going to have a v-shaped recovery. the closest anybody's come to it is china, and it doesn't look like a v to me. >> you may want to reduce the suffering because there's a risk that the whole system will come crashing down. >> now is exactly the wrong time for physical policy makers to get a case of fiscal rectitude. >> this is "surveillance" with tom keene, jonathan ferrell, and lisa. jonathan: for our audience worldwide, good morning, good morning. this is sursur. we're live on bloomberg tv and radio. alongside tom keene, we're together with lisa. n this monday morning, tom: we will talk about that, but sure, john, the symbolism of new york city, so hard hit, five, circumstances seven weeks ago, and yes, really back to open the last couple of weeks.

you say to yourself, come on, come on, come on. this monday is the "come on" where new york city reopens. with that, a better jobs report, and accident of course, the president talking it up. i thought the research over the weekend from goldman sachs, j.p. morgan and the others was just outstanding, putting shade and putting nuance on that jobs report of friday. jonathan: let's be clear. for this market, for the global financial community, friday never really ended. it went through the weekend into monday. the equity market continues to rally. we continue to look ahead this week to a federal reserve -- i just wanted to have the payrolls report change the fed's approach to the news conference this week, tom. tom: maybe a little bit of nuance to it, but i really don't think it plays in all that much. you ught it was great, come down, and the amount off -- they calculate it roughly of 15% recovery in the labor economy. i don't think that's enough to

have vice chairman turn to chairman sandowl say change the plan. i don't see that, john. jonathan: i totally agree with you. that's one thing to look out for this week. we got to start with new york city reopening, the long process of reopening. i think for many people, looking at the process play out here in the united states, on the economic side, i want to emphasize that, on the economic side specifically, the data has looked ok as we slowly got the reopening process underway. lisa: that's what wall street is laser focused on, and i think you wisely raise the point, the long road to reopening. yes, today marks the beginning of phase one of the reopening, which will last at least two weeks before phase two starts. this is curbside pickup and things of that nature. that's the main thing that i'm watching today. also, on the docket to keep in mind, president trump is meeting with some law enforcement at 3:00 p.m. at the white house. interesting to see whether he makes any comments over the past weeks' developments.

plus later in the day, the world bank releases its economics prospect report. to tom's point earlier, the question about the jobs data, the question about economists' ability to predict what is going to happen with this economy globally is in laser focus. how much credence do we give some of these projectionsst right now? jonathan: just to wrap things up, lisa mentioning the president of the united states, several reports that we might get an address this week on race and unity. a lot of people wanting to see whether that will actually happen or not. tom: an extraordinary weekend. and folks, we will go to our kevin cirilli here in about eight, nine, maybe 10 minutes, and that will be an important conversation. i love what greg said in his morning note on the president. he said this is a critical week for the president, particularly how he frames the competition, vice president biden, a

democrat, neutralist as a democrat tilted over to the liberals. that will be a topic for mr. cirilli here in a bit. jonathan: we'll head down to washington in about 15 minutes' time. what a rally we've seen off the bottom over the last couple of months. mike swell from goldman sachs joins us. friday, what did friday change for you as you look ahead to the weeks and months ahead through 2020? mike: i think that friday was just an example of a continuation of the impact of government policy. so big impact on fiscal, big impact of monetary policy that the rally can continue, because the level of support from the government has been so significant, crating enormous amount of cash, that is really looking for a reason to get investd. when you look at the employment rocket the discussion you had earlier today about the questions and the number, we're a long ways away from getting american workers back to work in a very meaningful way.

so the jobs situation is going to be one that is going to continue to be an issue for the next six months to a year. so i wouldn't necessarily call victory are w regard to the job picture. i think we have a long, long way to go. what i think you're seeing right now in markets is the more the impact of significant, significant policy, liquidity, more so than confidence in reopening. jonathan: the policy effort has clearly worked. they wanted to divorce financial conditions from the economy. i think we've done that. i think a lot of people are trying to work out whether the economic conditions catches up with where financial conditions have taken us. is that a challenge for the next couple of months or the turn of the year? mike: that is the number one, two, and three question with regard to how you think about financial markets here. at goldman sachs, what we did last week, we have a daily forum where we get together all different investors. we brought in our multiasset people, our fundamental equity investors, as well as fixed income, and had kind of a cage

match around this topic. and the conclusion that we came to is that, number one, the financial conditions that have been supported by the fed and by governments through fiscal policy will dominate in the near term. but in the long term, it's going to be earnings and jobs that are going to matter. and i think that it's too early to call victory with regard to where earnings are going to end up. i think a lot of investors are saying that, you know, we're going to jump back in 2021 to the earnings that we saw in 2019. we have a long, long way to go, and i think that there's a lot more repair that has to happen in the economy. we really don't know how companies are going to react to a different state of global economy when we have an issue, a medical issue that's going to be so significant and change the way that we do business. so our view right now is that for the near term, policy wins, stay long risk assets. but over the longer term it's going to be about earnings and

jobs. tom: i want to go to your work with goldman sachs, and before that with friedman. with your expertise in mortgage-backed securities, lot of rents aren't being paid. a lot of commercial real estate of every grade isn't going to work out. and there's all the loans and fancy derivative instruments off the back of that. are you troubled at all by a pending real estate crisis in the nation because rents are not being paid? mike: i would say that the residential picture is going to be 100% correlated to the job picture. so if we expect to continue to get america back to work and we can drive the true unemployment rate below 10%, we're likely not to have a housing market issue, whether on the price issue or whether on the rent issue. and so i think in terms of housing, we don't have oversupply like we had oversupply in 2007, and we

don't have too much leverage in the system. wee kind of fixed the very, very high loan situation, the interest-only loan situation. we don't have borrowers that are leverages. we're really going to be dependent upon jobs. i think if we continue to see jobs improve, we don't have a housing marketish. i do think in the commercial real estate market, there's a lot of adjustment that has to occur. there's going to be a decent amount of restructuring of loans. there's going to be some dwaults obviously on the retail side. but if you look at the commercial real estate market, there's a big debate there if we think that we're going to see a lot of companies move out of major hubs, major cities and diversify their exposure, having a negative impact on commercial real estate. the other side of that is in a socially distant world, you're finding that companies are actually looking for more square footage to be able to bring workers back in a safe way. so we actually think that the commercial real estate market is one that has still a lot of

opportunity f. we see reopening of the economy, like the equity market is telling you, you ought to see stabilization in the commercial real estate market. if you look in the world we live in, not in the direct market, but in the commercial real estate securities market, we have not seen a significant recovery in pricing there. if we see the economy get back like the equity market is telling you, we think there's going to be a lot of opportunity in some of the mezzanine commercial securities to be able to earn equity-like returns. lisa: i'm just wondering, you were saying it's time to stay risk on. certainly a lot of people have been risk on. if you look at high-yield bonds in the u.s., they've gained 22% since late march. we've seen $3.5 billion flow into the biggest high-yield bond in the past week alone. don't fight the fed, but you can front run it. has the fed already been front run fully or are there further opportunities sneer mike: i don't think fully. i still think there's going to

be a lot of demand for u.s. credit-related assets. keep in mind, it's not just front running the fed, but we're in a global interest rate environment where there are no interest rates. we're basically zero around the globe. and the u.s. credit market still is a market that offers investors yield. demand for yield is very, very significant. i think people will continue to view not only the u.s. treasury market, but also the u.s. corporate credit market as, in general, a safe haven. so i do think there's more troom run. however, more broadly around the question around risk as and it's where we go from here, in the short term, we do think that policy zero rates are going to drive risk as ritz higher from here, but that's not going to last forever. in the end, it's going to be about earnings. so in our discussion last week, our cage match around where we go from and here have risk assets gone too far, we definitely came to the conclusion that this is going to be a winners and lawsers market, both on the equity side and the credit side, and it's

time to think a little bit about moving away from just kind of being long beta and really focusing on the types of companies that will be the survivors and will gain market share. so we do think active management will be a very important part of future returns versus just the beta. >> we want to know who wins the cage fight at goldman sachs. how does that work out over the weekend, when that plays out? mike: well, i'm 6'5", 220 pounds, so i'm the biggest person, so i always win. who wins the cage match? the answer is short-term, risk on. long-term, it's going to really rely upon earnings. with the data we have so far, it's irrelevant to the longer term macro picture. stay tuned. follow what's going on in china. follow what's going on in south korea in terms of reopening and what's going on with the consumer, what's going on with corporate earnings in those countries. because those will be leading indicators for what goes on here. jonathan: mike swell, fantastic work, as always.

always appreciate your time. mike swell there of goldman sachs. alongside tom teen, i'm jonathan ferro. the long road ahead, as we take the first step and reopen new york city. much more still to come. from new york city this morning, good morning for our audience worldwide. this is bloomberg. ♪ rickity ajrkts u.s. city hit hardest by the coronavirus starts to reopen today in this initial phase. new york city will allow construction and manufacturing and wholesale trade to start offering again. retail stores can offer curbside and in-store pickup. if all goesing with, new york could expand the renoping two weeks. more than 17,000 people in the city died from the coronavirus. an aggressive proposal from the minneapolis city stuns coil. a majority of its members say they support disbanding the city's police department. that comes just as the state launches civil rights investigation following the

death of george floyd. one city councilmember says she wants to "end policing as we know it." lawmakers say disbanding the police force and starting a new one would be a long, complex process. saudi arabia raised oil prices, the most in at least two decades. that came a day after the opec coalition extend its historic output cuts, the biggest saudi price hike will hit july exports to asia. overall the increases for saudi crude raised almost all of the discounts the ding come made during its one-month price war with russia. brent crude has more than doubled since late april, still down 35% this year. in japan, the economy shrank less than expected in the first quarter. g.d.p. fell an annualized rate of 2.2%, but there's a catch. the result was based on a survey that probably overstated the strength of japanese business investment during the pandemic. first quarter figures may be revised downward later. global news 24 hours a day on

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>> the numbers are great. this leads us on to a long period of growth. we'll have the greatest -- we'll go back to having the greatest economy anywhere in the world, nothing close. i think we're going to have a

very good upcoming few months. jonathan: the president of the united states following the jobs report this past friday. good morning to you all awe're live on bloomberg tv and radio. tom, the risk for the single data point do you extrapolate that improvement out too far, far too quickly. a topic of debate for us through this morning. tom: it's really interesting, john, to that point, how you correlate any kind of improvement in the job economy over to g.d.p. j.p. morgan made very clear over the weekend, maybe they were wrong, maybe we're going see a more rapid improvement. but they hedged it about one, two, three, four, five ways to sunday to get us to september. jonathan: remarkable rally the last couple of months. the s&p 500, three-week winning streak coming into this week. let's get you price action worldwide. equity futures higher, up .6%.

we push out by 18 points, about two hours and change away from the opening bell in new york city. in the bond market, treasury yields, just a little bit higher again. it's been really interesting to see this. 10-year yields now .91%, up a basis point. the curve steeper at a 30-year advancing three basis points as well. another theme in the mix over the last couple of weeks has been that weaker dollar story, and that continues with a weaker dollar against the aussie. just a little bit stronger against the euro. tom: want to point out, oil. ed morris with a blistering note from citi group about two hours ago making clear he doesn't buy the inventory story, but oil, $42 on brent gets your attention. right now we must consider washington, and we have been really thrilled with our kevin cirilli, our chief washington correspondent, who is not only looking at the many sides of the national debate on protests, but also the many parties involved and the different shades of gray in

this great national debate. kevin cirilli joins us this morning. kevin, the lead story is about refunding, defunding, abandonment of police forces. gregory says this is a gift on a silver platter to the president, who this week can go after the vice president and say what kind of president would you be? how will the president take this debate and push it towards vice president biden? kevin: we're expecting to hear from president trump this week in some type of address, whether it be national or at a press conference, where the president addresses race issues in this country. but he's also likely going to discuss the issue of defunding police departments. it comes following over the weekend when minneapolis city council voted to defund their police department and break ties with their police department. but what that would look like is really just a dramatic

reshifting, i'm told, about how the city of minneapolis reallocates funds. greg is absolutely correct. when i talked to a republican strategist on down-ballot races, it's not just a gift to president trump, but also to senate majority leader mitch mcconnell, who's trying to keep control of the republican-controlled senate. republicans want to have the debate of defunding police departments. now, in contrast to that, former vice president joe biden's campaign wants to have the open discussion of making sure that african-americans are also heard. but beyond that, he needs that african-american coalition that obama had to turn out for him if he wants to beat president trump. tom: how alone is the president on this monday? kevin: i think in terms of putting together republicans, he has not seen a wide spread flocking away from republicans who are currently in office. former secretary of state colin

powell over the weekend, the president tweeting out that he takes issue with colin powell going to vote for joe biden. but in terms of folks who are still in office, the president enjoys popularity in red states. lisa: i'm wondering, shifting gears from the defunding of the police and the political debate around that, the reopening of the united states and the economy, i'm wondering about the dilemma for republicans after the jobs report on friday showed much better than expected scenario. how much pressure that reduces on their expectation for further fiscal stimulus. kevin: you know, that's a great point. and in terms of more economic stimulus, i think based upon the conversations that i've had at the end of last week with republican members, they're still anticipating sometime in between, right when they return from rise at the end of july, right before the august recess, so july 23 through the first week of august, that would be the window for there to be another economic round of

stimulus passed. but also some type of legislation likely, maybe on -- king some police jonathan: we're going to leave it right there because of the connection. thank you very much, sir. let's talk about this reopening, tom keene. let's get over to harold square. 34th street here in manhattan, absolutely unbelievable contrast as we begin the slow process of reopening this commep in new york city, yet still some of the major retail organizations aren't just unable to open their businesses, some of them are still boarded up, tom. tom: well, they're boarded up. you really nail it, john, as two different thrust going on here. one of them is the public wants open now. there's no question about that. you can feel it on the streets of new york. you can see it with people. again, heavily masked, but the

other two themes, john, are the boarding up because of the protests and looting, which seems days ago now, the looting definitely. and then other is just how do you get these stores open fast? i'm going to be fascinated, john, to see where we are thursday and friday with this so-called opening of new york. jonathan: lisa, this is phase one. what's phase two, phase three, and how quickly do we get there? lisa: it really depends on the data. it's not going to be less than two weeks in each phase as the officials try to gauge the data. and honestly, john, i'm looking at the data coming out of arizona, where the i.c.u. beds are getting filled up and the cases are increasing, california, florida. the case counts are going up as some of these regions reopen. we are expecting the same thing in new york. there's a question about the protests and how much the surge there's going to be there. all of these will be factors in the second phase of reopening. the initial one is curbside

pickup and construction and basic functioning. it's not going to be all doors open. i am curious to see how many people show up, though. joint bias in this market and the shift we've seen over the last couple of weeks has been absolutely remarkable. we all saw pictures of packed beaches several weeks ago. i said at the time, it's probably close al lined to your view of this market. it triggered encouragement or fears. it reminds me that have blue increase, gold dress. some people saw blue, other people saw gold. i think everyone at the moment is seeing gold. we've seen a massive shift in the last couple of weeks. tom: a huge shift, and stung move on friday, but kevin, what's so interesting here is away from all this debate, there's been some of the pandemic data of the last number of days, particularly in texas, a bit distressing. i don't want to oversell that, but it's an issue to me. jonathan: yeah. we'll try pick occupy that

theme later in the program. kevin will be back with us a little bit later this morning. from new york city this morning, good morning to all. this is bloomberg. ♪

zpwroip new york city, this is bloomberg surveillance. we're live on bloomberg tv and radio. alongside tom keane, i'm jonathan farro. two hours away from the opening bell. here's your price action. from new york city, with equities futures up 16 points on the s&p 500, we advance by another half of one percent, adding weight to the gains of last week and the last three weeks for that matter. in the bond market, big theme going into the fed this wednesday. yields higher. curve steeper. .9%.other basis point to the dollar weakness, we get some dollar strength against the euro. euro coming back .2%, but weakness elsewhere. i want to round things out with a look at crude for you. slightly negative, $39 a barrel. brent at $42. even as opec plus agreed to extend cuts. tom, it's the industry that i want to talk about for a brief moment as this headline crosses

from the bloomberg. the b.p. plans to cut up to 15% of jobs by the end of 2020. last time i checked, b.p. had about 70,000 employees. do quick math, that's a little over 10-k in terms of job losses if they go there. this speaks to the theme i think of the next six to 12 months. how do these companies right size, get away from the equity market? how do they right size for the world we have to adjust to in the coming months? tom: and what's interesting, john, usually the cuts are 3% or 4%, maybe 5% is a big cut. to see one slide there is a big deal. i think one of the things here is the nationalization or government intrusion into oil. how united kingdom intrusive is british petroleum? i've got a concept of total. i've got a concept of exxon. is b.p., is it incestuous with the british government or truly separate? jonathan: i'll be diplomatic and say it's far less intrusive

than russia or saudi arabia. how's that for a response, tom? tom: well, i guess that works, but i mean, b.p. is i think port of ephemeral out there. it's had an interesting 10 years as well. john, i think that it will be interesting to see, as you say, if there's follow on to this. john, why don't you bring in our six esteemed guest who can esteem for us on the bond market? jonathan: let's bring in localy, fantastic to catch up with you. in the energy space sthrks a cyclical rotation or a dash for trash? what have you seen in the market over the last several weeks, and how would you characterize it? >> the energy universe, along with any of the deep cyclicals, both in the equity and credit markets, are showing the same trends, which is it was beaten down so badly that if you believe in the recovery, these are the next sectors to recover. so there's a little bit of a

catchup that the market is trying to do, and part of it, these are the sectors that people dumped very evil early on and now just seeing are seeing a strong rally from. a performance perspective, i suspect people are also feeling the pinch. for us, we talked about it before, energy is a no-go on the credit side. limited upside, all down side. it's a continuous cyclical sector that keeps disappointing on the down side. jonathan: when does reality submit what drives it? we talked to mike swell, a former colleague of years from goldman sachs, and he said this real push and pull, the momentum of the moment is the big, big push going forward. then there's this big head wind on the horizon, which is what do the fundamentals look like? i don't think we're thinking about the latter at the moment. we're just focused on the former. how do you think that plays out? >> i think both the equity and the credit markets have basically written off 2020.

i think what's challenging is what i don't buy is i don't think you can fully divorce fundamentals from the economic reality. the way, if you went back and read, since 2007, 2008, you will see a similar trend. everybody gets really excited about liquidity. in fact, in march, from 2008 when jpjp, lehman's c.e.o. was on the record in an interview saying fed action has taken solvency off the table. we saw that didn't really happen. what happens is, when the economy starts catching up and, you know, we were down, if we recover back and stay down 50%, hat's not a full recovery. that's going to form your 2021 and 2022 estimates. lisa: you did say increasingly i believe that central banks

are they're manage asset prices. if they truly are committed to reducing market voluntarily at this time, which has translated into managing asset prices higher, why not go all in risk, because that's what's worked, and the fed has shown no illingness to back away. >> excellent question. it can certainly be the case. but that was also the assumption people went all in on lehman and that it didn't work out. that's really russian roulette. i did listen to your interview with dudley, and i think the challenge is if you believe in that, that really creates a because hazard, these are going to form systematic risk to the economy and the market, and you're going get a fed bailout, and that eventually question the fed's independence. i'm not sure we're there yet. i have to have more faith in the institution than that.

tom: are bonds fixed income right now? do you perceive it as a coupon and danger zone, or can you actually find total return? i don't understand how you get total return with fields, whether they're creeping or higher higher, whatever. i believe that means price down. can you actually make a total return in the next 12 months in this game? >> it's more about carry on the safer side, that's for sure. to reach a total return, you have to take a leap of faith and get into some of these beaten down sectors. that's the only other way. the rest of it is just carry and, you know, we have been on the investment grade side, and what we have done is, we'll look at crossover companies that are getting capital structure is split. part of the -- part tv is high yield, but the i.g. company will continue to get access to funding, which should pull the spreads for the sub order nature part of the capital structure as well.

but it's far -- it's very few opportunities like that. tom: what do mere mortals could? we're on a simulcast here nationwide. people are listening and watching that can't do a sophisticated spread of i.g. and h.y. that's bond var began, folks, like what you flare lisa and john. so if i can't do the i.g.-h.y. game, what do i do if i just want to make a coupon? >> if you just want to make a coupon, you just stay with the higher quality and do what everybody else has been doing, which is follow the fed. but again, that's not going to give us substantial term. we call it the 25% club. we basically go between cash, credit, defensive equities, and some cyclical equities. to john's earlier question, if the recovery rises to the upside, you're going to make a lot more money on the cyclicals.

if the economy disappoints, then we have the perception through our cash holdings. jonathan: i want to wrap things up with a final question. thank you very much. you mentioned lehman earlier. someone said this a couple of months ago to me, let's park the v-shaped recovery that we've seen in the market. put that to one side. are you saying that what we've seen wasn't lehman, it was bear, and there's more shocks to come, perhaps an even bigger one? >> what i'm seeing is, when the economy slows down, it exposes overleveraged balance sheets. it exposes fraud. it exposes bad management teams. those sort of things that people haven't really focused on that. central bank is here, and here's the gush of liquidity. one thing i will leave you guys with is when they publish a note and say this company is fine because they got a credit amendment, do me a favor, read

the details and work backwards from the leverage ratios. what you will see is pretty drastic numbers. nowhere are people focused on that. she han: lale topcuoglu, is one of the people that actually reads the prospectus. that was a little bit of snark, i know many of you do. before everyone starts writing in to me. tom, let's get back to the story on job cuts, because it's absolutely critical and to build on that conversation we just had with lale as well. we don't know what this economy really looks like in six to nine months. we have no idea what capacity, many of these multinationals will be operating for a sustained period of time. what we do know in the short terge as we see the data come through, we're focused on the rate of change, just how quickly we improve. to lale's point, it's going to be in the months to come where we get our hands around the plateau, what does that look like in several months' time, tom. tom: right.

it's also going to be the distribution of what those jobs are. jobs at british petroleum are not the same as restaurant and bar jobs in new york city or in washington. so the distribution of incomes, what quality of salary jobs we're going to lose is going to be something. jonathan: i would make it a little bit more nuanced, but what we learned on friday was just how temporary some of the layoffs were that have taken place over the last several months, what we learn over the next several months is the permanency of some of the job losses, and i might add the job losses still to come as well. lisa: there's a lot of focus on the adjustments within this data, the idea that the jobs report that we got on friday included furloughed workers as still being employed or coming back online, and this adjusted things to a three percentage point lower unemployment rate than otherwise would have had. the question that i have, though, is not the exact number. it's exactly to the point that

you're making, john. as this goes on, companies that have avoided making layoffs, like on wall street, lot of the white collar jobs are thinking of making job cuts, and we're hearing this across the board. the economy is not going to make a v-shaped recovery according to the vast majority of economists. as a result, john, there will be job cuts that will be permanent and not very many people can game this out. jonathan: yeah, these companies wanted to remain really, really nimble, and only then would they start to right size. it wasn't in the shutdown that these companies would right size the business. it's in the next several months that they have to think about what demand will look like outside of the shutdown. from new york city, as we slowly begin the process to rethough economy, right here in new york city, alongside tom keene, i'm jonathan farro, live on bloomberg tv and radio, getting you set up for another trading week after another really decent week of gains on the s&p 500. the banks, what a rally the s&p

500 banks had last week, up more than 16% over one week alone and still down and down hard on the year so far through 2020. futures this morning advancing 18 points on the s&p 500. we are up .6% from new york this morning, good morning, this is bloomberg. ♪ ritika: the mayor says if he sees indicators in the wrong direction, he'll be vocal about it. retail stores can often curbside pickup. president trump is trying to link joe biden to activists duels defund the police. the president's goal appears to be to portray the democratic presidential candidate as weak on crime. bide protests over the death of

a black man have the president on the defensive. president trump's order to pull 9,500 american troops out of germany has rocked order. the move would cut u.s. troop strength in germany by one-fourth. it's another sign of the disconnect between washington and berlin. president trump has criticized chancellor angela merkel's government for not meeting defense spending targets. and the world's auto market is rebounding, and the trade war up the u.s., sales were 1.%. the government added stimulus measures such as tax rebates to attract customers back to show rooms. air and had bnb is seeing a surge in summer demand. it's one of the first signs of life for the travel industry, which ground to a halt in march. airbnb has more nights booked for stays between may 17 and june 3 than it did a year ago.

meanwhile, the c.e.o. has rolled out an i.p.o. this year. ♪

>> we have the chance of even sending agreement to the end of 2022.

until death do us part. jonathan: the energy minister on the unusual alliance between opec and plus. opec plus extending out cuts. crude slightly negative, $39.30. brent crude, $42.30. alongside tom keene, i'm jonathan farro, together with lisa abramowicz. his is bloomberg surveillance. the fed on deck a little bit later this week. equity futures are positive. by round about .6%. we're you will 18 points on the s&p 500. there is no doubt, tom keene, we have made some progress on a series of issues and liquidity crisis a couple of months ago, the fed has done a lot of work there. it wasn't so long ago that crude was deeply negative, and here we are back up near 40. tom: just extraordinary to see and really, folks, the path from $30 brnt to global price,

floating price, up to 40, has just been a surprise for all. joining us now, amrita sen. she's outstanding at the dynamics of supply and demand. amrita, i want to dove tail your wonderful narrow work with those that have taken more geopolitical strategic work, because it folds in. if opec plus members, and let's go with opec, if they cheat, how does that affect your world of the minutia of supply and demand? amrita: i think in terms of the question you asked about compliance, by the way, we are resuming, we just cannot see how iraq, nigeria, kazakhstan, given their broader fiscal issues, they're just so cash-strapped, will comply t. just means that the rebalancing takes longer. it is simply that.

supplies are now falling faster than demand. we've been saying this right from the stock, that they would start from early june, and they have begun. but the more these guys cheat, it just means that the overall supply number, the production will be less than what the headline numbers suggest. lisa: i'm struggling to understand the supply demand dynamic right now. a lot of people saying the promised cuts of opec plus and the potential enforcement of them, which has been a challenge for years, that that has been the main driver of some of the recent price gains, and other people rails the concern that the shale patch is slowly starting to bring rigs back on. how much is this the story and how much is demand still the main driver here? how quickly the global economy can get back up to speed. amrita: i think you're exactly right. i think the global demand, at least in our view, is still very much the key driver. we did fall to record low levels in terms of demand, now we are recovering.

and that just means that you do need higher supplies. now, i still stand by the problem we have in the market in oil, the data is opaque. the data is very lagged. we still don't know how much we fell by. if we don't know how much we fell by, but the market assumed we would hit tank. i remember talking to you guys about that. but we never did, because maybe demanded -- demand didn't fall by much, and because of negative prices, supplies fell tremendously, and that's what caused us to overshoot to the downside. in some respect, we have overshot. but we need some of the supply back, because now refineries are bringing back production and demand is rising. i still think we've gone too far, because the demand is fragile. supplies from the u.s. are going to start to come back. it's not like a slam dunk that, of course, prices should be rising from here. jonathan: do you find the supply in the united states is

more elastic when prices roll over aggressively than when they rally? amrita: yes, i think the rate of change is absolutely the critical thing. the main thing i will say for right now, especially balls you asked about the u.s. in relation to gasoline demand, is unemployment, on our economic models, that's the biggest driver, even more so than rices. jonathan: new york city reopening. i think we're all trying to get our heads around how quickly demand recovers. this is a slow, slow process for new york city. but going global, beyond china, where we have a longer data set, what's the recovery and demand look like for these economies reopening? amrita: if you believe demand fell about 20 million barrels per day, we have easily recovered about 10 million to 12 million barrels per day, and right now we believe global oil demand is about 90 million

barrels per day, give or take. again, parts of china are actually above last year's levels, because the government has -- it's basically driving a big stimulus package. it's going take a long time, particularly in the aviation sector. but yes, economies are opening up around the world, because lockdown simply isn't sustainable for growth in the medium term. jonathan: am ri ta, fantastic to catch up with you, to get your thoughts. let's build on this. we all have trade data over in china over the weekend, and i think a lot of people looking at various industries to see what imports and exports look like. when it comes to imports of commodities, i think it's always important to look at volume and not nominal value, given where commodities were 12 months ago compared to now and the volume commodity imports into china is actually recovered really, really quite well as the economy has reopened. i think what we're looking to see is how quickly the same thing, just in terms of consumption, happens here in the united states.

lisa: so far, early indications are people are driving around much more, but they're still not flying all that much, and that is a major aspect of oil consumption, lot of questions in the data, especially as we look at a new york city reopening. i have to say that if you look at the projections, 400,000 people may be going back to work, may. how many of them will? how many of them will actually start commuting? these are some of the big questions that really factor into the demand side, which is still at this point the main driver of oil prices, more than even supply. jonathan: let's talk about curbside pickup as well. how many retailers can take advantage of curbside pickup in new york city? how many small retailers, small shops can actually take advantage of that? tom: i just don't see t. i'm glad you bring it up, because i think some of the ideas tossed around are pretty desperate. people just got to get out and do it and figure it out. we've got family members in

china, and they made very clear in shanghai, you know, you do a policy, and it takes two weeks for people to sort through it. again, i wonder where we are 9 end of this week, and i really wonder, john, where we are the middle of august, trying to get the kids back to school in september. jonathan: it is phase one, and only phase one, the very early stages of reopening this economy new york city. from notice city, good morning to you all. alongside tom keene, i'm jonathan farro together with lisa abramowicz. we couldn't you down to the opening bell. one hour and 35 minutes away with equity futures up .6% on the s&p 500. we advance 19 points. in the bond market, here's the situation for you. 10-year treasury, on a 10-year, up a single basis point. a 30-year up by three. higher yields and a steeper curve, that has been your story over the last month or so. and foreign exchange, the euro, after a big rally, euro dollar coming back in a little morn a

tenth of one percent. from new york city, this is bloomberg live on bloomberg tv. ♪

>> i think we're going to have a very sharp rebound, and you'll see in the second half of the year, probably with about 20% economic growth. >> the latest economic indicators and survey results confirm a sharp construction of the euro era economy and rapidly deteriorating labor market conditions. >> this is "bloomberg surveillance" with tom keene, jonathan farro, and lisa abramowicz. tom: good morning, everyone. jonathan farro, lisa abramowicz, and tom keene, our simulcast of "bloomberg surveillance." welcome on bloomberg radio across this nation, all of you digitally at home, still at home, even though new york city