Detention they are playing out within markets. Time now for todays top market moving news from washington and new york. We want to begin in washington, where President Trump extended his National Warning for social distancing in the United States until the end of april, abandoning his easter goal. Pres. Trump we can expect that by june 1, we will be well on our way to recovery. We think by june 1, a lot of great things will be happening. That was aspirational when i said easter. I said it would be great if we could do it by easter. Alix joining me from washington is kevin cirilli. What did we learn in terms of how the government is looking at the lockdown in the u. S. . Kevin President Trump has significantly backed off the claim that he would be able to get life back to normal by easter, now making that marker june 1. Thatresident pushing back timetable to june 1. Over the weekend, talking with sources, i can tell you that the conversation around the next form of economic stimulus would likely be around the same time, so now they are laying the groundwork for another round of stimulus late may or early june. The final point i would make this morning is from the American Enterprise institute, a conservative leaning think tank in washington, d. C. That has put forward an economic proposal plan. That is something i am told could be one of the foundations here inside washington amongst policymakers as they try to grapple with another round of stimulus. The go emerged as one of to Economic Resources for republicans during this time. Alix thanks so much. Now from new york, Michael Mckee, Bloomberg International economics and policy correspondent, joins us. The good news is the massive liquidity pump from china. Some say this echoes more aggressive action from the central bank. Michael their workers are by and large back on the job, but the rest of the worlds demand has collapsed, so they dont have any business. China has been trying to prime the pump, stimulate the economy to keep the economy going through all of this. The latest is a cut in reverse repo ratios come of the amount that they charge banks for borrowing, down to 2. 2 from 2. 4 . This is not a major Interest Rate cut, but it does help a little bit on the margins. The bank also injected 7. 1 billion into the banking system, so they need a bit of extra money there. Around the world, australia is going fiscal. Prime minister Scott Morrison inject toill safeguard jobs and give people essentially 921 every two weeks if you are affected. The Eurozone Economic Sentiment following the most on record. Indexropean commissions the lowest since mid2013. The mood is worse in all sectors , including future views of demand and employment. Echoingt, german that, the German Government says its advisors say this will lead thehe worst scenario since Global Financial crisis. U. S. , the here in the law of unintended consequences coming into play. Mortgage bankers sounding alarms that the fed emergency purchases of Mortgage Backed securities are creating problems because they are unintentionally putting the industry at risk by leading to larger margin calls. The Mortgage Bankers association finra to notc and escalate margin calls. When they are issuing new loans, they also short loans to prevent them losing money if the securities decline in value before they can sell, but now as they do that because the fed is buying, there is no fall, and apparently securities firms are demanding bid margin calls from the mortgage brokers, and they are asking for help. Alix fair enough. Michael mckee, relaxed. No jacket. I like that on this monday. Later on, he will be speaking with st. Louis said president jim bullard. Dont miss that. Now back to the markets. Oil slumping to a 17, 18 year low. The Worlds Largest economies continuing lockdown. Annmarie hordern joins us for more now. Walk us through the moves of the morning. At one point overnight dropping below 20 a barrel. Right now, brent trading around 22 a barrel. Really come of the story is this dual shock supply and demand, but everyone is focused on demand. Goldman sachs saying the world isng about 26 pumping 26 Million Barrels a day. Europe fallsities, lower than asia this morning. 0. 6 toxx 600 training down , the ftse 100 down 0. 8 . U. S. Futures are a bit mixed. We are seeing them hit the green, but dow futures are in the red. A lot of this comes as more uncertainty from over the weekend, more numbers about the virus, and trump abandoning his ambition to reopen america by easter. This new normal we are used to will remain in place until at least april 30. What i have been looking at drop most of the session overnight is the banks. Amro, seeing iag, abn unicredit all coming out and pulling their dividends. They are basically bowing to what we had from the ecb friday, saying if they request late payments, the ecb should ease these except it will times. We are alix great point. Appreciate that, annmarie hordern. One of the things we keep watching is the airline industry. The latest is easyjet is now grounding its entire fleet of planes. The airline says it is looking for ways to cut costs as it copes with the impact of the pandemic, and when will the u. K. Discount carrier resume flying . They say it all depends on government restrictions, as well as demand. Raised moreldwide than 17 billion in bank loans to shore up all of their finances. U. S. Carriers were the most active, with delta coming in right at the top. Coming up on your program, much more on your morning news, trade and analysis on the markets in todays first take. Happy monday, everybody. This is bloomberg. Alix time now for bloomberg first take. We are going to give you the news. You get the trade and first take on the market. Joining me is damian sassower, Bloomberg Intelligence emergingmarket credit andtegist, Michael Mckee, also vassili serebriakov, Ubs Securities fx and macro strategist. What do you do in this environment right now . Damian for me, what i am really looking at his we had a big spike in volatility across all Asset Classes. All of the curves are inverted. That has created a lot of dispersion across different tenors. I think that is where the smart money is going to focus. Vol comes down off of elevated levels. Those are the things i am watching. Theres a million others i can point to come up at that is what i am focused on here. Alix vassili, what do you think . Vassili from the ethics perspective in particular, from the fx perspective in particular, i am watching the dollar funding markets. Essentially, what the yield is on fx forward versus the ois differentials, that is still at stress levels. Ois incorporates the libor spread, which is quite wide at over 130 basis points. Think the normalization and some of those spreads would be critical from the ethics perspective from the fx perspective for a weaker dollar here. Alix mike, i want to turn to you on that. I thought the fed fixed all of that . Are there new cracks beginning to form or knock on effects from the moves they have had already . Lawael theres always the of unintended consequences, particularly when you are doing massive stimulus, both monetary and fiscal. We talked a bit about the Mortgage Bankers and what has been happening there. These are things they can address, and they will address. This is interesting. I was listening to tom keene this morning on bloomberg theeillance talking to head of the council on foreign relations. In as saying here we are postu. S. World, with no leadership anymore, and you have problems that are going to need world efforts. When the disease gets into smaller Frontier Markets that dont have the infrastructure to deal with it, that is going to be a problem. To step on damian s to step on damians territory again, somebody is going to have to get money out to these people because the fed is not going to do swap lines with every bank in the world. Theres a lot to be done in the corners of the markets that we dont normally think about. We are getting a lot of help in the major markets, but there is still much more to be done. Alix what do you think . Damian this is music to my ears. I will just sit back and let sili figure it all out. I am looking at markets like mexico, brazil. Look at brazil. In the worstdown performing asset class so far. The fed has just opened up a swap line with them to inject dollars directly into their economy. This has never been done before in emerging markets. I will be watching those very closely, as you well know. If i could just add a slightly more optimistic or , i thinkelement here we are rightly talking about the funding stresses and the demand for dollar liquidity globally. We are hearing it more and more from Market Participants that there are concerns about emerging economies having sufficient access to dollar liquidity. I think the difference from 2008 is the market is fairly long u. S. Dollars. There have been stories featured on bloomberg that the taiwan insurance industry, some of the other investors in the u. S. Have been utilizing a lot of dollardenominated assets. There is some natural protection now when the dollar goes up, so actually their holdings of u. S. Assets are somewhat protected when the dollar goes up because obviously, that kind of upset e pain in their local currency terms. That makes me more optimistic than 2008, but we had the reverse where the world was struggling to recover the short dollar. Alix alix positions do you buy that short dollar positions. Alix do you buy that sliver of hope . Damian lets take taiwan, for example. That is really a key point i cant stress enough. Frominsurance issuers taiwan who has issued in dollars locally have to hedge that dollar exposure. Something quite unique in south korea is happening. Products thated have been issued as the won collapses, all of this stuff blows out and it is dynamic collapsing, one after the other. Volatility remains elevated. Currencies continue to get hit relative to the dollar. So it is this recurring theme. It doesnt just go away, and there is no dollar amount that is really going to recover it. Though, taiwan and south korea are two to be focused on the most. We have industrial production, we have trade, we have some really interesting things coming out this week that i will be hyper focused on, for sure. Alix Goldman Sachs saying you could see 3 to 5 more upside for the dollar, and if it gets messy, you could talk about intervention. What do you think when you hear that . Michael i think there is a reluctance, in part due to the law of unintended consequences. Once you do Something Like that, it is very difficult to control what happens, especially when there is a knock on effect from the dollar being so important around the world right now. I think they will be looking more towards other ways of trying to keep the currency markets balanced as they go forward rather than directly getting involved. Vassili, do you agree . Vassili i do agree with that. Beis probably not going to an overwhelming focus in terms of the levels of the exchange rate. What is the focus as weve been talking about here is just the access to dollar liquidity. That being said, i think you kind of raised the right question for a while from now, so this is not next weeks or next months problem. Some investors are starting to contemplate that, when yields have pretty much fallen to zero. Market has been largely driven by yields in their history, but when yields have fallen to zero, and really dont have much space to move, what else moves foreignexchange . Does this then become more of a policy tool directly for governments and Central Banks . We are certainly not there yet, but i think that is going to be a question that is going to come up sooner or later. Alix ive been hearing a lot of and bund spreads continue to narrow. Damian, what is the importance of Oil Stabilization to the rest of the market when everyone says it is not like 2015, it is not like 2008 when it comes to the correlations between those assets . Damian especially the big oilproducing, emergingmarket currencies, the price of oil as we get closer to that 20 per barrel mark, you just see heightened correlation between emergingmarket currencies and the way they behave to oil, and you are seeing the same thing in developed markets. Certainly oil prices are having a very big impact on nearterm currency movement. It is something that certainly cant be ignored here. Vassili, the correlation you see . Vassili i think the bank of canada put it well on friday with the additional emergency rate cut, saying canada doesnt have just one shock from coronavirus. It has two shocks, from lower oil. If you look at the divergence between canadian Commodity Prices and, for example, rises of australia and new zealand, it is quite striking. There is this idiosyncratic element of just Lower Oil Prices on the back of the opec russia breakdown that might even be here long after the coronavirus subsides. I completely agree that in currencies like the canadian dollar, they are particularly vulnerable in this environment. Alix jeff currie had a really provocative note out on Goldman Sachs. One call was 92 of world gdp is in some form of shutdown or lockdown. That to me was really staggering. Michael that is what it leads to in the oil markets. They are predicting 22 decline in Global Demand, more than the United States produces, so it is not just canada that has a double shock. The u. S. , we talked with brock kaplan last week, his district is going to get really hard. It is shutdowns in the midwest and the permian that sent us into a mini recession that people didnt completely notice, but we are facing that again. We are facing the double whammy of the economy shut down and a lot of projects in the oil patch that are not going to start up again until Oil Prices Get much higher. That is going to lead people out of work in a situation where the government cant lift them up by providing bridge loans because there just wont be the demand afterwards. Alix lets wrap it up here. What is the trade, the thing you are watching and recommending most . Fxssili i think in the market, the dollar funding is the key issue. Our bias is more towards the short dollar side from the mediumterm perspective. I agree that in the short run, it is going to be very choppy and volatile, but theres some real risk premia in effect, and i think theres opportunity to get short the dollar in the g10 that havent been there in a very long time. When dollar funding normalizes, because it is starting to very slowly, what the fed is doing in terms of qe and rates in the u. S. Is going to push the dollar lower in the g10. So we think theres some opportunities in buying currencies like the euro and the australian dollar, just from the point of view that they are very cheap fundamentally, and will settle. Once those alix good conversation. Happy monday to everybody. Ubsili serebriakov of sticking with me, and mike mckee will join us later with jim bullard. This is bloomberg. Viviana you are watching bloomberg daybreak. European leaders, including unicredit, abn, and iag suspending payments on earnings, bowing to ecb pressure to retain capital during the coronavirus turmoil. The ecb asked banks to delay payouts until october. The ecb says it would be socially responsible to continue paying dividends in these exceptional times. Now to an optimistic outlook from j. P. Morgan chase. Bank strategists believe most risk assets already saw their low point, but there is a wildcard, rising Coronavirus Infection rates. Until the pandemic is overcome a markets are likely to remain volatile. The price of oil today plummeting to a 17 year low. Prices are on track for the worst quarter on record. Coronavirus lockdowns are cascading through the Worlds Largest economies. , plunging demand and a blooming crude surplus are overwhelmingly market. All the while, the price war between saudi arabia and russia continues. That is your Bloomberg Business flash. Alix thank you so much. Heres a Research Note that caught my eye on friday. This is how it gets worse for household Balance Sheets. This is according to deutsche banks torsten slok. Not only are millions losing their jobs, but the link would see rates had been up even before this outbreak began. It is especially true when it comes to auto loans compared to credit card dealing with these. 20 of u. S. Workers now make less than 600 a week. Consumers were already a tight spot to begin with. Coming up, will we see volatility calm down, and what does that wind up meeting for the broader markets . What really matters most . Dean curnutt will be joining us. Alix welcome back to bloomberg daybreak. We have been waffling around positive negative territory. I want to focus on european banks as many of them, like unicredit and abn amro suspend their dividend to help their liquidity situation. This has been pushed by the ecb. Switch of the board. It is still a stronger dollar within the g10 space. You are looking at the cable rate also, after you had a downgrade by one of the main rating agencies on friday, but not the worst off in the g10 space. Youre seeing a slight bit into u. S. Treasuries, but it is really the move in oil that has the eye of market purchase happens now. An 18 year low, going to get worse before it gets better. Looking at all of that in relation to setting up a big week for jobs at the end. Johnson johnson is announcing a partnership now with u. S. Health and human services. They are committing to supply about one billion vaccines worldwide for the pandemic. It sees the first batch of Vaccines Available by early 2021. It is also going to try to expand its Global Manufacturing capacity with all of that as well to stop all of that as well. The stock up almost 5 . All of that was in the market as well. We focus on the volatility and the moves we have seen, and if we can calm down a bit, plus the risk off events over the last few weeks. N curnutt, mass growth dean curnutt, Macro Risk Advisors founder and ceo, joins us now on the phone. Youhat environment, how are recommending that your clients position . Dean first, good morning. I need to update that statement because i wrote it two weeks ago. This is the much the the most substantial stress event of the last 25 years. Think the way you can arrive at that is simply look at Something Like 10 day realize volatility in the s p. We peaked out in this crisis at remarkably 177, which is well north even of the highest level during the Global Financial crisis itself. You have never seen something where the s p has had three successive moves of 9 or more. It has just been absolutely remarkable on the asset price side, and it mirrors the severity of the sudden stop for the global economy. Havingut can you wind up a situation where equity volatility and implied currency volatility continue higher, yet the underlying market but the s p stabilizes . Is i no, my best guess dont think we have seen the lows in asset prices. To be athink you have hero to say that just because the vol is so high. But just the Sheer Velocity of daily moves that it takes to get back to 80 is tremendous, and that was before the government and the fed had thrown the kitchen sink at it. It is unknowable how well this will work, how quickly this will work. In some ways, especially given the impact of the sudden stop on main street, it is a race against time. I see some good analogs to the 2008 2009 period when it comes to the vix. The low on the s p didnt arrive until march 2009. The vix was fully 30 points lower than it was in november 2008. I think you can see the market slip lower even as volatility recedes, but i think another analog from 2008 is it took all the way out to may of 2009 for the vix to go below 30. So i just see a sustained period where we are going to be north of 30, and maybe even 40, in the vix. It is just going to take so long for this uncertainty to clear the market. Alix you are not alone in comparing that to 2008. Lori calvasina of rbc said it is like a 2008 playbook, like we are finding a broader bottom here, but we will see much more downside before upside. So how do you handle that . How do you protect yourself . Dean if you are looking for cheap options, those came and went over the last month. It is just impossible to find insurance that doesnt reflect the degree of uncertainty on a forwardlooking basis, and the fact that the s p is delivering so much volatility on a daily basis. So youre left with some tradeoffs. I try to focus on implementing options in a costefficient way. So what can you do . If you are looking for protection, i think you are bound to wind up with some version of a spread, whether it is a put spread on the s p even that is going to be costly. You might think about selling a call spread to fund a put spread. There is some efficacy with a strategy like that. One of my favorites, and this gets back to the notion that even though i think we have seen a high in the vix, i think it is going to be up here north of 30 for an extended period of time. Vix andsell puts on the get really high premiums. Premiums onn the vix justifiably go up, too. I think you can safely sell Something Like a may or june 30 put on the s p. Get some premium for that. Nothing is free, but you can use that premium to fund other bets. So my highest conviction is that we have seen the high in vol, ti for this mean reversion process to take hold. Alix thats a great point. If you wind up doing that, take other bets, what would those other bets then be . That theres downside coming in the near term. I dont think it is going to be as violent. Again, you dont have to be a hero to make that statement. But if you look at the bear market rallies that occurred in 2008, 10 , 15 , it is just easy to get to when positioning gets very one sidedly bearish, and has to move the other way. Our kits are getting pushed around both by derivatives overlay, by the unfolding of news, of treasury and government response. But i just think the fundamentals are going to continue to deteriorate for a think youtime, so i are supposed to be looking at a package of short dated hedges. I think you have to use spreads because, as we said, options are very expensive. As an optimist, i do think we ultimately come out of this and you have an opportunity where these asset prices are sufficiently damaged, and the governments response is a kitchen sink and then some, that whether it is by the end of the year or early next year, youre going to see higher asset prices. To me, youve got to get to that finish line. You want to be an empowered buyer of assets. It is very difficult to do when vol is this high and you have already experienced market losses. That is why using hedges nearterm, if i am right that we down markets nearterm, youve got to protect yourself so that when there is this bottoming process, you get yourself sufficiently past the peak of the virus and some of the difficult medicine that we are all taking actually works, now you have an opportunity to participate in asset prices that are bound to go higher. Alix my last question here for you is, in the shortterm, we did see a ton of deleveraging from lots of funds like quants. Theres also been talk about how last week, the equity rally was really a portfolio rebalancing by Pension Funds at the end of the quarter. Is any of that noise done . Dean i think a fair amount of it is actually done. There was tremendous deleveraging from volselling funds that had to cover. So most of what we see out there points to a lot of that deleveraging being behind us, and perhaps last week was about the pension reallocation. But again, it is going to be really choppy just because markets have lost a lot of capital, so the buffers are not there. The swings are going to be significant. But again, i do think that the Sheer Velocity of the swings is likely behind us, but we are going to stay at a pretty elevated level of both implied and realized volatility for a few months to come. Alix i lied, this is my last question. When you get up in the morning, what is the first thing you look at . What is the indicator for you . Dean got to look at s p futures. That is your global benchmark. Then i am looking at the vix curve, european bond markets. It is a whole system. One person said to me once, they were asked is vol and asset class, and his response was that vol is the only asset class. You are on one side of the ledger or the other, and that is especially applicable right now. Alix really great to get your perspective. Thank you for joining us, dean curnutt of Macro Risk Advisors. Coming up on the program, hedge funds see some huge losses for the coronavirus selloff. We will speak to Maria Vassalou, vassalou Capital Management cio. We want to get you up on headlines outside the business world. Viviana hurtado is here with first word news. Morena spain is reporting than 800 new virus deaths. The country is tightening restrictions during the easter period. Nonessential Services Workers are being told to stay home. To 80 of shops opening their doors today in wuhan, where the coronavirus outbreak began. It is also the first time in two months. The chinese citys bus and subway Services Also resuming. We end with an aboutface from president donald trump. He now wants the public to continue social distancing until at least the end of april. Heanded his goal of extended his goal of normalizing to april 30. 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. Im viviana hurtado. This is bloomberg. Alix thanks so much. If you have a bloomberg terminal, go to tv. Anything you missed throughout the program, go to tv on your terminal, browse it. Check it out, and see anything you might have missed. This is bloomberg. Viviana this is bloomberg daybreak. Coming up in the next hour, an exclusive interview with jim bullard, st. Louis fed president. Viviana you are watching bloomberg daybreak. We begin with Johnson Johnson taking up with the u. S. Health department to supply one billion coronavirus vaccines worldwide. Expects to launch clinical studies of its lead vaccine candidate i september at the latest. J j says the first batches of a covid19 vaccine could be available for emergency use authorization in early 20 when he won in early 2021. A company unveiled a coronavirus test that can tell if someone is infected in as little as five minutes. The medical device maker says it plans to supply 50,000 tests a day beginning this week. The test is so small and portable, it can be used in almost any health care setting. The fda has given abbott emergency authorization to use the test. Jeffrey financial saying the long time chief Financial Officer of its main subsidiary died from couple of the coronavirus. He is one of the first senior wall street executives to die from dependent. He had been ceo of the new york firm since 2007. Before that, hes spent 16 years at morgan stanley. He was 57. Im viviana hurtado. That is your Bloomberg Business flash. Alix thanks so much. We turn now to wall street beat to cover three things wall street is buzzing about this morning. Today we are going to focus on one topic, the state of hedge funds. They see steep losses and gains from the global selloff inequities. Korea vassalou is a former portfolio Maria Vassalou is a former Portfolio Manager before starting her own firm. She heads up vassalou Capital Management, founder and cio. It is really good of you to join us. It is a very difficult environment. How have you determined whats working, whats not how have you performed . Whats working . Whats not . Maria thank you. It is a very difficult experience to be april fully manager these days. This crisis is unlike to be a Portfolio Manager these days. This crisis is unlike anything we have seen in our time. Where you haveon an external shock that affects the whole global economy, and not one particular affect or one part of the economy at the time as working conditions have changed, fundamentals have deteriorated rapidly. We are in the midst of a number of unexpected and unprecedented policy announcements, and we also experienced dysfunctionality in the markets, i was we have seen in the markets, as we have seen with spreads widening. So it is a difficult situation, but also a big test for managers , their operational infrastructure, risk management, and ability to function under this great pressure. Alix can you give us some insight into what strategies have been working for you, and what strategies have not been . Strategy are a quant and a global macro fundamental values, so relative i think we have weathered this situation quite well. But i think its very much based on the fact that we are not directional. We create complexity in our portfolio through our portfolio construction process, so embedded, there is some long vol without trading vix exclusively. That has helped the process, but in general, i would say this is a difficult environment because of the dislocations and the dysfunctionalitys that have appeared. Angeneral, in such environment with this unprecedented moves, the only strategists are focused on being long vol. But those strategists tend not to do well the rest of the time. So how different strategies have performed very much has to do construction, Asset Allocation decisions, and really the ability of the manager to risk manage in this situation. Alix what is it also like right to have to raise money . Maria [laughter] well, during a crisis it is always hard to raise money. I know that there are a number of funds trying to raise money in this environment. Point, i would say investors are shellshocked and trying to evaluate the effect on their portfolio, and also what the outlook would be. Crisis, as with every there are opportunities that present themselves. Behink there will strategists that will be doing well Going Forward, and it is a investors having the ability to understand what strategists will do well and allocate. In the short term, i expect it is not going to be easy to raise capital. Alix can you give me insight into the questions you are getting from investors or potential investors . Maybe a few weeks ago, where they asking Something Different than today . Maria i think the question that i get most from investors is my views on the outlook. What do i expect to see Going Forward . It is such an unprecedented situation, everyone is trying to evaluate how long this crisis is going to last, what the effect will be on the real economy, and what kind of recovery we can expect. From then on, Everyone Wants to manager has made or lost money, what has worked, what hasnt worked, and more specifically, the sophisticated toestor trying to drill in see what the risk Richard Beeson has been, the return retribution the risk retribution has been, the return retribution, the reaction to different situations. I think this Current Situation standinga very good for investors and data to really understand the process of each manager they are invested in. Alix such valuable insight. Really appreciate you taking the time today. I know it is a tough spot for the hedge industry to be in. Coming up, aiming to ease dollar funding stress. We will look at the feds expanding swapif you are jumpinr car, tune into Bloomberg Radio on sirius xm channel 119 and on the Bloomberg Business app. This is bloomberg. Alix breaking news. Germany now asking companies to suspend dividends for coronavirus aid. This comes after european banks like unicredit and abn amro also suspended dividends at the behest of the ecb to help their liquidity lines. Germany now asking companies to suspend dividends. We will let you know as that headline comes out. Now it is time for traders take. Joining me is of Bloomberg Intelligence. You are looking at swap lines. What have you got . Damian for me, this has never been done before with a lot of the emerging markets Central Banks. As it stands, weve got the ecb come of boj, the boh, and the snb having drawn down roughly 600 billion of u. S. Lines to date. , theow that the dnb riksbank started tapping their lines last week. But i am going to be looking at braziles like singapore, and mexico. How they use these swap lines and whether or not it alleviates distress stress on their funding currencies, we will soon see. Alix what about the countries that dont have any swap lines with the u. S. . Can they tap other kinds of facilities . Damian well, no. At this point, it is going to be basically a lot of those emerging market Central Banks turning to places like japan and europe for additional funding, but we are going to see some Central Bank Meetings this week. We are going to see chile tomorrow. Egypt is one of only two emergingmarket fixed income markets that is actually up on the year come outside of china. You will still see Monetary Policy in effect. That is really, at this point, with real rates coming off, some of coming off, sort of a last resort option. Alix thank you. Coming up, jim bullard, st. Louis fed president , will be joining us. His outlook. This is bloomberg. Shouldnt you pay less when you use less data . Now you can. Because Xfinity Mobile gives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. All on the most reliable wireless network. Which means you can save money without compromising on coverage. Get more flexible data, the most reliable network, and more savings. Plus, get 300 off when you buy a new Samsung Galaxy s20 ultra. Thats simple. Easy. Awesome. Go to xfinitymobile. Com today. Alix oil decimated in a prices trading around a 17 year low as countries around the world extend and enter into lockdown. Chinas liquidity pump. The pboc cuts Interest Rates to banks by the most since 2015. And swapping dividends for liquidity. Major european banks suspend their dividend to boost financial firepower, and now germany is asking companies to do the same. Welcome to bloomberg daybreak americas. Im alix steel. Volatility coming a little bit down. On the one hand, j. P. Morgan Asset Management saying you are going to want to buy safety. Other strategists saying you may on more take opportunistic risk. Buyingontinue to small continued buying at the small end. The pain of the entire Financial System can be seen within the oil price. A lot depends on what economies can recover the fastest, and that feeds back into Central Banks as well as government action. Joining me for more is Michael Stanley muni and u. S. Policy. Helpe stimulus going to them do that . Michael it certainly has the capacity to do that. Think theres obviously some. Perational questions particularly the sba loans to Small Businesses, i think theres a little bit of an unproven aspect to that getting 150 billion of loans out to the economy quickly. I think that is going to be an important story to follow over the next 48 hours. How are you going to be able to judge in real time if the stimulus package is actually working . Michael i dont know that you will be able to judge in real time, to be honest. I think the package is effectively a bridge loan, and the sense that youve got employers and employees who are aing to be downstream substantial amount of capital to make sure they arent going out of business over the next two and a half months. To mayan bridge everyone or june, what they undertake the same type of activities they did before a lot of that is going they did before . A lot of that is going to be a function of whether the economy can open up, and a lot of that is how much the Health Care System can deal with that. Alix that leads us to the next stimulus package. If this is a bridge loan to get us to recovery, what do we need to have a kind of recovery . What should be in a fourth package . Michael i think a lot of this is conditional on how well the u. S. Is dealing with virus caseload, but obviously if we are in a very similar place to where we are now, we would have to keep extending the bridge until the broader economy can open up. I think the real key once you have gone to a place where the to broadlyalt with open up the economy is has there been enough Capital Formation along the way . Has there been a builtup demand for goods and services that hasnt been purchased that people want to spring out of their homes and go ahead and do . I dont think this bill necessarily gives people a huge amount of capital built up to do that, but theres probably some Capital Formation that a larger stimulus on the backend would really spring into action. Alix how do you get in the short term any kind of multiplier out of this . Michael well, you dont really. Theres probably a modest one. What you are really looking at, and i think bridge loan is a good description of this, is keeping people solvent over the next couple of months. Making sure the Bank Accounts for Small Businesses and americans dont go to zero for paying for essential things. That doesnt necessarily translate into increased spending because we are actively disengaged from the economy. That critical multiplier has to happen once people are back in the economy, and more than anything that congress or any economist could prescribe in terms of flowing dollars, that is going to be a function of to what extent is it safe to reengage with the economy, and therefore more about how the virus develops over the next couple of months. Alix at what point are we having a conversation where these are no longer bridge loans, but bridge grants or bridge no one has to pay it back . Michael theres a lot of that built into this already. The Small Business loans are forgivable as long as you dont cut payroll, for example. The larger loans under the 500 billion pool for the treasury are structured differently. But for most Small Businesses, this is effectively grant money. I think if we are talking about the virus situation being very two, i in a month or expect congress is going to be very interested in perhaps extending the terms of some of this because the purpose first and foremost is to freeze everyone in place economically with the help that folks reengage the way they were before all of this started, and in terms of an additional stimulus package which you hear language in around washington, d. C. , unfortunately, i think the odds of that happening are probably correlated to how long this kind of disruption from the virus continues. If it is longer, we are probably going to get more, but if things get better, the appetite in d. C. For this is going to be less. Alix it is a fair point. Michael zezas of morgan stanley, really good to catch up with you to get the lay of the land. Tor more on the marke perspective, we are joined by Michael Collins and David Bahnsen of the bahnsen group. I have a chart that shows top income in many countries versus what fiscal stimulus is going to be, and it seems like about markets are making up the net income, but it is the emerging markets that cant. David bahnsen, how do you look at that . David i think there is going to be a disproportionate impact, but i would look at emerging market but i wouldnt look at emerging markets monolithically in this. I think emerging markets will be affected differently depending on their commodity dependency and their role as exporter versus a different sort of economic framework. In other words, china and taiwan and south korea and hong kong are going to have very different attributes than parts of south america and southeast asia. Alix good point. We did see overnight, though, china pumping more money into the system for liquidity, but it sets up potentially more aggressive easing actions. Michael cummins, what do you look at when you say Michael Collins, what do you look at when you say theres a lot more thats needed . Michael the numbers, as you pointed out, are gigantic. They are bigger in terms of actual economic drawdowns, potentially. But to me, the big thing to look at is how many defaults we are going to see. All these bridge facilities and lending and finance programs are really designed to prevent individuals, Small Businesses, large businesses, and ultimately countries from defaulting on their debt. Orsumably, within six months three months, we are on the tail end of this virus and the economy globally is starting to perk up. It seems like theres enough financing globally to at least keep default rates for at bay. Do you feel like we have seen the plumbing issues 100 fixed . Theres been a lot of talk about oir. Plumbers are working hard. We have a basis dashboard that looks a lot of these type of relationships around the world. Fixed, them are 100 like Mortgage Backed securities are 110 fixed. Those spreads are tighter than a month or so ago. Leasteasury market is at 90 of the way fixed. Certain credit markets are maybe 1 3 of the way fixed. Some other indicators like the vix are recovering. We have dozens of different indicators, and i would say the median recovery is probably 40 of the way back, but they are all slowly improving at least. Alix what also we got last week , david, was the increase in equity prices over three days. Some say maybe that was portfolio rebalancing for Pension Funds into the end of the quarter, but did you learn anything in when we do have recovery, what you need to be invested in . David im not sure that i learned from the market rally what we need to be invested in. I think what people need to be invested in is what they believe presents good Investment Opportunity where theres values that are most dislocated. I vehemently disagree with the idea that last week three rally last weeks rally was a rebalancing issue. 30th or the 31st or the the 23rd of the month, and then on the friday they were done rebalancing, the fact of the matter is that markets are clearly showing you they dont need a reason to do what they are going to do day by day. When markets are going up 1000 and down 1000 every day, theres not a lot of logical explanation. Its just a lot of hyper environment wehe are in for some time. Primarily it is what you just. Aid spreads really tightened in agencies, but in the nonagency space, other residential mortgagebacked and commercial mortgagebacked, they remain very wide. So last week, you saw equities improve in concert with some of the normalcy coming back in the credit markets. There is still a long way to go y to go there, though. Alix so where do you go now . David we are definitely taking on risk. Cant rebalance inequities the way that we want because we couldnt sell bonds the way we wanted. Municipal bonds and highgrade corporates were totally broken until a few days ago. Thats the issue. How do you rebalance when you cant get cash out of another asset class at an optimal level . That is starting to change. I think it will feed to the ability to rebalance. The question becomes for some clients, do we go all into rebalancing . Really put our whole equity position where we wanted to be . Or do we tether that rebalance in . I think that is a client by client decision by Risk Appetite and things like that. We have definitely kept risk on. It is just that with uncertainty still out there, we are not in a rush to go all in on a particular thesis. Time slowlyake our allocating equities back to the target because equities are clearly underweight for everybody this month. Alix same question to you, Michael Collins. What are you doing to your money right now . Michael on the fixed income side, liquidity has been really poor, so it has actually been difficult to actively rebalance within a fixed income portfolio. To buy something riskier, you have to sell something at a big discount, so the transaction costs have been prohibited to some extent. Seat an interesting we see all these flows, and there has been a big trend toward rebalancing from the big Corporate Pension plans. Fortunately, many of them had very high quality, longduration government and corporate assets that they were able to sell either at again or a small loss in rebounds and equities. Within fixed income, we are definitely in risk on mode. I mentioned this morning to my that if we want to come out of this with more risk than we had coming in, that is the key to navigate this type of environment. You want to come in relatively conservatively positioned because we come out of it with a lot more risk on. Generally, we are trying to buy higherquality bonds that arent necessarily sister will to a deep recession that arent energy or travel related and move out on the spread curve. There were some bonds last week that tightened 80 basis points. On a 20 duration, that is 16 points. Were some huge, amazing moves with that. Interesting take for both of you. Stick with me because coming up, we will pick up where we left off, oil trading around 20 a shock as Global Demand combines with a price war. We will break down what it means. This is bloomberg. Alix oil plunging to a 17 year low, wti dipping below 20 a barrel. Still with me, Michael Collins of pgim and David Bahnsen of the bahnsen group. How does that filter through to other Asset Classes . Michael it is really heavily correlated right now, and obviously on the equity side, with the stoxx primarily in that sector with the stocks primarily in that sector. Interestingly, there were a couple of days where prices were higher as equities were lower, and vice versa. You had oil not participate on at least one of the big equity up days, so it may not be a daytoday correlation with oil and stocks, but i do think it speaks to the risk on risk off paradigm. You will see it in highyield credit spreads, which is an area that has not been good, and i expect you will see highyield spreads start to tighten right around the time you see oil in the higher 20s as opposed to the lower 20s. Alix michael, do you think the default rates are going to be renovated to are going to be to energy . Are going to be relegated to energy . Michael theres clearly demand destruction as a result of this virus, but energy is moving to the beat of its own drummer because of the supply war happening between the saudis, the russians, and effectively, the u. S. Fracking community. It looks like the u. S. Fracking community is going to be on the losing end of that. To some extent a different path than the travel, leisure, entertainment related sectors all getting killed in highyield. Within the energy sector, within the enp companies, you could probably see at least half of them default at some point if oil stays at these levels, as david mentioned. None of them make money basically low 40 a barrel. Thats about 6 of the highyield index, so lets say a 3 increase in the default rate just for energy. Clearly, theres going to be other companies in retail and all of the sectors i said that some of them will voluntarily file for bankruptcy as a protective measure, notwithstanding government loans and potential grants because they need to save cash. It is irresponsible to send cash out the door when you know you are going to be out in several months. So that rate is going to go up without a doubt. Alix weve also seen germany calling for companies to suspend their dividend, european banks doing something similar. When you take a look at value, for example, some of these companies are going to go bankrupt, but there will still be a delta. There will still be a chevron. When you know how and when to buy in this group . David i dont think you can be completely tied to timing the exact bottom. You have to look through those issues of Balance Sheet strength. It is a completely different category when you are talking about a chevron versus a weaker Credit Energy player. Theres plenty of names there that are not unscathed by what is happening, but certainly have the financial wherewithal to come out on the others. The airlines, the cruise ships come of those types of businesses have a much different eric touristic in this environment, and a different relation a much different characteristic in this environment, and a different relationship. Outlook is always Dividend Growth companies, and Dividend Growth companies that qualify to be in our portfolio got that way because they have Balance Sheet strength. Andok to chevron and exxon, i go back over the decades upon decades that they have maintained their dividend and in fact grown the dividend, and i do not think they are experiencing the stress now that is even worse than in the past. That presupposes 20 to 25 oil being here for a short period of time, and that is my position. I think there are things happening behind the scenes, both with the saudis in the u. S. , that are going to change that dynamic. As long as oil is in the low 20s, it is difficult to feel constructive on the space. Youre going to have to see the supply side lead the demand side because we know demand is going to be constricted, at least for a couple of months. Alix alix really appreciate you guys sticking with me this morning. Michael collins of pgim and David Bahnsen of the bahnsen group, thanks very much. More coming up next. This is bloomberg. Viviana you are watching bloomberg daybreak. Johnson johnson teaming up with the u. S. Health department to supply a billion coronavirus vaccines worldwide. The drugmaker says it expects to launch clinical studies by september at the latest. J j says the first batches of a vaccine could be available for emergency use authorization in early 2021. An optimistic outlook from j. P. Morgan chase. Assetsists believe risk already saw their low point, but rising Coronavirus Infection rates but there is a wildcard, rising Coronavirus Infection rates. That is your Bloomberg Business flash. Alix thanks so much. European lenders like unicredit, abn amro, and ing are suspending dividends on earnings to retain capital amid the turmoil. John published ea john paul mustier had been talking about that as well. Also having some headlines cross from germany as well, saying that any help that Companies Get much and be paid to distribute dividends, so they cannot use funds in order to pay dividends. They were also some headlines we are looking for more information on asking companies to suspend for coronavirus aid. Coming up, our exclusive interview with jim bullard, st. Louis fed president. That is coming up next. In the markets, futures now positive for doubt of thems for dow jones futures. The dollar still the outperform are in the g10 space. This is 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. Alix welcome to bloomberg daybreak. A quick check on the markets. It has been wobbling positive and negative all morning. Now the dow and s p flipping into positive territory. Questions about portfolio rebalancing. Will we see that . Some say yes, some say no. Some say it could be as much as 1 trillion into equities. I want to point out what is happening with the dollar. The cable rate lower after a downgrade for the u. K. Credit rating. Worst slump for the dollar since 1985. Seeing a reversal of that now. You are seeing buying in the g10 space with the dollar and modest buying on the treasury curve, particularly the long end. Palmer a lot calmer as we head into the opening of the trading session. Oil is completely wrecked. Sector as well as overall Companies Getting downgrade after downgrade. The worse it is now, the potential for recovery later. When that turns is the real question. We want to turn to bloombergs Michael Mckee who has an exclusive interview with James Bullard, st. Louis fed president. As we look at the next step for the fed, h of specie says yield control could be on the table. Tohael we would like welcome jim bullard. Thank you for joining us. I want to see if we cannot catch up. About 10 days ago you predicted we could see unemployment as high as 30 in the second order and you called for a massive stimulus program. We got a massive stimulus program. Does that change your forecast for unemployment and growth . James thanks for having me this morning. I did want to see pandemic relief. I would not called stimulus, i would call it pandemic relief. What i interpret the program as trying to do is stabilize incomes and stabilize businesses. As we work our way through this investment in our National Health over the next couple of months. On the unemployment, we do have a blog on this. If you read carefully, you will see there is a way to bound the Unemployment Rate between 10 and the upper bound is 42 . We are because identifying vulnerable workers in this environment. What is going to happen is those relief are going to seek so they can pay their bills. We are expecting the Unemployment Rate to spike. Lets call that pandemic relief. Than they can pay their bills and once the virus goes away we will be able to return to normal. Hopefully if this works smoothly , and there is a lot of the legislation, we will be able to be out on the other side and get the economy rocking again. Is april 1,nesday mortgage payments are due, rent payments are due. Could we have a problem if people cannot pay their bills on wednesday . Is we are in a crisis situation, but my sense is everyone understands what is going on now. Obviously it has been the topic not just in the u. S. But around the world. That thederstand relief is supposed to enable people to pay their bills as best they can. Be delays, you would expect that. By and large i think there are plenty of resources in this fiscal package to handle what we will go to. Michael the main Street Lending program you announced is in the package. How will that work and when will that start . James that is in the design phase right now. Point of view, there are two ways to handle the crisis. One would be the traditional way , which would shut down temporarily and send to the workers to the pandemic relief or unemployment line. A lot of that is going to occur. We saw the claims number last week. That is ok. The Unemployment Insurance benefit is beefed up so they will get closer to 100 or 100 of what they would have gotten if they continue to work. That is one way to go. If the firm goes in that direction, they might lose the connection with the workers. Another direction to go is the Small Business administration, get a loan which is ultimately forgivable if you meet certain conditions, mainly you keep your payroll more or less intact. If you go that route, you might be able to retain all of your workers and then when the startup occurs later, you will be able to have the same workers and you do not have to hire all over again. That might be a better way to go for many companies. If companies decide to go that way, we will see lower unemployment and more uptake on the sba loan side. Your district has lowered incidents of infection rate. What is happening in your district . Storese the momandpop saying . James we do have a lower rate of infection but it is quiet. Louis, most in st. Things are shut down. People stayathome. , and just me think reading about across the country , that the idea theres a lot of regional variation is not the right way to think about this. Premuch everywhere has bought into the idea that we should be and careful about going out careful about spreading this virus. Another thing to keep in mind, this is not just things ordered by Health Officials. This is individuals and families making their own decisions and businesses making their own decisions about how they want to handle the situation. What you have is a private sector and household response to the crisis, which includes them not wanting to get sick and not wanting to get others in their circle sick. Because of that, regardless of what the Health Officials would say, at this point i think Everyone Wants to stay home until the virus goes away. Because of that, all across the country you basically are in a partial shutdown situation. Michael let me ask you about the bill that passed and the feds new powers. The language says you can buy Corporate Bonds down to the lowest rating for corporates. The ones whoiously will need the most help. They are also the ones most likely to see their ratings downgraded into junk, how much risk are you willing to take on . We have to think about exactly how to execute on that. The main idea of a program like that is to restore basic market functioning, which broke down as this crisis broke out. We have backing from the about the program, very powerful, and i think we will keep price discovery going in that sector. Michael uni bonds also in the bill. Will that be a new program or will you use the existing program you set up last week . Mostly we want market functioning to occur. I think investors got so worried about state and local government that they started to pull away from those kinds of investments, which have historically been solid. Hopefully we will get price discovery going again and i think the market will be fine. Billy of resources in the to handle our Current Situation and that should reassure investors that state and local governments will be made whole. Michael the law of unintended massivences the purchases you made at mbs leading to big margin calls for brokers. Is that something you can do something about or are there other possible unintended consequences you worry about . We have heard reports of that and i think the mbs so weses can be adjusted get accurate pricing in that market to meet the needs of those producing mbs. We will see how that goes. That is a minute by minute decision on intervention and purchases of mbs. We have a great team in new york that is working on that and i think we will be able to get good outcomes there. Michael when you think about where all of this leads, what do you see ahead . Have billions in Additional National debt, billions in loans out the companies at low rates, can you raise rates or are you stuck forever . James [laughter] stuck forever . I think nearterm Interest Rates will stay low for quite a while. We are taking on more debt as a nation. We are taking it on at very low Interest Rates. That part should work well for the nearterm. As we get further out past the crisis, we will have to evaluate our fiscal strategy. That will be up to congress. It is a big country. Debt. Carry 10 more it is not ideal but we can certainly do it. If there was ever a time where you wanted to do Something Like this, now is that time. Michael someone said when you first cut rates, instead of lending programs, you are throwing the kitchen sink, and then you through the kitchen sink again. You have more than one sink or do you throw the same sink over and over again . James [laughter] is these 13ine authorities in the Federal Reserve act are very powerful. Up to allow are set thefed to do anything in unusual circumstances with the consent of the treasury. You can do a lot and i think that is what we are seeing right now. If we had to do more, we could. It is a board of governors program, it is not an fomc program. We do need treasury authority. In special situations like this one, and what could be more special, it makes a lot of sense to use that power and see if we can smooth out this ride as we get to the other side. Michael you think baseball season starts this year . You are a big cardinals fan. James i am. I have not seen anything about baseball. I dont know about you, but one of the aspects of this crisis is i was very shocked when sports decided to shut down. That really jolted me. One of many jolts during this crisis. It was shopping. It was shopping it was shocking. Michael jim bullard, thank you for joining us on Bloomberg Radio and television worldwide. Back to you. Alix thanks so much. Important, wonderful interview with fed president James Bullard of st. Louis. We want to give you an update what is making headlines outside the business world. Here is viviana hurtado. Viviana we begin with a grim prediction from the German Government, who says the coronavirus pandemic will give the nation its worst recession since the Global Financial crisis. They expect outlooks to shrink 2. 8 , only of most restrictions are lifted in may. Spain reporting more than 800 new virus debts, down slightly from the previous day. Total fatalities in spain top 7000. The country is tightening restrictions during the easter period. Nonessential Services Workers are being told to stay home. Over the weekend, the number of patients who needed intensive care exceeded the number of available hospital beds. In israel, Benjamin Netanyahu will go into quarantine. His office as he came into contact with an aide who tested positive for the coronavirus. While they await the results of their tests, Prime Minister netanyahu and his staff will stay in isolation. 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. I am viviana hurtado. This is bloomberg. Alix thanks so much. We will speak to bill curtin, hogan level global head of m a joining us for todays bottom line. Any charts we used throughout the program, go to gtv. Rouse through them. This is bloomberg. Viviana this is bloomberg daybreak. Youre looking at the principal room. Coming up, an exclusive marc lasry. Th alix President Trump speaking on fox and friends saying he will discuss oil later today. Oil prices off just 5 , that is better than being off 7 . Any kind of output cut will come nowhere near the amount of demand destruction we are seeing as the countrys continuing to shut down from the virus. Time for bottom line. We take a look at companies and stories worth watching. Today we will focus on m a. Joining us is bill curtin. Of thehe picture for us environment of m a right now. Where is the activity, where is it not . Bill good morning. Great to be on with you and great what youre doing a bloomberg to keep us connected. M a has suffered the same type of setbacks we are seeing with the capital markets. ,ctivity has markedly declined experiencing the uncertain and unpredictabilitys that are anathema to transacting. We have seen month on month declines of a type we have not seen in quite some time. We still do have activity in the biotech sector, notably in the technology and distribution sectors generally. Overall, this has been a tough couple of months. What walk me through happens with the distressed companies. You are looking at a height yields or even private companies that cannot get funding or the ip markets close to them. Is that a Good Environment for dealmaking more bad . Then you have leverage on the Balance Sheet or the asset spread will be quite wide. Has been so unique about the current circumstance is we have not had this is not like 2008. This is more like what happened after 9 11. We have not had impairments to Balance Sheets or deterioration in the financial conditions of strategics or sponsors. To the contrary, strategics and sponsors are wellplaced. The glass halffull perspective is that now some of the valuations that were very high because of the boom economies we had enjoyed for years will reset and come to a more rational level that will open pathways for more transactions through the leverage point you mentioned. To get there, m a is all about confidence. It is about predictability. It is about what peers are doing in the sectors. While you are right to leverage profile looks better and the math lines are better, we are not yet at a point where we are active. Alix what about the type of contracts we may see ordeals that are already done that may want to be rewritten in terms of pricing . Going forward, we will have a coronavirus pandemic clause written into contracts . Bill i think so. You are absolutely right. Theres a lot of sideways activity in m a. , but into go forward fact what we are spending a lot of time on is the sideways stuff. At a deal, howng do you preserve the deal the parties put together before the difficult events of february and march came upon us . What do you look at when you think about material adverse change conditions for the partys obligations to complete their transactions. How do you think about this pandemic in the context of what we call force majeure or acts of god clauses which can exculpate parties from having to continue to transact. When two parties come together, they are looking to have high levels of confidence that all of the time, the resources, the money they have put into putting that deal together will come to fruition. An event like this that destabilizes and puts uncertainty into the mix is difficult for the lawyers and the bankers and the principles as we look to incorporate clauses that protect the parties from these acts of god events. Dealsdo you think the that have already been announced . They get done . What deals are vulnerable . Bill some of the deals will continue forward and get done. I do believe, and this is a note of optimism amidst the cloudy days, i do believe the m a community recognizes this is more like 9 11 than the financial crisis. After the financial crisis, remember, and bloomberg cover this extensively, we did not get back on our feet in m a until 2011, 2012, 2013. It was a sustained period of low levels of volume and value. When we think about going optimismow, there is that this is going to be a much different picture in the second half of this year. I think the second quarter, we will have further declines in m a. We are now down month on month about 20 and year to year we are 20 down. Catchall right, good to up with you. Appreciate your insight. Level. Rtin of hogan coming up, it is crude oil reading the deflationary tide. We will break it down in todays technically speaking. This is bloomberg. Alix time for technically speaking. We want to set you up for some traits of the day. Mike mcglone joints me now. Youre looking at oil. What you see . Running down at this 20 level. This is a significant level. I think it is a good spot. If you look at oil on the year, it is down about 70 . That is the worst year ever in the history of futures. 2008 it was down 50 . I think oil will stabilize. Oil is stuck and it has repercussions for the stock market. Potentially will drag down the stock market. Deflationary trends. Michael take a look alix take a look at treasuries and jgb. Mike that is a key point for all of us to remember if you look at lower yields in u. S. Bonds. Look at those lines. All heading lower. At the top we have the u. S. 10 year in yellow. Recently a spike. 1 is probably significant yield resistance and support is at zero. Ira jersery was talking about 40 basis points, but the trend is your friend. Alix have to leave it there. Thank you so much. This is bloomberg. From new york city for audience worldwide, good morning, good morning. The countdown to the open starts right now. Lets get you price action as we drift towards the cash open. Equities with the lift. Futures up 1. 35 . In foreign exchange, the dollar stronger against everything in g10, and in the commodity handle,wti with a 19 the lowest weve seen on crude back 17 years. We will talk about that in just a moment. Fantastic to be with you. Q1 has still not finished. It feels like the longest quarter ever. I know it feels like that for you at home. We have been trying to deal with a few things. Scope, severity, and longevity. How bad will this crisis be . How long will it spread, and how long will it go on . Over the weekend, we are grappling with the idea that the answer is longer and longer. With thatnd