement, it quickly breaks down over the coming months in the absence of a more coordinated cut. in that sense, the meeting coming up on friday between the g20 ministers, it will be even more important in terms of the commitments they provide. currencies -- the recent rally you have seen in both the oil price as well as the recovery in these currencies is essentially

removing a big part of the negative downside. so the market can be pricing the risks of oil prices, potentially turning negative. so this does create some stability in the oil price. we are seeing some movement toward coordination, but we are not convinced that this is creating much upside for the oil price. we at surveillance will give guy johnson a knock on the -- guys like guy johnson talk about that a conversation every day. george saravelos, let's go from guy johnson's norwegian krone over the canadian dollar -- kroner over the canadian dollar. emphasize the deutsche bank view on the massive disease of

industrial canada in the east and the oil country of western canada and what does that do to the loonie? the loonie is a duck and it has something to do with the canadian dollar. itrge saravelos, what does have to do with the canadian dollar? we are worried about canada in terms of oil production. they have one of the highest marginal costs of production, which means oil prices at these levels are even slightly higher. that poses huge issues for the oil industry. the thing to note with canada is that the oil industry has helped finance a huge whitening in the external account -- a huge whitening in external accounts. -- a huge widening in external accounts. the capacity to borrow from foreign markets in terms of the external accounts is much less when the oil prices lower. the bank of canada has of course cut rates close to zero and is now converging to the rest of the world.

so we are worried about what the oil price means to the canadian economy, and we are also worried about the huge level of leverage building in the canadian economy over the last few years. if you look at canadian private sector debt, it is one of the highest in the developed world at the moment. and now is not really a good time to be holding large levels of debt. i'm glad i asked the question. a nice briefing on the canadian dollar and the norwegian krone. coming up later this morning, with christina george eva of -- -- withsta li na kristalina georgieva. we will talk to her about nigeria, about turkey, about the drawing rights that they have to help assist the fed with emerging economies. we will also get a briefing from george saravelos on emerging markets here next.

stay with us. this is bloomberg. ♪

tom: bloomberg surveillance from new york and london.

francine lacqua is doing fine. your many emails on that matter -- she is doing more than good. i am tom keene in new york. i will be speaking with a managing director of the international monetary fund this morning. forge saravelos right now an imf briefing. they are coming at them -- 189 nations, george. many of them really desperate, even turkey, even mr. erdogan calling on the imf. will they need further funding from the rich nations? i think more funding will be needed. the critical question is, what type of funding? if you look at the last few weeks, the fed has been expanding the swap lines well ballon the -- well the on the developed markets of korea, other countries in asia. up of these swap

lines has been growing. we have 150 billion at the moment. as far as other emerging markets go, the question is, is it more corporate dollars that are needed or official sector dollars? if you look at the level of public balance sheet and public need for dollars, it is actually not that high. most em countries have low levels of external government debt. the key area of difficulty is corporate leverage, and it is s that need to dollars. i do think there will be more need for funding. the talking about launching a dollar liquidity provision program similar to the swap lines of the central banks, and that is the key question. corporatesuidity to rather than to governments. tom: many suggest now is the ,ime to expand the fdr system

the special drawing rights. and even to have richer countries allocate their portions of sdr over to nigeria or lebanon or other crisis countries. are we anywhere close to a revolution in the imf, to really rejigger that foundational idea of sdr's? an sdr allocation sounds very technical, but in terms of what it means in practice, the factor is a helicopter -- if the factor is a helicopter drop of money into every single imf, every country that has imf membership, i think that would be a great idea. in fact, there have been some suggestions of direct money transfers, even from g3, g4 central banks into government coffers, which would be a

helicopter drop in developing market economies as well. and the sdr is a global equivalent of that. are we any closer to that? i think no. there will be strong resistance to essentially distributing dollars and sterling to every , but ifconomy out there it were to happen, it would be really a regime shift in terms of how the international system deals with the crisis. george, how much em debt is dollar-denominated, and what kind of levels on the dollar do we need to see for em debt to be sustainable? well, we have more than $1 trillion of international lending that is maturing over the next 12 months, and in an environment where the market is worried about credit risk, it is

worried about rolling over those loans, that is where the need for dollar liquidity emerges. i would argue that the problem at the moment is one of liquidity rather than aggregate debt levels. and a lot of emerging markets has been deleveraging their dollar exposure over the last few years. asia being a case in point, -2016 situation with the china crisis. mainly it is a liquidity issue, getting the dollars out there to allow this funding to be rolled over. i think policymakers have actually made huge progress in that, and with the fed in particular being extremely proactive in extending these swap lines and now the imf actually launching another version of that program to many more emerging market countries. earner can of turkey has

called the imf the world's -- erdogan of turkey has called the imf the world's biggest on chart. would he be able to turn to them? the -- turkey today does the emerging markets of 1997, where there was a huge need for external borrowing, or for that matter latin america or argentina over the last few years. it goes back to being a corporate debt problem, one of needing to repay back corporate loans, and that in turn is one of liquidity. so let's wait and see over the next few months. but i don't think it is a foregone conclusion that turkey goes to the imf. guy: conversations already

happening in the turkish papers, which is an indication. norge, stick with us. george saravelos of -- george, stick with us. george saravelos of deutsche bank. and live events that we bring you as well. and of course come you can interact with us directly. tv . this is bloomberg. ♪

tom: good morning, everyone. number surveillance. tom keene in new york, guy in london. a longer weekend, no question about that. the data is a jumble. we want to note oil up a dollar, brent crude the 34 level, the vix the 40 level right now. the data today, a churning data set. guy johnson, what do you see? guy: as you say, tom, there is a lot to get through today. have the claims number, powell speaking, the oil meeting. there is so much going on today. stocks are off their earlier highs. the treasury is extending its drafter the bank of england here in the u.k.. the prime minister remains hospitalized.

1.0873.lar we are still trying to figure out what happens when it comes to the burden sharing here in europe, and the oil story absolutely front and center. the ripple across from the oil story into the equity markets, fascinating. and also, tom, what is happening amid the currencies -- we will be talking -- we were talking about that a little bit earlier on. the canadian dollar, the loonie, and also the norwegian kroner. tom, a little bit later on, we will be talking with this man, the ceo. that conversation in new york. 10:00 p.m. in london, 5:00 p.m. in new york. this is bloomberg. ♪

♪ you are watching in newllance." tom keene york, i am guy johnson in

london. jerome powell speaking at 10:00 eastern. christine lagarde reiterating her call for more physical help because central banks are struggling. the ecb is the only game in town. is one of the long-term indications of the fed controlling the u.s. curve and asset prices, what does that mean for foreign exchange? george: you do have an unprecedented situation because there is no historic precedent. on one hand, you have one of the largest gdp drops and economic contractions in history. on the other hand, you have extreme amounts of government and central-bank intervention, central banks lending to the entire economy. there is a huge debate that will

eventually emerge in terms of whether all of this is inflationary or disinflationary. we sit in the disinflationary going on is at is global liquidity trap. the private saving rate will have to rise aggressively. if you look at what happened across previous pandemics, the private sector started saving a lot more because of all the uncertainty and central-bank actions are not enough to shift us away from this japan equilibrium. what i recall the situation is basically a zombie market where central banks keep volatility extremely low. they end up being command economy agents for credit, bonds, equities, while real economy vol remains high.

currencies are essentially trapped because you could have higher macro volatility but financial market volatility is being heavily controlled and suppressed, so i would hesitate to draw a conclusion that financial market vol will be sustainably higher in this extreme environment. guy: in that scenario, money will find its way into corners of the market not controlled by central banks. you can see this in the hunt for yield following the financial crisis. there is a shadow banking system. the market will find a way to search for returns and there will be asset bubbles. where do you see those forming? george: this is absolutely the intent of the policy. the intent of the policy is to keep yields at zero to allow

permanent private debt rollover and government debt rollover. one big question people are asking is well we have a fiscal becausein 1, 2, 3 years governments are spending too much? gdp at japanese debt to which has exploded about 200% and yet jgb yields are zero. the fundamental reason is the private sector wanted to save a lot more. the risk aversion is high and yields stay low and you see this permanent rollover of debt at extreme levels. one area of the market that should benefit israel assets. -- is real assets. estate is a good example. economy,n in a bipolar

the real economy staying weak, unemployment high, but asset prices high at the same time because central banks are keeping the rates at zero forever. tom: we look forward to the continued research in your view of this new financial repression , george saravelos from deutsche bank. now here is viviana hurtado. viviana: senate majority leader mitch mcconnell wants a quick vote on the next round of stimulus, pushing a $200 billion boost for small business aid. nancy pelosi wants a package twice that size, adding 100 billion dollars for hospitals and 150 billion dollars for state and local governments. now to the rescue package, it is squeezing u.s. airlines. they expected government checks to begin arriving days ago and they are frustrated with the

prospect of applying for more financial information. says money would go to workers who lose their jobs during the coronavirus pandemic and yesterday he got a big boost when bernie sanders announced he was suspending his race for the white house. plea -- getat this over differences. renewing herarde call for a strong response to the coronavirus. failure to agree on a relief package and more talks are set for today. 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. we will drive forward the conversation on this important,

historic day for opec and russia and the united states for oil. unique knowledge on the kingdom of saudi arabia, stay with us. this is bloomberg. ♪

♪ good morning, everyone, bloomberg's "surveillance." an eventful thursday and the last two thursdays have been extraordinary. the direct statement on the

american labor economy and its economic contraction, we will look at millions filing for jobless claims in america. as guy johnson has mentioned, london is focused on oil. this is one of the most historic days for opec and the nations around the outside of the cartel. one of the great students on the leader of the cartel, saudi arabia, is john sfakianakis with chatham house and we are honored he could be with us to give us perspective on the royalty, the kingdom of saudi arabia. i believe the king and the family and mbs and the rest are retreated by the red sea. they are doing what all leaders are doing, trying to stay healthy. what is their number one goal today? what is the best outcome for the

kingdom? honoredrst of all, i am to be on your show. thank you very much. today is a historic day. they would be wishing to have oil go up and wishing for shale to disappear and wishing for no political pressure from president trump and wishing that the russians will agree with on either anorward output cut or all-out war, but there has to be an agreement between russia and saudi arabia. there will be a lot of wishful thinking today. tom: as part of this wishful thinking, part of this crisis -- is part of this wishful thinking, part of this crisis old oil buttressed up against new technology? thanhis virus nothing more

a catalyst of new technology overwhelming russia and saudi arabia? john: absolutely. this is a war between technology, as you very well and old shale, that is, oil, the conventional side of oil. unfortunately, saudi arabia and russia had to decide to go on a global price war to take out shale. this is something they should have done in 2014/2015 and was not achieved, and now they need to pray and wish that at the 11th hour they will be able to achieve something. ,or the saudis and the russians this is a short-term game because over the long term they know oil will go down. guy: the message i hear out of the united states when it comes to saudi arabia is, are you with us or against us?

is saudi arabia with the united states or against it? john: that is an excellent question. politically, there is no other way for saudi arabia to go and to be a friend of the united states, especially under the trump administration. they will be considering exactly the you said, are they with u.s. or against the u.s.? this is both the democrats and republicans, because saudi arabia is being attacked by both for this all-out war, so today they will have to think twice. if they decide to not pressure for an oil cut, clearly the u.s. congress is going to consider that saudi arabia is against the u.s. this is very serious business. guy: the president of the united states a couple of days back spoke of cuts of 10 million to

15 million barrels a day. can saudi make that happen and do you think there is a possibility we could see saudi tariffs applied by the u.s. administration? john: definitely. i would not be surprised if saudi and russia decide today for no oil cuts, the u.s. administration going for tariffs to retaliate because president trump is under enormous pressure. they will have to show some negativity of what saudi and russia decide. there biggest worry today is if oil output, iown would be hard-pressed to expect them to bring down oil output in saudi arabia by more than 2 million barrels.

if that is enough for the global oil market, because there is a glut of so much oil, and the saudis and russians had bad timing, at the wrong time decided to go on an all-out oil war. your perspective on the royal family, boy, do things change. give us an idea of the strength and power of mbs. changes you said, things . boy, things have changed over the last four to five years. mbs is in full control, no doubt about that, and there are those naysayers and dissidents who might say that no, this is not the case. i would say that mbs has been vindicated because in 2015 and 2016 when he was pushing hard

for saudi arabia to reform and change, he had a position within the family and outside of the family for being too much of a pusher, but now he has been vended k did because what because -- vindicated what happened? oil crashed and the only thing they have is oil, and that will be less wanted in the future. tom: this has been wonderful, john sfakianakis, thank you for joining us today from outside london. of course with chatham house. we will continue this discussion as we look at the pandemic and economics, particularly the jobless claims statistics at 8:30, but hydrocarbons, we continue the discussion on oil. with citigroup on the geopolitics of the moment

and the response of the insident in what we see riyadh and moscow. this is bloomberg. ♪

♪

you are watching bloomberg "surveillance." a sharps warning slowdown from the coronavirus pandemic will get worse before it gets better, saying the financial impact could extend as far as september. starbucks facing -- basing that assessment on what happened in china earlier this year. blackrock will not lay off employees this year because of the coronavirus, according to the ceo larry fink. toy will pay full-time wages cafeteria and maintenance workers even if they cannot come to work. more than 90% of blackrock employees are working remotely. proposediggest banks paying dividend payments. credit suisse wants to pay half and pay the rest next spring.

the banks toging delay part of the payouts until the impact of the coronavirus pandemic is clear. that is your bloomberg business flash. guy: thank you very much. the swiss banks resisting a little longer but ubs and credit suisse are pushing back. exclusively spoke with sergio monte. sergio: we announced we would suspend the share buyback following the second half of the year and the coronavirus situation has only confirmed that it would not be prudent to continue with share buybacks, so the share buyback team has been postponed to the late part of 2020 or for the future, so there is no discussion on that point.

earlyor 2020, it is too to make a forecast. think prudently about balancing our desire to keep a strong capital position lendlso serve our clients, where appropriate and necessary, and take into consideration the needs of our shareholders in terms of capital returns. this will be a balance act we can only consider at the end of the year. guidance inave some terms of first-quarter earnings, $1.5 billion. give a sense of what kind of lending to the wealth management has been part of the business. where has the alpha come from? -- i am gladrms of to see that all of our businesses are very strong

operating performance and our lending activities have been banking inorate switzerland, where have -- we have been helping to speed up the process of liquidity to smes and larger corporate's. u.s.e working also in the in the location of 2 billion in loans for the paycheck production program -- protection program. we saw the need for loans created in the investment bank and the wealth management space, we saw some deleveraging coming through, and some new demand for credit which has contributed for

sure to an increase of our lending balance. i ask you, sergio, in terms of the markets, we are back in bull territory on the dax and s&p 500. is this turnaround rational? does it make sense, such a verlander return to bull market lant return to bull market? sergio: if you tried to rush things in the past few years, it would be a struggle, so it is good to see markets rebounding. on the other end, i do think the -- is is a little bit expecting a recovery in the late -- quarter, and a recovery

in the second part of the year. the reason, the downside risk to that scenario and in that sense, gettingbe careful about too much exposure in equities at this stage. manus: jamie dimon warned of a bad recession. any echoes of 2008? we talked about counterparty risk in 2008. where is the systemic risk in the world today? sergio: first of all, of course you have risks on both sides. sense, its that in a could well be that we would see a very welcome v-shaped recovery. i don't think it is the case. you could see a severe downturn of the economy.

i don't think anyone is in a position to call what will happen. uncertainty will be the main driver for the future, for the near future for the markets, and also together with fear. think it ise, i very difficult to make a forecast about how the situation will develop. ermotti of ubs with our manus cranny, they have developed a nice relationship for sharp interviews. on the data, really going to the jobless claims, the numbers at 8:30 new york time, a jumble of data today with red and green on the screen. a vix of 44 showing a better market, moving from the wonderful pre-pandemic numbers of 15 and then we went out to

the absolute lehman like fear of 80, and then the recovery and now down to a middle 40 handle on the volatility measurement. , and thatlar today dovetailed into our conversation with the managing director of the imf which we will do in a couple of hours after an important speech in a virtual meeting of the imf. coming up, david rosenberg. we will parse disinflation and inflation as well. ,uy johnson and tom keene another hour of "surveillance." ♪

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sirens of the ambulances receding in the distance, new york city and new jersey record over 1000 deaths. there is a hopeful bending of selective curves but this pandemic rages and claims young and old. a third week of horrific jobless claims data. support is too little too late. what can a divided washington do? contraction, the federal reserve and international monetary fund must find solutions. "surveillanceerg ," tom keene in new york, guy johnson in london. the prime minister still in intensive care. guy: at least he is setti u