The meeting and it is still on. Manus a warm welcome to bloomberg europe. Zurich for a in couple of days. Wobbling. Omewhere is as Martha Malone says you are asleep at the wheel, opec. Is rate cuts the right policy response . Nejra and how long can that little rounds last bounce last . Are you moving from survival to strategy . Manus the dollar seems to have taken a new lead. Take a look at the dollar, down for the fourth day in a row. Deutsche bank says it is time to sell currency. The biggest slide to. Dropping over 1 . Deutsche bank, 100 basis points by the end of the year. Goldman sachs, 100 points by the middle of the year. The oil market has a b ounce. For the 10 year Government Bond yield the probability of the fed going to the zero yield, i bring you back to 2008. The Options Market says it is unlikely you will get there. Somebody is right. Somebody is wrong. Good morning. Asiapacificci index. Turning negative after the report says the draft doese g7 meeting, the call not specifically call for a new Government Spending or coordinated Interest Rate cuts by Central Banks. Futures taking a hit. European future still in the green. The aussie showing a little strength in todays session. Speaking of the rba come it has cut rates by 0. 25 . The move comes after Christine Lagarde said the ecb stands ready to take appropriate steps. The south korean president says the nation is at war with the virus. The message echoes the oecd which slashed its forecast to the weakest since 2009 and called for coordinated action by global communities. What would make a true difference for all people would a coordinating action by seven of the g20 committees to do something fiscally to help the people be yang of this economic shock. Beinghelp the people affected by this economic shock. Nejra joining us for the hour is paul flood from newton management. From the a statement g7 later and it does not have a call for a coordinated response in terms of Interest Rate cuts and fiscal policy come what action are you expecting in markets . Are i think the markets expecting some form of coordinated action. Thinkdo not see that, i markets will take this badly. We need some kind of monetary stimulus to keep liquidity in markets. That is what we got wrong in 2008. We need that but more importantly, we need some kind tax cuts. Response by manus breaking news that the ceo at ubs is stepping down and he has been nominated as the swiss chairman for 2021. Anyone that thought he was going off to the distant hills to go skiing for the rest of his career was wrong. It is an Insurance Company we understand. Swiss re. Let us continue the conversation. They are all using the word appropriate. The central bankers, Christine Lagarde. I want to ask you about the scale of what the bank of japan did yesterday. They did six times the amount they normally do in equity biting. Is that playing catchup to the fed or is it a benchmark the yanks set for the rest of the world to follow . Paul i think what they are trying to do is support the markets. Markets toe capital some extent. Liquidity for Capital Markets and people positioning themselves. It does not really help with corporates. The one thing that has not moved is the japanese yen. I wouldve expected it to strengthen a lot more given what is going on. As for the other Central Banks, we are in unchartered waters with this iris. We are at the beginning rather than towards the end of the outbreak. They will be very data dependent to see how it spreads. Whether they can contain it more and how fast it spreads and its impact on the economy not necessarily the Capital Markets. Nejra there has been a lot of discussion about the in it the ineffectiveness of rate cuts to impact the virus. Are they pushing a bear market in equities out . So when the market wakes up come it will not have an impact on the real economy . Paul lower financing costs do help corporates. It would certainly depend on how long this lasts for. The economy tot wake up into the second half of the year and wake up to the spending. It will certainly have a shortterm impact in terms of reducing finance costs for the corporates. What they really need to do is get on the front foot. Marketsd to show the that they are here and willing to deal with this. The centralt just banks. We need the governments to take action. ,anus with that in mind needing governments in action, what would make you feel they are getting out ahead of this . What do you need from a policy response from g7 . I have various people saying we need 100 basis points from g7. What do you need to hear to think they are out in front . Paul you would really like to see some quiet operation. Something that helps businesses deal with the fact that they will see less business in the next quarter. Especially after we see what has happened in china. Nejra at the end of last week, there was a lot of talk about survival. Are you employing a strategy and trying to find returns after what happened last week . We are longerterm in nature so it does provide opportunities to get into the businesses that we like longterm. We are looking for those companies to have that strong structural support. We are talking about Government Strategies that they can develop. For provides the ability some of the green agenda. If we look at what we are trying to do with the carbon i think ecarbonizing d carbon the world we will see more support for the buildout of infrastructure in europe that does not help every business but it does help some and it does help the underlining economy to get back up on its feet. We are looking at renewable space and the support for electric vehicles and the infrastructure to support them. The market has been pretty indiscriminate in the selling. Tos provides opportunities build into those you think are strong for the longerterm. Let us get to the first word news. Australias central bank has cut rates and signal it is open to further easing as it tries to cushion the blow from the chinese slow down. The cash trade has been cut, a new record low. Virus outbreak is having a Significant Impact on the australian economy. Opec is going ahead with a much anticipated meeting later this week. Ministers from the group and its allies will gather in vienna to discuss if additional production cuts are needed. Minister, prime netanyahu appears to be within striking distance of forming a new government. Exit polls show Netanyahus Likud party and its allies are ahead of the former military chief. Joe biden has gotten a boost from some former rivals. Klobuchar have endorsed a biden. 14 states and one u. S. Territory are up for grabs today. 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. Have a number of airlines issued warnings on the coronavirus as it continues to spread worldwide including local carriers. Major operators like iag and air france. Do not miss our interviews. We have them stacked up quite easily quite clearly on the runway. Right here on bloomberg. Nejra over a barrel. Opec says it will go ahead with its meeting in vienna even if the coronaVirus Outbreak is forcing cancellations elsewhere. This is bloomberg. Manus this is bloomberg daybreak, europe. I am manus cranny. Nejra we are seeing a bit of green on the screen in asia for the second day. But reports that we may not get a coordinated response from the g7 call causing future to lower. Se futures the bond market is not taking much solace from Central Banks promises. The chart that matters. Look at the real yield. Annmarie hordern is here with more. The real yield is looking real negative. The 10 year yield dropping to the lowest we have seen since 2013. Say comes as Central Banks they are willing to give their support. There is no inflation and no prospect for inflation. Given the Growth Outlook come it does not look like that will happen. Said how bad the Global Economic outlook is looking. Sinking to the lowest level we have seen in over a decade. Thank you very much. Pivot to the commodity market. Rebounding from last weeks slump as global policymakers have pledged to safeguard markets from the coronavirus. Ministers say the group will go ahead with its muchanticipated meeting later this week in vienna. I hope so, i have just traveled seven hours. Despite mounting concerns, the lost the austrian government says it is up to the cartel to decide to proceed with the meeting. Let us get to our mliv asia editor on the story. We have had this rebound in oil markets. The market seems to believe we barrels of a cut. Is that what is happening . That is what the market is expecting from the opec plus producers who are going to meet later this week despite this coronavirus crisis. What we have the look at is one Million Barrels per day a cut that the report said that the saudi r. B. I. Was seeking. Anything more than one billion barrels a day of a cut or at that level we could see oil prices expand its rally but otherwise, prices could resume declines pretty easily. Oil, pricesat brent are 20 below the peak in january. Prices are vulnerable to a reversal in case of disappointment from the meeting. Nejra what other things to keep an eye on in the runup to the opec plus meeting . To keepne thing we need an eye on is russia. Russia has been pretty much russiant so far because is relatively resilient to any change in prices relative to other members of the opec plus. When it comes to the success of the meeting, it remains to be seen if russia will be corporate it or not. Another issue to look at would be libya. Manus we are going to leave it there. You are right though with libya. Our editor on energy joining us from the team in singapore. ,hen you look at the oil market itterday was a story saying would bid at 30. It is about galvanizing the action. Where do we take this conversation around oil . Yout is pretty clear have seen the pollution levels over china. How significant the reduction to pollution has been. That will have an impact on demand for oil. Opec is looking to address that with the supply side of the equation to keep prices table. For us, we would rather be thisweight oil because if is prolonged, there will be demand cuts for a much longer period of time and that will have a Significant Impact on the oil price. We will wait to see what comes out of the opec meeting. We prefer to be in renewables and less price sensitive options. I know youou focus on renewables is that an area where you might see opportunities . Paul coming back to the previous question about liquidity. It is important for the Central Banks so the company can refinance itself. Many companies will go into bankruptcy. We have not seen that yet. Do is it will shelve some of those oil projects that are further out oilas we know, the big majors have been reluctant to capex. N at some point, as the corporates turned around, i think they are more likely to get rewarded for that than they are for looking for more supply. Nejra paul flood from Noon Management staying with us. Forchief has been nominated the chairman of swiss re. Last month, ubs named the ing boss to take over. Years toax may take reach of the reduction goal. Boeing says it will likely take until 2023 for the macs built right to hit 23 planes per month. Amazons prime and fresh Delivery Services are being overwhelmed by demand as a sign that coronavirus shoppers are being impacted and turning to delivery. Orders will be delivered more slowly than usual. In company has seen a surge demand for bottled water. Reached itss it has goals ahead of schedule. That is your Bloomberg Business flash. Coming up, the Trump Administration addresses a series of efforts to contain the market fallout from the coronavirus. We discuss that next. This is bloomberg. Manus this is bloomberg daybreak, europe. Nejra back to the coronavirus and the Trump Administration is discussing a series of steps to contain the market fallout including pushing the Federal Reserve to allow an emergency cuts. Trumpin the day, donald also criticized pharmaceutical executives for not meeting earlier. Manus the meeting consisted of executives from pharmaceutical companies. Including pfizer. They told the president they expect to have an antiviral treatment ready in months. And a vaccine next year. And that is as the number of cases in the u. S. Rose to 100 with six deaths. Vice president mike pence says the vaccine could be going to Clinical Trial as early as within six weeks. But is still downplaying the risks. Riskt us be clear the to the American People of the coronavirus remains low according to all of the experts we are working with across the government. Mike pence. Hat is flood is from newton management. Real yields. It is collapsing. That says to me that the bond market has already begun to price the lowest since 2013. It says to me that the bond market is doubtful about the policy response and that Recession Risk is higher than the equity market suggests. Part of that is due to the Interest Rates and where they are and where bond rates are. This is an important chart for us. We are taking the benefit of the slower real yield because we do leave a fiscal response will calm. More emphasis on government having a fiscal strategy in place and to try to get the economy back on the road to recovery. And so we think that if anything , it will allow a catchup. At some point, the Interest Rate will catch up because even if you have supply constraints, that is inflationary. If you cant get your hands on inventory, prices will go up which will be somewhat inflationary. Not for consumers. That would be offset by prices falling heavily. You live through that, there is a Good Opportunity for index bonds going forward. , stay with us. Another 30 minutes. Paul flood from noon. Coming up, coronavirus disrupts global travel. We discuss precautions travelers need to take. And we speak to chief executives of the biggest airlines. The lineup on the runway easyjet, klm. On bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Good morning from bloombergs european head quarterbacks, i am here with man us live from zurich. His is bloomberg day break europe. Global stocks trim the games. Eason7 wont call for coordination. Finance machine sisters discuss the crompe tonight. The ecb joins global Central Banks pledging action. South koreas president says the nation is at war as cases tip to rise. The u. S. Banks expand travel curbs. We speak to the c. E. O. s of ryan air, slashing short haul flights for a threeweek period. And oil extends its rebound from last weeks slump amid expectations of deeper production cuts. Also his government says it is opecs decision whether to go ahead with a meeting. It is still on. [captioning made possible by espn, inc. ] u. S. Equities jumped more than 4 for the First Time Since december 2018 in yesterdays sessions. They gave up gains on concern we not get a desired coordinated response from the g7 call we are getting. The yield slides to a 112 handle. We get all the Market Action from around the world. We do indeed. Saying aff and emphasis we may need 100 basis points of a cut. Will they deliver . Sally is in singapore. And marie is in the heart of the action in new york. The r. B. A. Kicked off what we believe is going to be a coordinated Central Bank Action of cutting rates. How has that been received . Well, we did see a spike in the aussie. But this was extraordinary given when you saw the close of the market on friday in sydney, there was only a 15 chance we saw a cut. They cut to a record low to half of one percent due to the effects of the coronavirus. They say it is having a significant effect on the australian economy. This is blackrocks craig, head of fixed income for australia saying that prolonged equity losses and more could send the nations 10year bondyearold into a negative rather for the first time. Moves coming through are expecting from the r. B. A. As they cut rates to a record low. Thank you. Indian markets reaction to new cases of the coronavirus. What are you watching . Well, for now things are looking extremely precarious. We did start off with some good strength coming in, but at this point in time we are looking at the benchmark, and see trading near days lows. We have seen continued selling. This continued from yesterday after seeing some strength. This is despite the fact that Indian Markets do seem over sold on a technical term on the relative strength index, which is currently below the mark of 30. That said, there is still no respite, and we are continuing to see further selling pressure every time you see the marks end up higher. We have to wait and watch whether or not there can be some release at least in the near term, but for now that is not the case. She loves an r. S. I. , especially in the over sold tear he toll. Anne marie, talk to me about gold. We have sfeen a wobble, but it looks like it may be a haven. It had a bit of a wobble. Now gold is starting to stage a comeback. I want to point to what jeff of goldschmidt sacks said. He said there is so much surgeon the gunshot. Gold is the currency of last resort for gold sacks. Remember in 2011 when the fed took on this massive q. E. Program, gold was above 1,900 an ounce. Right now the level we are looking at is around 1,600. Gold is a buy. Thank you. Great work all. Lets get to the first word news. The e. C. B. Is joining other Central Banks in pledging to take action against the coronavirus. They are monitoring the situation and will take appropriate measures. It echoes statements from the Federal Reserve and the bank of england. They are concerned the outbreak will undercut the global economy. Policy makers try to cushion the blow from kleins slow down. They cut the cash right to 0. 5 , a new record low. It says the Virus Outbreak is having a significance effect on the economy. Netanyahu benjamin is forming. Exit polls show his party are ahead of the former military chief. Ahead of super tuesday, joe biden has a boost from rival. Buming buttigieg, and amy and one other have endorsed the Vice President after his big win in South Carolina. Today, 14 states and one territory are up for grabs. That amounts to about a third of all delegates in the primary. News 24 hours a day. Powered by 2,700 journalists and analysts. Several of the biggest u. S. Banks as well as the nations largest life insurer, cushing all nonessential trims abroad as the coronavirus coronavirus spreads across the globe. Twitter has gone one step further, advising its almost 5,000 employees from around the world to work from home. But for people who still need to travel, what precautions can they take to avoid the virus . You see these whole series group, ations, city goldman sachs, assets. Lets get back to our guest, paul. I want to pick up fien on that torch that ann marie. It is their currency of last resort, gold. There is an immunity in gold. Do you share that . I heard you say earlier it was more on the currency side on ehn. Is gold where you would want to be . Clearly gold is a safe haven, the asset of choice when the Interest Rates around the world are going to zero. The question is how much gold, and how do you value it because there is no yield from gold . Certainly from a currency perspective, it is a good stabilizer in times of uncertainty. We have been adding positions in gold over the last couple of months and not just because of the coronavirus, but just in general. That is clearly starting to work. We see some people get caught out and having to unwind their gold positions. That gives an opportunity for other people to get involved and participate in the market and get exposure to gold. You have to be clear on this. Investors need to be aware that we are just at the beginning of this coronavirus in terms of the news flow. Its impact is unknown. There is a lot of uncertainties. At some point we will move from trying to contain the virus to trying to mitigate the affects so it doesnt overwhelm the health care system. All the data we have seen and looking at suggest that it is likely to become something that is more prom nement across the globe but perhaps could be something that is something that we can deal with that becomes a normal seasonal flu style virus. Before we get to that, paul, are you expecting not just the rate cuts from Central Banks, which is what markets are pricing for, but do you expect quantitative easing . The b. O. G. Has been very clear on that, support on asset purchases. Liquidity in the marketplace is important. We expect to see the rate cuts to help support financing costs for corporations, but we need to see that fiscal response, something that helps the businesses get over the short term period where perhaps cash flow is going to be lower than the yields expect. Lets talk about airlines. Joining us to talk about that is david, medical advisor for the International Air transport ssociation, or as it is known, iarta. Clients travel a lot and are still traveling. What precautions can they take if they are getting on a tpwhrite in the next few weeks . Well, of course any public place where you are close to other people carries a small but significant risk of catching something from them. That hasnt changed with the current outbreak. It is the same principles. One thing about the airline environment is that it has got a very pure air supply. So people may not realize, but the fresh air flow in an airliner is about 10 times that of a normal air conditioned build. Half of that is fresh and the other half is recycled through very efficient filters, the same type we use in operating theaters. So that air supply is 99. 97 pure in terms of bacteria and viruses at least. But the problem that remainses is if you are close to somebody who is unwell at the time. That is the risk that you have to be conscious of. As with any other public place, there are some tips that you could adopt that will help this. In terms of hygiene. Surprisingly enough, one of the most important ones is hand washing and hand hygiene. Viruses piratory require a person to either cough on you to transmit or to cough on to a surface that you then touch soon after. All right. So david, i believe you just got off a sixhour flight and some people were wearing maskses, wiping seats, et cetera. I suppose we are seeing a little built of panic and reaction. But to talk to me about the Material Impact and the benchmarks that you are using to traffic the geographies that are going to be most impacted in the data that you see at the moment and the monetary value . Well, i am a medical person, not an economics one. So i cant really speak with authority on that. But in terms of what you said about peoples concern, that is valid. In terms of the masks that you mentioned, they are really very ineffective other than if you give them to a person who is is unwell at the time for that person to probably. Probably not necessary, but an understandable precaution that people take. David, we certainly have seen several airlines either canceling routes or flights to hot spots. But some of the cancellations have to do with lower demands rather than preventing the spread of the coronavirus. Is the Airline Industry managing this correctly at the moment . Should they be canceling more flights or is that actually not an effective way of containing the coronavirus and therefore they should be carrying on as normal . Well, airlines are making their own risk ais assessment decisions on the basis of a combination of things like restrictions that are preventing people from moving, availability of passengers and the availability of crew. That is not something that i would dictate for them, but they are trying to manage that, and we have an International Work shot going on in the next couple of days, making sure we are taking the right approach to contend with this as an industry. David, can i take you back then to the medical side . Terms of the response mechanism . What was the single biggest learning from the last series of outbreaks, whether it was sars or the middle east virus. Where have we learned the most and got better at . One of the main lessons really has been the value of Close International collaboration. W. H. O. And iarta have a work plan that has run thrull all of those years and outbreaks and is still operational now, a little with the International Civil aviation organization. You will find that all of those organizations give very much the same messages about aviation as it pertains to outbreaks. One of those messages you have seen from w. H. O. Is travel and trade restrictions dont necessarily help, and in fact they often hinder the handling of outbreaks. David, thank you very much. David powell with the realities of traveling if you are about to go to the airport or just got off a plane. Coming up on the show, we speak to the chief executives of some of europes biggest airlines. What are they do in preparedness on routes and on their capacity . The easy jet c. E. O. , lundgren, joins us just after 11 30 a. M. Time. Plus, air france c. E. O. Ben smith, 3 30 coverage time. This is bloomberg. This is bloomberg day break. I am in lone do not. And i am in zurich. So here is what you need to know for the trading day ahead. It is super tuesday, and the former Vice President , joe biden has picked up three endorsements from former rivals. So super . It i will get my words out. It is a cluster. Got excited obama an airplane with so yims. Good morning, man us. It is not just any tuesday in america. It is super tuesday. 14 states hold primaries. Here are the states in play. Alabama, arkansas, california, colorado, maine, massachusetts, minnesota, north carolina, oklahoma, tennessee, texas, utah, vermont and virginia. They will award 1,357 pledge del gates. That is about a third of the total. The big prize is california with 415 seats at stake. It is followed by texas with 228. Populous the two most stays. Depending on the outcome, it could trim the crowded field or prolong the fight into the summer. It is a big tuesday. We will all be watching to see what happens. Thank you. Here to give also some insight on what to expect this super tuesday is kathleen, u. S. Politics editor. After his performance in South Carolina, does joe biden have the delegates to take super tuesday . Well, that is the big question. He certainly had a Strong Performance in South Carolina as we all know now. This is the performance he had been promising, his campaign had been promising all along and until now had failed to deliver. Heading into super tuesday, he has gotten boosts from the endorsements he has gotten, particularly from pete buttigieg, who we all know finished first in iowa and endorsed jobe obrien yesterday. So really, things are moving in joe bidens direction. It certainly didnt look like that was the case just a couple of details ago, which shows how fluid this democratic field is. 24 hours from now we are going to know a lot more, whether or not he is able to capitalize on the things that have broken his way ahead of subbanner tuesday or whether our candidates like Michael Bloomberg might end up being a spoiler in the race. Kathleen, if we look at the voting process, do you think that you will get real unity thin the democrats if they coalesce around biden . Do you think there is a risk of splintering or real cohesion here . Well, i think there is an opportunity for democrats to have some real cohesion behind more centrist i dont and Bernie Sanders. That being said, there is this persistent schism in the party that dates back to 2016 when we saw the division between Hillary Clinton and Bernie Sanders. There is a sense that sanders might not be that well equipped to take on trump. The counter to that is that sanders is someone that energizes the progressive base. So i think the thinking there is that programs he could be someone, if it becomes a base election, that would bring out the base more effectively. That being said, many in the Establishment Democratic Party leave a more sent rest candidate like joe biden would be in a better candidate to take on trump. What we have seen is until now that vote being splintered among several candidates. What we are seeing now is the possibility of the establishment part of the party coalescing now around joe biden. Talk to us briefly about the importance of california . Well, quarterback is taking on some added significance this year. It is always an important state because it has the biggest number of delegates. This year it is particularly important because it is par of the super tuesday crop of states. That is a state where Bernie Sanders has been polling very well. He has had a strong ground game there, but i think the question is whether or not he or one of the other candidates is able to win that state. It is obviously a huge prize, the biggest prize on the table today. And whoever wins it i think is going to be coming out of super tuesday ahead of the game. Thank you very much kathleen. We are going to be gripping the edge of our seats for these numbers. Paul will be back with us in just a second in terms of his take on politics and that in market. Coming up, coronavirus disrupts things. We will talk to the chief execities of some of europes largest airlines. Air france and others join the bloomberg team. This is bloomberg day break in london. And i am man us karanusicy. I braved the airline. I am in zurich. Equities are showing signs of stabilization. That was mondays story. J. P. Morgan says act with caution. Ann marie is here with the warning. What does it say . Thats right. We took a brief reprieve, but j. P. Morgan says be cautious of this. They still expect more pressure on stocks for longer. They say the virus teenage on rates will need to peak first. They expect that to happen in april or may before you see stocks really have a lasting recovery. But in this note i will say that there was some solace. They say the negative impact is unlikely to keep crimping Economic Growth in the second half of this year thanks to the Central Banks support. Not good news just yet, but there is a light at the end of the tunnel. Thank you. Paul is still with us. If we get the Central Bank Action that markets the pricing and pushing for, would you defer to deploy the cash you have in your portfolios in equities or in credit . I think we would be looking to deploy the majority in equities given where bond yields are. Obviously high yield bonds, copper bonds, are spread over governments, and Government Bonds are incredibly low. We have already seen negative yields in the u. S. Now, follow the rest of europe. For us, it is Brandon Morrow likely to deploy some of that cash in areas where the structure is. The key thing is to make sure that you are not exposed to companies with high levens of debt that wont be able to see this through. If you get a quarter of the revenues that are missed because of this shutdown, as we have seen in china, that puts a significant pressure on balance sheets. You want to avoid companies that are going to be required to dilute equity hold erls. If you look at Companies Like ryan air, for example, which are going to see a tough time, they have a very strong balance sheet. They are going to be one of the winners. They will be able to see this through and be a Stronger Company coming through the end of it. That would be what we are look to go add to. Companies like volkswagen, which are in the electric vehicle race, we think they will be selling more electric vehicles than tesla in a couple of years ago. They are on a very low evaluation. Paul, we have to draw a line it there. If you see michael in the green room, he will give you a hug. Ry positive calls with madam ligard, positive, the coronavirus call. We will espn3 how that plays on market. What is a coordinated response for the world . Welcome to Bloomberg Markets european open, live from Bloomberg European headquarters in london. I am anna edwards along matt miller in berlin. The markets say, where is our rebound . The dow jones jumps 5 but no sign of that much optimism in the european future, just slightly higher. The cash trade is one hour away. Matt