the ecb has a role to play there. they will do it by showing that they are ready to go by the fed into buying the fallen angels into doubling to add more corporate credit into what they are doing. >> thank you for flushing it out. a lot to look forward to today and karen, thank you as well >> let's remind you that me and annetta will be hosting a special coverage of the ecb's decision we will cover the decision as well as the virtual press conference beginning at 13:40 cet. please do tune in. i want to bring you a couple of fresh comments out of the german health industry. we are seeing a bounce this morning. they say that they estimate the r number, the speed of reproductive rate stands at 0.76 the rate of people infected people can pass the virus on to. anything above 1 is considered alarming they say it stands at 0.76 they recommend anyone with symptoms get themselves tested, we have the capacity to do it. germany has been aggressive with testing. a couple of encouraging data points there let's get a check on asian

so the country will need help, and we are fortunate in that we are now in the ecb program, and ecb isng government debt, but we are very much looking forward to that discussion at the european level to conclude, to be included in the broader fiscal effort that will be done at the eu level. alix: you and italy and all other countries as well. thank you so much. i really appreciate you joining us, george papaconstantinou, former greek finance minister. stay with us. we are going to bring you christine lagarde's news conference in about 15 minutes. one market participant saying a helicopter drop for banks, so we will delve into that. coming up, yum! brands says its first quarter was a tale of two realities. i will be joined by the ceo david gibbs, next. this is bloomberg. ♪ alix: earnings continue to trickle out. yum! brands reporting after the bell yesterday. earnings coming in short of expectations, but the quarter reflect momentum at the beginning and the heavy impact of covid-19 at the end. joining me is yum! brands ceo david gibbs. really appreciate getting your perspective today. t

without question the ecb meeting is front and center today. a change after what chairman powell said yesterday. absolutely stunning the difference between the u.s. central bank in the european central bank's. it's could be a radically different press conference from lagarde today than what we saw from powell. francine: many people say it's a different economy and cycle. i'm excited to be talking about that. first let's get straight to new york city. trumpbegin with president blaming china's coronavirus response on politics. he says beijing would do anything to see him lose the election. the president did not provide any evidence china would liberally mishandle the outbreak. he says he is considering various ways to punish the chinese government. china's response, it has no interest in interfering in u.s. internal affairs. chairmanderal reserve jerome powell, he worries about the long-term economic damage of the coronavirus. if the economy starts to recover in the third quarter, it's far from over. to the european central bank it will decide to

that may send a message to the ecb they don't need to do more. i think they probably will not do much. they will tweak but they will come in with extra firepower. that may be a mistake. they need to follow the fed and do more, particularly on investment-grade assets and make sure they stay low for everyone. tom: that is right where i wanted to go. jon ferro is better at this than i am, and color this for our american audience. explain -- explain the relationship between buying high-yield debt to the institution the european central bank? what is the relationship of garbage bonds with what goes on in frankfurt? nouriel: the point is -- marcus: the point is the moral hazard germany and the more fiscal governments have and a bore in's to buying government -- abhorrencen's to buying government debt they have tried to stop a problem to gum up the banking system. -- doubleg double be, grade, below investment and a knock on effect would feed into lower credits even though they are not buying them. yield hunters constantly going to find things with tigge

let's talk about the ecb. i'm trying to understand exactly what the ecb did in totality post-up it looks like a rate cut to me but the market seems disappointed with the new programs. michael: i think the market is trying to figure out everything that was announced. the ecb did not change his deposit rate remain refinance rate so the headline read no rate cut but really, what they are using is monetary policy is the targeted refinancing operations and they did cut the rate on that significantly. that's kind of a new benchmark these days it seems. those are loans to banks and then the bank lends that money to the business world and if they do, they get a lower interest rate from the ecb and they can land at a higher rate so they profit off of that spread. toy lowered the rate teltros 150 point lows even get down to negative 1% on a loan you are taking out in the introduced the pel whicht seems to be be open toit may nonbank lenders and it has fewer conditions and what you can do with the money. taking seems to

if needed, can the ecb do more for italy?e i 2.29%, thes to fraction of the bonds in italy's capital, which is 13%, that is enough to finance it. i think that narrower -- that could beeurope -- they asked to do it directly through euro bonds -- probably yes, but in terms of the effect on the market, the ecb is probably past confidence, and that could happen through esm. francine: thank you so much for your time. economics professor. we have more of a conversation on oil coming up, after we had the headline from the bloomberg terminal about russia not willing to actually do anything to look at prices. we talk oil. that is coming up shortly, and this is bloomberg. ♪ francine: this is "bloomberg surveillance." we had the headline from russia not planning to boost oil output admitted the -- amid the oil supply, according to governor -- government officials. to have a full round up of oil price, let's get to the chief oil analyst and cofounder of energy analysts -- always great to speak to you after a headlined like this from russ

what is important for the ecb?e is their objective in terms of getting that spread back to some kind of normalcy? what is it going to take? the ecb, through the program, is buying a lot of bonds. they are actually not releasing exactly which bonds they are buying. it is highly likely that they are buying peripheral bonds. it is vital that the bond yields are as low as possible and that spreads are contained at a reasonable level in order to avoid fred tatian. particularly, to stay with the state of italy, it tightens financial conditions for everybody else and particularly for the banks. you get problems in the extension of credit. that is the fragmentation that the ecb is concerned about. one has to be careful because i think there is an interesting contrast here. on the one hand, it is widespread. these same time, we see record auction takedowns involving italy and spain. what i think this means is we have to be a little bit careful about the secondary market prices. there is really not a lot of liquidity. what h

the ecb has been halfway on them. allowed fundamentals to remain but they have not explicitly said if fundamentals could be bought in a bond program or through the ppp. that our to tell us potential financials will be protected. there are two big questions, whether they are considering additional quantum approaches and to invest for very long, [indiscernible] i would expect lagarde to be open to this. i would not expect hard decisions tomorrow. the expectation for miscommunication is hard tomorrow, because if she sounds [indiscernible] or the reemerging has a hard limit, my fear is the market would not take it well. francine: thank you so much, gilles moec joining us to talk about the economy and europe. withg up, a conversation ignacio gallant about -- ignacio renewables and his spain. this is bloomberg. ♪ ♪ francine: good morning, good afternoon, good evening. this is bloomberg "surveillance." the focus is on markets and the fed. the conversation has changed in the last 24 hours with economists and market participan

the ecb said it will accept some junk rate debt. we will look at that next.his is bloomberg. ♪ nejra: this is bloomberg "daybreak: europe." manus cranny in dubai. germany's ruling condition with of package to dampen the further economic impact of the coronavirus. the european commission is floating a 2 trillion euro plan of economic recovery ahead of talks between e.u. leaders today. the plan involves tapping the market for 320 billion euros and will partially use the existing seven your budget and the contentious rate over the rescue package, the ecb said they would accept some junk rated debt as collateral for loans to banks. the move to shield her euro area's most vulnerable economies as they face the risk of credit downgrades. and we get that s&p rating on friday. coming up, president trump says georgia is reopening soon after his executive order suspending u.s. immigration. ♪ awesome internet. it's more than just fast. it keeps all your devices running smoothly. with built-in security that protects your kids... ...no matter what they're up to. it protect

do you think that is going to happen to the ecb? will the ecb listen? yes.aic: the ecb, the fed, the global central banks are in listening mode. i think it is interesting. whenever you have a new initiative coming out from a central bank, you go back and look for a problem. this is an example of where there is a problem. there has been a problem in terms of getting access to liquidity. we know there is the commercial program that helps. the commercial program in the u.s. is still not up and running, but when it is, it really helps to lubricate the front end and take pressure off the banks. what's happening is a lot of these corporate's that need cash are drawing from banks, and it puts a bit of extra pressure on the banks. this ifr dimension to there is quite sizable demand anyway for high quality short-term paper. the way to square a surplus from the practice that's for the crisis programs is for the ecb to come in and issue corporate issuance. that would square that circle and make an awful lot of sense. vonnie: we definitely covered a lot of ground t

next week we got an ecb meeting. do you think the ecb next week is going to up the amount of firepower available to protect the euro zone, and in what form do you think that will come? peter: i actually don't. i think next week is the point at which the ecb has got to say let's allow some time for measures to be put in place and have their effect because frankly, there was very little they can do anyway to prevent the worst of the economic crisis from happening. so what they are trying to do is ensure that economies are in a , butnable state to rebound i think this is when they can set for now, through the course of march and early april. think ultimately, they will have to do more? peter: i think it is likely that they will, for the simple reason that it is all most a never-ending pop, unless governments are able to find the .iscal firepower whichis a comp my package -- if it is a comfort my package, then the ecb will couple he have to step in with , soidity providing measures the ecb is not done yet. on the a quick

there is also talk about the ecb and a bad bank. how important of a step would that be?incent: well, i think that that be a very good signal we are putting some of the bad loans together, that would send the signal of a joint effort. idea thatss, it is an has been put on the table before and has not progressed. i'm more concerned reviving those talks in the middle of the crisis maybe is not the best time. we haven't done all the work we have to do over the past eight years and putting this out now is going to be quite complicated. there is this idea of the bad banks and there is the argument and theean risk fund, european council will happen on thursday. i think it will be very important for the future of europe. we need to see a time of three sharing, which so far, we haven't really seen. francine: thank you so much. vincent chaigneau from generali investments where he is head of research. coming up, and interview at 3:00 p.m. london time, an exclusive conversation with larry kudlow about how to get americans back to work. that is later at 3:00 p.m. and this is bloomber

the ecb. dayecb announced the other they are going to accept collateral. it is quite important. it shows determination of central banks to support government. supportat it takes to us. we would not be surprised to see more decisive action from that front. >> in that case, would that encourage you to become more positive in european equities? or would you prefer, for example, to be buying high-yield debt? to theuld probably go side of that. with european stocks, there is a reason we do not like european stocks. they were in a kind of precrisis situation even before coronavirus. we had endless conversations about is you are recession? we do worry about european -- it is our least favorite region. >> ok. lots more in the markets, next. this is bloomberg. ♪ morning. cases rise atus the slowest pace in three weeks. this as steven mnuchin ones equity in return for eight. wants equity in return for aid. whipsaw as aares covid-19 drugs a failed in a trial. the company says the report does not fairly r

did you get any sense that the ecb is from today's news conference? that they are still, and terms of how they are buying assets themselves, they are still wary about going too far, particularly on the sovereign side, so don't think we've got to the sense of how they can approach their own qe program on that yet, but again, they would like to stretch what they can do. if you are temporarily downgraded for a while, you can keep on going. i wish they would just get rid of the word junk, change the whole rating view because it is too arbitrary a line. but i don't get the sense in the data they are ready to do that. i get the sense that that is a step too far for now. , we willis gets worse get there in the next crisis. vonnie: what does christine lagarde mean by suggesting the ecb will not tolerate monetary fragmentation? as far as we are concerned, you've got different government different credit ratings around europe, but we are not going to see italians pay more to borrow than germans, or someone's euro worth more than another euro. is it a -- it is a

anna: she has no view from the ecb. let's get the thoughts of peter fitzgerald.n helicopter money, whether the ecb should go down that route. is that needed? >> first of all, the ecb and the eurozone is anymore difficult situation than pretty much any other economy. they have control over monetary policy. you can see the flexibility of the bank of england. whether that is pure helicopter money or not is something for economists to debate. you have helicopter money and versions of it in the u.s. and in japan. the euro zone is in a very difficult place. where you would like to see the mutual is asian of debt across europe. if you think about the real risk and a number of people have said this, within the ecb and within the commission, that this is a bigger test for the euro zone. they are using the financial process into thousand eight. going into this particular states, every nation and effectively followed their own , close to their border, and imposed their own version of various lockdowns. i think what is really unfortunate for europe is that they used to this

we can't have much stimulus coming from the ecb.t places the onus on member states to do more with fiscal policy. my feeling is actually, if we look across europe, the fiscal response has been bigger and quicker than we expected. countries like germany, which traditionally don't like running deficits, have announced absolutely enormous fiscal stimulus. that said, it is an uneven picture. italy, which faces one of its most serious problems, hasn't thegh, and maybe there is space for italy to provide the fiscal stimulus which it needs to replace income lost in the lockdown. vonnie: how do we get out of this? we have the ecb talking about buying junk bonds. there are going to be huge deficits all over the world. there may even be emerging-market problems. investors seem to think it is all going to be ok. is it? markets, myink the view is that the markets are not fully pricing in the depths of the challenge which the real economy is facing. the countsks like are stabilizing. there are hopes of getting things under control in some countr

coming up, we will focus in on the ecb.ielding weaker euro economies as the central bank says it will accept more junk rated debt. this is bloomberg. ♪ matt: welcome back. 23 minutes into the session and we are looking at the dax now down zero point 1% and the ftse as well. the cac up 0.5%. let's get the bloomberg business flash, today's top corporate stories off the bloomberg terminal. credit suisse is building greater reserves to whether the coronavirus storm. the money it is setting aside for bad loans is almost three times as much as expected, the most since the financial crisis. profitability at the swiss lender rose 13%, but the investment banking unit took a hit. the pretax loss was much higher than predicted. unilever has withdrawn its financial guidance for the year as the coronavirus disrupted the company's global business. underlying sales were flat for the first quarter, but like other consumer goods companies, unilever is benefiting from strong sales of cleaning products. offset by weakness in other products. q

how can we symbolise the ecb's approach?dea is to basically try to shift up enough chris agape towards the end of the season “— chris agape towards the end of the season —— enough cricket. but what goes? well, the tournament may be postponed, but the ecb are still backing the concept even in an atmosphere of declining revenue. backing the concept even in an atmosphere of declining revenuem is certainly going to make us i guess is certainly going to make us i gu ess less is certainly going to make us i guess less able to invest in the areas of the game, what we wanted to. but this is something that is they are as something that is going to generate revenue, generate interest, generate excitement, and thatis interest, generate excitement, and that is the kind of project we need to continue to prioritise. to try to get some cricket played this year, there is certainly unprecedented in concept. how about counties playing on until october? in the middle east? there is a possibility of extending the season, and you will look at th

the fed and the ecb still to come. after italy dodged a downgrade from s&p friday, you've got a trading 1.77%. yields moving lower, down by about seven basis points. still an awful long way to go on that story. vonnie: in the u.s., it is a positive session, slightly risk on. we have some guidelines for when the economy might start to reopen in new york city and in various economies around the country. markets hanging onto that. banks are the best performers in the s&p 500, which is up 0.9% right now. they are followed by consumer services and real estate. the yen is stronger today as well, off its highs now. 107 .20.t crude down at $12.40. that continues to darken. the 10 year yield is now up to 65 basis points. slightly risk on tone today. . talk a bit about what is happening in a little more detail. italy, france, spain announcing plans to ease lockdown restrictions as the british prime minister pours a little cold water on the idea. giuseppe conte in italy raising concerns about a possible second wave of infections

boostists don't expect a to the ecb asset purchases until december.surges as advertising revenue holds up. frederick today right now. later, -- let's get straight to some breaking headlines that are pressing. by french economy shrank 5.8% in the first quarter of this year. the estimate was for a contraction of 4%. nowhere is that felt more aggressively than the french banking industry. investment falls 11.8%. let's bring some of the data to a man uses it on a daily basis. losses for thee first quarter. its stock traders also wiped out by the market volatility in the wake of the coronavirus. we have the ceo of societe generale. welcome to the show. great to have you with us. the first quarter, you set aside 820 million euros for bad loans. thated you, what made up 820 million euros? were there any one item in their? can you guide the market for 2020 in terms of how bad that number could get? good morning. frederic: good morning to you. first, let me highlight one thing for the first quarter results. bank, we account for all taxes in the first quarter.

have ecb and fed on deck.mes how much can the equity market diverge from the actual underlying economics of what we are seeing due to the virus. if oil is actually telling us about the underlying micro-conditions, can equity ?arkets still be this high individual stocks moving in premarket here, to the downside, leveredal, one of the stocks reacting to the oil price. facebook is on the upside. boeing even on the upside, despite the fact that the airbus ceo is warning workers it is , but stepping away from a deal that is not good news for brazil, but probably good news for boeing. all of that wrapped into the market. in the bond market, it is fairly quiet. looking at a little bit of selling on the backend in the u.s. yields up by about two basis points. solid buying happening in europe and the peripheral italian bond yields, down 10 basis points much more coming up. we will take a quick break, and delve more into the market action. this is bloomberg. ♪ >> you have to be extremely careful in this market. i think

and the reason is that the ecb is buying it.s long as the ecb buys it and holds it, it is cost free, and therefore, it is ultimately the debt service payments that cause trouble, not the debt stock numbers. i think people are overly concerned about the big increases of 10%, ponte percentage points in ddp during this -- of 10, 20 percentage points in gdp. francine: there has been a lot of apologies, blunders, unhappiness about how the block as a whole have dealt with. will we have something substantial to make europe stronger by the end of the week? have first ae summit, obviously. said fort is basically a number of things on the agenda, including basically a pool of what the euro group decided on the three components, the 200 billion dollars in guarantees for the eib, the credit line for the esm, and then the unemployment scheme with 100 billion from the commission. i think that is ok. i wish they would do something much more dramatic, and i wrote about this in my notes yesterday. i think there should be an agreement to finance

a lot coming out of the ecb right now. it was probably the most interesting thing we learned so far. she said that each month of a 3% of gdp,osts 2- referring to the euro area, per month. is saying that debt has to be paid back gradually. of course, everyone from average consumers to large businesses are amassing debt right now. we are minutes away from the open. up next, the rally that started the week has hit a wall. although, we do see futures higher and we do see u.s. futures moving higher as well. maybe that wall is mobile. discuss the various bets unwinding and not the coronavirus. this is bloomberg. ♪ matt: welcome back to "bloomberg markets: europe." about 6.5 we are just minutes away from the start of .ash trading let's get you top stories from the bloomberg terminal. diageo is not starting its buyback program, saying it is not yet in a position to assess accurately the impact of the coronavirus and i'm like and is withdrawing its guidance for the year. 1.5 had already returned billion pounds in the first phase. s

the are we taking ahead of ecb story? mike: i think the ceos made the point it all depends on how long this goes on for. if you get a short shut down in the economy, and hopefully there won't be that many defaults, and therefore loan loss provisions don't need to be too high, but if this becomes a protracted lockdown, then the risk of defaults rises, and i guess also the thing in europe one has got to consider is the extent to which the kind of furloughs we have seen and short working our schemes actually mean that you don't get consumer defaults. would have a you lot of people in significant trouble at the moment, whereas if they are actually getting paid even though they are not really working, then obviously it reduces the need for them to default on mortgages or credit cards, etc. ofof course, those kind furlough and temporary working schemes may not be in place forever. they may not be in place once unemployment is still higher in some parts of the world. and also, they are not covering all of people's prior income,

ecb policy support and them being all in is dramatically important.er big difference of this crisis versus the global financial crisis is not only how quickly the policy stimulus has come but how it has gone into completely new areas. the focus on the high-yield bond market and investment-grade bond market is crucial. if i look at earnings, what is the biggest correlator? it is not gdp. it is what happens in the high-yield bond market, despite the facts that central banks are getting involved gives you a big policy put you did not have last time. tom: that is right where i wanted to go. your weekend note was extraordinary on emphasizing credit spreads as important. part of your charm is finding the bottom and moving higher, but having the courage to stay in the trade once you have come out of the bottom. explain how the credit markets, in improving credit spreads, falls over to the equity market weeks after you find a bottom. ben: markets are sort of paranoid here about there being a double-dip and this has been a bear rally and we will retest lows. t

the ecb is again doing a lot of the heavy lifting. program that started last thursday certainly helped to bring in spreads on that date. much theyk at how have spent over the last couple of days, over 15 billion in the overall program. this compares with with the end of the year, which would be a fraction of this. it is a lot of money. at the end of the week, so by friday, spreads go wider and they kept widening again on monday. given these political concerns that we have discussed before, probably they need to do a lot more still to support not just the new debt that will be issued in italy, but also existing investors who rather want to reduce the exposures given the unresolved political issues. matt: thanks very much for joining us. we will keep you with us for a little longer. we still want to talk about corporate critics with christoph rieger, head of fixed-rate strategy at commerzbank. in7% year on year jump fourth-quarter revenue was reported by --, beating expectations thanks to robust growth in internet services and overseas

in europe, and i mean the euro zone, we will have strong intervention by the ecb. be buying btp's right now with those spreads having doubled since mid-march? at for theooking time being. because webuy it yet need probably to go further in terms of how to find public deficits. italy, public deficits are growing very fast. at a point of the time, we will need ecb interventions. to finance public deficits in europe. then it will make sense to buy btp's. soon, as long as we don't have an agreement between countries. great to have you with us this morning. thank you. europe." for "daybreak european futures and u.s. futures firmly on the front foot head of the european market open. ♪ matt: good morning. welcome to bloomberg markets. this is the european open. i am matt miller in berlin. the markets say take a step back. a two day rout in oil. u.s. stocks fell 3%. futures are pointing higher here in europe and back over in america as well. cash trade is one hour away. here are your top headlines from the bloomberg terminal.

expansion of the boq in a move that sends asian equities higher and sets the stage for the fed and ecb meetings later this week >>> uk prime minister boris johnson returns to work to lay out a plan to lift the lockdown. spain lets children outside and france looks to approve its exit plan in parliament. >>> very warm welcome to "street signs. you can see we're outside downing street awaiting boris johnson, who's returning to work after recovering from the coronavirus. we'll bring you the prime minister's comments as soon as they come in. >>> meanwhile, let's get a check of european markets. we're off to a roaring start the stoxx 600 rallying in the first hour of the session. last week we saw a modest retreat and just about 1% lower. this week focus firmly turning towards the reopening of the european economy with several countries over the weekend announcing their plans to ease the lockdown measures. the united kingdom is the outlier in that respect. we're awaiting clarification to the uk's strategy for real opening the economy. it's q1 peak season earnings we've heard from a number of

we've got the central bank, ecb and federal reserve. putting it all together in the first session of trade for europe >> let's look at the regions green across the board here. fairly evenly split across uk french and german market the ftse mib is up about 1.6%. i mentioned errinarnings as we to get as handle on what the rest of the year may look like bp shares down about 2%. a lot of interesting commentary coming out of bernard who spoke to "squawk box" earlier this morning. targeting $35 a barrel for the year hsbc down about 60 basis points. more of a down beat set of results from ubs which is trading firmly up about 5% calling the credit quality of the ubs portfolio very, very high and strong. novartis up well holding about 50 basis points. cap gemini also high and san stand dar also up. this has been a key folkal point. ubs credited the jump to increase trading activity and more amid the loans amid the coronavirus outbreak ubsceo said the bank was better positioned in its exposure than its peers. >> we have always been focused on ris

coming along with may be the possibility of the ecb -- with maybe the possibility of the ecb to use -ey are able to buy more bonds from countries that are in trouble. mr. finance minister, please, please stay with us. he is the austrian finance industry, there are no blue mall. we are thrilled that he is with us today. let me look at the data right now. i really want to look at the resilient daughter -- dollar but againstat euro a decidedly weaker japanese yen. please stay with us. this is "bloomberg surveillance. good morning. ♪ >>>> good morning. i am tom keene. all sorts ofg out stories including prime minister johnson in st. thomas hospital in london. he is resting there. this is one of the ancient hospitals of london, timed back to the 12th century. in the 21st century, the prime minister rest there this morning. we continue with the austrian finance minister. we are thrilled he could join us. there is major tension over using already versus thepaper issuance of an all-encompassing european bond. this is a heated debate. minister, i guess it is germany, the netherlands and austri

yields move lower after the ecb will accept junk, recent fallen angels as collateral. time now for today's market moving news from brussels in new york. we want to begin in europe, where the pandemic drove the economy to a record slump in april. pmi area services completely decimated, falling to 11.7. manufacturing also dropped to 33.6. bloomberg's maria tadeo joins me from brussels. --maria: what you are seeing is that the coronavirus crisis is going to do a lot of damage to the european economy. [indiscernible] brussels tell us they do anticipate a contraction for the entire euro area. this is potentially huge. you're seeing again the european central bank stepping in to try to shield some of those markets, in particular in countries like .taly ,he other side of the equation what exactly are european leaders going to do to help the ecb, to put more money on the table and also protect their own economies? there has been a lot of back-and-forth. perhaps a 2 trillion euro package. but all of this is still very much in the air. political divisions still going on, and eve

what about the role of the ecb?them doing a lot in terms of increasing the rate of banks and indeed a lot of other measures to support the euro zone economy through this after making some early stumbles. now an expectation that maybe there is more bond buying to come. >> yes. you are seeing the european central quicker but also more aggressive action. yesterday, eu leaders were told that if they did not take quick action, we could see a big contraction of 15%. it is really that ecb has taken all the big action and shielded theirperhaps from gatherings. there is buying in the market, to the treasury is going have to issue a lot of new debt and a short amount of time and that may trigger costs to increase that program, and that is what the market is betting on , that the market will have no choice but to increase that total sum. anna: thanks very much for joining us with the latest from brussels. a busy evening for anyone following european politics, even with a remote video call taking place rather than actually bein

ecbe could be stuff on the side in terms of some of these bonds. the fed has kind of done its thing. it will be extremely interesting to hear from them. scarlet: it will be a virtual press conference from jay powell. thank you for calling in. that does it for "what'd you miss?" have a great evening. this is bloomberg. ♪ emily: welcome to "bloomberg technology." markets ending the day up, though oil seeing big declines as we await a slew of corporate earnings this week, from amazon to apple to alphabet. the whitending by for house briefing which was initially canceled. now it is back on.

matt: what do you expect from the ecb and the fed coming up?re they going to do more or is it now time to really allow fiscal action to take hold? ecb, the possibility we get a tweak on their tie ring mechanism because they have been increasing texas liquidity, so they may accept more deposits from their threshold. that's possible at this meeting. it is also possible they delayed until june, but that is possible. other than that, there is not much to expect. the focus of the ecb is going to be around christine lagarde's comments about the growth rate for europe, which is worse than anybody is forecasting. that is relatively uneventful. the fed likewise is still in emergency mode. they're going to make some significant changes, probably at the june meeting, where they moved to the form of yield curve control as well, they change the community program and roll out some new forward guidance, but i think it is early for that. this meeting is focused on dramatically changing the statement. you recall the last statement of the labor market was in goo

are you taking the same approach in europe, in fixed income, based on what the ecb is doing?ainly in investment grade, and good-quality investment-grade. difference between good investment-grade and investment-grade that could become high-yield, which we think is very risky and has liquidity issues, so we stay on the very good side of investment-grade in europe. nejra: if you look at european equities, fiona, over 100 companies in the stoxx 600 have suspended or delayed dividends. far fewer u.s. companies have done that so far. does that make european companies at all more appealing in this environment, where a lot of investors are focusing on balance sheet strength, particularly with lack of visibility on earnings? fiona: it's a good question. there are two answers to that. the first one is that europe moved to cut dividends, but the situation in europe before the covid crisis was already less while the less growth u.s. had 1% or 2% growth. in terms of valuation, european stocks are cheaper than u.s. stocks, but in terms of the economy the u.s. was stronger before the covid.

the ecb will hold more than 20% , quite an amount already.his is a different scenario for markets. clear they areit .uying tons of debt even if we do so and extend the program until next year, at some point the market is pricing it in in the longer-term. i would not talk about debt restructuring or bailouts, but this will have to be reflected in prices today. what kind of investments does europe need after this? who can afford it? frederik: many countries can afford it according to the commission and the macro imbalance procedures. it has not been put in practice, obviously, about germany, the netherlands, and those countries have started to use it to be fair. crisis, also improving the green economy, there is a lot more they can do with the investment banks using in ecb as indirect financing some cases. there is much more they can do. and probably in terms of this something that is efficient in terms of coordination with the public and private sector, this can be improved in the future and build up on the idea of the juncker plan. francine:

me this ecb, and fed week and growing pressure to support slowing economies.a big earnings we can asia, 600 companies out with numbers. 225, up more than 2%. we have the's, pretty flooded. the boj set to increase its asset purchase as the economy slows. the question is, it will twounce unlimited qe prevent bankruptcies. in other markets, the csi 300 index of 9/10 -- .9%, the hang seng up 1.5%. some reports suggesting hong kong is considering easing some social distancing measures if new virus cases remain low. the asx 200 index, currently up .3%. some good news last week on the virus hunting hong kong, three days last week where we saw no new infections. the rest of the markets, we are still watching oil markets and we talked about how it has resumed its slide. with wti, back to around 15.89, off of session lows, but there is still the whole worry of demand destruction, storage capacity that continues to run out despite saudi arabia starting this production cuts earlier than the may 1 start date. aussie dollar seems to be outperform her, sustaining gains of cl

the ecb president was saying a contraction can be about 15%.ld come out shortly. given the disinflationary impact of the impending recession, the central bank, a lot of people are expecting it to cut and they cut the rate to 5.5%. this is pretty much as expected. if they had done anything less than 50 basis points, it would have made no sense given the tollenges and midterm risk inflation and overall financial stability of the country. tom: we have seen mexican and turkish interest rate cuts, which were a bit of a surprise, and now russian. i am going to go to italy where one of our guests earlier looked for a rating adjustment in italy. the stresses of course are different from russia then italy. italy was the epicenter and is locked down by rules put on by the commission, but in russia if you have to have a think about how they are balancing the books , one thing supporting the ruble is sales of foreign currency, but they had a huge impact by the negative oil we saw on monday. the russian situation is much more complex so the decision moments

is it driven more by ecb momentum?ric: before we address the issue, i want to point out something incredibly important. one of the most important policy decisions that hasn't really been paid much attention is an -- it is quite extraordinary that the european central bank did not cut interest rates during this crisis. if you look at where 10-year bund yields are and 30 year bund yields, the yield is higher than it was in august of last summer today. if you can't make money in the bund market in a global pandemic , what does it take to make money in bunds? manus: well, we will come back to that subject in a few minutes. thank you very much. eric lonergan stays with us as the guest host from m&g. coming up, a call for national lockdown. gates gives his views on the coronavirus as the u.s. works to avoid the worst case scenario. this is bloomberg. ♪ nejra: this is "bloomberg daybreak: europe." i'm nejra cehic in london with manus cranny in dubai. president trump and mike pence says there are signs the coronavirus in the u

the ecb prepares for its rate decision tomorrow.on deck today as the ecb and fed face questions about how to grow their economies. and bad loans versus good trading. european banks put aside more money for bad loans. welcome to "bloomberg daybreak: this wednesday, april 29. the conversation yesterday was did we see a selloff in tech because of weaker consumer confidence numbers, and is this a change in leadership? or was that just normal trading patterns? that is something we will break down today as we try to dissect the earnings coming out. it is a broadly weaker dollar story. no doubt

we have a very strong purchase program from the ecb, and we need now to build common tools of fiscalot only leaving them to member states, but it is now what is under among member states and the commission. francine: some officials are already talking about a form of bailout. italy once the pandemic has passed. do you think that will be necessary, talking about debt relief? you will start earlier than you have in the past. -- i thinkink it is this is completely out of the outlook that we have. i think we have clearly to draft -- on the ecbthe intervention. the ecb intervention was very useful to reduce risk of fragmentation among european the situationon of their debts. i think this creates no problems of this kind at the moment, in the future that we can foresee. so this is not the moment of this kind of risk, this is the tending to face the immediate challenges that we wee, and building so that are using common tools at e.u. level. francine: but at e.u. level, there seems to be a lack of trust and goodwill. why is it proving so difficult for member states to agree even on the basic

we have the central bank meeting coming up with the fed and the ecb on thursday.ecting the dollar. where do we see yields going. are we where we are going to be at this point, even with all of this issuance? joshua: it depends on what the fed does tomorrow. in particular, how they think about their asset purchases. qed was all about ,epressing term premium depressing the risk you took by taking long-term treasury risk. the treasury was buying more every day a couple weeks ago than they bought a month during qe operations. it was not about term premium or the shape of the yield curve, it was about the structure and function of the markets. a big question tomorrow is how does the fit view the success or not of that exercise. do they think markets are functioning effectively and does that mean their purchases slow down? if you're buying $10 billion a day at a reduced pace, that will have an impact on the level of yields. the market is very focused on that to try to figure out what the next move in the 10 year note is. there is quite a bit of uncertainty, mostly becau

the ecb meets tomorrow.thomas piketty wrote his best-selling book "capitalism in the toy for theury" which argued -- pandemic has sent shockwaves through the economy, so how much will the outbreak increase the gap between rich and poor? us back.ketty joins his new book capital and ideology focuses on income inequality in society's third history. very good to have you with us today. i wonder when you look at the current crisis we are in, do you think it will have a long-term impact on the distribution of wealth in the global economy? thomas: yes, i think it can really contribute to change in ideology in terms of how you deal with inequality, the way you regulate the economy. what i see throughout history in my book, and i should say, this is a long, but readable book. what i see is the primary determinants of inequality are really ideological, political, economic, or technological. what matters is how we feel we should organize the economy. reinforceoday will public infrastructure, public services and in some

central banks, the fed and ecb, before that, the bank of japan today.oj is taking big week. policymakers are expected to take steps to contain the financial and economic damage caused by the coronavirus. kathleen hays is here with what we might see. .irst up is the boj if the bank of japan moves towards a limited bond buying, how much will that help the economy? bigleen: that will be the question because we learned from nikkei news probably what they are debating going into this meeting is a couple of things. this pledge for unlimited -- doubled corporate bond purchases. surveyed inmists tokyo said yes, you will see more steps. bnp paribas was reported as saying what they have to do is avoid looking less aggressive than the fed and european central banks. if that happens, if the others are more stimulative, this could make the yen stronger. even though the federal reserve has boosted its bond buying and the size of its balance sheet, the boj bond buying is the equivalent of 110% of gross domestic product of japan. percent compared to gdp, they are more

what exactly is the ecb holding off for?s if they want to hold their fire and wait for the right moment to unleash their firepower. moven: we think they will next month. courterman constitutional is going to rule on certain programs of their legality. the, it is not clear that ecb itself, and the government and counsel, is convinced you have to through the kitchen sink in. obviously, when you look at the fiscal authorities, they are nowhere close to having the kind of fiscal stimulus they were looking for. romaine: i want to get your thoughts on the fed yesterday. not so much what they did, but what they did not do. goingin the u.s. possibly negative for the fed. interest on excess reserve. changed atas not all. i wonder if we should read anything into whether the government -- whether that portends any sniffing around that 0% negative territory. steven: i don't think so. we thought that they would push it up and explain as a technical move. they did not, obviously. i don't think the fed really thinks that negative rates can

then there is the big monetary solidarity, that is the ecb. when you think about what the ecb buys, the fact that they are diverting substantially now from capital keys, that is a huge sign of solidarity to me. recovery fronte that is going to be designed inside the commission that will help down the line. for me, in a sense, as i wrote yesterday, i feel that this sort of discussion has been mixed up with this underlying issue that a lot of people feel that there should be federalism inside the eurozone, because the solidarity, why is switzerland not part of this conversation? why are denmark or sweden not part of this conversation? it feels to me like it is not really solidarity, it is about the opportunity to do something in the eurozone that we otherwise could not get through. francine: you also talk about the narrative over debt sustainability being wrong. erik: yes. this is the extension of this conversation, that public debt goes up, and italy being the case in point, everybody says, my god, public debt to gdp goes to 165 or 180, whateve

alix: i just want to clarify, i mentioned ecb buying junk.he conversation today is whether or not they put up junk bonds as collateral. is that actually make any material difference in europe, especially as eu leaders head into the summit tomorrow? michael: this all falls into the -- when they put in that pet program, they agreed to take greek bonds as collateral. the question is, do you expand that to italy if italy gets downgraded? they are one level above junk in many of the rating agencies, so if they downgrade italy, the ecb has to decide, is this going to be a policy that we continue to take dunk going forward, even if the economy starts to improve? they have a decision to make, but the bedding is if they need to, they will do what it takes. where i heard that before? alix: exactly. what is the thing you are looking at today, the next 24 hours? allan: my concern is that these facilities by central banks do not replace lost earnings. they are going to lower yields, but it doesn't guarantee that the credit markets will be open to these is

ecb president christine lagarde warrant the economy could shrink 12% this year.rged european politicians to provide more fiscal support. global news 24 hours a day, on-air, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. amanda: live from toronto, i'm amanda lang. shery: i'm shery ahn in new york.. we are joined by our bloomberg and bnn bloomberg audiences. let's get you started with a quick check on how markets are trading this afternoon session. u.s. stocks under some pressure after falling from that seven-week high. the s&p 500 being led lower by materials and financials. we had some abysmal economic data again, jobless claims coming in higher than expected. this, of course, slowing, but elevated. the nasdaq being boosted by strong results from microsoft, facebook, and tesla. sentimentve some coming from the fed on their desire to expand the main street lending program. we see boeing gaining ground a little bit, this after they said they would be selling $25 billion

second remark, the ecb has confirmed its own total determination.christine was saying with regards to the purchase of securities and until the end of the year, 1 trillion euro purchase program. there was total flexibility in the use of the pandemic emergency purchase program, which this flexibility is very, very important in the president juncture and there has been also a number of additional elements that were also important, in particular the famous targeted long-term refinancing, which is now at the level of minus 1% for new lending, the interest rates that the banks are refinancing with last point, the attitude of the governments and thens t the mese is clear, that the present blockade on the financing of the recovery program, which should be very, very important, the present of the commission mentioned a 1 trillion euro recovery program, whatever the amount, it would be very big, but it has to be decide upon whatever the final thing, it might be euro bonds or another way of finance, this recovery program, i would say the important thing is tha

has a debt to gdp ratio of 160% or more, that will be in the hands of the ecb, which means the debte market is going to be around 110%. we have to rethink the concept of sustainability, which will be better than what we may think based on the cases. vonnie: the chairman of the societe generale on bloomberg earlier. an update on new york virus debts. moved up to 14,337 from yesterday. 14,347 deaths total. let's check in on the first word news with ritika gupta. president trump joined those saying a deal is close on the next coronavirus a deal. democratic leaders in the white house have been working on the package. it would provide up to $500 billion. more money would go to the loan program of small businesses. there is also funding for hospitals and testing. factious -- top in infectious disease expert is warning that unless the u.s. gets the virus outbreak under control, real economic recovery is not going to happen. pushing back against protesters ignoring their governors stay-at-home orders and calling for him to be fired. another sign the longest expansion in u.s. history has com