youseftom: this morning, the mee of furlough, to lay off, to rightsizing in july. ,ig and small business america europe, adjusting to the pandemic. masks they are here to there and everywhere. from tulsa to timbuktu, the manley cave. more bank earnings. they will trade in any storm. good morning, everyone. this is bloomberg surveillance on thursday, and i'm tom in new york. guy johnson stepping in for francine lacqua in london. jobless claims in america, hugely important economic data, but the real economic conversation will be in frankfurt. absolutely.

the ecb today likely in some time,ust merely to mark there may be some tweaks in terms of determining will it have an impact, but it will not be major. the ecb is waiting for more data. the ecb is also waiting for meetingnd the council which will determine this rescue plan, 750 billion euro rescue plan, and everybody is waiting to see what happens there. yousef: a medical meeting today -- tom: medical meeting today, first do no harm. right now with first word news in new york city come here is ritika gupta. ritika: president trump is shaking up his struggling reelection campaign, replacing manager brad pascal. pascal has been under fire for some time, coming less than a month after the resident's

sparsely attended rally in tulsa. the twitter accounts of some of the most prominent american political and business leaders have been hacked, amongst them, barack obama, joe biden, elon musk, jeff bezos, and warren buffett, an apparent attempts to promote a bitcoin scam, sending out tweets promising to double the money of anyone sending funds via bitcoin in 20 minutes. it is investigating. the coronavirus outbreak has gone worse in texas. the biggest number of daily cases, almost 10,800. california had its second worst day with more than 11,000 infections. san francisco and sacramento have become the latest cities to announce that public school students will not return to classrooms when the new term begins. china's economy returns to growth in the second quarter, an important milestone in the struggle to climb out of the slump caused by the coronavirus. china's g to be expanded 3.2% from a year earlier.

industrial output rebounded but consumer demand is still weak. retail sales continue to fall. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm ritikauntries, gupta. this is bloomberg. guy? tom? tom: a little bit of a risk of feel. i don't want to oversell it, but nevertheless, a little bit of weight two days in a row. , 29.10.it in the vix futures negative, dow futures negative, to 26 right now. yield, out toar two decimal points, and that is a little bit of sargon is there. other than that, pretty quiet. guy: we are waiting to see what happens with the ecb, waiting to see what happens with the council meeting friday, tom.

one week implied volatility for the euro, now with a one-month high. there is not a lot of kind of fear surrounding what is happening here. there is a sense may be that if the council would agree on something friday into the we can, we have a little bit of time to fix this. nevertheless, a little bit of wind coming in, dollar strength in the market. european stocks falling -- following what we saw with the stoxx 600. the retail number has spooked investors, as has the chinese authority's decision to criticize one of the biggest companies in china, criticizing the idea that alcohol prices are too high, and that has been taken as a signal to the authorities concerned about the very strong rally. another interesting indicator in terms of the risk off sentiment. one point about -- 1394, tom. --

divot coal joins us now. what is your chart -- david cole joins us now. david: the ecb plays a role, but much more important is really how fast e.u. leaders will come up with this recovery fund. we think at one point they will agree on this recovery fund. the logic is there. with that, the longer-term, gold can go higher. thending how quick compromise has been achieved. how quick shift from monetary policy, which had been the main support driver here, goes to fiscal policy. this is usually a good environment for currency. guy: can we sustain ourselves at those kinds of levels? if we get a deal done, if we reduce denomination risk, is

that a rating of the euro that will be sticky? david: we think so. the ecb in some space will go further up. with more of a focus on fiscal -- the currency has to be viewed in a different way. so it is not more as risky when it comes to the cohesion risk in the euro zone. this helps on one hand side with negative rates that is the head for every currency. tonka david, i want to dive into the european economy. lost the script there. how much is the labor economy driving the debate in europe. 9%,s ago it was appalling, 10%, 11% unemployment.

dynamic partment of the discussion at the ecb and part of the discussion with these leaders? on thenot so much monetary policy side. the big advantage with the european union and lots of european countries in the current crisis, they have automatic stabilizers which support the labor market. you don't have to put this in place. the stabilizers are basically made for such a crisis, which we observe right now, which is not ane -- it is made from exogenous event. you don't have to think about whether they are in place. and that is why monetary policy is quite relaxed when it comes to the labor market, because the fiscal side has put in place already some measures here to stabilize the labor market and to stabilize these dynamics. the emphasis of the

stabilizers? do they diminish economic growth? david: they do when used in a normal recession. somely near to clear out imbalances in the economy. right now i would be less pessimistic that this automatic stabilizer would depress productivity because right now we don't go in a recession because of imbalances. we go into a recession or we went into a recession because of the shutdown of the economy. the usual negative effects, side effects when it comes to productivity. christine lagarde is going to want to lean on the idea, mario draghi leaning on a great deal, that fiscal policy needs to do more, and that could potentially be the case this time. nevertheless, what can she signal in terms of the ecb's ability to deliver further shots to boost the economy?

she is going to want to make very clear that she is not out of ammunition. how is she going to do that today? david: the most important instrument ecb still has in this situation of negative or zero interest rates is basically forward guidance. therefore, the communication is really key here for the ecb. this is there instrument which way -- which they will use. it is basically how much they signal and the coordination of fiscal and monetary policy. so when we have fiscal policy, how committed the ecb is to prevent any increase in interest rates. when the economy picks up, when interest rates go up, when spreads are widening. this is basically the area where the ecb will do probably more when it is necessary. we will do more in terms of volume. much more important in terms of flexibility, basically to go away from the static support in terms of volumes, but go in the

direction of we will compress spreads wherever we see them, and this is basically the instruments, also that the ecb can work with. guy: david, i was surprised to hear the chief economist at the ecb talk about the fact that he has no particular view on spreads. did that surprise you as well? david: that is i would say the usual ecb rhetoric which we are hearing since basically they have started to introduce -- they have their legal limits. so the ecb is basically with his policy and the compressing spreads, but they never confess, they never say this is our target. so what they talk about is usually, they say we want to improve financial conditions, and we all know that you improve financial conditions by compressing spreads. this is the measure we target to

come and therefore the ecb is split with its communication. because of the legal framework they are operating in. i think it is off the radar, this meeting, and there are distractions because of the out there, what it seems banking is under a new strain with chronic persistent negative interest rates. i think it is fair to ask this question. is a negative interest rate experiment done? david: we hope so. it is indeed for our business, as a measure not the best environment to operate in. but we think that central banks have learned that going into negative interest rates, it is only in very special circumstances, the good strategy -- take for example the swiss national bank for them. it is probably the only strategy to avoid here, over appreciation

of the exchange rates. for the ecb, there has to be more in room -- more room to maneuver. the coronation of fiscal and monetary policy is something that will allow the ecb to move away negative interest rates similar to what we have seen for the bank in sweden, which has moved away from this route of stimulating or trying to estimate late the economy. tom: we are continuing this kohl,ssion with david and we will have full coverage of the ecb announcement in a press conference. always some interest there. but interest is american banking, and particularly the success of james gorman of morgan stanley in the broader sphere of asset management. it has been truly a decade of excellence. in the 9:00 hour this morning. stay with us this morning. this is bloomberg. ♪

tom: good morning, everyone. bloomberg surveillance. i'm tom keene in new york. interesting stuff going on here, with an ecb meeting, and of course all the other market activity as well. -- dow -30, dell futures futures -- we are speaking with ohl,icult -- david k who is more than qualified to continue the discussion on negative rates. i want you to talk, david, about negative rates to the public money market funds and short-term paper. bankst understand how the withove forward day today

these interest rates. david: we have seen because there is an in norma's amount of revenue with the money market funds, they are quite low. so in terms of interest rates basically making these kinds of asset classes less attractive, and from the ecb part, perspective, this is exactly what you want to achieve, you lessto make risk attractive. it is a measure, and experiment, to push money more into risk advances out of the money market fund. of: this goes to the heart julius baer. , just very simply, if there are challenges in asset management, how will julius baer attack that? why do you -- adapt to that? why do you position your accounts with the stresses of negative interest rates? david: of course we try to

accompany our clients to shift duties more risky segments. this is key to clients, when they risk -- when they join more risky segments, that they understand the risks, and then you can go with usual conservative clients into more risky segments. assets is how we as managers deal with these challenging environments of negative interest rates. pick up on the issue of negative interest rates. let's talk about what is happening in the u.k. the u.k. two-year is pricing the fact that we are likely to see negative rates for the bank of england. we have seen disappointing jobs data out of the u.k.. is it your expectation we will see the bank of england joining the ecb in the realm of negative rates, and what does that mean for u.k. assets? that the bank of england will be quite reluctant to join this experiment of

negative interest rates, and why? the reason is the benefit is usually very low. it is the highest benefit you get from negative interest rates when you are a small open economy, and really depends on the level of your exchange. when the exchange is at a level which you need to steer the economy, avoiding some downside. in this respect, this will be -- the u.k. is not a typical country which relies on the chief interest rates, on the chief exchange rate to stimulate the economy. so we would doubt that the bank of england really goes in this direction of negative interest rates, simply because the benefits are probably too small, and have a draw down to the negative, the costs are too high, so rather we have seen the -- to stick to purchasing policy. in: with what is happening

germany right now, we are seeing data out of china that indicates the industrial part of the economy is doing relatively well. is that good news for germany? is that likely to be a stimulus for germany? david: well, i would say good news. i wouldn't go so far to say -- when you drill down in the industrial part of the chinese economy, it is still again the investment buys, which is more domestic driven, which is more real estate driven, which is more infrastructure driven, and there is thelly same gearing toward the same leverage, the same as the manufacturing side. manufacturing has to be ok, but it is not the recovering -- germany would need to wait longer. when this part also kicks in and --na, and then don't forget

again, you see it more on retail business side. auto sales has been down in china. so the german economy could get a better number, actually come on china, then we have seen so far. tom: david cole, thank you so much. , thank you so much. we will continue the discussion on european in economics. for more, and economics discussion with the representative of the united states to the international monetary fund, in the 7:00 hour. stay with us. this is bloomberg. futures -27. ♪

ritika: this is "bloomberg surveillance." let's get the bloomberg business flash. the european union top court has struck down the u.s. data transfer agreement known as the privacy shield, meaning facebook and thousands of other countries that shipped commercial data across the atlantic face turmoil. the court says e.u. systems data is not safe because u.s. authorities are able to survey it. the court did approve another system to transfer data. -- 25,000irlines will workers could lose their jobs. that is about 25% of the u.s. workforce. the cuts are needed because the pandemic is still battering demand for flights.

dell is exploring a potential spinoff for its potential ownership of vmware. dell's personal computer and server revenue has see sought in recent years. that is the bloomberg business flash. tom: thank you so much. data is at stasis here. the ecb meeting, in and of itself, is quiet. negative 2.30. i am going to call that midrange right now. got? -- guy? guy: as you say, tom, a big focus not only on the ecb with the council meeting friday, the euro is a little weaker this morning. saw backthe spike we in march, so that is a key level to keep your eye on stop the overnight is really quite important. csi6 -- 4516 is where the

data closed. retelling china is the retail area where the market focused on weak data there. --s the chinese authorities european stocks are at session lows. at the moment it looks as if the nasdaq is going to open flat, the s&p opening significantly lower. where back to the place where we were days earlier. we will speak with johnson & johnson's cfo. york, 3:30 p.m. in london. this is bloomberg. ♪

guy: good morning. guy in london, tom keene in new york, back in the office.

let's talk twitter. the twitter accounts of some of the world's most prominent people in both political and business arenas have been hacked. among them, barack obama, joe biden, elon musk, jeff bezos and warren buffett. bloomberg europe tech editor joining us to discuss. how did this happen? >> at the moment, it was most likely caused by social engineering or human error, and essentially an outside party was able to gain access to internal tools used by twitter in order to basically post these messages , essentially simultaneously across a wide range of accounts. twitter has not come out and said step-by-step what has taken place. what it did do was try and prevent worsening impacts of

what happened, which was unprecedented, in that it actually stopped the ability of anyone who had a verified twitter profile from tweeting anything for several hours. once things came back under control, those restrictions were lifted. guy: what does this mean for twitter's credibility? what does this mean for the medium-term? nate: for the medium-term it is very poor because all eyes are on upcoming elections. with that in mind, the ability of twitter to just switch off the tweeting potential of people with verified accounts is going to be significant, given that those accounts are where people look for up-to-date and accurate information about political events and other things. it is notable that president trump's account did not seem to

be compromised at all in this instance. it was business leaders in broadly tech people. that is going to be a question twitter is going to have to answer in the coming days, as to whether that will be prevented from potentially happening later in the year. tom: we should mention that one of the accounts compromised was michael bloomberg, the founder of bloomberg lp and its television and radio operation as well. nate, that is all fine and well. i have had my account shut down before by previous hacks. how have the people who lost money -- how will the money who lost money -- how will the people who lost money be made whole? nate: they have from a blue lost money. one of the problems with bitcoin, the cryptocurrency, is it is very difficult to track. it is extremely difficult, near upon -- near impossible to appeal any kind of loss because

it is not controlled by any central organization or agency. as we have seen encases cases for many years, once the money has been moved in bitcoin, it is going. tom: nate, let's turn this into a two hour conversation. everyone who has been against bitcoin from day one speaks of common-law activity that is unenforceable by governments. is this when governments finally say enough? nate: it is unlikely from the perspective of bitcoin. there have been so many other instances in the past, where significant amounts of money have been lost to a bitcoin failing or attack, and that has prevented -- in that has not prevented the currency from being used and traded. this is not going to be the end for bitcoin. tom: a great brief. nate lanxon, still working on this story, our europe tech editor. with our "first word news," here

is ritika gupta. ritika: a shakeup in president trump's struggling reelection campaign. -- will be replaced. gave joecame as a pole biden a lead over the president. it also said more americans trust biden to do a better job on the economy. anthony found she sounds like he has had enough. he fired back at critics in the white house. he told the atlantic that what he calls the bizarre behavior there only hurts president trump. he described the white house attacks on him as nonsense and wrong. the trump administration reportedly made bandmembers of china's coming to's party and their families from traveling to the u.s. according to the new york times, the executive order is still in draft form. fundnternational monetary reports small and medium-sized business bankruptcies could

triple this year. more than one third of small businesses in the u.s., u.k., canada and south korea worry about viability or expect to close in the next year. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. i'm ritika gupta, this is bloomberg. tom, guy? guy: thank you very much. coming up, a conversation with the speaker of the house, nancy pelosi. that conversation taking place at 12:00 p.m. in new york, 5:00 p.m. in london. where are we with the next round of stimulus? this is bloomberg. ♪

guy: i am guy johnson in london, tom keene over in new york. tom, the data out of china kind of mixed, i think. i take it as glass half-full, despite some of the numbers. i think the retail side, the investment community is worried about. a bounceback of 3.2%, considering what china has been through, i think the headline level does not look too bad. the big issue remains the rest of the world. anda is a global economy, we will see that that may be an achilles' heel. chief joining us on the line. i want to talk about this data in the round. we have seen the chinese over the last few years trying to boost the retail side of their

economy, the consumer side of their economy. this data seems to be a throwback to a previous era of strong industrial numbers and weak consumers numbers -- consumer numbers. that china ise is outgrowing the traditional modes of infrastructure led, construction led growth. -- is not serving the economy as such, so absolutely on the consumption side, which is still the largest and main key driver of growth needs to step up and going forward, i think the challenge will be how policymakers manage to boost household spending. currently, i think the root cause of that household consumption weakness is on the back of real disposable income growth still being negative.

if we look at details in the data, we can see that rural and urban real disposable income growth still remains negative, albee it improving for -- albeit improving from quarter one. levers can the chinese pull to increase that growth? jinny: further unlocking of the economy will certainly boost household spending but realistically, more spending in terms of welfare spending to make sure disposable income is on the rise, not just this revenge spending mentality. we have seen, for example, auto sales are quite weak in the latest set of data. lots of underlying weaknesses in sentiment, precautionary saving is on the rise, meaning those

who are able to have savings and have job stability are really making the most of it by spending it either on housing and equity markets, but as we have seen recently, regulators are becoming much more aware of those bubbling areas. tom: jinny, thrilled to have you with us. i am very interested in world trade and the dynamics with china. there import demand, what do you -- their import demand, what do you see on import demand and the end of the year? they: very strong, as of most recent data. we highlight dare, -- the highlight they are, domestic demand is very strong -- the , domesticthere demand is very strong. i think very strong momentum.

however, there are obviously structural shifts that china is trying to produce much more goods,d value technological goods, etc. uncertainties will continue to plague the trade data of china, going forward. tom: this is really important and it goes back to your work at the london school of economics, leakages with the import, -- import/export system. is it a changed pacific rim for china, in terms of the marginal development of investment, to vietnam, indonesia, taiwan? is it a new pacific rim for china? jinny: new supply chains are forming.

relevant regionally in asia, we have seen that the longer are we seeing these kind of low value goods being outsourced to neighboring countries. in fact, china is trying to build infrastructure, digital infrastructure for its neighboring countries. there is already a framework that has been applied, but increasingly further on the outside of asia, across central asia and africa as well, we have seen connectivity is increasingly important, not just on this traditionally commodity type of good but now services, china is exporting services to these emerging economies. guy: jinny, will that compensate for the absence of american technology, the absence of

european technology? both continents look like they are going to limit china's ability to take and use technology from other parts of the world. that has been a key growth driver over the last few decades. if that is curtailed, what impact on growth will that have in china? the recentink episodes have really highlighted the fragility of this kind of technology driven growth. certainly in the interim, we will not see a replacement immediately of western supplied technology. chinese technology won't already being supplied by the developed markets. there is a grace period, and you see that with the u.k., where companies have been encouraged to either originate their own technology or start to displace. china needs to look carefully at what opportunities and what challenges are ahead.

clearly, they will be a lot of shift, structurally, but this will continue to show uncertainty for chinese corporate's looking to develop -- chinese corporates looking to develop supply chains. standardy yan, icbc bank chief china economist. we will carry on the conversation. -- is going to be joining us, one of the biggest companies out of the nordic region. we will talk about that, next. we will talk about the numbers today as well. this is bloomberg. ♪

ritika: this is bloomberg surveillance. i am ritika gupta. -- in a u.s. ipo. shares were priced above a target hour -- that was already

raised. by visiony is backed fund. shares begin trading today on the nasdaq. uber is in talks with investors interested in taking their freight division. the ride-hailing service held discussions. the funding round would give the freight business a standalone valuation of about $4 billion. uber freight connected truck drivers with shipping companies. the top oil driller in california has filed for bankruptcy. says -- theesources filing could kick off the next wave of collapses among oil drillers and businesses that depend on them. that is your bloomberg business flash. tom, guy? guy: very good, ritika. thank you very much. -- has cutres

revenue and profit, hitting asian operations. joining us now is sigve brekke, telenor's ceo. thank you for your time. i would like to start with the cut to the targets. i am curious as to the specifics, as to why you had to make these changes to your guidance. think werst of all, i have the worst behind us. -- but also from closures and lockdowns across the nation. we were able to more than compensate with reducing our costs. going into the next half of the year, we still see uncertainties, which is covid

related in a couple of our asian markets, especially bangladesh and thailand. see a quite stable operation going forward. you are taking costs out, and that is dropping down into the bottom line. how much more can you take out in terms of costs? sigve: if you look at the second quarter, we took out costs of $1 billion, and also direct covid related costs. is from the structural motive -- mobilization program. we will continue with that, going forward. even in the next half of the

year, we will see cost effects costthis organization and effects that are more covid related. ok. gove, you have decided to with -- for your primary 5g provider. will there be any huawei? we haves you said, 5g.ded on our [indiscernible] decisions on this market . i am not ruling out anything. i think what we have learned from the past is that it is important for us -- in our

operations. you have a very interesting geography. a huge asia expansion as well. will the tensions of china with the united states, with europe and scandinavia, will that slow down your asia growth? sigve: no, we don't see that. -- i don't markets, think that is affected by the china-u.s. relations. i have to ask you an american question. i understand dividends are higher in europe and for utilities in scandinavia. i see a gross yield of 5.9% on the bloomberg. with this slow down, due to the

pandemic and other challenges, is the dividend at risk? discussionad this with the board about this when the covid situation started back in april. the board decided then to pay out dividends and we will do that this year. the first chance was in may and the second chance will be in october. there is no change to that. [indiscernible] the payouts. when you are looking ahead to what you are going to do next, what lessons have you learned, during this pandemic that you could apply to the business going forward? how much more redundancy are you going to need in the system? what can you tell me about mobility data in the nordic region right now, and terms of

economic recovery that we are seeing? sigve: last question first. there is aic, we see and we of solutions course will try to deliver. b2b, toa very strong deliver. to your first question, i think there are three areas that we see coming out from covid. the way ofne is in vertical change. -- we want them to have flexibility in where they work. they can come to the office or work remotely. we will use this to speed up the

process. area is customer journeys, and we are prepared to do that. is we are going to invest more into making our operation remote. thank you for your time. . sigve brekke, telenor's ceo. thank you very much. this is bloomberg. ♪ it's pretty inspiring the way families

redefined the word 'school' this year. it's why, at xfinity, we're committed to helping kids keep learning through the summer. and help college students studying at home stay connected through our university program. we're providing affordable internet access to low income families through our internet essentials program. and this summer, xfinity is creating a virtual summer camp

for kids at home- all on xfinity x1. we're committed to helping all families stay connected. learn more at xfinity.com/education. tom: this morning, the measure

of furlough, to layoff to rightsizing. this july is not that april. the biggest small businesses adjust to the pandemic. timbuktu, the -- we speak with james gorman, later this morning. good morning, this is bloomberg surveillance. york, guyeene in new johnson for francine lacqua in london. guy, is ityou sit, an ecb conversation with madame lagarde or is this just a yawn to get to the weekend? guy: i wouldn't go as far as a yawn, but i would not get overly excited. madame lagarde like all of us is waiting for the events of friday and the weekend, to say we are waiting for the council