nejra: good morning from london. i am nejra cehic with manus cranny, from dubai. this is "bloomberg daybreak: europe." a negative report on moderna's coronavirus vaccine leads to a mixed picture for stocks. president trump says 1.5 million u.s. cases are a bad javon everett testing regime. jay powell says the fed is ready to use all weapons. the plane says the ecb is prepared to boost bond buying. tells uss adrian orr

rates. not want negative the bank of england's own debate with subzero policy continues. andrew bailey testifies today as the u.k. chancellor sees a recession unprecedented in scale. 6:00 a.m. in london, 9:00 a.m. in dubai. the global debate on negative rates. rbnz thatt was the shifted the dial in terms of monetary policy. -- only thing i learned is steven major comes and gives me one phrase which is, what the aussies and the kiwis do, bets the global agenda or pushes back on negative rates. i think it will be interesting to see where the fed would be with the ecb. their rhetoric is shifting further away from the and irp domain -- nirp domain.

let's see what happens with the bank of england. nejra: you love that phrase and i do remember it well. absolutely saying that negative rates have got to jump the hurdles. when we heard from powell yesterday as well, where the focus was much more from the take away with him not being so gung ho about talking about fiscal the way he was in the past but then if we talk about what shifted the market, it all came back to moderna and concerns. we had the bank of america survey. only 10 percent of investors expect an economic recovery to be v-shaped. 68% of them say the rebound in equities is that bear market rally. if we take a look at how the u.s. will open today, futures are positive. negative in europe. green on the screen in asia but it is the qb that is in focus in the fx market.

with the comments from adrian orr, the 10 year yield is steady. and then of course oil, how different things look to a month ago in terms of what we are looking at in terms of the oil price. wti up .5% above $32 a barrel. that's get back to moderna. investors digested the report questioning early data from a small trial of its potential coronavirus vaccine. biotech company closed down 10% after monday 20% gain. the gradual slide began when a report from the health publication highlighted the early nature of the vaccine data. bloomberg annmarie hordern is in new york for us. what does the report say about moderna's study? annmarie: what a difference 24 hours makes. we were here yesterday talking about the fact that moderna had this record high in the markets. bloomberg did say yesterday the results should be viewed with caution.

one thing they highlighted, the early nature of the vaccine. it said most of what moderna disclosed was words, not data. it cited the lack of a press release from the u.s. national institute of allergy and infectious diseases paid on -- diseases. they are waiting to see more data. it is clear from the scientific community that data is going to lead and what they view as stead of words. we talked about that with gilead. there seems to be any glimmer of hope in any of these vaccines we are seeing around the world. the market really takes that on with stride because any chance of getting a vaccine really does mean that economies could be lifted and go back to life before the pandemic. of us should really undermine the palpable sense of relief that you would get if somebody says i have got something that can help possibly

shift 20 million people, 36 million people from unemployment cues. i think that is why markets move. to the white house, and the president, he now argues -- good morning, by the way -- that the u.s. is a badge of honor. why? >> he is talking about pushing his narrative, saying that the u.s., which has more than 1.5 million cases, leads the world in terms of coronavirus cases. he says it is a badge of honor because it reflects how much the u.s. is testing. that was kind of the narrative. this has to do with u.s. testing. contrary to what the united states is saying, the u.s. is not extraordinary when it comes to testing to our data shows the u.s. is falling behind the u.k., italy, and germany. president donald trump was answering a question when he made this comment about whether or not he was going to block visitors from brazil. spain,has overtaken

italy, and the u.k., now third in the world when it comes to coronavirus cases. president donald trump said he is considering that ban on brazil. brazil is going to be want to watch, really chaotic, and many are saying it is just going to get worse. president bolsonaro had fired the health minister last month, and the replacement for that health minister resigned last week. really a chaotic situation in brazil and you can see the infection numbers are ticking higher. manus: stay safe, annmarie hordern in new york headquarters. president trump is hoping -- reopening the economy. that sentiment is shared by republican leaders with senior senator mitch mcconnell saying the only way out of the crisis is for america to grow again. president trump is predicting a really great quarter for the u.s. economy.

talks have soured with the u.k.'s chief negotiator accusing the e.u. of only offering low-quality deals. david frost says the block is treating britain as unworthy of a fair trade agreement. the chief negotiator, michel barnier, says britain wants to keep the benefit of being a member state without the obligations. new zealand's essential bank governor says he is open to taking the cash rate negative but only if it passes a number of tests. assays it has got to be seen necessary and effective. the reserve bank also has so far turned to quantitative easing. 02 .25% for rate at the first quarter of 2021. south asia is bracing for the biggest storm over the bay in 20 years. authorities are evacuating more than 5 million people.

the cyclone is expected to have wind speeds of 200 kilometers per hour. bangladesh raised its warning to the highest levels. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. nejra. nejra: coming up, further stimulus may be needed but jay powell dodges the debate on specifics. more from his testimony to the senate banking committee, next. this is bloomberg. ♪ is is bloomberg. ♪

>> what congress has done today has been remarkably timely and forceful. >> there's scenarios in main

street where we could lose all of our capital and we are prepared to do that. >> i want to call out the risk to longer-term damage to the economy. >> there is the risk of permanent damage. we are conscious of the health issues. >> it is all about the service sector, particularly those parts of the service sector where there are lots and lots of in person contact. >> we do not intend to send anybody back to work without the protection spirit i was prepared to come there today. i thought it was safe to testify. >> we need to take a step back and asked, over time, is it enough? we need to be prepared to act further if the need is threre. ands: now is jay powell steve mnuchin testifying before the senate banking committee. powell tried to remain neutral as he was drawn on the debate of whether congress should build on stimulus. more fiscalr said aid may be needed.

the treasury secretary said he plans to use all of the 500 billion dollars congress provided to help the economy. he did this by backstopping fed programs. the head ofst is g10 fx research. a lot of warning from both mnuchin and powell in terms of the risk to the economy. a lot of people are debating whether the fed would go to negative interest rates. you say no. you say the next logical step is -- if so, when, how express would it be, and the consequence for the dollar? good morning. >> good. there is a debate. in thes a recognition market that the fed has been impacted very early. unprecedented relief in anion, we are

uncertain outlook for the u.s. economy. we think more measures may be needed and by referring to yield curve control policy, we are just referring to the fed and what itself has been saying. fomc members have been talking about the fed considering yield curve control policy down the road similar to the boj and indeed the rba. the other central banks doing that at the moment. you mentioned negative rates. for a period of time, the markets have been speculating about negative rates but the fed has so far ruled that out. never say never. it may come but i think that they will try to use other options, yield curve control included, before they resort to considering negative rates. nejra: i find it interesting that you point out the further out the curve that the fed were to target with yc see, the more

negative the impacts would be for the dollar whereas if the fed were to signal the focus of purchases at the near end of the curve, he would see a steepening and that would be positive for the dollar so that is an interesting distinction that you make. on negative rates, even if the fed fed were not to move and kept pushing back, as long as the markets have expectation of negative rates, how negative is that for the dollar? valentin: yes, indeed. it is one thing to be telling the markets that negative rates are out of question. it is another thing to retake measures. exit reserve to prevent rates going negative, so in other words, talk is cheap. and the markets really could continue to speculate that the fed could go negative down the road. and from what i can tell, that fedex to talk about it but not really act upon it. from that point of view, they are more than happy for the markets to continue to speculate about that.

in terms of impact on the dollar, clearly, the speculation about negative rates is likely to hurt the dollar rate. the euro, the yen, swiss franc, the dollar is a current account meaning theency, u.s. has to rely on foreigners to fund its spending, and if indeed rates in the u.s. were to go this low or actually continue to go lower on the back of the mix by the fed, the foreign investors would simply demand the discount to continue to buy u.s. assets and that discount will be a weaker dollar from here. manus: if that is the trajectory, i want to circle back to the yield curve control argument. bang, bang, bang. the shift has been quite monumental.

i want to get a sense from you, are we hitting a critical point where there is steepness at the longer end and therefore yield curve control is something coming much more quickly down ,he pike, perhaps in the market which really comprehends? valentin: that is a potential risk and there is a degree of steepness it can tolerate. overall, oure that expectation is for the measure to be implemented later on this year or actually more likely has year before the fed exhausted other options. current asset purchase program. it is also the case that the result of the yield curve control policy, it will try to keep or flatten the curve as much as possible. nejra was highlighting, our analysis is suggesting -- steepness of the yield curve

could be quite negative for the dollar. the most sensitive dollar changes in the box spread is in the dollar-yen so the implementation of a yield curve control at the long end of the curve resulting in a flatter curve could be quite detrimental for dollar-yen from here. from: valentin marinov credit agricole stays with us. the boston fed president has defended the risky loans being handed out. he told bloomberg the aim is to save jobs in a weak labor market with the reopening of the u.s. economy set to be a slow process. eric: it is wonderful news that we are getting to the place where we can start talking about reopening. but i would highlight that is only the first step that we need to take. consumers have to be comfortable actually going to businesses and buying in stores, going to restaurants. employees have to feel comfortable going on the subway, the train, or a bus, and with community spread still

continuing in massachusetts, i think we are a little ways away from that point, so as important as it is to take the first steps to open up businesses or allow businesses to open up, i think we should be cognizant of the fact that many people, particularly older americans, are going to be very leery of going into restaurants, going onto mass transit, or going onto planes until the public health problem is more resolved. >> what our ceo's of companies in your district, and even people who run mom-and-pop stores, telling you about their expectations for business, for the economy, as you reopen? eric: they are very much hoping there will be a pickup in the second half of the year. i think in gdp terms, there will be a pickup. i also think that, unfortunately, the labor markets are still going to be pretty weak. in a talk i gave today, i highlighted that by the end of the year, i expect the unemployment rate to still be in double digits, so it is probably

going to be significantly down from where we are right now. the unemployment rate was 14.7%. many americans that took that survey said they were employed but were not working the week of the survey so the numbers are probably a little closer to 20% and we will see in the next couple of months, if it still goes a little bit more, but i think by the end of the year, we are probably talking in the low double digits. that is still a very high unemployment rate. what that reflects is the fact that i do not think many employees are going to want to go into some of the cities that are still having significant problems and i think consumers are still waiting to feel more comfortable before they go into stores, before they go into restaurants. >> one of the other programs that has come under some criticism is the secondary market lending program because some critics say you are propping up zombie companies that really cannot continue to survive unless they continue to

borrow, and at some point, we will have a lot more defaults and bankruptcies. do you see that happening in your district? streetith the main program, we are definitely doing somewhat risky lending and that the borrowers we are providing finance for were borrowers that were in good shape at the end of the year but are now facing difficulties as a result of the pandemic, so partly by design, these are going to be problem loans, and so what we are trying to do is get the right outcome for employment. if all these businesses end up failing, that would be a significant impact on employment. we want to avoid that outcome. that means we are taking a little bit more risk than we normally take in order to try to make sure there's sufficient financing. during the financial crisis in new england during the 1990 crisis, where it was a credit crunch crisis, one of the problems was creditors and

finances could not find financing. we want to make sure that does not become a problem right now and make sure that what is hopefully temporary spells of unemployment actually stay temporary and people are able to be reemployed but the longer people are unemployed, the longer businesses have to finance themselves, the more risky it becomes for the economy overall. >> many companies have discovered the joys of working from home and may be the savings working from home. do you anticipate any problems in the commercial market? valentin: i think commercial -- eric: i think commercial real estate will go through a major shift as a result of the pandemic. clearly, office space is certainly one area. there are probably more warehouses than we needed before, and i do think that some multi family housing and downtown areas may be more challenged as people rethink whether they want to be downtown downtown

or in suburbs. i think we are in a period where real estate is going to be going through some -- manus: -- real estate from boston fed president eric rosengren. coming up, the kiwi climbs for a third day after the new zealand reserve bank governor, adrian stillignals native rates some way off. we will get the details. this is bloomberg. ♪ erg. ♪

>> it has not to jump the huddles, it has got to be seen to be necessary, effective, efficient, and operationally capable. zealand'st was new central bank governor, adrian orr, talking to bloomberg tv about the possibility of taking the official cash rate negative

in the future. the reserve bank has turns to quantitative easing to battle the candidate make -- pandemic. mironov is still with us. the kiwi is catching a bid for a third day today on those comments from adrian orr, talking about there having to be many hurdles to jump for negative rates. kiwi herebe long based on that view from the rbnz? valentin: you can make the case the kiwi will regain some ground. if anything, that view should be expressed against other commodity currencies and the same region, really. i'll see kiwi looks across -- like it is topping out. so a return of demand for the new zealand dollar could indeed push it lower from current levels. comments also come to highlight how much of a struggle for any

central bank from here would be the consideration of negative rates, and equally, how much of an important driver negative rates have become for the currencies, our outlook. to the extent the markets are now repricing the risks of negative rates, that will continue to boost the kiwi, especially against the australian dollar. the other narrative in the past 24 hours has been kudlow telling us the trade deal is not dead between the u.s. and china. many people have questioned the veracity of that trade deal anyway. and then you have the chinese lashing out at the australians. many people say the chinese are pinned into a corner and going on the aggressive offensive with other nations beyond the u.s. what are the ramifications of a reassertion of a demonstrable these australasian currencies?

valentin: clearly, they play out as negative in our view. the deterioration in the relationship between the u.s. and china has been around for some time. hass the case that it already taken its toll on both the australian dollar and the other, pushing them to move low. however, it is not over yet, and it seems like that in the u.s., the presidential campaign is getting into gear. those tensions are likely to worsen. the fact that china is also retaliating in its own way by escalating the trade tensions of australia or other countries are depending on china for trade and that certainly is a part of that broader conflict and the conflict is not going to go away. at the moment, -- manus: hold those thoughts. hold those thoughts on the risks for the market.

about aoing to talk wave of downgrades set to rock the global credit markets. this is bloomberg. ♪

♪ >> good morning from dubai. i am manus cranny in dubai. your top headlines this morning. negative reports on moderna's coronavirus maxine paints a mixed picture for this -- vaccine paints a mixed picture for the stock market. president trump says coronavirus cases are a badge of honor for its testing ridging. philip lane says the ecb is prepared to boost bond buying.

england's own debate with subzero policy continues. andrew bailey testifies today. this as the u.k. chancellor sees a recession of an unprecedented scale. nejra: welcome to "bloomberg daybreak: europe." it is bearish, according to the latest bank of america survey. shaped0% expect a v- recovery and 68% say we are in a bear market rally. reports around moderna questioning the data. moderna questioning the data. if we talk about the rates, it's all about [audio drop] there is hurdles to be jumped. high hurdles.ite he says i don't embrace or endorse that kind of linkage. kathleen hays -- language.

not kathleen, it took the governor to join in. pushing back against negative rates. what did powell do in his testimony yesterday? yesterday, some say he damaged the narrative for further stimulus because he did not commit hard enough. the bondhave gotten market is really the risk that if you don't get that stimulus, do you get the barclays risk yield shock? you have a bad policy error. the efficacy of pollock seat -- a policy becomes cumbersome. roll it over, have a look at the rest of the markets and you begin to see what is happening beyond the bond markets. you have oil up 70% from its lows. citigroup says you will see a

market go from a massive surplus to a record deficit in the third quarter. despite thisup sign of aussie distress. gold up. what does that tell you about protection in the markets? the economic pain brought on by the coronavirus has all but halted the cash flow for corporates around the world. that's as a balance sheets deteriorate. here to discuss the coming wave of fallen angels is dani burger. good to see you. give us a context of how dire the situation is. oaktree capital referred to yesterday. give me the numbers. sani: so far year to date -- dani: so far your today, $300 billion worth of bonds have been downgraded. it is likely to get much worse from here. 111 firms are at risk of becoming sub investment grade. that's the highest number on record.

the coronavirus has brought this, as has the drop in oil prices. this crisis was almost waiting to happen before the coronavirus hit. almost 50% of investment grade firms were the lowest rating. these were companies that already had a lot of leverage on balance sheets. that reduction of cash flows likely to push them to become fallen angels. firms losee 111 their investment grade status, that's a big deal. becoming a junk-bond means it will become more difficult to raise funds. the cost of capital increases. when you look at these companies , there are a lot of financials, burgeon money, for example, bank virginand -- version -- money, for example, bank of ireland, peugeot. nejra: i'm reminded of the fed's stock warning on friday, where it said that you can see asset prices remaining vulnerable to

significant price declines should the pandemic take an unexpected course. what's being done to these companies -- support these companies? >> yesterday, powell reemphasized the need to support these companies that are in threat of being downgraded. it is not only the companies at risk of a phone angels but the fed stepping into support fallen angels themselves. when they are getting into the junk-bond market, this is exactly what they are targeting. supportingthe ecb is triple b rated bonds, though they have not stepped into the fallen angel category yet. many commentators believe that is likely to come. we are seeing corporate's get very creative once they have lost their investment grade status. royal caribbean, the cruise line, recently downgraded to junk. they have done some very creative financial maneuvering to issue debt when it has become more difficult as a newly rated junk-bond.

we should expect more companies to do the same because now is a crucial time to need to raise cash. it becomes a very difficult scenario for a lot of these corporates. nejra: thank you so much, dani burger. let's bring you another big interview, the ceo of bank of america says consumer spending is picking up in some areas of the u.s. as government relief programs cushion the credit impact. brian moynihan spoke with david westin. take a listen. >> this is a health care crisis. as you are starting to see the health care crisis be mitigated, not solved yet, you are starting to see the economy start to recover. the approach to winning the war against the crisis for us has been a customer centric, community centric, employee centric move. we have been supporting claes and try to make sure they have the credit and capital -- clients and make sure they have

the credit and capital to do what they need to do. you can see that in the loan balance extended to ppp loans and other things we have done. we have helped our consumer clients through waivers. we have helped our teammates by saying no layoffs. they know their job is secure. we have helped our communities by contributions of $100 million in cdfi investments. about $170 million is already out. all of that is offsetting the impacts of the current second quarter. we don't see it much differently. we are starting to see us coming out of the other side of this, frankly. >> we have heard from the federal reserve and they have expressed some concern that has continues, there may be some threat to the overall system. specifically, it talks about commercial real estate. are you seeing some parts of the

market particularly vulnerable on the credit side? >> continues, remember that the. economy is going to be dependent on the activity of the consumer base. you have to start there when you talk about the u.s.. even though we have this from the bank of america research team, which is the best in the minus 5.5% this year and -5% next year. what we have seen come in terms of their spending, because of this -- what we have seen, in terms of their spending, borrowing activity, transfer of money, you saw all of that fall to the lowest level. travel, hotels and things are most affected. as you have seen steadily through the third week of april and to the first part of may, you are seeing activities pickup, even in states that are still under stay-at-home. you are seeing activity pickup much quicker. for the month of may, we are seeing it down about 2%, 3%, 4%

versus last year. that's the question. the length of this will be how the consumers behave, given the high levels of unemployment. people getting back to work, , thegetting back in stimulus payment and how it all works to change consumer behavior. have we changed consumer behavior as we look across the next 4, 5, six quarters? >> that is the key question. when it comes to the consumer, i know you have already taken about $4.8 billion in reserve credit versus possible losses. do you think that will be enough? what you have seen so far is >> -- peoplet 35 or 40% other who asked for a credit card

payment deferral when they have admitted payment. because of -- they haven't made a payment. balanceseeing higher in our account. balances in our account. that is because the stimulus between -- enhanced unemployment -- by the fed have worked to offset the unfortunate aspects of very high unemployment. so far, you are not seeing the delinquencies and things rise. you have seen payment deferrals increase but you are seeing them start to level off and come down in our book. we expect to see charge-offs coming later on as this thing goes on. right now, you are not seeing the kind of credit damage would expect to see with this amount of down draft and activity. what happens next? nejra: that was the ceo of bank of america, brian moynihan. let's get to the first orders. jerome powell dodge efforts to

get him to pick a side in the debate over stimulus. she testified in a virtual hearing of the senate banking committee and reiterated his stance that more fiscal support may be needed but he stopped short of calling for it immediately. brexitbrexit talks have soured,h the you kate's chief negotiator -- u.k's chief negotiator accusing -- michel barnier says britain wants to keep the benefits of being a member state without the opposition. moderna shares tumbled yesterday after hitting an all-time high. it also cited the lack of a press release from u.s. officials who partnered with madonna on the trial -- moderna on the trail. south asia bracing for the biggest storm over the bay of bengal in more than 20 years. more than 5 million people are being evacuated to safe

locations. the cyclone is expected to have wind speeds of over 200 miles per hour. bangladesh has raised its 20 to the highest level. chief executive says take fridays off and thanks for the hard work. he says many have been a juggling the work, home schooling children and taking care of family numbers. he says, please take the day to relax. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. manus? speed let's get up to with the stories that we are tracking across the bloomberg platform. later this morning, the european commission will unveil its spring package. this will lay out the economic policy recommendations for member states, taking the virus impact into account. andrew bailey is going to testify before the u.k. parliamentary treasury committee about the economic fallout of the pandemic. you can be pretty sure there

will be a negative rates question. u.s. energyme, the information administration will release its crude oil inventory report. fomc begins tohe publish their minutes of the april meeting, the great debate. you can track the bank of england testimony of andrew bailey right here on bloomberg tv 2:30 p.m. u.k. time -- london time. we will talk about the subject and the focus and the prospect of the u.k. economy. this is bloomberg. ♪

♪ nejra: this is "bloomberg daybreak: europe." manus cranny is in dubai. let's get to the risk radar and investors might be bearish,

according to bank of america but we see a little bit of green on the screen from asia today. futures point higher today. european futures lower, 10 year yield is study, so is dollar-and. it is really the kiwi -- dollar-yen. it is really the kiwi you want to look at. oil, the rally stalling but we are slightly integrate. speaking of -- in the green. speaking of negative rates, let's turn to the u.k. country issays the heading into an unprecedented recession as he laid bare the extent of the economic cost of the coronavirus. later today, we will hear from the bank of england governor andrew bailey. he is giving testimony and was minister. you can catch that hear from 2:30 -- in westminster. you can catch that here from 2:30. still with us is valentin marinov.

u.k., traders betting on negative rates by year-end. are you on board with that? does it make you negative on the pound? >> i personally think that negative rates in the u.k. could be quite a controversial decision and therefore would not expect negative rates to come that soon, if at all. overall, the debate has been going on. the justification for the markets to expect negative rates is the fact that during the thete, the boe or part of mpc have been remarkably open to the idea of negative rates. different from other central banks. i think that whereas the track record of negative rates is rather next, for the pound now , for the side -- mixed pound now on the fx side, negative rates could be

detrimental. the u.k. is a current account deficit economy. it has to rely on foreigners to balances books -- balance its books. it has to continue to make assets more attractive at a time when the u.k. -- is still widening, at a time when you have these growth concerns. negative rates are only going to diminish the appeal of -- fournette investors will naturally demand a heavy negative rates arediscount -- fs will naturally demand a heavy discount. >> are the hurdles lower in the u.k. to test negative rates? saunders at the skew, and haskell went for more qe early. bailey did not say it is off the table, he just said it is not at the top of the agenda. for now, we are looking at it. , saundersat the skew

seemsl, bailey-esque, it as if negative rates have more potency than the kiwi, the fed, the ecb. >> i will agree with that. the communication from the bank of england has been fairly different from what you get to hear from the fed and indeed the rbnz. y will bethink ther rushing into negative rates anytime soon anyway. that should highlight again that the negative -- the track record of negative rates has been mixed. it is not helping the banking sectors. it is hurting bank profitability. it could potentially hurt the functioning of the lending channel in the u.k. at a time where the bank's lending will really be needed the most to help the recovery.

from that point of view, i think a decision to cut rates below zero could be quite controversial and ultimately, should be exercised with care. bearish on the pound versus the euro and other, partly to do with -- and the dollar, partly to do with boe easing, but also the risk of brexit. do you think gdp-vol is an attractive buy right now? usually goesund hand-in-hand with a bullish view on the sterling-vol. the short end is still offering a lot of volume -- value. events for the currency in the next 30 days, the bank of england's june 18 policy meeting

, where i think everybody is expecting an increase in their current program. we could get a hint of more to come, like negative rates and i guess more importantly, we also have on the same day the start of the eu brexit summit, where among other things, there will be a discussion and hopefully a decision on the extension of the , which willeriod make possible a trade deal between the u.k. and eu. the expectations are very low. the relationship between the two has worsened even further. from that point of view, if you look at all these risks and whether implied-vol is at the short end, that is definitely a buy. >> buy the vol. valentin marinov from credit

agricole stays with us. islip lane says the ecb ready to expand its bond buying if necessary. this is bloomberg. ♪

♪ is "bloomberg daybreak: europe." nejra cehic alongside me in our london office. let's tack about the european central bank. they are fully prepared to expand their emergency bond buying program if needed, according to the chief economist, philip lane. let's get to valentin marinov. in terms of the narrative from in terms of later in the day, we are going to talk european commission.

they will unveil their spring package and we will speak to valdis dombroskis. valentin marinov is our guest. did emmanuel macron save europe yesterday? >> i certainly hope so. it has been a major step towards solidarity in the euro zone. federal will be taking over some of the national level debt. that will help the eu really grow out of its deepest recession on record. overall, the message from the ecb is still that the recovery needs more support, needs more help. i believe that the european commission will indeed stress that. it is growth over fiscal responsibility for the time being, in the sense that fiscal and monetary stimulus will be needed and the fiscal imbalances

that this leads to will be considered later on, once they have delivered growth. nejra: you are cautiously constructive on the euro. ,ow much is the caution there given some of the questions and obstacles of this plan to fund economic recovery for europe? >> indeed, there are some unanswered questions. among those, there is the opposition by some important eu member states. we believe there are ways to sway at least some of the opposition. for example, the scandinavian countries are known to support green initiatives. the proposals are quite full of that. we are cautiously optimistic, as i was saying. a compromise could be reached. marinov, great to have you with us. thank you so much. that's it for "bloomberg

daybreak: europe" "bloomberg markets: european open" his up next. u.s. futures bounceback after read on the screen in the u.s. yesterday. this is bloomberg. ♪

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anna: good morning. welcome to "bloomberg markets: european open." i am anna edwards alongside matt miller in berlin. matt: good morning. today, the markets say watch out for extreme behavior. signs grow that markets are unsettled but surging volumes and options markets and volatility elsewhere. european futures trading lower on the cash trade starts in and our.