from london,orning this is bloomberg "daybreak: europe"/ hit 3 coronavirus cases million. new york deaths drop to the lowest in almost a month. improvesof demand limits on government bonds and boosts its scope for debt.

a surprisenk posts profit after saying it made below the ratio target. the ceo joins us, don't this it. -- don't miss it. manus: a little bit later on, joining us at 7:30 a.m. that isravity defying, the word used. you look at the numbers. of 66 million, and revenue comes in at 6.4 billion, beating the number of 5.7. undoubtedly, those are good numbers. they do warn that we might have a little bit of a problem. nejra: of course, we will get the full details scheduled for

april 29. i do wonder why they said they may modestly and temporarily dip cet1 the target for the ratio. otherwise, markets very much focused on the gradual reopening of economies around the world. you had a report from the who over the weekend saying that if you get coronavirus, it might not make you immune to new infections. he wonder if the market might be underestimating the prospect of early opening. in japan, after what we heard from the boj overnight. u.s. and european futures powerfully higher. we did see some green on the u.s.n for the u.s. as yield, we are above that 60 handle.

seeingen though we are risk on elsewhere, quite a big $16 a barrel.elow to coronavirus cases around the world, spain and france reporting their lowest death tolls in more than a month while line to easet a time restrictions. annmarie hordern joins us now. great to have you with us. both sides of the atlantic are looking into how reopen their economies. annmarie: i want to start with europe and what we are seeing. some of these countries that had really the strictest lockdown measures putting out these plans. italy.to on may 4.reopening construction and manufacturing

first, then two weeks later we could potentially see retailers and museums. early july, restaurants and barbers could open. conte didwarn of a -- one of a second phase. to spain, seeing some of the most draconian measures taken. they will finalize these plans tomorrow, which could include lifting measures about outdoor exercising and walks. you see the difference that these government approaches are taking. unwind. their plans to the government plans to ease some of the measures with schools planning to be the first to open. differente the approaches. all of these leaders are still warning of second waves. they need to maintain social distancing even as they reopen. manus: let's talk about where

you are at, in new york. by cuomo conference is are sort of a daily watch in terms of litmus tests. story?re we on that evolving? we heard the new york state governor talking about the details. he said it would be complicated. new york city looks much different than upstate new york where my sister lives. new york city is a major metropolitan area and you have transit of people coming in from connecticut, new jersey, and long island. andrew cuomo said construction and manufacturing would be the first to open, then a two-week because. assess the details, logistics, and hospitalization rate.

he said all of this would take into account logistics. operate about how public spaces operate. citigroup, goldman sachs, talking to their employees on what that would mean as they started to return. when did the lobbies look like, what did the elevators look like? see,you could potentially a lot of temperature checks on arrival. of essentialtion rooms that you have public spaces within, like public spaces, coffee rooms. one thing does seem to be clear, that it will be a slow and gradual return to life in new york city. manus: stay safe. annmarie hordern tracking the

very latest from new york. to the first word news. from --s recovering about 1.5 trillion euros the chief.o he said the funds need to be ready by november. leaders are itching for a deal. how memberat resolve states will be given grants or loans? u.k. prime minister boris johnson is said to be returning to work. today, he is sent to chair a monday morning meeting. and of easing lockdown other nations, he is under pressure to explain the next steps for the union. speculation about north korean leader kim jong-un's health have intensified over the weekend after on -- after reports of a

visit of a chinese medical team and movement of the leader's train. south korean leaders have rejected the idea that he is either dead or dying. according to the financial times, the coronavirus death the may be 60% higher than initial tally. it reports statistics in different countries, significantly more deaths than usual. if that same level of underreporting is true worldwide, the global death toll 318 thousand. officially, it sits at just over 200,000. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. good morning. nejra: good morning, manus. big week oft is a

central bank decisions. tomorrow, we expect a bank to double asset purchases. kicks off its fed first scheduled monetary policy meeting since january with rates expected to be on hold. thursday, the ecb is not expected to move either but could step up asset purchase program. this as we get the latest from scott at guggenheim, saying to prepare for the era of recrimination. we will discuss next. this is bloomberg. ♪

manus: this is "daybreak: europe ." to the markets. prophets may have tanked in china, but the bank of japan

goes unlimited. asia stocks this morning just a little bit higher. s&p futures also in the green. you will have to see a movement in the credit and bond markets for deutsche bank to be convinced of buying stocks. a much sluggish economy. euro stocks, avoiding junk in italy, and a marginal opening up of the economy. in the u.s., you are seeing deflation risk heating up dollar-yen, singularly unimpressed with open ended bond buying in the market for the yen. let's turn our attention a little bit per. bankapanese central joining counterparts and ramping up stimulus. the bank of japan has removed limits of purchases of

government bonds. it has raised the ceiling on corporate holdings to ¥20 trillion, thereby increasing the scope of commercial bonds, paper, with extra measures in support of struggling companies. long-termas left interest rates unchanged. bader fromis clouse societe generale. you make the point that markets around the world have validated the aggressive adoption of these measures, but you warn about execution risk and delivery of the measures. is that why the markets are a little bit tentative this morning about the boj? is so i don't think it much an issue of implementation. i think that is relatively

straightforward. what i mean about implementation on the really much more fiscal policy front. the measures we have seen governments adopt i think are just as likely the right measures, supporting household incomes and supporting corporate exactly the way to go. but, it is one thing to announce these policies and quite a different thing to actually execute that. we see that around the world in the u.s., the u.k., many places where companies are complaining that the help is a little bit slow to come through. of course, fiscal authorities are relying on the banking sector to actually extend that credit. i don't think they have been overcome yet. with the boj and

implementation of the bond buying, they have set they will now have unlimited bond buying. in reality, will it lead to much more of an increase of the balance sheet? open, that is completely and i sort of doubt it. ambiguous anden confusing in combining the price target. they still have the 80 trillion purchase target but, at the same time, they declared a control issue. since they announced the yield curve control measures, they have actually had to buy much less. boj is with the signaling, we will be buying much less than we need to in order to maintain this target, no matter how much the government issues bonds. i think it is really much more or clearingy issue

out obstacles in the way rather than imminent change in policy. i think the much more interesting and decisive change is the corporate paper and bond buying. see how thatl plays out. i was reading a number of different facts from the boj. one of them is guidance of cpi. at theat breakevens lowest since 2009. should we be talking more about global deflation risks? yes, that is definitely the big risk rather than any kind of deflationary surge. i think it all very much depends on how successful these policies are and how large the output gap

will be once we have had a leg up in economic activity. i think the risks are in the more medium-term that there is much more deflationary than inflationary pressure. bet said, there could inflationary pressure in some areas. i am rather worried about food prices because the production of food, getting food to markets is proving pretty challenging in a number of economies. nejra: we have the fed this week as well, the central bank that is least expected to do anything new this week. with miner from guggenheim a note out overnight talking about preparing for the era of recrimination. is critical ofhe policy moves saying that there will be consequences when you talk about the corporate debt and high-yield buying.

bobbitt l area has been talking has beened el arian talking for a while, talking about how the prospect of the fed backstopping stocks. should the fed start stock piling equities? is it inevitable? klaus: i think it is an area where central banks need to be very careful. to pretty does lead significant distortions. i think buying equities for all central banks is really the last step. the issue is, which companies do you support? i don't think central banks are really set up to run large equity portfolios. it is a much more natural domain for a central bank, interest rate instruments. and i think they will try their

hardest on that. go ahead, finish your thought. difficulty, you think about the u.s. markets, think about how many non-domestic companies are listed on the new york stock exchange. it would be very difficult, i think, for the federal reserve to start to buy equities in a way that is not going to cause all kinds of controversy. nejra: klaus baader stays with us. we will pick up on that in just a moment. let's get the bloomberg business flash. deutsche bank generated more revenue than expected in the first quarter, posting a surprise profit of just over 200 million euros. deutsche's said it will temporarily slip below a key ratio, the cet1 ratio.

airbus is warning employees that the playmaker is bleeding cash. the chief says they need to quickly cut costs to adapt to a radically shrinking industry. airbus is reassessing its outlook. sh says the plan to slah production by one third may not be the worst scenario. deal with afrom a commercial aircraft business. twodeal collapsed turned longtime partners into competitors. they say boeing has "wrongfully terminated the deal" and it plans to seek damages. manus: coming up on the show, we will talk more about central-bank action. -- policies on thursday. what can we expect from christine lagarde? this is bloomberg. ♪

this is "daybreak: europe ." rising for italian bonds as investors are counting on the european central bank to boost the access -- the asset purchase program this week. policylure to deliver support is likely to see them continue the worst losing streak this year. it kept the rating two notches above junk on friday but the risk of downgrading still hangs above the debt. klaus baader from societe generale is still with us. increaseee the ecb

bond purchases this week? klaus: i doubt it. the ecb has just very recently come up with some very significant programs. the pandemic purchase program, that has a volume of 750 billion, which is absolutely enormous. of course, we think that in time , that program is quite likely to be scaled up. ofre were of course a lot signs of relief about the absence of a downgrade for italian debt. nowhere is that sign of relief going to be louder than at the ecb. we have seen some compression in the spread. the fear of fragmentation, which is one of the big fears that haunt the ecb, it has diminished quite clearly. i think, at the moment, with the ecb having thrown a lot at this,

it is up to the government to put together the recovery fund. manus: serendipity. we are actually showing that italian-german spread. i read a whole variety of notes suggesting that it should be double. took 1.5 trillion to deliver a further compression on that spread. what is important for the ecb? where is their objective in terms of getting that spread back to some kind of normalcy? what is it going to take? the ecb, through the program, is buying a lot of bonds. they are actually not releasing exactly which bonds they are buying. it is highly likely that they are buying peripheral bonds. it is vital that the bond yields

are as low as possible and that spreads are contained at a reasonable level in order to avoid fred tatian. particularly, to stay with the state of italy, it tightens financial conditions for everybody else and particularly for the banks. you get problems in the extension of credit. that is the fragmentation that the ecb is concerned about. one has to be careful because i think there is an interesting contrast here. on the one hand, it is widespread. these same time, we see record auction takedowns involving italy and spain. what i think this means is we have to be a little bit careful about the secondary market prices. there is really not a lot of liquidity. what happens to the secondary

market may not be perfectly reflective of the price. nejra: very briefly, we get gdp data from the euro zone this week. given that this will be a services led recession, as you talk about, does that mean we could see quite a strong rebound in europe given the weight of manufacturing in germany? klaus: i think so. i think we are going to see a pretty significant rebound once the lockdown eases significantly. i love this term in the chinese blogosphere about revenge spending. i think not only is the manufacturing sector probably less affected by this, but it is probably likely to rebound first. it is easier, of course, to have a distancing, a social distancing, and introduce more

security measures, more safety measures. manus: we will take up that between a manufacturing recession in just a moment. time has run against us. we will continue the conversation with klaus baader shortly. ♪ these days staying connected is more important than ever.

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♪ manus: a very good morning from bluebirds middle east headquarters in dubai. i am manus cranny. global coronavirus cases hit 3 million. stocks rise amid plans to gradually reopen economies from italy to the u.s.. to thek deaths drop lowest in more than a month. plans on the purchase of

government bonds. appears to be up with its own virus bond buying on thursday. and, deutsche bank on why it may dip in its buffers of capital. a major corporate today. interview ahe little bit later on. nejra: welcome to "daybreak: europe." speaking of adidas, the numbers coming through. first quarter revenue at 4.75 billion euros, down 19% year on year. it is the guidance we are always looking out for. i data's saying they are not able to provide an outlook for the full year. they do say that the top line continues to recover in greater china in april. coming up, we will talk the earnings with kasper rorsted,

the ceo of adidas. don't miss that interview just after half past seven this morning london time. let's get to the chemical side of the business. sales for the first quarter, 12.5 billion. ebitda, theed estimate was for 4.17. to the statement, talking about covid, talking about employee safety. globalll about the synchronized recovery. that is going to be quite disjointed. we have a conversation with the bayer ceo. let's see how that interview runs in terms of guidance in regards to what kind of recovery

he expects. themmed l rian warns of risks of an unsynchronized recovery. you have chinese prophets imploding. dollar-yen unimpressed by the movement. deutsche bank wanted to see caleb with more meat on the phone -- wanted to see a little bit more meat on the bone. capacity, stores will run out in the next 3-4 weeks. nobody told the aussie that profits and china had crashed. on a splendid run. 10 year government bond yields at 0.62. the deflation debate, down by 0.4%. good morning. nejra: goldman saying there is narrow breath in the s&p, a bad sign for stocks. at guggenheim, simon talking about the error of recrimination

for central banks. coronavirus, cases globally around 3 million. spain and france reporting their lowest death tolls in more than a month while italy set out a timeline to ease reopening in more than a week. also outlining a phased reopening plan. manus: deutsche bank, first quarter results with a beat. surprise profits for the first months of the year. dani burger has been taking a look at the numbers. let's get to her. she is on the line. unexpected beat in terms of profit. what was the driver? wednesday, report on so we don't have the exact details yet, but it is a pretty safe assumption, considering

what deutsche bank's wall street peers did come a surge in volatility, that helps trading results. have the positive revenue surprise. deutsche bank's long-term strategic plans to turn things around. they are understandably worried about volatility leading up to earnings on wednesday. here is a way for them to quell uncertainty. it might give some investors at least temporary relief. it was not all good news. deutsche bank talked about the and that they may modestly temporarily dipped below the cet1 ratio.

do we know why? dani: it is kind of the bitter sweetness of better trading results. that may help them in the short term. in the long term, the economic impact is helping exactly where you are mentioning. saying there will be a higher level of defaults. at the same time, it has them trying to provide embattled businesses with financing. already, deutsche bank has one of the largest piles of hard to value holdings among peers. one saving grace might be european regulators. deutsche bank says that will give them headroom. let's keep in mind, liquidity is much stronger than it was at the start of the global financial crisis. that might also help them mitigate the balance sheet risk.

nejra: great work. let's get to the first word news. italy is putting in place a plan to start easing lockdown measures on may 4. prime minister giuseppe conte is warning a second wave of infections would cause a damagence of death doing to the economy. isernor cuomo in new york setting out a phased reopening that could start as soon as may 15 and probably will begin in new york before moving to the city. , says, as long as we act prudently, the worst should be over. --lling stockpiles making it the glut is taking tanks close to capacity around the world despite saudi arabia starting to curb output ahead of the start date for production. it is starting to cut from about 12 million barrels a day to the

agreed level of 8.5 million. the bank of japan is removing the cap on the amount of sovereign debt you can buy. bank has not bought at anywhere near that level in recent years. the boj is also in the cap corporate debt, more than doubling the amount it can hold. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. icahn isinvestor carl not buying stocks right now. he is hoarding cash, shorting commercial real estate, and parent for the coronavirus to wreak more havoc. he spoke to our erik schatzker about his oil purchased during last monday's crash. >> we keep it pretty well hedged. but, even the hedges could not

stop us from losing some money. but, we still have quite a bit, so i am not crying about it. i have always kept a large amount of cash, cash equivalents, for a stormy day. i think there is going to be very interesting times ahead. well you have to be extremely careful in this market, and we can discuss that, i think there will also be some good opportunities. i can't talk about it short-term. short-term, you may have some big downdraft. that is where i am with that. foundre else have you opportunities to make money in this kind of environment? i gather you bought some oil on monday?

i want you to tell me about that. >> that is a much smaller item. down to -- we own a refinery. we own what i think is a very good refinery. we own 70% of it. when that -- when oil started sinking like that, i called them up. usually i don't micromanage. i said, we have some storage space. they said, it is hard to get the trade through, and whatever. they set it up real quickly, we set up an account. -- you never not see this. we made some money on it but relatively speaking, it is nothing like the cmbx or something like that that we are

making money on. it is fascinating. you will never see that again in history, i don't believe, where they have to pay you to take their oil. again, you have got to look at risk reward. sometimes, when you do those futures, and they have funds that do the futures. any ofe thing as 2008 or these times before the market really breaks. playing in the future market, in is oil game or any commodity not for the faint of heart. >> let's turn our attention back to the coronavirus and the pandemic. right now, it is wreaking havoc. i mentioned occidental petroleum. the company is so cash-strapped that it is having to pay warren buffett in stock essentially for the financing deal that you opposed. that must make you boiling mad.

i am not going to belabor it anymore. the board has changed. i cannot really freely speak about it. i respectfully disagree a little bit with what you are saying, cash-strapped. i think occidental has a lot of great assets. can't argueaid, i with you. one of the most ridiculous deals i have ever seen. i have said that publicly. those days are over. we are now on board, we are working together. hopefully, i think, there are thegs we are -- i think shareholders will eventually be rewarded there, i think. the risk reward is in your favor, i believe. activist investor and

chairman of icahn enterprises, carl icahn. to quote the man, you will never see that again in history. never say never. we are down 12%. that is quite an attack on wti this morning. goldman sachs says stores will be locked up in 3-4 weeks. we are at an inflection point, rebalancing could start. ofcan't get the impact covid-19 on the buyer numbers. the buyer relief, they talk very clearly about the presence of covid-19, partly due to inventory. they talk about the lawsuits on ,he crop sciences business 52,000. they say that does not reflect a credible number that is possibly going to come to pass. ebitda up 10% year on year.

you have a little bit of adidas. are you buying any sports kits? have been doing a lot of exercise, but maybe i should. i have been teaching yoga, doing a lot of dance choreography. waited skipping rope, i hear you use one of those. adidas, basically, they talked about a topline continuing to recover. stores point over 70 still closed. tossume that number refers worldwide. they have not been able to provide an outlook for 2020. revenue drop of 19%. that skippingsend rope to you. we have a lot more to get through.

a slump in profitability in china. no one told the aussie dollar. a third in march amid the struggle to recover from the outbreak. this is bloomberg. ♪

nejra: this is bloomberg "daybreak: europe." with the prospect of some economies around the world tentatively reopening, equities taking that well. seeing a lot of green on the screen in asia. europe,for the u.s. and the 10 year yield moves up, seeing some dollar weakness very fourth day against the end. crude continuing to be punished.

of chinese industrial companies dropped by a third. struggling to recover from the aftermath of the outbreak in the country. pledging support, saying that maintain liquidity while also avoiding to aggressive macro stimulus. he added that the impacts will be short-lived. klaus baader from societe generale is still with us. what cues should we take from the recovery in china given that there is a heavy focus on manufacturing and you pointed out that this will be a services led recession globally? klaus: this big dichotomy in the march figures between industrial production, which made a very health the -- very healthy

recovery and retail sales, which remained depressed. i think china remains in many ways the blueprint of how it is likely to go, given that china experienced the epidemic first, the lockdowns first. i think that the key in china is going to be over the next couple of months the ramping up. leverageover excessive but thise back burner, is not the time to think about deleveraging. if you remember the monetary data, that credit numbers out of china for march were extraordinarily strong. you see, for instance, sales of excavators.

ofis going to be a revival investment. particularly in the catering sector likely to be pretty slow because people will be hesitant to go back to restaurants. manus: the whole of the world is going to probably relearn socializing skills. when we talk about the policy response in china, many people have been critical of the scale of the response from china thus far. some people are saying it will be local bond instruments versus grandiose to -- randy yost measures. thefunding in terms of public sector deficit. can you run us through the size, scale, and targeting? klaus: that is very difficult to do because while the chinese government has made a lot of

quantitative announcements, central government bonds. pipeline,at the proposed projects from the regions is absolutely huge. at this stage, it is very difficult to say how large that is going to be, but i think it is going to be very significant from the chinese government. i think it will try all it can to get the economy going as rapidly as possible. so far, they have been doing a pretty good job of that. manus: to do whatever it takes. morning toost this set you up for this week's trading and central banks. deutsche bank generated more revenue than expected in q1.

the german lender posting a surprise profit of just over 250 billion euros. they said they temporarily dipped below the key target, the cet1 ratio. the report suggests the bank may have benefited from a research and amid volatility. -- thee warning that chief says that it needs to quickly cut costs to adapt to a radically shrinking -- airline customers unable to accept new deliveries. airbus is reassessing outlook. softbank's buyback is helping investors ignore the tech giant's profit head. for its flagship fund. month, they boosted the size of plan repurchases by around $3 billion.

that is your business flash from bloomberg. nejra: coming up, crude piles up as global oil producers begin production cuts. more on that next. this is bloomberg. ♪

it is "daybreak: europe." sub $15.arkets, wti global crude stockpiles have made it more difficult for leading producers to balance the market by curbing. klaus baader is our guest. to quote carl icahn, you will never see it again in history. toward zero. going

what is the risk about heading zero again in wti? good morning. klaus: i think most analysts do not expect it to happen. i think there are two points to be made. the first point is that wti is physical and relates to a very small part of the united states. the brent contract is the international benchmark. there is good reason for that. ofhave not had this kind massive distortions and highly counterintuitive price action. ofm relying on the analysis our commodity, michael haig who says basically, fundamentals have nothing to do with it. , chiefklaus baader economist at societe generale. that is it for bloomberg

"daybreak: europe." the european open is up next. looks like we could open in the green. this is bloomberg. ♪ staying connected your way is easier than ever.

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nejra: welcome to "bloomberg markets the european open." morning.d today the markets say we have reasons to rally. futures point strongly higher in europe as nations outline their exit path from lockdown and italy avoids a credit downgrade. cash trade is less than an hour away. let's