italy reports the fewest deaths since lockdown. we'll get a view from the ssociation of italian business about the path forward. president trump sees the u.s. 100,000.ll rising to the u.s. secretary of state says there is evidence that in a wuhan began lab. global markets sink. risk-off returns as investors infections wave of and a steady stream of bad economic data. good morning.

evening.ernoon, good this is bloomberg surveillance. i'm francine here in london. of course, it's monday. to everyone out there. a lot of the focus is on what we heard from president trump yesterday. ideal way to actually reopen an economy is well.uarding lives as we'll look at italy as today is the first what they call phase two. actually day that it's starting to slowly reopen. his is what your markets are doing. the focus is not just on european stocks, but on -- you can see european stocks down some 2%. crude oil. because of the rolling of the contracts and what we saw just a to le of weeks ago need spend a bit of time in terms of oil and what they see. president trump also blasting china. we troo i and figure out what that means for trade. e'll be speaking to our brenda murray very shortly. now let's get straight to new york city. bloomberg first reviews is -- we begin with the daily --

falling from the u.k. to italy. hat's as leaders across europe grapple with how to ease lockdown restrictions. the government prepared guidance for the next. this includes if employees need wear face masks and the use of public transportation. here in the united states donald trump says he won't pass further stimulus easures unless they include payroll tax cuts. for weeks he's been advocating for the move, but most democrats it.ose it's not clear how much support it has among republicans. he made the comments during a virtual town hall event. a question for you, why hasn't struck any thaway mega deals during recent market volatility? this crisis is different. warren according to buffett. he says the company hasn't found any attractive deals today. this with its record 137 billion catch pile. the fed stepped in, the opportunities became women's network less attractive. the comments by the way

at his annual shareholder meeting, and at the sign of a it was an annual web cast. in years.rst time it was followed by retaliation and a verbal warning. he escalation coming a day after the north korean leaders first public appearance in 20 prompted absence global speculation, by the way, about his health. on al news 24 hours a day air and a quick take by bloomberg powered by more than analysts nalists and in more than 120 countries. i've viviano. this is bloomberg. francine? francine: thank you so much. resident trump, of course, accused china of covering up coronavirus. he promised the u.s. government out with a conclusive report on the chinese involvement in the pandemic. e also said that imposing tariffs on chinese imports would be the ultimate punishment.

to what the listen president had to say yesterday >> they made a horrible mistake, want to admit it. we're going to be giving a very exactly what as to we think happened. i think it will be very conclusive. it could have been stopped on spot. they chose not to do it or something happened. either there was incompetent or it for some o reason >> how do you feel about president xi? relationshipe your with him? >> i'm not going to say anything. i had a very good relationship. should not have spread all over the world. they should have put it out and et us and other people

francine: what would you worry about if we were to see a of trade tariffs? are they -- given that they were he first one on to shut down, so a lot of companies, i imagine, had to refigure out how to process things and get them out? i think you would see a on of businesses teetering the edge of collapse. you know, doing that rather they had to pay more in tariffs. one of the questioners to aesident trump last night was business in south carolina that was paying $60,000 a month in of tional expenses because the existing tariffs. he made that directly to the president, and the frez, you know, came back and said, well, we're giving the money that paying in tariffs back yeah, ican farmers, so, there's a sense -- and one economist whose note i read this the last time a resident added tariffs in a

recession what happened in 1930 and that ended in a depression. lot of people looking at the prospects of another trade war immense doing an amount of damage brendan, shah so much. brendan murray in charge of all our trade coverage. next, we talk about the european economies and italy as today begins the phase two. the relaxing of some of the lockdown measures. a lot of companies will start again manufacturing and shipping. about the director general of -- this is the italian lobby when it comes to businesses. that's coming up next, and this is bloomberg.

>> francine: good morning, everyone. surveillance.erg ow, nearly 5 million italians are returning to work this week. they're allowed to restart from today. this is what we call a phase two but, of course, shops will remain closed for another two weeks. to bars and restaurants, meanwhile, they've been told that they actually can't reopen for quite some time. i think until june at the earliest. as companies look ahead to further ease, what do italian the esses want to see from government? well, i'm delighted to be joined by the om mill aran director general -- thank you so much for joining us. is the all, what biggest concern out there? is it the economy, or is it to work?eople back are people still afraid of going

and shops?actories >> people are not really concerned going back to work. e are not experiencing any morning.this back to work -- going quite well. about not very worried that. they are worried about the economy? > when you say you're worried about the economy, how tense is this going too fast or too slowly? number of e's been a questions asked by the government. slowly re reopening too or too fast. in?h camp are you gdp in the first semester of 10%, which is really

something unknown since world war ii or women's network earlier. why we are very much worried about the future of the economy. we've that since today been restarting the economic toivity, and slowly get back normality. nonetheless less, the whole of to follow- -- the dramatic fall of demands of this eek would be headed -- we need liquidity. money in companies in rder to -- and come back with investment. the money will arrive quickly, the economy will start to start again. we have a problem? >> francine: how much of a problem is it if we go into again?n

at the moment it's baby steps trying to figure out whether there are new infections. of here was a second wave infections and a lockdown, who that be worse than actually reopening time and the economy? would be much worse, will be a new -- -- which means where the contagon is happening. show this quite clearly, contagion didn't happen in productivity activities. for the the agency and security within companies issued a paper that workers that have

taken coronavirus weren't workers within companies for but workers for the hospital, mainly. account o be kept into because we cannot shove down all economic activities by, let's say, as the start of this. we have to go and check where contagion is happening, and then close those activities or hose single areas where grows? n >> what are members now asking of the government? state aide?ugh is the package big enough? executed okay? >> the urgency, as i polled told is liquidity.

this is slowly starting to to happen. it needs then if companies borrow money, to pay not use it taxes. hey have to use it to pay workers and to start the activities. then after this we need money. money for investments. the se we have to relaunch demands, which is blocked, completely blocked, and then the to relaunch it quite quickly is invest. public investments and private investments. his is the priority for the ext month. >> what kind of relationship do needs nk the government to better on?

now with the -- that increased the money for public and accessing credit. -- the starting -- has government started with some the rty provisions, but problem is time. and now are some slowly being we stored. we have we have to go on with aking companies access to credit to finance in order to risk their activities. e are quite worried that many will not be able to be

open after this long lockdown sectors are most at risk? i know there are many questions bout tourism, restaurants, you now, hotels. these ou see a lot of companies needing money for a very long time, or will there be bankruptcies? >> some sectors have been heavily hit. tourism, part of transport, but also manufacturer. some sectors have remained month, and that is a problem if you think that many you think part of ompanies are global value chain.

like hotels and tourism are particularly struck, and they assistance by the overnment. if there is one thing you could ask the government to do ow -- i know you talked about testing. is it anti-body testing to see whether people have had it, or s it just more state aide to, you know, maybe small companies hat struggle to get funding from the bank? i think we have to go on with

measures that help companies get liquidity, help companies feel and really g taxes, in order to allow all those get quickly to the economy >> francine: do you feel like italy has had enough support europe, or could they have done better? >> it's not a problem whether italy has had enough support countries european are sharing the same situation. think why we have to european and not italian in europe. -- i think italy that

new york city and viviano >> we begin with warren buffett. e dumped his stake in the four largest airlines. the billionaire investor remains collapse osed to the in air travel. berkshire hathaway still owns an aerospace parts supplier. it bought the company in a deal billion.7 as clients boeing and airbus cut faces lean on, it times. we end with roche. it's the latest company to win approval for a coronavirus anti-body test, and it promises to scale up the tool policy hope will help reopen economies. by june, this was giant expects production to reach the high digit millions.

that's your bloomberg business flash. francine francine: thank you so much, viviano. what we're looking at in terms of a pretty fighting president trump yesterday in an with journalists saying that actually the only way to punish china. first, he said that china should gotten other countries more involved in dealing with the the mic, and then he said only way to really punish china is to impose more tariffs. we'll have plenty more, of course, on that. we'll speak to brendan murray about what this means for global trade. from 2.2%.ocks down euro dollar $132. coming up, the hong kong the cial secretary warns city could be facing its worst economic slump. this is bloomberg. 49...50!

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even your dvr recordings. download the xfinity stream app today to stream the entertainment you love. francine: good morning, everyone. now, we did speak to one of the chief financial officers in hong when talking about what

kind of economic slump they'll face. we're waiting for some data that out in the next couple of minutes looking at hong kong. the size, of course, of the see.sion that we'll hong kong has really not only been hit by the coronavirus like in the world, but they have to contend with still some of the strikes and into 2019.at we saw see if we do have that data. we're expecting a clearer picture not only but also ooking, what's next. it's interesting to see hong kong reopening. leaders here in europe have been looking to china or hong kong for some kind us a sense to give of how they can reopen the minimally damaging, of course, the health of i know a lot of the leaders in europe have been looking for example, china, hong kong, for some kind of template. to give us a sense of how they can reopen the economy minimally

damaging, of course, the health of their citizens, while also trying to sustain the little growth that they could have in the next couple of quarters. all right, hong kong first quarter gdp just coming out. -8.9% in year on year, we were expecting a figure of -6.5 percent, so the first quarter gdp for hong kong coming in at -8.9%. we will have plenty more on hong kong throughout the day. let's get to new york city with the bloomberg first word news and viviana hurtado. viviana: we begin in the u.s.. as many as 100,000 -- 100,000 americans could die from the coronavirus. donald trump promises a conclusive report on the chinese origins of the pandemic. that is after comments from both the president and the u.s. secretary of state, mike pompeo, that the virus started in a chinese lab.

they should continue to do that it's work. viviana: for a parliamentary majority, they need a third coalition memory. deutsche's, lufthansa, expecting to reach a deal on government german aid soon, according to a letter the company sent to employees. the -- it would be a decisive step to secure the airline's future. the company says the aid is important to help flights resume as soon feasibly possible. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. francine? thank you so much. let's get an update on your markets. what will happen in the month of may -- i am delighted to be joined by andrew mccaffrey, global chief investment officer for asset management at the delhi international.

thank you so much for joining us. it seems the markets are stabilizing, but i'm not exactly sure what they are looking at. is it because the number of infections and deaths are going down and we are slowly reopening the economy? morning, francine. i think there are a number of things at play. one of the chief ones is that prices from the panic as we saw, the amount of interventions starting to feed threw two markets include impact, key elements causing the stress and panic, whether it be looking into first defunding relationships, whether it be looking at volatility itself, and seeing that ease, and then just the flow through from that to some -- i think participants can start to think about how long this may last. , is is the impact from it it more constructive than reviewing levels is that process

played out? i think the important part that may be -- thecine: how do you see reopening of economies, andrew? andrew: the reopening is an important part, with a number of optimistic views starting to surface around it being more that are v shaped in nature. the challenge now is that we have discounted some of that view, the slightly more constructive view. now we look at what are the consequences of unwinding the lockdown and the phase from that and the challenges that will arise for the real economic effects and effect on companies over the course of the months ahead. andrew, what are you worried about the most? i know there is this debate at the end of it, when we start to see an economy that picks up, will it be reflationary, disinflationary?

and that will change the markets completely. andrew: it is interesting because this conversation is increasing quite rapidly at the moment. i think the part that we are looking at first is that the hole that is being the intervention that we have seen from authorities, how much furthering that whole, how big it will become? in terms of inflation, i still believe that some of the production hits that we are going to be taking that are occurring now from the supply side declines, the effect on supply chains over time may well raise that inflation, but i think that still is going to be coming later rather than sooner. francine: where do you see the best value right now in the markets? andrew: i think the part that we

have been looking at is driven by two-fold. one, to see from the bond markets, especially, where we are seeing such significant levels of support and intervention by the federal reserve and other central banks, and to see some of the pricing around defaults that have occurred across different parts of the market. we have been focused more recently on to the new issuances appearing that had some fairly significant premiums and spreads for some of the companies that went to investment grade but possibly the fallen angel category. then looking out more toward the high and especially toward asia, where we feel that there is also more of the sort of regional weightings that could be seen as we see that part of the world basically manage the process somewhat better over time, but

also the activity picking up, and also you have a level of value that we think can be extracted from this. so really, a bias of looking to parts of the investment grade and slightly better sectors within high-yield, but especially toward asia and to china itself. andrew, is there anything more that the fed can do, or given what they have already done, to what you mentioned also, affording to high-yield, or should we not fight the fed because they are there and they mean business. andrew: i think there is a challenge around that, that maybe it is the part of moving through liquidity support that is being provided, and then into that sort of true solvency position through time, where some of the companies in these sectors are potentially not going to survive, are going to be very challenged. business models, the lack of

strength in the balance sheet ,eans that they ultimately will going to disappear. i think it is important to be very selective around this so that it is not just a generic view across the whole of the high-yield universe, but i think within pockets, definitely those are stronger -- they are well supported and we can see recovery starting to take place. i think another sector may the looking intot that parts of bank security, where we can find that you are going to have elements of the sort of , significant watching across financials more broadly than just banks that some of the discounts there were very

attractive. there is reasonable support given the way the central banks are trying to make sure that banks are part of the healing process this time. francine: thank you so much, andrew mccaffrey. he stays with us and we will talk about region by region, several of -- some of the countries where andrew sees opportunities. coming up, we have a full round up of the markets and we talk about u.s. jobs. the number of americans that have lost their jobs is absolutely astounding. economists are forecasting that u.s. april jobs on friday will also be quite ugly, so we are talking through what is ahead this week. this is bluebird. bloomberg.s ♪

francine: good morning, everyone. this is "bloomberg surveillance ." let's go to viviana hurtado. viviana: we begin with westpac deferring its dividend as the prophet plunged to a two decade low and bad loan provisions sort. .- soar there is selling some of its small units, including its wealth and insurance operations. the company says, "this is the most difficult result westpac has seen in many years." not to blackstone, talking about an investment in chinese properties. they seem to have stalled, sources telling bloomberg the coronavirus pandemic is making it difficult to assess the outlook. recent turmoil is introducing concerns about financing a deal. and telephonic --

liberty global and telefonica are closer than ever to negotiating u.k.'s biggest operator. a potential deal could come as early as this week. o2 andd see a merger of virgin media. the combined company could be valued at $30 billion. that is your linger business flash. francine? francine: -- that is your bloomberg business flash. let's get back to andrew mccaffrey. we were talking about the pitfalls, what you are watching out for, and you said we have to be very selective. is asia a better opportunity because they are out of the lockdown? andrew: i don't think it just stems from that. i think that the longer-term area, potential from the we also see the sound or deafening -- demographic profiles in many ways around the development and the ability to

generate income attention from the region also just the flex ability within the economy -- the flexibility within the economies is reflected many times in recent years, seeing it continuing into the future. i think that it is encouraging how they are seeing a return to activity, the way in which the health care systems have managed , and the way they are managing the overall profile for their society, but also i think there is a much stronger longer-term trend not to recycle as well. francine: when do markets pick up on all this generated debt, and what does that mean for emerging markets? --rew: i think that this is one of the challenges that has fully been taken on board, we

look forward to the consequences onto budget deficits, and again, i think it is important that the challenges for the west as well in terms of -- this again is going to a significant impact on to economies of intervention in very real and long-standing ways, along the various governments. issuesying back into that we did not think we would be talking about, i'm sure for many years, but we saw small and when we had the fed step in to provide support to the markets all the 2019,ck in september of it seems such a long time ago, but now we have the signs of crowding out issues potentially coming again. i do think that the risk to the markets is that the authorities will have to do more to try and

control and keep this under wraps and keep this -- these low rates and bond market supported. the talk of curb control is likely to support that as well. what do you do with gold in this moment, andrew? andrew: gold is quite a difficult one because with this ,rive to negative rates negative real rates, it is providing support in here at present, but with the fed, there are still signs that we have not gotten through some of the challenges around how the dollar liquidity has flowed around the to flowd continues despite the fed suspensions. there is an extent where i think gold has got the position of being reasonably well held as a defensive player to diversifying play, it has a good

underpinning. but likely it is a bit overexposed in terms of asition, so from here i think good medium-term holding on the back of the risk of that ongoing negative real rate environment may be positioned and it will be a challenge to go through the next few weeks. francine: thank you so much, andrew mccaffrey from fidelity international. coming up, we will spend plenty of time talking about hong kong after we had that gdp figure. we will talk about what hong kong can do next, and we will bring you our interview with a hong kong councilmember, michael chen. this is bloomberg. ♪

francine: good morning, everyone. this is "bloomberg surveillance ." we had the gdp from hong kong falling more than expected, falling 8.9% year on year. the economy contracted 8.9% for the first quarter. earlier we spoke to a hong kong legislative council, michael chen.

here he is. michael: we have had 14 days of no new cases of local infection, so we are going to relax the icial distancing limits too, am proposing, 12, so you can at least dine out with the whole family. the government is probably thinking about eight. another 14 days, day 17, all the experts are saying if we go to 28 days of zero cases of local infection, we could actually completely do away with the social distancing measure. however, we should require certain situations, that people where face masks. it is becoming increasingly clear that face masks makes a huge difference in terms of relaxing the social distancing measures in the future, so public transport, gathering more than 12 people, church gatherings, things like that. so i think we are on the way to good situations by

the end of may. >> but if you compare it to other nations, hong kong, as you mentioned, has a huge treasure chest when it comes to its fiscal reserves. should it be doing more than what it has already done? people willg kong concede to raise debt in the future, all right? mindset,s actually our and 14 months of government expenditure is actually very, very low. and then in the future we have an aging population. that is the most important thing. we have an aging population. spending will go up exponentially. we are not looking at the same kind of growth in sales. there is talk about broadening our tax base. as you know, hong kong has no

dividend tax, none of those things. so a lot of people make a lot of money without really paying taxes. so we need to undergo a complete tax reform by broadening our tax base, which i actually support, for hong kong to be health. theo not want to look to motherland to help us because that will completely destroy the system. listing of travel restrictions, potentially the possibility of a return to consumption and tourism for hong kong. we are already seeing on friday police having to pepper spray protesters again. is there the sense that when the social distancing instructions are lifted, we are going to see an immediate return to civil unrest and the protests and the political dissatisfaction already being played in hong kong for the past -- for the past year? i cocoa i am afraid you are

correct -- michael: i am afraid you are correct, but i think it will be on a much smaller scale. in the next five years, we are projecting deficits every year. hong kong people are awakening to the fact that they need to wants andeological economic independence from china . the last thing they want is for solved ourve financial situation because then it would make a mockery of all these people where we could be standing more on our own. so it is going to be striking a balance. i believe the future consumption tourists willna probably be half of what used to be, and all the retailers in hong kong are planning for future consumption after the coronavirus to drop about 15% or is -- that 15% is

dropbuted to an expected that would probably never come back. they obviously feel with all the protests going on, there will be a deep divide in hong kong. they may not be completely welcome in the future. francine: that is the situation in hong kong. as we help you navigate covid-19, repercussions on the economy and what it means for businesses that are slowly starting to reopen, such as in italy, this is what you need to look out for this week. tomorrow we will get a decision from the reserve bank of australia. we will watch for any update on their economic outlook. thursday, boris johnson's government is looking to review lockdown measures, and we will end the week with the u.s. april jobs report. that is on friday. it is expected to reveal the's since reports on

the labor market began in 1939. this is bloomberg. i am spending a bit more time than usual looking at the chinese renminbi. the chinese renminbi did see volatility after president trump once again threatened some of the tariffs that we saw last year. we saw also news and corporate's with telefonica and talks 30 billion -- the dollar is strengthening. u.s. futures are down. european stocks down 2.4%. this is bloomberg. ♪

francine: europe gets set to reopen. italy reports the fewest deaths since the lockdown. we will get a view from the association of italian business about the path forward. president trump sees the u.s. death toll rising to 100,000. the u.s. secretary of state says there is evidence that coronavirus began in a wuhan lab. trump promises a conclusive report on the origins of the pandemic. and global markets sink. risk-off returns as investors fear another another wave of infections and a steady stream of bad economic data. well, good morning, good afternoon, good evening, everyone. this is "bloomberg surveillance." tom and francine from london and new york. we also had ugly figures from hong kong in terms of gdp, down 8.9% year on year, and we look at the space in italy to give us an idea of what that does to re-infections and therefore the possibility of -- tom: happy may day. mayday was friday but this i