The second world war. Futures are rising. Oil retreats after a meeting with Top Producers is delayed. Talk is tough. We are just under an hour away from the start of cash Equities Trading in europe. Gains looking at decent across European Equity indexes. If you take a look at u. S. Futures, you see gains. Asian stocks advanced as well as these gains that we have seen. Daily reported death tolls and some hotspots dropped on sunday. Boris johnson was put into the hospital. Lets get into the markets right now. Lets talk about risk sentiments. Are we talking more about a risk on day because traders think maybe we have somehow peaked in terms of the coronavirus threat . Futures are telling us it will be a risk on day. If we look at daily fatalities, on april 5, they are the lowest in a month. We are seeing a flattening of the curve in countries like spain and italy. U. S. States saw the first reported decline in daily fatalities. That thissoon to call will be the end of the market pressure we are seeing. I think investors are looking beyond the issues assessing the longterm impact on the economy. How know how economies will get out of this. Matt some think that earnings could dip as low as they have been. You . That sound too low to it looks like we can see forecasts have dropped down to 150 a share for a rolling basis for this year. Could it be much worse than what we are already looking at . Insightnt have any about what earnings could look like. Looks like it will be even greater than the decline we have seen. We could potentially dip below that 2000 range of the s p 500. It depends on the duration of these lockdowns. We could see significant deterioration. It depends on how long this is going to process. The endme think this is of capitalism as we know it. Because all of these governments shut down action to business, we will have to loan them money, but those loans, with certain stipulations. Your question of the day is related to that. Where is the risk . What response i you hearing to . Hat this does come with long term ramifications. There is likely to be a ban on stock market buyouts. From a shareholder perspective, there are implications of this. It is really too soon to look at the longterm effects. To takegovernments those steps to ensure their survival. Matt thank you very much. A lot of breaking news right now. An application has been filed to put them under administration. That is british code for a bankruptcy filing. Rollsroyce scrapping its payments for 2019. That is in line with a lot of the headlines we are seeing. If you are expecting buybacks, that age seems to have passed with this coronavirus pandemic. Are we nearing a bottom or not . Jp morgan says stocks could be set for better days ahead. Is that optimistic . We will discuss. This is bloomberg. Back. Welcome we have seen asian stocks rise. We are seeing european and u. S. Futures rise. Lets get the first word news. Here are our top stories. Taken tonson has been the hospital for tests. He struggles to shake the symptoms of the coronavirus. Downing street says this is a precaution. He remains in charge of the government. 50,000 coronavirus cases. The British Government is learning the warning the lockdown could be tightened. The Health Secretary has criticized people ignoring social distancing. To queen has urged britain adopt the same discipline and resolve that got the u. K. Through world war ii. Everyone will be able to take pride in how they responded to this challenge. That those of this generation were as strong as any. Matt the leader of the u. K. Labour party is a moderate. Little time in criticizing conservative governments over austerity and damage done to the National Health service. He promised to work constructively with the current government. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Gm 3m has denied that a shipment was diverted to u. S. Authorities. He said it was absurd that the company is not doing all that it can to increase availability of masks in the u. S. We continue to do everything we can to fight covid19 and support Health Care Workers here at home. We have ramped up our production in the u. S. As quickly as possible. We ramped up Production Capacity that we keep vital for just these kind of situations. Focused on delivering as much as we can. The narrative that we are not doing everything we can to maximize this is false. We are not doing all we can is absurd. It is always hard to know exactly what the white house is talking about. Seems that thet president heard a report that thesee selling some of masks to latin america and canada. In a crisis like this, we double that output. We continue to support canada and latin america as part of our strategy. Fight is like nothing weve seen. We are often the sole supplier in those countries. We will ramp up another 5 million respirators in the month of april. Exportan agreement to from china into the u. S. We are stepping up and we are bringing more production online. We will get up to 50 million plus what we can bring from china. We are a net importer into the u. S. We serve canada and latin america with a small amount of that production. It becomes a humanitarian issue. We are maximizing everything we can to bring to u. S. Health care workers. Is there price gouging . How far down the supply chain are you able to control prices . It is good to be clear. We are manufacturing respirators. We are triaging to serve the need. We would never increase prices for our respirators. Highestt sell to the bidder. We help with counterfeits. We work with those two callout price gouging. We are doing everything we can to help Law Enforcement take that on. We monitor this every day. It is disappointing that they are taking advantage of this. Matt that was the chairman and ceo of 3m. U. S. Stocks may be nearing a bottom. The president expressed hope that coronavirus cases in new york city might be leveling off. , some pandemic continued say the s p has much further to fall. Another 1000 points. Less than 1500. Earnings will only be a dollar a share. Joining us is the cio of Private Banking. Let me ask you to weigh in on this debate. Do you think we have found a floor here . [no audio] nejra i think we have a problem there. We will continue to try to get him on with us. Lets take a quick break. When we come back, we will give you an exclusive listen to the ceo. This is bloomberg. Matt welcome back. We are about 40 minutes away from the start of cash trading. We have futures gaining right now. It looks like it will be a risk on monday. These connections become fairly difficult to make. Market cratered in march. We saw those numbers. The emotional reaction to the massive jobs missed. It is a sad day. We had job growth for well over a decade. Everyone expects a downward tilt on the job side. I think the unemployment numbers on deployment numbers are going to get worse. This is so unprecedented. Forecasting is a silly thing to do. Restaurants and bars in this country employ about 12 million people. We can get to 30 million pretty quickly. How fast will the fed fee able to stand up this Lending Program . We want to achieve the goals of this legislation. Treasury is our cosponsor in this. A lot of the devil is in the details. We need to pick out the right segment. How much risk do you want to bear . Im glad you brought up the risk question. Say no bigeople who raises for ceos. But there are reports that the fed do not think that applies to them. How do you feel about that . Is being this stuff worked together with treasury. It gives us a little bit of time to try to land the parameters of this. Matt that was the richmond fed president speaking exclusively to us. There is an interesting parallel. It would be the labor numbers here. If this economy is cratering so much harder, could that be too optimistic . Can we see the market fall too much further . We do think there is a risk. We think there is a tugofwar going on the markets. It is the magnitude of stimulus we see coming through. Matt we are going to hold you with us. We will discuss the possibility of stimulus and the shape of the economic recovery when we come back. Also talk about the opecplus onting set to take place thursday. Some are saying that the russians are joining the fray. President trump might be around as well. This is bloomberg. Matt welcome back. 30 minutes away from the start of cash trading. Anks like we will have update. Monday will be a little bit higher. There is a little bit of optimism and markets that the curve is starting to flatten out. I was talking about the shape of the recovery. Can we say 2020 is a write off . A year are focused on ahead . I think it is reasonable to look into 2021. Matt what kind of economic recovery do you expect . On the one hand, there is reason for optimism with so much money already being poured into the system. Commitments to doing more stimulus on the other side. Likee other hand, it seems businesses and consumers have no revenue. There will be a bit of a disconnect between markets and the economy potentially. We have seen this in europe and japan. The stimulus will be very good for markets. The economies should recover. There were covers should be modest. What do you have clients doing right now . Have you sold out already . Can people fasten their seat belts and go along with us in terms of equities . Were cautioning consciousness as early as january. We thought the markets were pricing more in 2008. Some tactical are opportunities. A lot of people are talking about, if you want to avoid equities, maybe it is time to play around with bonds. There is no real return from government debt. What you think about fixed income . One of the lessons coming out of europe is it is never a bad thing to spend from the central bank. This makes a lot of sense. You want to be active. And very selective. Nejra glad we finally got you on the horn. Thank you sticking with us. Cio for Private Banking at union bank. Also dealing with some treacherous waters. Oil trading lower this morning. Giving up some of its gains from last weeks rally. Will the president or the u. S. Administration get involved . Cutaim of these talks is to Oil Production by about 10 Million Barrels a day. Will the u. S. Join . Those two parties want President Trump to be part of the talks. He has shown little willingness to do so. Despite originally calling for the deal. He wants levies on imports to blunt the impact of the price for if necessary. I would do tariffs. Very substantial tariffs. We are independent. Matt catch us up. Expecting . Rkets the big concern is how do you get to a deal . Opecing the u. S. Into an plus deal. President trump is willing and ready to use tariffs if need be. He said he has been against opec his entire life. He was throwing a lot of cold water on this. There are immense hurdles for the deal. Matt it seems like there is no anger a real yearning for free market here. It is is it even legal for the u. S. To help the cartel to set the price of a commodity . Wayt would not be the same as they come out. States that can ration like taxes would do that. It is a very fragmented world when it comes to the u. S. Oil industry. There are more than 6000 producers. Russia make clear if the u. S. Is not aboard, there will be no cuts. This is another issue. Where they coming from . The baseline of 10 Million Barrels a day will be something to focus on. The saudis clearly want to cut from current levels. There is a lot to work out before we get a deal. Matt absolutely. The president has been in with nbs andphone saudi arabia and putin in russia. He has been on the phone several times. The administration have been talking to their counterparts in both of those countries. He believes russia and saudi arabia will move away from their quibbling. The president has said that oil prices have gone up a bit. Why theseeason discussions with president tromp and putin will not bear fruit. I think they will. I think flooding the market with oil on top of the pandemic was a very poor decision. Will u. S. Be part of those production cuts . We do not dictate oil policies. Those are smart businesses. Oneu. S. Is still the number Energy Producer in the world. We expect to remain so. That is, this , business sense. On a day when these Small Business loans are going out, can you communicate to a broader why they are meeting with Oil Producers today . I am looking forward to the meetings. Done number of conference calls. The degree of public and private Government Partnership is unparalleled. We have worked with every industry. In president has seen them person or done conference calls. Energy is a key part of our economy. Regarding any collusion attempts we talk about paycheck protection. It is american operation. That is what we are concerned about. Matt that was larry kudlow. As governments and Central Banks around the world inject record stimulus to stave off the impact of the coronavirus, how can they make sure it is ending up in the right hands . This is bloomberg. Matt welcome back. It is the european open. Go before the kickoff to trading this week. It looks like it will be a risk on day. Futures pointing higher here in new york. How do they make sure the measures are filtering through . Who knows to someone about these lines of liquidity. Coronavirus Crisis Management has been set up to help public and private companies. Thank you for joining us. How difficult for you or the companies you are helping to get a hold of these lifelines being thrown out by the Central Banks or government . Thank you so much for the question. Most of our companies are operating on a global basis. Veryunding is happening localized and nationalized. We were helping global clients tap into those measures. They arethat are applying for the appropriate tax relief. Appropriate levels of financing that are being channeled through local and national banks. Matt which countries have made it easiest . I guess there is a tradeoff. If you make it too easy, there is a high risk that sound bad actors are gaming the system. Difficult,make it to it can be timeconsuming. That is exactly right. You have to have a good mix. We cant let that apples get in the way of ensuring that governments are trying to do their best. Those who need it most are Small Business enterprises. They are working on exactly how they can dispose of those funds. By providingis direct immediate stimulus. Financial loans, a lot of the governments have moved to leverage their National Banking system. Having those company supplies. That can help with the online application and make sure it is working smoothly and efficiently. The same procedures apply. Application and a little bit of certification. Matt one of the big concerns here is that these companies will come out of the crisis on the other side having no income throughout this. I think that will be a big issue going forward. I dont think we will see debt forgiveness. I think you will see a lot of where government stakes will be on the rise. In order to stabilize. When it comes to the airlines for example. This applies to all lot of that middlemarket. Governments are looking to step in. They do not immediately want to go to forgiveness. In fear of hurting their own balance sheets. They will have longerterm issues. Matt thanks very much. Would love to get you back in the program. There is so much talk on this. Thank you for joining us. I want to quickly mention, in asia right now we are seeing south korea rise 23 . That means the kospi is now officially enable market. South korea took the bull by the horns in terms of coronavirus testing. A lot and early on and getting it under control. It looks like investors are rewarding that country by bidding. Equity is up more than 12 . 12 minutes away from the opening of european stocks. We do see positive futures. This is bloomberg. Matt welcome back. This is the european open. A good monday morning. We are seeing futures rise. Highgrade credit has been flooding the market. Despite the freeze in economic activity, investors are still prepared to throw billions of dollars at companies amongst the hardest hit. I should start with the volume growth in the highyield bond market. Corporate bonds continue to get cut to junk. This is only just the beginning of the downgrade. Companiesll of these strapped for cash. They see this incredible window to raise as much cash as possible. Even this is happened as the economy is essentially frozen. They are pushing bonds to market. Junk bonds are doing well. Thanks very much. Dani burger with the concerns of fixedincome. 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. Matt we are in minutes away from the open of cash Equities Trading here in europe and over in the u. K. We are looking at futures pointing higher. Headlines from the bloomberg terminal. Boris johnson has been admitted to the hospital as a precautionary measure. Is the queen of england showing the same kind of resolve as during the second world war. Signs of stabilization. Global stocks gain as the death toll levels off in a number of the hotspots from madrid to new york city. And giving us gains. A meeting ofafter Top Producers is delayed. Tough talk from the u. S. Over a deal knocks sentiment in the crude market. We are just about to see you European Equity markets get out of the gate. Futures are pointing positive. Ftse, euros, dax pointingand higher. The ftse up 1. 5 as is the euro stocks, the bluechip european index. Ibex is up 3. 5 . Are seeking outside gains on the iberian peninsula. The netherlands is also up more than 3 . Some decent gains today on the optimism surrounding the coronavirus. There are still concerns in corporates and we are getting headlines right now from bmw for example that firstquarter vehicle deliveries fell 20. 6 . Firstquarter vehicle delivery dropping by a fifth. When we Say Something is decimated, that means it is reduced by a tense. 10th. Times to. Ecimated times two. No one is going out to purchase a car right now. No one is even allowed in the showrooms. I suppose you could purchase one from your neighbor but you would have to do it over the fence. European markets are opening higher as the death rate from the virus pandemic shows signs of low worrying in major hotspots from madrid to new york. Haven demand has receded in treasuries and the yen but the dollar index continues to make gains this morning. We have a special guest. David bloom, global head of fx strategy. When i saw that people were optimistic and futures were up, i expected to see the bloomberg dollar index retreat a little but nevertheless, it is showing strength. What is going on with this march higher for the u. S. Dollar . David Everyone Needs the dollar. It is king. People were talking about other reserve currencies. I think they have found out who is the big boy out there. Everyone needs dollars. There is a half 1 trillion that em has to pay back next year. Corporates need dollars. We all need the dollar, it is the centerpiece of the whole ,inancial architecture and boy is everyone finding that out in spades at the moment. Issue,he number one david, right now seems to be how difficult is it to get those dollars . What does the liquidity look like right now in the market you trade in . David liquidity is fine. There are all sorts of issues. But you can trade. No problem with the big boys. The issue is that if you owe dollars and you used to have dollar revenues, those dollar revenues have dried up so how will you pay back the debt . There were good businesses in the u. S. Or europe that borrowed in dollars and their assets and liabilities matched beautifully. No problem. Now, god. What is your payment on the liability . Still there. You have to sell your local currency and try to make dollars. Not everybody gets the cross currency swap. You can see in this world, Everyone Needs dollars and the corporate also are desperate for dollars because their assets and liabilities do not really match at the moment. Matt does the fed need to do who did notpeople find a seat when the music stopped just duck . Needs tothink the fed do a lot more as a lender of last resort. Issues with mexico or brazil, big moves in those currencies i think the fed was very generous. Interventionglobal if this rout continues. Some of the currencies are falling over 20 this year alone. We cannot have that happening unabated. Matt what kind of global intervention would be helpful . Do you thinkaccord this coronavirus pandemic warrants . David if it starts harming the United States this is the question, what would prompt the u. S. To do that and that would be harm. The fed would come out and sell dollars to everyone. And you have a coordinated intervention just like we had many years ago. It is not impossible. Nothing is impossible in this market. It is wild out there. Matt it is wild than crazy. Even though everyone is staying home. David, you are going to stay with us. We wall talk more to david bloom , from hsbc. After the u. S. Labor market worseed in march, much than had been expected in terms of the nonfarm payroll numbers. We spoke exclusively to the richmond fed president. We will get his reaction to that data, next. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are nine minutes into the trading day. 4 on the dax. The ftse gaining more than 2. 5 . Bloomberg business flash. Top corporate stories. Easy to founder is looking to remove the airlines chief Financial Officer in the latest escalation with his feud with the companys board. He has long opposed the carriers purchase of new aircraft. He says if easyjet dumps the air press the airbus contract it wont need loans. Scrapping its profit targets and suspending its dividends. The company is also announcing a new Credit Facility of 1. 5 billion pounds. Last month, the turbine makers said it would significantly reduce all but essential activities at its Civil Aerospace the facility. And that is your Bloomberg Airline oriented business flash. The u. S. Labor market cratered in march. What could be a curtain raiser for even further weakness ahead . Spokechmond fed president exclusively to bloomberg about emergency lending facilities and his emotional reaction to the massive jobs lost. It is a sad day. We had job growth for well over a decade. It is hard to see the numbers turned negative. I think everyone expects very serious downward tilt on the jobsite. This is the first indicator. If you look at initial unemployment claims for the last two weeks, the highest ever had been 700,000 in 1982. Last week was 3. 3 million and this week was 6. 6 million. I think the unemployment numbers will get worse before they get better. Forecasts ing suggesting that in april we could see anywhere from 10 million up to 20 million jobs lost. Does that seem crazy to you . So unprecedented. What i do try to do is look at the numbers just to get some perspective on it. Restaurants and bars in this country employee about 12 million people. Drug,al retail excluding 11 . 11 million. And travel. Numbers like 10 million or 20 million are beyond the pale. This adds new urgency to the effort to get new loans to get operating capital to companies. When can you start lending to people that need the money . Well, we want to achieve the goals of this legislation which has put a lot of money behind supporting the economy and Small Businesses in need. It will take time to work the details out with treasury, our cosponsor on this. See, the Small Loans Program that the sba has announced, the devil is in the details. It is complicated. Trulyg money out to those in need. It is challenging to find the vehicles and instruments. And how much risk do you want to bear . We are working hard. Glad you brought up the risk question. People say the federal legislation says no buybacks, no dividends, no big raises for ceos but there are reports that suggest the fed does not think it applies to them. If you put those strictures on, Companies May not apply for the loans which would be worse because they would have trouble keeping people on payrolls. How do you feel about that . All of this is being worked together with treasury. Give them a little time to land the parameters of this. Matt richmond fed president tom barkin speaking exclusively to david bloom. Speaking exclusively to bloomberg. David bloom is still with us. I want to ask your take on what is essentially happening here. Mike mckee mentioned that a lot of these loans and programs, with Strings Attached. What you start to see is a takeover in some way if those loans are except did of a capitalist of capitalist companies around the world. Are you concerned about that right now . Or are we still in the triage, the emergency room portion of this rescue . David in the emergency room. Quite right. This all needs to be temporary. Gdp will take a long time to get back to the level it is at at the moment. Banks ar is central issue ise the Central Banks are doing what they came. It is the opposite of what youre suggesting. Capitalism always tries to rejuvenate in many different guises. Here, the state or the sovereign has to step in as the lender of last resort. This job is temporary. Things will get back to some kind of normality. Matt will it all be funded by debt . Or do we try the modern monetary experiment now . Should Companies Just print money and pass it out . David we have seen that fail in zimbabwe spectacularly. The one thing you cannot print is dollars. You can buy your bond market and your equity market or by whatever you want, but you cannot buy dollars. At the end of the day, that is why currencies are important because the pressure falls under the currency eventually. That is where you see truth. You can print all of these things but you cannot print dollars. If you are not very careful, your currency comes under massive pressure. We have seen that in some countries where their currency has come under massive pressure where they are doing unconventional policy. Euro comingsee the under pressure. Right now, it is at 1. 0 weight versus the dollar. 1. 08 versus the dollar. It is unclear how the bailout of these countries in euro land is going to work. What do you think of the common currency . David i think this will resonate with most people. Unhappyappy family is in its own way. We know that now that we are in this kind of isolation. The breakup risk in europe is at its low. What worries us more than ofthing is once we come out this situation, then you scratch your head. The government is fine in the aggregate but if you look at all of the subcomponents, what are the common rules . How will it work . Europeans coming you have to take it to the precipice of the mountain and just as they are about to fall over, they say they will do something. Thinkk they wer i there will be pressure on the euro. That is why the dollar is king. What will you buy . That is the big puzzle that no one can answer. They all want to sell the dollar but they will not tell you what to buy. Euros and buy substitute them for the dollar. There are still issues to deal with. Once we come out of this, what are the common rules . Debt and fiscal policy was one of the anchors of the whole eurozone but that has all gone out of the window. How do they solve that problem . I think it will be with the vocal the and the euro will stay under pressure. Matt what if they do go to some kind of shared debt . From i see here in berlin, that does not look likely because the germans are still dead set against it. But if europe does create some kind of shared debt, what does that do to the currency . David that then shows there is some willingness to push together for some common position. I think it is possible. Steve majors arguing with the the debt has been neutralized any way by the state and not really on purpose. We are getting there anyway. The problem is before they do that, they usually have a series of disagreements and those are made public and then reflected in the currency. I think the euro goes down before it goes up and it will come under pressure. But ultimately, they will come to something and sort it out but it does not mean it will not be a painful process. Matt ok, david, we will keep you with us for one more block. David bloom, global head of fx strategy at hsbc talking about these fast and. As markets. Coming up, the worst fast and furious markets. Coming up, the worst is yet to come. As the Prime Minister of the u. K. Is taken to the hospital. We look at the outlook of sterling next. This is bloomberg. To theelcome back european open here on bloomberg markets. We are 23 minutes into the trading day. Solid green arrows. Dax. Than 4 gain on the were looking at a gain of more than 3 on the ftse. Britain, the Prime Minister, Boris Johnson has been taken to the hospital admitted as a precautionary measure as he struggles to recover from the coronavirus. The u. K. Which has seen almost 5000 deaths is preparing for the worst of the crisis. Government advisers says the peak is likely to hit in the next 710 days. Consumer confidence has seen the sharpest plunge as the reality of the shutdown hits. Sentiment dropping 25 points from the middle of the month through the end. It is easy to understand why. Let us bring in david bloom to talk about the effects on markets. On the pound, how do you see this playing out as britain needs to lock down harder than it thought it was going to a few weeks ago . David on the pound, it is risk on, risk off is how we look at the market. The correlation of the currencies. Everything is behaving as it showed. You have norway, australia, new yen. D, pound, everyone is performing within their ranking at the moment and the pound is doing fine. People worried when the pound 5. Ll to 115 1. 1 it is down about 7. 5 this year. What is interesting about sterling is we used to be a much more risk off currency. We decided we did not want to be a closed economy. Tobecame more susceptible Global Forces them we used to be. Sterling is performing as it should but what is interesting is the position of sterling is that it is a much more risk off currency than it used to be. I have been dollar bullish. I have been absolutely smashed. My forecast for the end of the year is 1. 35. I maintain that. Cheap. The u. K. Is but i have been given a good hiding on that. Matt what the you think reaches parity first eurodollar . I wonder what you think about euro ftse while we have you. David the ftse you look at the yen and the euro. The yen is flat on the dollar. There is nothing in it. These are the kinds of moves you see in some e. M. s on a daily basis. Norway is off 16 and australia off 14 . The ftse outperforms the euro. I think the swiss franc is still one of the currencies with a fiscal surplus. All the things you want going into this kind of crisis. Rand isg like the starting from a crisis going into a crisis. The ftse is starting from a beautiful strong point into a crisis. This was frank will do well. Matt david, thank you for your time. Fxid bloom, global head of strategy at hsbc. He will continue the conversation with me on Bloomberg Radio so you can join us again at 9 00 a. M. U. K. Time. Tune in if you are in the city or on the internet. You can find us anywhere in the world. Are scrapping payouts amid the coronavirus pandemic. And cutting bonuses may be on the to do list. We will talk about banker pay, next. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. 30 minutes into the trading day and we are looking at gains across the equities. European benchmark index. Three and a0 is up third percent this morning. Virtually all groups gaining this morning. If you were to look at the grr you would see green arrows as far as every single industry group. If you were to look at the mov screen, you would see 585 stocks up and only 13 down. A very broad up day. Bloomberg news. Top stories. Oil is trading lower after a delay to the planned meeting of Top Producers. A virtual gathering of opec plus which was originally scheduled for monday that was postponed until third day thursday as saudi arabia and russia traded barbs about who was to blame about the crisis. The white house sees signs that the u. S. Coronavirus outbreak is beginning to level off. It is citing a daytoday reduction in deaths in new york. Mike hence says they are starting to see glimmers of progress. Moredent trump was optimistic saying we hope we are seeing a level off. The japanese Prime Minister is said to declare a state of emergency according to reports in local media. It comes after coronavirus cases in tokyo jumped over 1000 over the weekend. Declaration could come tomorrow according to one newspaper as well as tokyo, osaka is likely to be included. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. That was your Bloomberg Business flash. Banks are scrapping payouts to protect their capital cushions on the coronavirus pandemic. Cutting bonuses for top management is next on the to do list. Spanish lenders were among the first to kick off the european wide trend with italy following suit. This follows repeated calls from lenders to be conservative as the region confronts the worst recession in living memory. Joining us now is hose a manual campo. Jose manuel thank you for joining us. See kinds of roles do you in terms of remuneration . Should Bank Executives be cutting their pay beyond giving up bonuses . Jose first of all, thank you for having me. We are entering into an area where there is a lot of uncertainty regarding the economic outlook. And the recession is likely to be large. I think the expectation of everyone in society is that we are heading into hard time so we should be prudent. And that applies to the remunerations from banks. Is that theirtion practices need to be conservative and consistent. They need to adapt the existing practices to the coronavirus environment. This will be reflected in the next quarter as well as the next few quarters. There has to be a longerterm horizon. Ask you then about their behavior in terms of lending. Orave the possibility the ecb has estimated that an additional 1. 8 trillion dollars could be supported. How do you see that progressing right now . Do you see any estimate for the amount of new lending that you banks are doing that eu banks are doing . Jose [indiscernible] the are engaging with their customers in providing moratoriums and other liquidity mechanisms. Some of it is supported by government initiatives. Others are supported by industrywide initiatives. To make sure that the liquidity goes to the customers. We think that is the right thing to do. Now is the time to make sure that the liquidity is there. Central banks are active in providing liquidity. It needs to get to all of the areas of the european economy. The individual customers tend to be the weakest links in the chain. It is important that banks are actively engaged with the customers. They are the number one priority. That is the number one message that regulators have sent to encourage banks to cut their buffers. Matt exactly. And you have allowed them to do that. You have put that on the table. Do you have regulators and with anymore ammunition in terms of relief . Is there anything else in the pipeline that you can do to help banks get the money out . Use we are willing to anything within regulation. We are actively pursuing that. Just last week we provided banks ons for interacting with the moratorium and state guarantees. [indiscernible] tools. S can use the they also need to do the proper risk assessment. The crucial aspect is that liquidity needs to go where it is needed. Aware of need to be the severance he concerns that may arise over time. Matt jose manuel, thank you for joining us, chairman of the european banking authority. Coming up, we speak to mark schneider, the ceo of nestle. An interview you will not want to miss. This is bloomberg. Matt welcome back to the european open. 40 minutes into the session and still looking at 3 4 gains across european indexes. The ftse gaining 153 points. In the u. S. , unemployment last months dropped in the first decline since 2010. Spoke withon ferro larry kudlow about the big miss for nonfarm payrolls. This story moved incredibly rapidly beginning in march really. Somethinged out as that we thought would be smaller , and we put up travel restrictions with china and for a bit that looked ok and then it exploded. The virus exploded. I and others including secretary mnuchin, we had to change our point of view. As it rose exponentially, as a virus and its consequences rose exponentially, something frankly i dont think anyone could foresee, we went into full year moving quickly through congress as best we could. Starting with covering sick leave for people hit by the virus or family members and going through the economic assistance package at 2. 2 trillion to put as much help into the economy as we possibly could. The event moved rapidly and we moved rapidly. And in a bipartisan sense, congress moved quickly. Maybe not quickly enough. One thing the executive branch can do on its own, the white house can get together and do something about tariffs. We understand there is a consideration about announcing a 90 day deferral of tariff payments. Where are we on that decision . Thatknow i have read about a lot. I do not expect that to be the case. We never looked in any serious way at rolling back tariffs. The deal with china is in place. That is going to be implemented. Usmca is in place. We looked a little bit at mostfavorednation custom duties and we decided it was too complicated and it would send the rights and it might send the wrong signals. I would not expect to see any movement on tariffs right now. The size of payment the size of paycheck protection is the issue. Billion apart from the business loans, to individuals, families and that includes the unemployment grows up. We are giving checks to one edge is 75 million americans. Let me repeat that 100 million one edge is 75 million americans. And leveraging from the treasurys emergency fund. The reserve has embarked on a number of programs including broadbased industry assistance program. We of monetary and fiscal policy working. This is principally a main street package, a middleclass package. We are not going to change any of the tariff policies right now. The president cut some pretty good trade deals with china and usmca and when we return to prosperity which i think will occur before the year is out, when we return come apart at the return will be an export boom in my judgment from these good trade deals. Not now. There is no tariff pullback right now. Far down not go too the road. You say no tariff pullback right , there you know go joe is an input from china where they have requested an exemption. Ustr has declined. I cannot understand why the administration would go forward and not consider the request . Who would it be sending the wrong signal to . President sof the trade policy. On specific matters like this, i do not want to rule anything in or out. You have to talk to ustr on that particular point. We are trying to keep the flow going. We have imported a lot of Health Care Products from china and the rest of asia. We have also exported some assistance. We are trying to Work Together in terms of the unity of the nations around the world to fight this pandemic. I dont want to get into pacifics i dont want to get into specifics. Your question was broadbased and i am saying there are no 1sanges whether it be 30 or 232s. I am not up to speed on that. Was National EconomicCouncil Director larry kudlow talking to our very own Jonathan Ferro on bloomberg television. Auto stocks are gaining this morning. Everything else is too. Industry fromcar the corona virus pandemic is piling up. French Passenger Car registrations dropped. Saidparts supplier valleio it was putting staff on partial unemployment. Ofning us now is the ceo valio. Thank you for joining us. Acques aschenbroich. Are you getting the kind of help you need from governments . Jacques we are in most of the countries where we operate. There are unemployment Funds Available for us. In france, germany, italy, and spain. Eastern European Countries as well. We are really getting help from governments to help us overcome that situation. Matt and how about coming out on the other side . Will you end up having lost so , carrying a, income lot more debt than you did going into it . Jacques that is probably too early to put a number on what you said. It is clear that the next few weeks will be not that easy. Tois very difficult though make it official. We will as soon as we can. Putting numbers. It is clear that the next few weeks will be difficult. It will be difficult in europe, north america, and south america. And the problem is when do we start again . We need to be prepared to start again. Oure are indications that customers want to start again before the end of the month. Maybe by the 28th of april. We will be ready with a protocol in our plants so that we can take care of the health of our people. Andll depends on this beat when our customers can restart. Need toes the industry restart production right now . Are we seeing dealerships with no more supply . Is there any demand out there . Jacques that is a good question. When we look at when we get the feedback from our customers, it does look like there is demand from the market. How big, i dont know. But we are seeing from our customers a very strong desire and necessity to restart as quick as possible. That means they have a residual demand and an existing demand for the market. There are confinements in most European Countries. Are european governments considering the speed at which the confinement will be over and then the economy has to restart. Matt on the other side, if i every dayy coffee last month, i am not going to purchase 30 coffees when i get out. But if i need a car, i need a car. What does the supply chain look like from asia . Supply chain look like it is starting to function smoothly again from asia . Jacques it is interesting but as happened in china. Year,e of the chinese new everything stopped on the 20th of january. February, our factories started. We started all of these 34 plants we have in china including the one in wuhan. Two months after the beginning of the corona virus in that province. Now all 34 plants are working normally. Things weting the need from the supply chain in china. Beenupply chain has incredibly resilient. The question is, when we start in europe, how can we be certain that the supply chain will work again . To know how quickly the supply chain can work. Impression that our customers want to restart before the end of the month. Stepbystep. Theeed to make sure that supply chain will allow us to restart. Matt i appreciate your time this morning. It is important for the economy that you do well so good luck with the recovery. Maker, of car parts valeo. Where is the risk if nations and up running all the businesses . That is up next. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. 55 minutes into the trading day. Decent green arrows. 4 gain on the dax. In paris. E cac joining us now from london is mliv teamr of the an in europe. The thing that caught my eye is garfield piece regarding the end of western capitalism. It is a concern that a lot of people have had in the last few days watching governments lend out money with Strings Attached to companies. It looks like a backdoor nationalization. What kind of feedback are you getting . It is interesting. It has hit a nerve with a lot of people. It is exactly how it is playing out. It is a Global Health crisis giving fiscal stimulus and governments are supporting economies. Here it is and we are seeing it now. According to garfield, equities feel fine. Said we have been waiting for this in terms of market expectations. It is some indication of government stepping up to help economies whether the crisis. The crisis. Central banks have been parroting the need for governments to step in and support monetary stimulus measures to create this twopronged approach to the economy. We are seeing it as coincidentally we see markets and equities having a nice daytoday. Matt christine, thank you. Mliv teamloomberg pieceg about garfield suggesting socialism is not so bad if you need it. That is the end of the european open. I say that tongue in cheek so please do not send me horrible emails about socialism. Surveillance with francine lacqua. I am heading over to radio with david bloom, the global head of exit fx research from hsbc. This is bloomberg