francine: coronavirus cases in the u.s. top one million. in europe, france is set to reopen on may 11. the fed decides before the 26 go back toricans work. the u.s. central bank meets today. as banks set aside billions for loan loss, we speak to the chief executives of multiple banks.

a lot of the folks just focus on earnings and what we heard overnight out of the u.s.. a lot of banking as well. later on we will speak to the astrazeneca chief executive asking about vaccines or medicine that will work in treating covid-19. if you look at the markets and the pressure we see on the dollar, probably one of the biggest stories out there. 0.2%,an stocks gaining euro-dollar 1.08. let's get straight to the bloomberg first word news in new york city. italy, the with nation seeing its -- delivering an out of cycle downgrade, one level above junk. the timing of the move may catch some investors off guard.

it wasn't scheduled for review until july the 10th. but the outlook made fears of a future cut to noninvestment grade. over the u.k., boris johnson's top aide crest scientists for a lockdown. he swayed the discussion towards faster action. number 10 denied the political advisor influence the committee of experts saying it's appropriate for aides to sit in on the meeting and ask questions. australia is calling for an independent probe into the origins of coronavirus and beijing is pushing back and calls it politically motivated. it's also morning of a potential boycott of australian products. bow toy canberra won't "economic coercion. totish airways cutting up 12,000 jobs, about 30% of its

workforce as part of a restructuring to prepare for a long downturn for the airline industry. charge isllion euro adding to the carriers first loss with its planes grounded, the parent company says results are likely to be "significantly worse." 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. this is bloomberg. thank you so much. let's get on to news between covid-19 and what that means for the markets. coronavirus cases in the u.s. have top one million. lost thencan lives during the vietnam war -- now, more american lives lost in the during the vietnam war. the record long u.s. expansion

is all but certain to come to an end with the release of first quarter gdp data. joining us to talk about markets and lockdowns and restarting the economy is fidelity investment head of global macro and investment strategy. great to have you on the program. looking at the macro confluence is and exactly what we are seeing, you are focusing on the recovery. what kind of recovery are you expecting to see? i think it's likely to be -- across the world and we will expect, with social distancing measures are very likely to be in place for longer which will make activities very difficult in the sector. v we are not expecting a

shaped recovery. potentially with new measures imposed over the next few months. francine: we are having a little bit of connection issues as we are going to take a break, redial and get you back more on the recovery. we will get back and talk more about recovery and what social distancing actually means for consumers. more on that shortly. this is bloomberg. ♪

francine: this is bloomberg surveillance. having a great conversation about the recovery and what kind of phase fidelity is looking at. ,et's get back to our guest head of global macro investment strategy. we were talking about the recovery and you were explaining what kind of recovery you were expecting. the socialpecting distancing measures to stay for at least a year. that would mean we could have a very touchy recovery. as economists are -- economies are opening up now, we will see subsequent waves of infections. able to do widescale testing and tracing across the world, that means activities are going to be very difficult,

particularly in services where you have activities and that means recovery is going to be very slow. worldne: what part of the will recover before others? does it depend on how the lockdown is eased? is it too soon to say or do you already have preferences for certain regions in the country? long does depend on how the lockdowns last. going into the crisis first, they are coming out of lockdown, i think china as the roadmap on the exit and the effect on the economy. far, secondary waves are relatively limited. i think also those countries that have been doing more

introduced give here,ive policies and germany in particular in europe, veils of australia and maybe the u.s. given the amount going into the economy. it is very right now. look at: when you long-term fiscal response i know you think these of it at -- these of exceeded expectations. are these reaching the right part of the economy or is there concern that in theory it is great but in practice it is difficult? clearly in terms of think thesize, i do focus is on the implementation. those areas that need cash the most haven't seen that yet and

that's in the u.k. in the u.s.. because these are so unique. longer it takes to reach those areas, the deeper it's going to be paid and so if you think about it doesn't matter how much, if the money doesn't go into the economy than the fiscal multiplier zero. >> what can you tell us about how much my fiscal stimulus monetary policy help we will get? it seems everything at the moment is trying to deal with the crisis. how do economies recover? right now the focus is on providing credit and bridging incomes of households but as we

come out of this crisis, much more fiscal support will be growth andocus on make sure the economies recover. i think the place the needs it europe, obviously we've had commitment already, it is small relative to the size of the u.s.. get somewhereto between 3% to 5% of gdp in the u.s. and potentially more over the next few months. in europe it is still very low, so we really need a fiscal response at an areawide level and of course it needs to be liquidity, just on

the structural reform particularly in italy and spain. much more fiscal stimulus and it will have to focus on those measures, that will really help in the recovery. what can you tell us about emerging markets? i know they are not all equal. the pandemic is starting to reach in some countries and that's a huge worry. are we going to be talking about debt forgiveness or something like that? >> i'm really worried about emerging markets. at these,you look they don't look as vulnerable as they used to, but i think because it is about public clearly a lot of

emerging markets have very weak health systems and weak institutions in some politics that is really unhelpful in the current crisis. the combination of the collapse of the oil price, the weak institutions and also quite limited governments with policy maneuver will mean emerging markets are facing difficult times and i think the pandemic is spreading their now apart from asia and so i think we are potentially looking at some emerging markets crisis over the clearly aonths and lot will depend on multilateral help and if they will get that. for now when i look at the biggest emerging markets i see the most vulnerable are

countries like brazil and mexico and potentially some asia where lockdown just up -- just proved extremely challenging. and given the system i think we will find a tough to bounce that quickly. -- bounceback quickly. francine: thank you so much for joining us. some great analysis on the macro trends. coming up, corporate earnings and some of the chief executives out there trying to figure out what to do and what markets they want to go into. hydros after north reported first-quarter earnings among the pandemic. that's coming up shortly. ♪

francine: good morning everyone. looking at the european banks. we have the earnings from wall street, deutsche bank coming out with earnings today. we spoke to the chief financial a about how the pandemic is raging through the economy and what it means for bank lending. >> we have had a significant

number of applications under the german law for moratoriums on interest and principal. that extends over three months and we've been engaging with clients and been providing the supports in terms of those holidays. >> can you qualify as quantify those numbers? >> and application terms about 50,000 that have come in today and we expect more and so we are working throughout our network and online to support clients in a way that the law perceives. the impact of that we see as being very manageable in our risk constraints and our liquidity cap bath -- capacity. on track to post a pretext profit this year, but

now you expect revenue to be slightly lower, does that mean you will make a profit? targets wereal 19.5 billion, and there we feel we are on track. the expectation is we will exceed and improve upon that target. the other principal as we had were capital targets, hence the decision on sunday to suspend those targets. people we be clear to are not essentially abandoning that level as a target. we are suspending that, we think we will restore our capital and move through the 12.5% level but we think we will restore it relatively quickly, hence keeping that target for 22. francine: that was the deutsche bank chief financial a speaking

to matt miller. coming up plenty more on your markets. this is what i'm looking at in terms of what we are seeing, euro-dollar, it's interesting story. we will discuss that shortly. a full roundup of your markets we will also understand what many more banks have been saying. here is the chief executive -- our position overall was 2.1 billion pounds, of that come 1.4 billion pounds was basically what we think might have happened to our consumer and corporate credit business if we had a very difficult economic scenario play out for the rest of the year. we take forecast around unemployment and we use those for the u.s., we take a gdp

reduction which was quite severe in the forecast for the third quarter and you run those forecasts through your models and the models punch out at 1.4 billion pounds reserve. high,mployment goes that we have reserved we anticipate the kind of losses to be. if the government response is so robust around the world first to mitigate contraction the economy, that will free up reserves later on so we think we have been prudent but it shows given the inherent profitability of the bank we can take reserve like that and still make 600 million pounds after-tax possible. >> a lot of people are focused on concerns about the health of smes, consumers, and small and medium-sized enterprises. what kind of demand are you seeing from loans, from smes and

i suppose you got to throw in the credit card business as well. a lot of small businesses bootstrap those with credit card. how helpful have government programs been in helping you to meet that demand? >> the thing we are really living with is the strain and stress that is being put on the consumer and the small businesses and the self-employed, it really is difficult to watch. like we havethings given payment holidays to some 230,000 consumers who were clients of the bank. to try and ease that pain. more in terms of demand of credit is less. people stop spending they are trying to reserve cash and hold on for the recovery. isthe demand on our credit

not what you expected to be. weare extending credit where they want to. extending low interest long-term credit, transmitted through the banks were in the case of the program we -- our skin the game is about 20%, we've done some mortgages like a student program. two small businesses in the u.k., so the governments are putting a lot added. i think it's just begun. we all need to preserve our because theyegrity can start to hopefully bring andoughed employees back in we are all going to need to do

our part to get that part of the economy reengaged or this will be a tragic economic crisis. this is what european stocks are doing, fluctuating it touch again. a lot of earnings from the tech sector, let of bank earnings. -- a lot of bank earnings. this is what your markets are doing. andpean stocks fluctuating then seeing these in health care and personal growth shares. ♪ staying connected your way is easier than ever.

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from all of that on xfinity.com. faster than a call. easy as a tap. now that's simple, easy, awesome. francine: this is bloomberg surveillance. let's get to new york city with bloomberg first word news. in the u.s. were

coronavirus cases now top one million. death rising above 58,000. more american lives lost in the vietnam war. president trump told meat processing plants to stay open. he signed the's enclosures threatened food supply chains. in bad loan provisions are overshadowing a blockbuster quarter, securities division reporting 77% jump in first-quarter trading revenues, more than double the average 30% gain. isclays also set aside it provisioned a decade. now to the test -- tech world. alphabet share surging after first-quarter results. the company's businesses cap going -- growing in the midst of the pandemic. sales over $303 billion fine that's up from a year ago.

cloud topline soaring. and we end with volkswagen joining other automakers with the unprecedented follow from the coronavirus, it's expecting those to drop severely down to supply and demand around the world. effort to rein in spending will allow the company to remain profitable. 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. this is bloomberg. francine. francine: thank you so much. let's talk about monitoring fiscal policy and what this means for the u.k. economy. my next guest was the youngest ever vice president of the world bank. she served as managing director the imf and governor the bank of england. now director of the london school of economics, let's get straight to her.

welcome to bloomberg surveillance and thank you for taking time out of your busy day. when you look at the economy and what we are seeing in the recovery, how do you see it playing out. i think we are going through a period where the world economy as a whole will look like different including the u.k.. trade could change. makinge is talking about supply chains much more local. that's partly a response to the crisis of coronavirus but it's also a response to automation which make me cheaper for firms to bring -- and it's also a way to protect yourself from trade wars. we are also going to have an economy that's much more digital. we see the move and digital in this crisis and a lot of that will stick and we will see more

domestic and international trade in services going digital. we will also be in a world of very low interest rates for a very long time. u.k. andnments, the others have borrowed a huge amount and people will be worried about inflation and what's happening on the supply side. whichl be in a world demand for social insurance will go up. i think this crisis is revealed what many people -- that many people have no savings and no other protection and no safety net and demand for that will grow and there will be a backlash against the sort of extreme flexibility that has occurred in our labor markets. that will require taxes to rise. francine: how much more support

will households actually need when the economy starts to recover? a lot is now being thrown at dealing with the crisis come once the lockdown ends and the recovery starts to make sure we have real growth, what kind of measures will we need? >> i think the immediate measures of keeping the economy in hibernation until lockdown ends will have to be phased out. natureill depend on the of the phaseout. theink everyone expect lockton will be phased out and i think the economic return to --mality will be multiple multi-phased. francine: we talk about inequality, what kind of reviewing will it be

and what will be the right way to address this? inequalitiesxtreme are between rich and poor countries. i think one of the tragedies of the current response to the crisis is national governments have thrown out the kitchen sink at the crisis. they have been far too inadequate in international response particularly on the poorest countries with the coronavirus is only just begun to play out and if we don't prevented from being a catastrophe there come we will never solve that pandemic. and i think that is where the worst inequalities. within countries was unique workers whor those are working flexibly. workers who are part-time, gig workers. those are people who have suffered the most and where the

lack of safety net has been most apparent. francine: when do you think we will get, will this be a new to theor when we go back growth of economies we had in the past, will it take five years or 10 years? do we understand the consequences of this huge crisis? >> i think what's different about this crisis, usually when you have an exogenous shock or supply shock in the oil market, you have a bit of a boom afterwards even tragically after gdp and inan see this recovery and that creates economic activity. what's different about this crisis is we are having a big structural change in our economies, people's willingness to travel, people's preferences to operating digitally.

as suchvery will not be a bounce back it was before. it will be a recovery to structural change, it will take more time to generate growth. like beinghat is it the head of one of the most well-known universities? when you actually expect digital courses to restart. >> it's a huge challenge. we were one of the first shift online. has amazed how everyone risen to the challenge of operating virtually for the remainder of the academic year. we are looking at what happens at the beginning of the next academic year. i think particular uncertainty students.rnational we are preparing is a contingency to continue online

if we have to. we are also thinking about how social distancing can operate on campus. importantly we are doing our best to work towards recovery. a very interesting analysis was published from the lockdown should end using a well-being concluded that in the u.k. for example the lockdown should and. done great work on practices and how people are with theth tragedy government adjusting its policies on issues around coronavirus. how differenting theseolds are coping with .- with this virus

francine: thank you so much for joining us. up, we have plenty more interviews coming your way. we will speak to two chief executives. we will speak to the chief executive about a number of things including possible m&a in this kind of environment and then later on we will talk with one of the largest banks in northern europe coming up shortly. this is bloomberg. ♪

francine: let's get on to some corporate stories of earnings we been watching closely. coming out with first quarter results earlier and they set itself positive effects from currencies and volume also realized how many and prices had a negative impact. guest,et straight to our she is chief executive officer and joins us now on the phone. thank you so much for joining us. and isalready cut capex put dividends on hold. will that be enough to whether a long-lasting downturn. we have implemented forceful mitigating actions, but we will continuously evaluate further as the situation develops. tos more important than ever

focus on elements we can control ourselves and happy to see their improvement efforts coming ,hrough in the first quarter obviously there significant relatednty and that's to the covid situation moving forward and that's why we have to be on their toes and focus more in the areas we can with cost control and improvements in all aspect of our business. what kind of other measures? tot are you looking into mitigate the circumstances? costsare focused on throughout the company. ourell as restructuring business is where we see and that's been ongoing for some time to look for opportunities to reduce cost and keep us on

the cost curve in this environment so that we are demandwhere we see the is challenging. given how markets are developing, what are the chances you won't issue dividends at all this year? >> they have been asked to have to consider that and keep the cash within the company will we see how the situation develops. francine: some of the plans we heard about, do you think everything is on hold or are you still looking to sell parts of the business? the -- those that we have under review for some time we

are continuing that process with speed. the covid situation makes it difficult to travel and to be out in the market, but we have options on the table we are not taking any decision yet. that process is ongoing. francine: talk to us about your customers. as there is a gradual easing of lockdowns across european countries, what are your customers telling you? with a ramp up production, will they be using some of these are they being cautious now? >> that's the big question for us. we see in europe, we have the lockdown and temporary curtailment spread some of these are restarting but at which speed and with what shape is because be questioned we hear about the automaker

starting up at which levels and speed it's hard to tell at this point. that's the uncertainty for the next quarter. do you think your customers are waiting to see a second wave of lockdown or what of the questions they are waiting for? for think they are waiting the final customers optimism in the sense that people in the lockdown and have been out to work will they buy a new car or will they start to build a house, it's really to see how the customer optimist is coming back after having been locked down for some time and have been without a job. that's the main question, the customer started to pull for these products. thank you so much for

joining us today. excited -- a company that has deal with the real economy and real customers. coming up don't miss our conversation with the chief executive of swedish corporate bank, they also reported earnings, that conversation is up next.

>> good morning, i'm francine lacqua in london. let's talk about sweden and the banking system in europe. sweden is the second largest bank by market cap. reporting first quarter results on. we break down the numbers earlier for you despite negative impact from the coronavirus pandemic, the underlying business. let's get straight to the chief executive, thank you so much for joining us. banks have seen capital requirements lifted and other requirements. is it enough or you expecting more to fulfill your primary

function now which is lending to small and medium-size enterprises? >> thanks for having me. i couldn't say if it's enough or not enough heard i would say that's a very good stretch. we are operating in 20 countries in the national response to limit the pandemic effects have been quite different in different countries. i would say we are very impressed by many of the quick decisions governments and other authorities have taken but there is clearly room for more should this situation deteriorate. >> how much more lending are you expecting to do at this time? >> we have just today in conjunction with the report showed that we have seen a very large increase in lending demand. we put a number on it. just shy of two months.

which is an increase which is significant, about 10% and as such -- in such a short. of time. ita goodyear we would expect to grow by 5%. we have done two to three times that amount in a very short amount of time. we've seen from the credit card statistics that we follow very frequently and along the pipeline that these levels are beginning to tail off so they are elevated so that the down ,ick in credit card spending they are not continuing to fall and we've seen demand to increase and stabilize on these levels. and we share that now come we have about an 8% incremental demand for loans that we publicly have stated on the balance sheet at this time. customersh our drawing on credit lines and how much more in the weeks and

months? are you getting new ones are just extending the ones that are already existing? >> it's different for different banks. a corporateminantly and large corporate bank. much sent to undrawn facilities at this time. 133 billion, we could see millions coming in and most of these are coming from large corporate spread large corporate so fast. they have strong balance sheets and professional finance departments. and they are acting in a very forceful way to almost using an insurance policy type narrative. it is a rainy day. to the it's very similar last financial crisis where the banks were in the center of the storm. companies ask for credit

commitments. if you look at what's been drawn in undrawn on the existing ones it's a marginal increase. it's mostly the credit commitments at this time. sweden has had a very different approach to almost anyone else in europe. do you think this was the right approach and what have businesses been telling you? >> i have no clue. we are part of dialogues every day trying to review and critique the different responses. swedenlth authority in has a very high degree of confidence amongst the general population. there's definitely a belief that we are doing as well as we can in sweden and we do it appropriately. being an international bank we see very different problems and responses in other countries. it is definitely clear that if you want to have immunity for population, this is the way to

get it faster and reduce the effects of wave risks and make sure the economy doesn't take an unnecessary beating and given social distancing. i'm not buttigieg what's right or wrong. that sweden has -- there's been a bit more of a reluctance with social distancing. question that actually caught our attention, something you were saying in the call earlier on in earnings. lowcally saying is a very comparability across banks, why do you think that is? >> the accounting standards for how to treat this, for years we've been implementing it. we ran it in peacetime so to have a clear we

drastic turn of events of the negative and we are testing it right now. all the local financial authorities have regulators are telling the banking system to use wisdom and good judgment and not to be to model based. so it's kind of calibrated in the best way. that gives you a degree to do what is right. we want to be prudent and accurate. i've seen the reports from the u.s. and several are in from europe. thank you so much.

w?w?uhió'ñó francine: coronavirus cases in

the u.s. top one million. in europe, france is set to reopen on the 11th. yet -- italy gets downgraded. bank meetsntral today. european earnings season continues. we talk to chief executives of astrazeneca on their efforts during the pandemic. good morning everyone. the focus on the number of cases in the u.s. and the focus is on a lot of earnings, it's on the of and the gradual reopening a lot of european economies. tom: the fed is front and center to really report in this crisis. michael mckee scheduled to be at that press conference and will do a full show this afternoon even though so many of us are remote.