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. the coronavirus has been a

remarkable 24 hours. the sirens are still more than evident on this island of manhattan and with that said there is quiet across the nation today, it's just a benchmark of the deaths in the covid virus reported in america are now greater than the deaths of americans from the vietnam war. that is a real touchstone in america. looking at figures for london, the number of deaths now bigger than what we had -- one thing i was reading about in the u.s. was number of deaths and care homes. states retro ramp-up testing to make sure the elderly are safe. news go to the bloomberg in new york city. >> we begin with u.s. federal reserve policymakers to keep the benchmark rate near zero.

focus on thelikely next step it can take to rescue the economy once the lockdown ends. the decision at 2:00 p.m. new york time. area that might need support, mortgage servicers. a couple of grim milestones of the u.s.. the number of infections topping one million. that is a number -- and then number of deaths passing more americans killed during the may vietnam war. in the u.k. there is a sign current restrictions are likely to continue until the second half of may. systemernment seeing a don't take off once a lockdown is like -- lifted. 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. let's look at equities, bonds, currencies. a vanilla data check. higher, dealsties come in. equities lifting up but the yields come in looking at the 30 year bond under a 1.02%. -- 1.20%. francine: i have a very similar data check. looking at dollars what this means for emerging-market currencies. year, if you.s. 10 look confidence in the euro area , it's unclear when consumers will start to pick up again and that's the main concern for the market. looking at dollar falling, oil

advancing. very good, it's arguably the house -- the hottest streak. hsbc with a stunning equity of 2018t the bottom drop. call even adollar strong dollar call. nothing like steve majors call. sherry pandemic helps out in this great economic contraction but in -- but it's remarkable how steve major has nailed a low interest rate call. he joins us now from hsbc. good morning as well. i wanted to reaffirm the direction of the 10-year note. summersay over the hypothesizing how the 10 year yield under 1% and even driving it lower. interestsible that rates could drive ever lower? >> costing 50 basis points for

the 10 year treasury, it took us a month or so to commit to this. we had to do some analysis. it obvious he gives us bound for a while, that's like a magnet across the curve down. iso more academically their our staff which could be 100 basis points lower than we previously thought. the fed was guiding to ask around 50 basis points in the medium to longer term. we might have to wait until june, but i would suggest the pandemic effect has taken are stocked on a long way. if that's the case, we need to on thetting our sites range further whole treasury.

>> this is extremely important. talking about one full percentage point shift. steve major, there seems to be a persistency to that, how long do you perceive this or even outright good inflation we will see? what is your timeline? all, the japan efficaciouse japan is underway. it's a decade or so long trend. debtan talk about excess driving yields lower come we can talk about this inflation. we can flow through all kinds of things on this. thinkw development i gives us disinflation and

deflation as for the next year or so. we can talk about inflation later, but most of us have this in the back of our minds and eventually some of it can get out and you can get it conventional inflation move. and central banks of got the tools to manage it. i'm more concerned with this. maybe a couple of years we could see some inflation pressure. heart, i'md on my not sure i could believe them. first.isinflation with the specter of deflation, what would deflationary pressure look like? word andar the

probably think in a negative way. but i was explaining this to my colleagues recently. if prices go down more than your wage goes down you are better off. you can take a 10% weight reduction if the prices of everything went down 50%. i'm not saying that's going to happen, but there is a good deflation. -- could also say japan has zero,e had 20 years at the project 10 more years. people seem to mother along over there. it's all about how you measure the success of the policies. i wonder whether the goal posts might start shifting over time. there were supposed to be a framework, what has happened to that? if you want to show -- slowly

maybethe goal posts, then there's been a successful outcome at some point in the future. can you talk us through how much more stimulus of the fiscal kind of monetary kind will be once the economies pick up. what we had so far from the fed, just to deal with the crisis and a lot more to make sure the economies stay on the right path. >> the numbers are huge. world, it's heading 15 to 20% and this is just a catch up with a downward move in the economy. multipliersis what are here that we are assuming?? the fiscal two employment

multipliers in certain convexity. billion,create $100 it's less. so the authorities are racing to catch up to fill a hole that's been created. here are going to continue and then we will be joined later in the hour as well. comments areyour absolutely stunning and i wanted .o talk about the non-linearity trillion i guess as the fed balance sheet. tell us about the challenges that the chairman has with that build up in the balance sheet. they are for 9 trillion or so , there talking about convexity.

i've got an open mind on these kind of things. slowf you are in a long long -- of have a slow growth, then you have a long perio of recession. everything compresses on zero, the balance sheet is constrained as well. you can't build it forever. they were buying 75 billion a day as of a month and a half ago. purchasesized rate of of assets. the point is they are constrained and they are's scaling back. the policies that might be there, yield curve control we discussed more.

the guidance itself could be important. they could have projections for that. they could come out today or we would have to wait till june. this opportunities to give guidance. how much they are going to buy each week or all kinds of tools they have that they can deploy and so i'm assuming that stays in place. thank you so much. steven major. he joins us back in about 15 minutes from now. coming up next, the chief executive of astrazeneca to talk about testing and vaccinations. that's coming up next. this is bloomberg. ♪

francine: many businesses have suffered from the pandemic. drugmakers story for that have been in the spotlight like never before. a lot of companies have been stockpiling the medicine. astrazeneca working with the government and trying to find a new test and drugs to fight the covid-19. we are delighted to be joined by the chief executive of astrazeneca. thank you for joining us today. i want to ask you about

something everybody is excited and worried about. your collaboration with glaxosmithklein and testing for the virus has a goal of 30,000 test today in may. how is that going? >> very happy to be with you today. it's going actually very well. team have done an absurdly -- absolutely incredible job. we have 100 50 people working on site in cambridge. bringe been able to various equipment. we have a lot of equipment i was site.g on and we directed this equipment to the testing site.

we are going to start testing this week, we are very much on test a daye 30,000 very quickly. do we trust those tests? >> go ahead. francine: i was going to ask if we trust the test as far as the unexpected challenges in this. >> we do trust the tests. there from a u.k. based company and from a design. we are very much working with validated byt is the nhs. much onthing is very actually testing will work very well we believe.

we think we can really very efficiently with this in the things we have on site. francine: how much time is astrazeneca trying to figure out covid-19 the pandemic and how is it affecting development, marketing, the the use -- >> you have to kind of keep in mind people of the most exposed to this infection in terms of the consequences are the people who have underlying conditions, anybody who has asthma or hypertension, any of those be more is going to de-risk. we make medicines to treat all these conditions, what's very

important for us is to make sure we provide patient with her medicines so they can keep those conditions under control. through factories to make sure that we could produce those medicines. aspect has been looking at how can we come up with potential new treatment and we looked at this in three parts. one is the immune response. to the extent they have these in theirlammation kidneys and heart. developing an are

antibody that can be used to treat and prevent the disease. we are also in the process of testing and inhibitor that is leukemiasome forms of and can reduce the inflammatory response and also we are testing an agent we have shown that benefits the heart and kidney. tom: i want to be direct. israzeneca is a stock chart the envy of anyone in the world including jeff bezos of amazon. withave been on a tear wonder drugs to come including your stunning lung cancer success. we see some sell ratings including goldman sachs has a cell on your shares. he and i looked at your -- i

looked at your financials and it's really interesting for with the astrazeneca success how you're going to shift from a dividend paid off debt to a dividend paid off cash flow, how will you accomplish that and when will you accomplish that? >> thank you for acknowledging we are doing well but i can tell you it hasn't been like this always. and it is the result of the hard work of a lot of people in the organization, everybody has been very -- working very hard. tom: tell me about the dividend. this dividend question is critical to wall street. as far as goldman sachs you will have to ask them why they have us on that. why weey could explain

are there. , we have saides for years we would look for a time we would not cover the dividends with cash flow. topline --re strong and we will cover the dividends. this year we will cover the dividends except for the one-off payments we have to make as part of our collaboration and from this wer and beyond will no longer cover the dividend and start leveraging. i think this reflects that they believed we are trying to achieve that. what is most perplexing about this pandemic?

when you look at you are at the forefront of china, what have we learned, what can we learn from china? i think we've all learned -- absolutely everybody has been learning something new. verye whole world has been -- has been trying to adjust to it. is credibly contagious which is a big difference compared to other infections and by being contagious, there are specific challenges because people become contaminated very quickly and people can be contagious even if they have no symptoms which makes the challenge even bigger because you don't know who is going to infect you.

is anotherhing physical aspect -- physical aspect of this is hyper immune response tends to trigger in some patients. contagious it's very it affects a lot of people in is anyper immune response inflammation of the lungs that forces people on a ventilator and is driving this mortality we've seen. everybody has been moving very quickly come with think about how quickly the medical is workingeverybody in looking for the cure and prevention. it is a big challenge for the world and we are all adjusting as quickly as we can. very quickly, is

business the same as it used to be? >> china has bounced back very running factories are at full capacity and our teams are very much actively back at work. worriede patients are about going to a hospital which is what we see throughout the u.s. and everywhere, but it's a problem of course because patients who have chronic conditions need to see a doctor so they need to to make sure their welfare is taking care of and if they don't they will allow other chronic conditions to get worse as well. chinaare rapidly in , no with to normality some specific aspect, people are wearing masks and social

distancing. we are returning to a new normal. tom: very good. thank you so much. we will drive forward the conversation particularly with the fed today. on european economics, no one better to speak to van jill. and the quietcs of their economy. york, this and new is bloomberg. ♪ save hundreds on your wireless bill

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celebrates the birthing of a baby boy, a big deal and a celebration after a very sick prime minister. francine: it is a celebration. we found out boris johnson with boy, borne had a baby earlier this morning. they are the first unmarried couple to move into downing street together, and i'm looking at twitter and some of the comments. this is like u.s., a country that has had very bad news with the coronavirus and so many arrivaleople about the of a bouncing baby boy for the prime minister. tom: you see a brand-new baby and the first thing you do is look at the hair. can you imagine what the hair will be like? s froml be seeing baby gif steven major.

steven major rejoins is now. your comments on disinflation and deflation are extraordinary. what did they mean for the credit market, away from your expert study, full faith and credit, what are the ramifications of that disinflation for credit and high yield? surface youn the would say that the fundamental , the the economic data outlook is pessimistic. it suggests more reorganizations, more restructuring, wider spread. we were setting up for a credit there market coming into this year, things like the flat yield curves, the consumer sentiment. we were overdue a recession. the ideaally, i get that spreads have to be wider.

it is not good for credit, but now you have got backstops so the fed has been very clever. without buying very much, they have in a backstop and there was a line in the sand on the 22nd of march of what is defined as a fallen angel. before that, you are good as far as the fed is concerned. i am wondering whether the ecb may go down that route they are not into buying junk. they may own some but they are not going into acquiring some. ,t is clever, these backstops because without using much ammunition and breaching mandates, they provide a backstop i don't know -- backstop. true for aw if it is multiyear horizon. at some stage, there will have to be a handoff from the public

sector to the private sector because the bank says, we are not buying this anymore. that is somewhere down the line. i think for now, central-bank backstops put a cap on credit spreads and it is correct that we have rallied from the wide. the central banks are signaling .trongly that they are there enoughe: is there solidarity in europe? some countries wanted corona bonds, eurobonds with this new fund. will we be left with countries that will see a repeat of the greek crisis because they will need a bailout? steven: there is an allergic reaction from some countries. eurobonds,s,

security bonds, it is predict bowl with a will say. i have looked at this for decades. everything has changed. the ecb balance sheet is so big and will keep adding bigger. there is a debt realization going on under the table so if you are a creditor, you can meet with debtors and discuss in an orderly manner, or get it done for you under the table. that is what is happening at the moment. the ecb is building up a huge position in the bond market, financing its position reserves. those flow freely over the banking system and over time they are mutual lysed. a lot of people do not agree with that and cannot see it, but you have to convince me these huge numbers are not relevant. the ecb takes down the entire

flow of the italian debt and then some. yields cannot go up in a meaningful way and that is what matters. tom: steven major with hsbc, thank you so much, with a terrific call on that r-star idea on disinflation. on this day of the fed with our first word news, here is viviana hurtado. signed anonald trump executive order compelling slaughterhouses to stay open. a number have shut down because of coronavirus and donald trump says that frightens the supply chain. activists want to protect workers from the disease. donald trump says states facing budget deficits because of the coronavirus will not get aid unless they take action against so-called sanctuary cities. the president says sanctuary

cities would be part of any deal with u.s. house democrats. now to germany, for the first time in three days the number of coronavirus cases is rising. there have been almost 100 30,000 infections, 6300 deaths. china, trying to build its way out of the coronavirus long. expect 565 billion dollars in special bonds to build roads and airways. --na did the same paying same thing years ago during the global financial crisis. 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. remote, of great

technical challenges in television and radio. that will not stop us from giving you the best coverage we can today of the federal reserve , the press conference after the 2:00 p.m. announcement. -- will lead our coverage. thrilled to bring you scott minor, all the controversy on his comments of a slowdown of this american experience -- experiment, scott minerd. this is bloomberg. ♪

♪ this is surveillance," tom and francine from london and "surveillance," tom and francine from london and new york. a push forward to the fed, we are joined by gilles moec. great to have you on the program. what do investors misunderstand about europe? gilles: i guess there is probably a belief in the possibility of the ecb to provide infinite support. large and theyis

could still do a lot more than they have done so far and probably well -- will, but it is not infinite. there are legal issues they need to deal with which is exactly why we need more progress on the fiscal side. not follow that -- they are probably intoxicated, so to speak, but why -- by what the ecb can do. francine: what more can the ecb do to support the economy once we are over the pandemic? gilles: i think there will be a supportn the quantum of of their need once we are out of recession. i really think that the nature

of the shock means that especially people at the bottom will need a large amount of support in the months and maybe years ahead. sectors will be impaired for a long time. deficits will be large for a long period of time, and the central bank will lead to make this possible. there are options to do this. in the short term, there should on increasing the emergency program. is on the [ocus indiscernible] the ecb could tell us about the thatestment of the debt

will be implemented. that would reassure the stability, but it is a big decision to make for legal reasons. lagarde will do that tomorrow but one thing i think will provide additional clarity. tom: one of the great words and phrases, concepts of the engineer jean-claude trichet is to diffuse and an economic and social impulses, diffuse across europe. how does a great economic contraction, a great exogenous shock diffuse from the netherlands and germany down to the southern countries? i am fascinated how you see the broader economy coming out in two to three years. gilles: i think the understanding we have is everyone is affect did.

affected i would say in due proportion to the severity of the lockdown. ,here the lockdown is mild probably the level of contraction is smaller. where lockdowns are severe, the loss is big. if we protect ourselves in the next two to three years, even if the northern economies have become less dependent on the asiaone and look towards for exports, it still accounts for a significant amount of exports. the netherlands are very open where exports are nearly 90% of gdp. about the current debate in europe is you have basicallyal countries

fiscal for a return of [indiscernible] quickly. depressed -- which will in turn -- if it was just about their individual interests , these countries should be more open to fiscal observations. tom: let me cut to the reality -- what do you expect from madame lagarde tomorrow? , iles: on actual decisions would expect her to be the more inerous on the fundamentals the fed is very generous, allowing fundamentals to remain. the ecb has been halfway on them. they have allowed fundamentals to remain but they have not

explicitly said if fundamentals could be bought in a bond program or through the ppp. that our to tell us potential financials will be protected. there are two big questions, whether they are considering additional quantum approaches and to invest for very long, [indiscernible] i would expect lagarde to be open to this. i would not expect hard decisions tomorrow. the expectation for miscommunication is hard tomorrow, because if she sounds [indiscernible] or the

reemerging has a hard limit, my fear is the market would not take it well. francine: thank you so much, gilles moec joining us to talk about the economy and europe. withg up, a conversation ignacio gallant about -- ignacio renewables and his spain. this is bloomberg. ♪

♪ francine: good morning, good afternoon, good evening. this is bloomberg "surveillance." the focus is on markets and the fed. the conversation has changed in the last 24 hours with economists and market participants trying to figure out what kind of monetary and fiscal stimulus will be needed to sustain a recovery effort when the recession is over, so look out for that and debt levels, and lock downs, whether

whetherl be eased and the economy can restart. tom: you see across the u.s. newspapers in the early morning a real jumble of timelines. one idea that is just out there and a little bit in the zeitgeist, and maybe it coalesces and sums up all of this in the united states, mr. trump's polling, ratings are very weak. 43% is considered a benchmark there and in some of these selective poles, the president has dipped under that. you wonder about the urgency as he juggles opening up the debate, the lockdown and also with it what to do about the american economy.

i think it will really be interesting and we will focus much more on the fed meeting and words and actions of chairman powell. francine: we well. -- will. the conversation on utilities, the first one to report earnings, the spanish company reaffirmed its 2020 outlook, brushing aside concerns about impact from the coronavirus. we are thrilled to be joined by ignacio galan, the chief executive officer. epidemiclook at this and how it is impacting prices and energy demand, have we seen youworst or are we -- are going to have more pressure on those front? ignacio: good morning, francine. it is a situation we never faced

for, so what we have seen is the that started initially was spain and we had already suffered in this demand drop for think the but i situation is being recovered. it is already increasing and the demand is moving the situation, where before the blockage for all the activities. -- not beenbeen to affected for demand because of our regulated activity before the hedge. the retail prices are hedged. and weieces play well have not been affected until now. francine: when you look at the price of oil, and we spent a

good amount of time in the last 10 days to figure out if wti can go into negative territory more often than the last 10 days, how does that adversely impact demand for renewable energy? think it is a very strange set of circumstances. germany, we have seen electricity, and the moment the to absorb.ot allowed in germany, the price was negative but that was the situation. we have to look before the crisis. in the case of electricity in europe, our prices were not at the level --

ceo --u are and esteemed ceo of spanish culture and work in the united states. what has been the best practice of spain to get beyond those horrific set of nursing home calamities that we saw weeks ago. iberdrola so -- ignacio: so i think first on that one is the early decision, to take the decision as soon as possible. nobody thought it would be as bad as it is and in those we had already acted. lesson.the better to spend a few days in tough conditions than to spend more in tough conditions.

our company, we took rapidly that decision and the number of people affected in our country -- company is much lower than the rest of the country. tom: we are out of time, but we say thank you so much for joining us. francine and i look forward to seeing you in madrid. mr. galan of spain. eric robinson joins us with standard chartered. it is a focus on the fed this is bloomberg -- fed. this is bloomberg. ♪

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continued to surge on the powell-lagarde jump on put. the chairman will stay socially distant from jeff bezos will not buy amazon shares. a week of central banks to the rescue. meet packers are leaving the virus we know there -- virus. we know they are buying cuts they have never bought before. in these three months of vietnam war, the number of dead good morning, -- dead. good morning, everyone, bloomberg "surveillance" from new york and london. the emotional swings from this landmark of 58,000 dead and harkening back to the vietnam war, to the