we will have a conversation with the head of the bundesbank. the broader european index only has to fall another .9% before it has posted its worst week since the third week of november in 2008, so a very bad day indeed, and the questions there are as we see stocks fall this precipitously, are you concerned about deflation? are you concerned about a panic? on the supply side, are you concerned about the hits the coronavirus closures in china have had on german manufacturing? and what can central banks even do about supply-side problems? they feel like they know what to do about the demand side, although they have not been successful thus far. the supply-side could be even more difficult, so a lot of ofstions for the president the bundesbank today. let's take a look right now it what is moving markets with our macro strategist. let me start by asking -- why have equity markets fallen so precipitously? coronavirusast on fears, which have been around since at least the end of january. >> i think the difference is that now we are seeing this recali

jens weidmann, president of the georgia bundesbank -- of the deutsche bundesbank.nk you for that. still with us is jeff kleintop. do you think officials are going to be behind the curve in dealing with this crisis? jeff: well, you were talking to fiscalconservative official in germany. german economy is so export oriented, it doesn't really matter that much to germany what germany does in terms of fiscal stimulus for interest rates. china stimulus matters more for germany. remember, all the auto sales that germany since over to china, that is more important. lowering rates further in germany, what is that going to do? already negative. alix: stick with me. we already talked the ecb. what about the fed? will it cut rates when it meets in three weeks? that's up next. this is bloomberg. ♪ loomberg. ♪ viviana: this is "bloomberg daybreak." coming up later on "bloomberg: the open," mob it all area and .- mohamed el-erian ♪ alix: the coronavirus pummeling the market and causing traders to ramp up their bets on the fed rate cuts, almost four by january 2021. , andus are d

can the german military the bundesbank meet the new challenges. i do believe that the german military is in a very dire and critical state is the number of ships that can sail the number of planes they can't fly. can the western alliance system still guarantee security. what role does germany play in nato and in the world. when nato sounds the alarm the order reaches the 9th armored demonstration brigade in moonstone in northwestern germany this time the mail is about an exercise but the entire apparatus responds as it would in a genuine emergency the brigade provides part of the ground troops for nato's very high readiness joint task force the v.j. . it was established in 2014 in response to russia's annexation of crimea. and i'm pleased. that i can also add. however no longer here because i received the alarm order now a value waited and then i decipher the letter combinations in the order to find out which alarm measures have actually been triggered and for the timing for that i consult the board is fair crisis response plan. so i can see which

the bundesbank president among the global central bankers weighing the impact of coronavirus, and theeed for some kind of policy intervention as a result. the st. louis fed president james bullard said earlier today further policy rate cuts are a possibility, if a global pandemic develops with health fx approaching the scale of normal influenza, but this is not the base case at this time. so what could a rate cut mean for financial services already under pressure? equityanyon is the chief -- fred canyon is the chief equity strategist at steeple. everything is down in a significant way. hard to isolate one group. financials were already feeling pain. how bad does it get in this environment? >> it has gotten pretty bad. the challenge with financial services is what is viewed as a solution, rate cuts, is viewed as that for financials. they are getting whacked not only from the concern of the economic conditions but what happens with interest rates. it's something along credit happens, that will feed itself through financials. vonnie: there have been some high-profile downgrades of financ

one of nato's elite units it's a fully equipped brigade which makes it quite an exception in the bundesbank. the military is supposed to have 8 fully equipped brigades by the year 2031 but at the moment not a single brigade is 100 percent ready for action which even the v.j. t.f. troops had to borrow material from all over germany. is cut and everyone has realized that the way the system functions at the moment we had to bring materials from throughout the been despair to munster or other places to fulfill our mission but that is not an acceptable state of affairs who this is not about building but adequate equipment those 8 brigades have to be fully equipped so that they can be just as ready for action as this brigade is. fully acquitting them will be costly but germany has made a binding commitment to nato. the army estimates that the price for a single brigade will amount to $5000000000.00 euros but in recent years there has been practically no investment in material and equipment and even with a lot of money it will be. hard to quickly rebuild all the structures that have been dismantle

the head of the buddhist bank has been -- the head of bundesbank whose country has been affected by this says we have enough accommodation and at this point there is nothing central banks can do because you will not go out and spend extra money if you are afraid to leave your house because of the coronavirus, even if they cut. jim bullard from the u.s. fed saying there's enough accommodation in the system with bit rate cuts last year still working their way through. the fact that rates have fallen so far this week is also a bonus for the economy so the fed does not have to act. david: there is also a question of whether it is the right tool. it was said most of this is a supply shock. on wall street week we have michelle meyer from bank of america making the same point. monetary policy does not usually help you with supply shock. wendy: that is a big part -- michael: that is a big part of the argument against doing something. the argument for doing something is it could also be a demand shock because people stop spending. they are not stopping spending because they have lost their jobs w

francine: later today, we speak to the bundesbank president about the central bank's annual report.e questioning will be on deflationary pressures and coronavirus. this is bloomberg. ♪ ♪ francine: bloomberg witheillance." we are back carsten brzeski and rupert harrison. we went through a number of regions and the huge swings in markets. what do you do with emerging markets? they seem to be on better footing but if this pathogen hurts emerging markets, what does that mean for investors? rupert: the market dynamics and em have changed. the outperformance of em in equities has been extraordinary but i guess that was because they were hit much more earlier in the month. they were under owned. everyone has been long u.s. equities. in a couple of sessions, you have seen the liquidity impact where people are running for the exits and no one can get out. case wherea classic this is an illiquid market and people are trying to get out. you see the currency remarking dramatically and the short-term effect on em currencies is what we are seeing. the interesting thing is the focus has moved on f

the bun has to provide the money -- bundesbank has to provide the money and say, we need more money.y and a bill. negative interest rates, you have to send us more. commercial banks cannot make sensible returns for their shareholders. francine: what needs to happen to own european banks? consolidation, the end of negative rates, or something else? james: it is both of those. francine: so 2023? james: you need to look at the global framework of competition and jp morgan is head and shoulders above every european bank. if you are a commercial bank wanting to do serious business lending, jp morgan will eat you alive. if you want to do lending in asia, they find that china's banks will eat them alive because they will compete on non-economic terms. it is hard to see where the european banks turned to make money. tom: hugely valuable hour, marcus ashworth, thank you. james bevan with us as well. we have a few days we are trying to reframe and reprocess the idea of where you should be in the equity market. she is head of -- strategy at blackrock, kate moore. of whole question of balance in

we have axel weber, maybe we will talk some bundesbank, but what are the constraints central bankerspply shock in a safe haven market? erik: they do not have much, to be honest. tooink the markets are casual about policy stimulus if you have a clear supply shop. this is a supply shop. there is not much if anything you can do about liquidity. the chinese provide liquidity and credit lines. that is good because companies hit by the supply shock will not go under, but in terms of similar demand, you cannot do it. if people do not want to go to the movie theater because they are scared, you can give them any amount of money and they will not go. francine: thank you both. in all weather conversation, erik nielsen and geraldine sundstrom stay with us. the european bank in focus, we will bring you a conversation and its offer. hammerss to ing's russ .o succeed the current ceo this is bloomberg. ♪ ♪ francine: as ever, tom and francine from london and new york. since his appointment in 2013, carla mussina has overseen as steadily rising price. an offer for the number four lender took markets