>> whatever it takes, the fed leaves rates near zero. powell thousand to support the recovery. to support the recovery. the largest plane maker burns through $5 billion in the quarter as it waits a collapse in demand for new aircraft. shares rise after an overhaul of the investment bank. we will bring you our interview with the ceo. welcome to "bloomberg

surveillance." i am nejra cehic. we are seeing european equities accelerate to the downside. the stoxx 600 down 0.6%. futures pointbut to a lower open. the five year yield hit several record lows. target rangeow the from the fed. let's get the bloomberg first word news. laura: the u.s. death toll from the coronavirus talked 150,000 -- topped 150,000. texas, california and florida had record cases. dr. fauci warned more protection will be needed.

he said if you have goggles or a face shield, you should use it. facebook's mark zuckerberg was speaking alongside the bosses .rom alphabet, apple he says facebook lags behind its competitors. credit suisse says it will merge trading and investment banking and combine its risk function. the chief executive says it is the first major rebound of the swiss lender. undoes some of the decisions by the predecessor. >> the bank merger is something we have been discussing for months. bute will be cost-benefits, it is about having one underwriting business to have one investment bank globally.

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. bloomberg. you.: thank we will get back to the german gdp data in a moment. we saw a contraction in the second quarter, worse than the estimate of 9%. back to the u.s., jerome powell has kept his message is dovish as possible, left rates near zero. he said signs of a coronavirus resurgence are starting to weigh on activities. he will boost fiscal spending. >> we remain committed to using our tools to do what we can and for as long as it takes to provide some relief and stability to ensure the recovery will be as strong as possible, and to limit lasting damage to

the economy. the path of the economy will depend to a high extent on the course of the virus and the measures we take to keep it in check. the data point to a slowing in the pace of the recovery, but it is too early to say how large that is and how sustained it will be. the rising joblessness has been severe for lower wage workers, women, and african-americans and hispanics. the fiscal policy actions taken so far have a critical difference to families, businesses across the country, and it will take continued support from monetary and fiscal policy to achieve that. the federal reserve is taking forceful actions to more directly support the flow of credit in the economy for households, businesses large and small, and state of local governments. these are lending powers, not spending powers. all of us want therapeutic vaccines as soon as possible. we cannot plan on that.

we have to hope for the best, and plan for the worst. on capitol hill, more talks between the trump administration democrats brought them no closer to a compromise on a virus relief plan. joining us now is christian nolting, cio of wealth management, deutsche bank. thank you for joining us. yield hit aive year record several times. it continues to slide today. the 10-year yield has been steady for a while. what is your strategy around treasuries? christian: thank you for having me. only government bonds. if you look at a fixed income strategy portfolio, there is not much money to be made.

government bonds including in the u.s. at such low levels, you would need them lower, which is not likely. portfolios are really key, that is why we have to look at other areas. there is no doubt we need government support for stability of the portfolio. if you want to create on the bond side, you need to look at more risky spaces, and that could be on the corporate side were there is support from the fed. we have to watch the risk scenarios. that is clearly necessary. it is less on the government bond side. nejra: you do have some preference for high-yield. in terms of u.s. versus european equities, do you see much more upside to the u.s. versus europe? christian: it is interesting to see we have years of outperformance in the u.s.

we have seen a slight change recently where we did see outperformance in europe. that was probably triggered by what we have seen on the recovery front. we have seen interest from asia and in the u.s. into europe, but it is not overweight. europe is the most under owned region globally. think this will be a trend. i think we will see better , so this trend will not change. we see a slight movement over the recent weeks which is interesting from my point of view. nejra: what i find interesting is your outlook for the recovery is a reverse square root, but you think the quicker rebound for the u.s. economy relative to

the eurozone is a likelihood that is greater. the u.s. economy rebounding more quickly. some high-frequency data has shown the opposite of that. do you stick to that view, and do you see the upside for the euro-dollar capped where it is now? christian: the recent data, that might be the case. the u.s. went later into crisis mode. we have seen europe was earlier and there were programs there. i would not be surprised, it is weak in the u.s. and in europe, but the u.s. is recovering slower. if you look down the road, probably the u.s. will be down .oughly 5%-7% for europe it may be more severe. some countries had a long walk like italy and

spain. the overall numbers in the euro thanwill be a bit more 7.5%. 2021, the growth potential of the economy, the u.s. will do a bit more on the recovery side than the eurozone. peoplewhen i talked to about cyclical exposure, they either say europe or emerging markets. you do not seem positive on europe. are you positive on emerging markets, or do you stick with the u.s. is your biggest conviction call as a defensive market? christian: we like the emerging-market, especially asia where there are opportunities. we have tilted to the emerging-market space because what we see from the support function on the fiscal side and the central bank side, there is a lot going to the emerging markets as well. the growth potential is higher

in europe, so we like emerging markets. probably negative on the european area, but that is what we see from a growth perspective. nejra: thank you so much, christian nolting, cio of wealth management, deutsche bank. great to have you with us today. a headline crossing the bloomberg, hong kong is borrowing pro-democracy to thetes, according media. coming up next, our interview with guillaume faury, ceo, airbus. this is bloomberg. ♪

>> good morning, you are watching "bloomberg surveillance ." i am guy johnson. it is 13 minutes past the hour. let's talk about airbus, the company's paring back its wide-body jet production after burning through 4.4 billion euros in the second quarter. the company is trying to wait out the collapse in demand for new aircraft. they saw delivery slump in the second quarter when global fleets were largely grounded. boeing also announcing measures to preserve cash and adapt to the shrunken market yesterday. airbus stock is trading up, almost exactly at three euros, 5% higher on the day. , talkinglaume faury about a difficult situation

ahead. the ebit line did beat expectations. he will not ramp-up production until he has more visibility. guillaume faury joins us now. thank you for your time today. we appreciate it. you say you will not ramp-up production until you have more visibility. visibility is very difficult now for your business. are you operating? how much visibility do you have? guillaume: good morning, guy. we have announced our half-year deliverednd we have 74 airplanes in the second quarter of 2020. than significantly less normal times, but slightly ahead of what we were expecting for this unprecedented situation.

in this second quarter of the euro, we have production system to what we think is the new from ament, and reduced production rate of 60 per month down to 40. we adapted to the situation, and we are active with their customers, the airlines around is world to understand what the right calibration moving forward. appropriate for us for 2020 for the vast majority of 2021, and we are awaiting signals from the airlines and the passenger traffic to understand when things will recover. we think there will be a recovery, it is likely. what is more difficult to assess at the moment is when. that is where we are today, and

we are never getting for a situation of uncertainty and changes. we have gone in the front foot by adapting the company, resizing, adjusting production rate, adapting to the supply chain to this new difficult environment. guy: there was a lot in that statement. ands unpack it a little bit talk about the component parts. let's talk about deliveries in cash. you are not cash flow positive going into the crisis. you said today you are looking to get the business to a position where it is neutral on cash in terms of the burn in the second half of the year. deliveries are a key part of that, that improves your cash flow position. to realistic is it to get a neutral cash position in the environment you described? guillaume: you made a good

point, deliveries are tied to the cash flows in our industry. elements toin respond your question, the first is on the cost side, and we have managed to adapt to the new situation. we think we have the right way of moving forward through the second half of 2020. we see uncertainty in our cash containment, then we have to make assumptions on the delivery. a large number1, of planes are ready to be delivered but are not delivered because of the situation of the airlines and the customer. we have 145 planes produced but not delivered, very high. will manage this significantly in the second half of the year.

this will tie to the balance of the cash flow. it is an objective because there is a lot of uncertainty. we are making good progress on the delivery schedules, and our contact with customers, and gaining visibility in the second half of 2020 and 2021. make our objective to be cash flow neutral in the second half of 2020. let's talk about the customers. you described the situation you have fiscal discussions ahead. what are customers saying to you in terms of their expected deliveries? are any customers defaulting on their commitments, and how will you extract cash from customers given what is going on? sure it isi am not

about extracting cash from customers given the situation they are in, it is about finding ways of dealing with the situation together, and preserving the vital interest of both parties. we have to recognize there is covid-19 and a big drop in traffic, therefore we are working with airlines to find the most appropriate way to deal with that situation. it is a case-by-case situation. each customer has a different situation. is a changing situation, they find ways to get inancing, gain visibility the crisis, and this is when we can clinch new agreements and gain visibility. we are long-term in the industry, and we have long cycles, therefore it is important to regain some visibility to plan production, plan are cash flow, distribute

work to the suppliers, and give them some stability. this is what we have managed to obtain in the second quarter. we have better visibility moving forward and hope the recovery of passenger traffic will be as expected. we think it is likely airlines will stick to the agreements we have with them. guy: let's stay with reduction. you cut the wide-body rate from six to five. you talked in the past about resizing the business to lower levels. how much further can you shrink production? are you getting to the limits of your ability to reduce the rate on the wide-body's? guillaume: i missed the end of your question, the connection is not very good.

i think i get the substance. basically, we have resized the production. 40, that is 60 to behind us. 350, from 9.5 down to 6 in the early days of the pandemic, early april. we have decided to go from six to five, and this is the best production rate that fits with demand for the next couple of months. we are ready to further adapt. what we have proven with the unexpected situation is it takes for than a quarter production going down. at the end of 2021, 2022, when we think there will be a ramp-up of production again. flexibilityave

moving up, because traffic will recover, airplanes will come back, and we need to be ready for that. we need to be realistic in the short-term, but not too pessimistic for the long-term. we have a bright future and we need to serve demand when it comes back. guy: a pleasure to speak with you today, thank you for sharing your time with us. guillaume faury, ceo, airbus. coming up, our conversation with the chief executive of renault, that is in around 10 minutes. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." i am nejra cehic. .arnings onslaught coming up coming up, our conversation with the deputy ceo of renault. we will talk carmakers next. this is bloomberg. ♪ save hundreds on your wireless bill

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get a $50 prepaid card when you switch. 5g is now included with all new data options. switch and save hundreds. xfinity mobile. welcome to camp tonsafun on xfinity! it's summer camp, but in your living room. learn how to draw with a minions expert... how to build an indoor obstacle course! plus... whatever she's doing. and me, jade catta-preta. the host of e's the soup! camp tonsafun. it's like summer camp, but minus the poison ivy. unless you own poison ivy. in which case, why? just say "summer camp" into your xfinity voice remote to join. nejra: this is "bloomberg surveillance." i'm nejra cehic and london. risk off with european equities

and futures. get first word news with laura wright. laura: jerome powell is warning of the most severe economic downturn in our lifetime. he kept his message yesterday as dove adjust possible. sounded a downbeat tone on the road ahead. -- powell sounded a downbeat tone of the road ahead. >> path of the economy is going to rely on a high extent on the path of the virus and the measure that we take. i want to stress, it is too early to say both how large that is and how sustained it will be. laura: standard chartered is set to begin a new round of job cuts. sources tell bloomberg it could see several hundred positions eliminated. earnings beat estimates. less money than expected for bad loans, but the second half of the year may see

sluggish growth. a $8.1 billion right down as push to cut carbon emissions and pandemic have raised questions. airbus is paring back its production of wide-body jets after burning through an added for .4 billion euros in the second quarter. it wades out the collapse in demand. biggest plane maker global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, -- this is bloomberg. nejra? nejra: thank you so much. breaking news from hong kong. we learned earlier that hong kong is barring pro-democracy candidates from the legislative council election. we are now hearing from the

shanghai -- south china, excuse me, warning post, saying joshua fromis barred from those the hong kong election. , june in retail sales hong kong, down 28.4% year on year, a little bit worse than the expectation of a drop of 24%. earlier we spoke with credit --sse ceo, scott stein gomas koch done -- thomas ottstein. thomas: we have good results ,oth on the p&l, the revenues or on the balance sheet. very pleased. >> what happened with the share one ratio? a lot of people were expecting it to go down and it has

actually gone up. thomas: we were obviously cautious when we gave guidance at the end of the first quarter because we did not know how much risk rated assets would increase, and at the same time we generated more capital through our earnings come and that is why our ratio is at 12 points 5% -- at 12.5%. thecine: talk about structuring of the merging units. thomas: even with my predecessor it was already a topic. 2015, clearlyn the two had to be separated because we had to restructure the trading business. now we are at a stage where we can put them back together again, and most of our competitors have anyway. this is not a cost exercise. there will be some cost benefits, but it is about having

one underwriting business, to have one investment bank created, and we also trading solution business which builds on our success we have in its, and that serves our equity and fixed income transactional business for the private bank and the institutional business. francine: how difficult was it to do this in the middle of a pandemic, where it is less easy to speak to people face-to-face? thomas: it was relatively good. zoom callscalls -- and internal calls to get this up, but it worked very well. you know, i have to say not one person within credit suisse was against that combination of icbm and global markets. given miller's stepping down from the board, he was actually -- david miller's seven gun from

the board come he was actually convinced, and it was a move where we had to convince a lot of people. -- it was a move where we did not have to convince a lot of people. francine: do you see credit suisse streamlined more in two divisions in the future? thomas: no, we believe in the original model. we like to have the swiss business, the asia business, and that makes total sense. francine: what is your biggest concern over the next 12 months? we seem to have gotten over the worst with the pandemic, more or less. thomas: yes and no. in hong kong we were up to 65% in the office, and now we are below 20%. the biggest concern is a second wave of infections. we are doing well in switzerland, almost active 50% working at the office, but that is the biggest concern. francine: how many people overall do you have working from home as opposed to the office?

when do you expect active change? thomas: globally we have only 20% working from the office, 80% working from home. we have 90% enabled to work from home. the trend is going up in most countries in terms of people as ing at the office, but said, there are certain regions like hong kong, where actually the last couple of weeks it has gone the other way. francine: do you expect any permanent changes for people working from home? thomas: i definitely expect in the mid to long-term that we will have more people working say one day per week, maybe two days per week. i think it is important that you have this informal exchange, and therefore coming back to the office is something that everybody wants. everybody i spoke to, they were so happy when they could come back here.

it is something that really people want to do. gottsteint was thomas , speaking with francine lacqua, earlier after the bank overhauled its investment bank and beat profit shares by six tenths of a percent. renault grappled with a sharp market downturn. the french comedy, which makes europe -- the french company, which makes europe's --t-selling clotildeeaking with delbos. thank you so much. speaking earlier, it was said that renault is working with nissan executives to make sure the fire does not take over the whole house. is this alliance going to survive? >> yes, for sure.

i have no doubt about that. thes true that nissan has facilities. that you have the facilities to share cost, technology, and to be strong and your alliance, that is what we're doing. the difficulties is that we show now, we use them when we presented the alliance plan at the end of may, so there is nothing that has changed since we announced see you at the end of may. we are working on it. at the end of may we explain the logic, the strategies, the ideas, and now we are working on implementation project i project, region by region on what it means. it is going on at the right pace. no worry about that. pace, canaking of the you give some guidance on when

renault will no longer be hobbled by nissan's difficult financial situation? is difficultl, it to say, because first, it is nissan who has to say that. but if you look at the announcement of nissan earlier this week, they said that they will have difficulty here, clearly on the 2021 year, and -- they will have a difficult year, clearly on the 2020 when year, and able gradually recover. -- and they will gradually recover. talk to me then about cost cuts. the 14,600 job cuts planned globally, it includes 4600 in france, 10% of the workforce. how are the discussions going with unions? clotilde: they are going pretty

well, actually. speak,last week, as we and agreement. in france it is very complicated, but we had to first agree on how we are going to discuss, and then we can rule on the real elements of the discussion. this agreement has been fine with the union, and i want to underline that every single one refused too do so last week. need for teas from an outside person, etc. -- do we need expertise from an outside person, etc., etc.? these will be dealt with stream by stream, the plans, etc. everything is now planned, so eat is going as planned. we knew it was going to take time -- so it is going as planned. we knew it was going to take time. beyond 2022, we knew it was going to take time.

we are right in the process as we had envisioned, right in the timing. now the good discussions are going to take place right after summer, and we welcome this discussion. it is in the dna of renault to do it collaboratively with the and the stakeholders, and you often find even better ideas what to do in the plan when you do it that way. if i take the plans where we have in france, where we went to implement the economy, since we started to discuss with our unions, we have more and more ideas of what this means and what can be done in order to implement the circular economy. everything is going according to plan at this stage. nejra: ok. that said, will you release the numbers earlier -- when you released the number earlier, you said renault is not in a position to give a reliable guidance for the full year. at the same time, you said this

morning the third quarter might be good. can you give us a little bit more detail on guidance and when you expect to see a recovery? first, i think we expect h1 to be the floor. we should see in the next semesters gradual recovery of our results. what we know, if we can talk about q3, it is because we have pretty good.h is we see the restart of the activity, especially in europe -- it is more complicated and other regions -- but in europe we see a pickup in june. the books will drive us through september. you have the incentive plan from the different states, especially in europe, again, which are june inlace now, from france, from july and most of the other countries. we know that people are going to

be willing to buy cars, and also because the car is safer in everybody's mind then public transportation. what we don't know, is it just a technical rebound now that there has been no business for three months and people want to come back to what they had before? some of those measures have a limited time in terms of every period or amount that the states are willing to put on the table. so what will happen in the first quarter? what will be the development of the pandemic because we think this is not over. giveght be ridiculous to guidance for the full year. we will see step-by-step. nejra: it is a big question for everyone, whether it is pent up consumer demand versus sustained demand. ceo clotildey delbos. thank you for joining us today. more are in earnings next. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." i'm never cherish in london. let's get the bloomberg business flash with laura wright. itsa: nestle is outshining rivals. expects to nestle percent to 3% growth this year. it may focus on more of its premium offerings. thanbev has sold more beer expected in the last quarter. sales topped $10 billion. the world's largest brewer saw growth in june after volumes crashed. it is slowly picking up again. ab inbev saw solid signs of

rebound in china in the past two months. that is your bloomberg business flash. nejra? nejra: coming up standard chartered delivers earnings that top estimates. the exclusive interview with ceo bill winters next. this is bloomberg. ♪

nejra: economics, finance, politics. bloomberg surveillance. standard chartered says the worst part of its debt has passed. 1.7 -- $1.57 billion of -- projected losses. i asked the winters about the political situation in hong kong and asked if more shareholders had expressed concern on standard chartered's decision to endorse china's security law. see ant would be hard to investor not support hope for economic and social stability. it is our biggest market, that period of stability would be helpful.

we look, it is in a severe recession right now. it began with the administrations last year, covid has made it a suit -- a more severe recession. that i'm sure investors would hope for economic and social stability in what is otherwise a very vibrant economy. nejra: bill, were you under much pressure from china to endorse the security law? the decisions that we take in terms of our expressions of hope for economic and social -- itity are entirely goes without saying that this is something we would hope for. me most reassuring thing for and i think for all of us in terms of the market, and part of the reason that hong kong has

remained a target for capital with massively capital raising flows in hong kong over the last couple months, for chinese companies and others, is because there is a strong endorsement of the one-co., two-systems approach. in deference to the ongoing judiciary -- the hong kong judiciary. these are important considerations for the financial center. you seen that case, do hong kong becoming a less important market over time as a result of the security law? for example, perhaps with a shift to business in singapore? bill: singapore has some tremendous advantages, and singapore will continue to thrive. hong kong will continue to thrive. hong kong is the gateway to capital into and out of china, and it is an important region

for financial but also for trade more broadly. that is nothing to suggest that is going to change anytime soon. nejra: ok. in terms of the hong kong dollar peg, bill, of course with tensions between the u.s. and china rising, one thing that has been tabled, is the u.s. going ahead with undermining the dollar peg. are you looking at scenarios in which that might happened? is it looking more likely for you this year? bill: i don't think so. the hong kong peg is extremely well supported with reserves. i think we can say safely that the hong kong dollar peg is unassailable. that doesn't mean that somebody will not try to assail it at some point, but i don't think they will be successful. and i'm not sure what purpose it would serve in any case.

at the end of the day, hong kong is an integral part of the global financial system, and attempts to undermine hong kong i'm afraid would have some pretty deleterious effects on the financial system more broadly. it is hard to see any policymaker in the world thinking that is a good thing to do any time, but particularly now during a pandemic. generally,, more with tensions rising in the past few months between the u.s. and china, how do you see those relations evolving, particularly with regard to the phase one trade deal? bill: it is good to see that the trade one trade deal -- the phase one trade deal is still in place because it was suggested that things are getting quite worse. going into the election period in the u.s., if there is an issue with the democrats and the republicans aligning, i think we can expect

tensions to probably, at the best, stay the same or possibly get worse. theink the deal struck in interest of both parties, as a result, has not been particularly threatened or canceled. but rhetoric will pick up, and all weekend -- all we can hope for and be encouraged is a sense of collaboration between the two leading economies in the world. nejra: that was standard chartered ceo bill winters speaking exclusively to me earlier. we initially saw standard thanered gain better expected, but shares are down now almost 3%. thanks and carmakers are the two industry groups that are the worst performers on the stoxx 600. reflecting00 is losses to the downside.

1.2% following a dovish news conference yesterday. the 10 year yield or purchase 55 basis points, after dollar weakness yesterday, the dollar making a bit of a comeback on that risk off tone. "bloomberg surveillance continues in the next hour. tom keene joins us in new york. including a conversation with the head of a health care company. this is bloomberg. ♪

tom: this morning, lower for longer.

longer according to chairman powell. he says the best chance to return to a job -- he is candid about the urgency for fiscal stimulus. speaking of which, it is thursday and "hope springs eternal." so says a leader. negotiations are not going well. how about compromise? jobless claims at 8:30 this morning. jes staley is not impressed with wf h. barclays says hi ho, hi ho, it is off to the office you will go. good morning, everyone. "bloomberg surveillance." guy johnson es const on the acreage in london. is const on the acreage in london. google says you don't have to come back for a lear that a year, five