francine: that was the bnp paribas chief financial officer. coming up, the initial shock of the pandemic has not been fully hedged -- we speak to the chief financial officer of the world second-biggest reinsurer next. this is bloomberg. ♪ francine: economics, finance, politics, this is "bloomberg surveillance." says that the worst effects of the coronavirus is already hedged. the world's second-largest reinsurer surprised markets. that claimsadded and reserves are there to cover the majority of losses. joining us is the chief re.ncial officer of swiss when you look at how many more losses we could see from covid-19, how difficult is it to model central lockdowns and the number of companies that will be affected by this? offrancine, we have a series scenarios we have run based on the first half of the year. we believe we have a pretty good handle on the losses which are likely to come. we believe most of the insurance thees were incurred in first half of this year. it is due to the fact that the the pandemics yes, there will continue to be flar

is bnp paribas willing to follow this recommendation? >> supervisory authorities extended the recommendation not to pay dividends. course, one assumes that when the environment does not thiser deteriorate, recommendation will not be extended. at that moment, there is a return to normal meaning the regulatory moves are applicable please -- pre-covid. be able to return to plan dividend policy. bnp paribas anticipates over 2022.o 50% that was the b.n.p. paribas cfo. second quarter provisions lower-than-expected. bnp also confirmed a -15% to 20% full-year net income guidance. let's get to the markets. yesterday we've got new meanings for the phrase, a beat across all big tech companies versus what we learned on u.s. gdp and jobless claims. read on the screen. that is because japan and australia are largely weighing on the msci asia-pacific index with those stockmarkets, posting a little bit of red based on coronavirus developments. futures in the u.s. getting a lift from tech earnings. s&p futures muted. nasdaq futures outperform. european f

bnp paribas has reported a blowout performance.ut one of the -- this will allow the french lender to move past embarrassing losses. the ceo was asked if they would maintain guidance in the event of a surge of coronavirus cases. we anticipate there will not be a second nationwide rollback. we should look at the results of this quarter and the first six months. it is in line for us to confirm. was --d income activity it is up 100 54%. this exceptional market volatility will be less in the coming months? it is an issue, institutional but also sovereigns. it is probably above normal. to serveas we are able customers, because of our strong financials, of all the financials we have, we have oath the market share. being there for clients. weis something we anticipate will keep on having in the second half. >> french retail revenues are down 11.8%. it is worse than our estimates. anticipate a recovery there? impact had an impact, particularly in april. if you look at the activity, the number of activities, credit card transactions, demands

revenues have helped bnp prompting the french lender to maintain its outlook for 2020. more on these numbers. the market like what they see. numbers up nearly 5% what is so encouraging about this update. >> better than expected results from up 4% to 11.6 billion euros. one of the good surprises was the cet ratio of 4.1%. that performance driven by the number in cib. revenue up 33% you remember french banks suffered particularly. they said there is a gradual recovery like we have seen in other european banks doing particularly well. i spoke with the cfo and asked him how much of this momentum he could see going into the second half of the year, take a listen. >> if you look at the solid results. this is not just on the back of the wave we are talking. this is a platform to serve corporate and institutions we have built and honed over the last couple of years so having the right people and products that's what we have. when we have the pick up, that platform with the strength of the bank has really allowed it to serve that is what we have done. even if the volumes might b

edmund shing from bnp paribas stays with us.take a look at some of the events we are watching out for today. make sure they are marked on your schedule. going onbout what is in brussels. eu leaders meeting to discuss the recovery package. the need for reform. this will be their first in person summit in months. and the bank of england governor andrew bailey speaks at a citizens forum. and before the u.s. market opens, blackrock will report its second-quarter earnings. we will be waiting for larry fink's comments. next, the accounting scandal shining the light on poor corporate governance. esgill discuss the g in with edmund shing. this is bloomberg. ♪ anna: welcome back to the european market open this friday morning. still 15 minutes to go until the start of cash equity trading. known asmeant to be the year of investing but the coronavirus has remained the focal point of market attention. esg investing has continued to grow as investors look for ways to insulate themselves from shock. on the environmental front, the record amou

joining us is the cio at bmp paribas.a -- bnp quality never goes out of fashion.l say never say never, but run us through your thinking around the higher-quality names. >> yes, good morning. is one of the two investment themes that we dedicate to low risk investors. we think in the current situation it is difficult to focus on the short-term. we tried to forget about the short-term. we want to be long-term for investment. with that, quality stocks continue to be one of the main investment themes for low risk investments. -- you never forget quality. you forget the price. quality remains. it is varied for investment in equities. withhe main problem quality stocks is that they are expensive. in they could underperform case the markets continue to be very bullish short-term. , qualityhe long run remains an asset to hone. citi is maintaining a defensive position on their top investors. with health care. is this of the you can get on board at the moment? general, it is one sector where a lot of people are investing in. we are trying to focus on innovation within the se

we were in the third replacement company until you got orders of what unit you would bnp we knew we were the third division but we were not sure which regiment or company. i got assigned to company a of the seventh regiment. my other two guys got assigned to easy company, the seventh regiment. the other got assigned to fox company, seventh regiment. we were all in the same regiment. we were in and got assigned to move up. they came and got us at night. everything was at night, you know. we went up there and they took us in as far as they could take us. third division was on the line then. i remember how scared we were. small arms fire, you could hear artillery and flashing, and thinking, this is going to be something. we were met down below the mountain by a korean rock soldier. we had korean rock soldiers with this. i was one of the first ones in able company, and so me and some of the guys went up to our assignment. the other two guys, easy company and fox company, the same night. we were in a combat situation, which at that time was pretty quiet. you could hear small arms fire and thi

bnp paribas reports friday. natwestk., watch for results.oming up, larry kudlow sees a positive picture and thinks a v-shaped recovery is possible. this is bloomberg. ♪ nejra: this is "bloomberg daybreak: europe." ae u.s. economy is poised for third quarter rebound according to white house economic adviser larry kudlow speaking to cnn. he says the impact from hotspots in the sun belt is likely limited as he sees a v-shaped recovery. putblican party has together a stimulus bill that will replace 70% of lost wages for jobless individuals but nancy pelosi says the proposal is too complicated. emmanuel cau from barclays is with us and we will hear from the fed this week. a lot of people are expecting the fed this week to give a signal to markets of lower for longer for bond yields and they stayed suppressed. how much of a risk for high yields do you see from a potential v-shaped recovery and the stimulus? marketl: the bond doesn't seem to be betting on a v-shaped recovery. a disconnect between the strong equity market and strong bond market, so

yielding 10%, was -- bnp paribas was yielding 10%. what i think will happen is you will see the strong getting stronger. , in the ssm,e ecb made it clear that they want further consolidation and they will allow financial ins to sheehan to use the difference between book value and how much equity you have an your market cap. today, the european banking assessed 70 -- the ss can buy that at 60. that gap is huge. then they later say you can use it in order to clean up your books on nonperforming loans and to pay for charges. 500 billion,sive 600 billion firepower that the consolidator will be able to use in the industry. i don't mean to interrupt, this is absolutely brilliant, but where is the catalyst to really jumpstart a new european banking system? way -- i think the only first of all, there is no magic, there is no silver bullet and we willank -- see this in the space, too -- can operate at zero or negative rates for a long time, so you will have inevitably impact on margins. what i do expect is you will see further cost gouging thr

and bnp paribas reports a blowout performance in fixed-income trading, leading all but one of the large wall street banks. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. shrinking 12.1% in the second quarter matches the estimates that we have been speaking to. italy was ugly but better than expected, so it does seem that when you look at the overall picture, inflation, that inflation rate coming in at 0.4 percent, that is higher, a touch higher than expected. tom: this is economic data, and we need to do what we do at bloomberg, which is explained the way they quote gdp data in europe is different than america. the 12% number is equivalent to number yesterday in the united states. it is showing tension in europe as well. friday --low on this is it absolutely extraordinary? francine: i feel like we have not had a quiet newsday on a friday in quite some time. .e had quite a lot of earnings quite a lot of politics with the latest declarations by president trump, and there is just quite a lot overall in geopolitics as well, so

bnp paribas has been pushing for this not to happen. down by 0.4%. psa up by 3.12%.a more positive picture than you would have anticipated months back. the virus will dominate all of this. the single noise ratio improving a little bit in terms of this reporting season versus the last reporting season. but nevertheless, we are still try to figure out the direction of travel with the virus. that ultimately is what is happening here. let's get a sense of what is going on. look at the latest on what is going on with the virus. expertjoined now by an epidemiologist in terms of what is happening here, infectious disease expert. thank you very much for your time. look. what i am try to figure out here is, what defines a second wave? is that what we are starting to see here in europe? >> thanks. a second wave is if you actually managed to control the first wave. i think there are many countries that qualify for that. maybe in asia. example, we for absolutely cannot claim to be in a second wave situation unless you are in new york. alix: what about over in europe as we are se

francine: we know that bnp paribas out, they were lobbing to resume dividend payments.had hinted that they may return more capital to shareholders towards the end of the year. could there be a problem with compliance? do they just kind of do what they are told, especially d's big banks -- these big banks? paribas, a big french bank, was going to promise one of the fattest payouts of european banks. whether they comply, i think they will probably have to. the ecb is saying it is a they can force the banks, if they need to. a swissause they are --k, under ecb supervision they are a swiss bank, they do not come under ecb supervision. you can go ahead and pay dividends. it certainly could make ubs to be a more attractive prospect than a european bank who is to pay a dividend. francine: thank you so much for joining us. up next, revival plan in the u.s. republicans unveiled a $1 trillion to move this proposal to kick off negotiations with democrats. we will get all the details next. this is bloomberg. ♪ ♪ economics, finance, politics, this is "bloomberg surveillance." let's

joining us now from paris is william, the bnp paribas group chief economist. it feels like this was a good week for europe. we have the p.m.i. more than expected and the recovery fund. if you look at job losses they're going to get ugly in europe. william: that is a concern i have if you look at the p.m.i. data today. what strike is that yes, manufacturing significantly and new export levels in germany are just flying but the employment series is showing that companies are under no intention whatsoever to increase hiring and on the contrary. that's a concern. it's a concern because the recovery will depend on what households do, how much they spend and they need confidence. alix: what is going to give them that confidence? william: the problem that you have at the current juncture is you have the kind of circular reasoning, what i mean is that households need to be comfortable about the labor market prospects. now, companies can only give that comfort if they say their sales will be ok. one needs the other and that of course is why it is so important that we h

very high because clients have been very, very busy, just to give you a sense, in europe, a home of bnped 200 billion financing to european clients, equity markets, with 60% loans indicated market there and over 50% of the high rate bond markets, you know this is the activity experiencing here in the united states, we followed exactly the same trend, supporting corporate clients, funding, access to get to markets, as well as, a times of just we've been very active advising on hedging strategies. >> let me ask you this ecb to keep interest rates unchanged this morning, emergency coronaviruss stimulus program unchanged, monitors the economic strength of the eurozone all monitoring how business is changing i want to get your take on real estate, this is also an important point, in terms of your own business, people feel that with real estate is going to change, people will not wanting to into high-rise buildings a lot of commercial real estate on cutting room floor how do you see real estate right now? >> well, you know it is really what you've been covering in your show combination of pan

we are joined now with the chief economist at bnp paribas. am sure that what merkel is saying there is fairly obvious. there has got to be some unity, i am sure, in order to overcome this. what kind of recovery do you expect, william? an unevenere will be recovery as well in the e.u. inliam: definitely, we are -- really towards the end of the mechanical part. i would say that means that at the end of the lockdown, activity picks up, demand picks up, and now, we will be going towards a slower pace of quarterly growth. the differences between countries is of course going to theery much dependent on characteristics of the country. italy has been suffering more. germany has been oriented. you can expect that there will be, at the end of the year, a quite significant gap in terms of gdp growth between the various countries. anna: good morning to you, william. i want to ask you about unemployment and where you think that heads given what you said about the path of growth from here. where do you see unemployment rates peaking? william: well, it will

bnp paribas saying that 10 year yield could rise to 3.4%. we are watching other markets as well. hong kong is a focus today. we saw a record number of local virus cases, the most since the pandemic began. they tightened distancing rose again. 150 points lower on the hang seng. jakarta is flat at the open. p, and a lot down. you are seeing a little bit of an asia fx selling off today. the dollar yen is at 10703. offshore renminbi holding at seven. the korean won weakening by half of 1%. we are talking about the very hot ipo market in hong kong. ipos pricing the hong kong new the bottom of the range. we know that chinese companies counted for a record 95% of first timeshare sales in asia in the second quarter. headlines first word for you. the virus is flaring again in parts of asia with hong kong and tokyo reporting record new spikes despite seeming to have control the pandemic. both recorded single day highs. hong kong with 34 local cases. tokyo was 224. the news comes after weeks of normalized activity and raises the possibility of renewed social restrictions. scientists say cov

then you have bnp paribas reporting in france, paris. out forthe u.k., watch natwest will be lord.rie: it's going to be a slew of earnings, as well as big tech, big oil, etc. i want to turn to aviation now. ryanair reported this morning and they say its biggest fear is a second wave of the coronavirus. they booked 185 million euro loss as the outbreak largely put an end to the september holiday plans. the u.k.'s decision to add quarantine restrictions on travelers from spain will likely only make it worse. we spoke to the cfo. take a listen. guest: you're not going to see profits. you're going to have to look into next year before you see a recovery on that front. annmarie: joining us now on the phone to discuss, sid. thanks for joining us. what are the key takeaways you found of these numbers from ryanair this morning? sid: good morning. so, the biggest takeaways at the moment are the fact that there are going to be localized quarantines and essentially airlines are seeing more delayed bookings of flights. ryanair said he does see demand, but it is loaded towards the flights. the

the broader story around banks is hsbc, bnp, santander, ing, all of those names all up more than 5% inon. matt? matt: let's get to bloomberg first word news. these are today's top stories from the bloomberg terminal for you. a new high for daily coronavirus infections around the world, this according to the world health organization. mexico now has overtaken france, as well, to become the fifth deadliest country. and scientist have written an open letter, warning of the dangers of the airborne spread of the virus. according to the guardian, they say these dangers are being underplayed by the who. and israel, benjamin netanyahu declared a state of emergency. he said more steps need to be taken to stem the spread of the coronavirus. the cabinet will describe -- decide on new restrictions. netanyahu says parliament cannot ate like it's business cannot behave like it's business as usual -- cannot behave like it's business as usual. if access to london's financial markets are blocked, that's when clearinghouses may need to start closing the positions of european firms. the associations for