Economy could lose a chunk the size of japan as coronavirus cases top 1. 5 million. Across extends gains opecplus meetings as Top Producers move closer to a deal. Cutia says it is ready to 1. 6 billion barrels a day. Just under one hour from the start of cash equity trading. Lets take a look at your futures. Gains inoking at futures on the ftse, cac, and dax of 1. 2 . More than 1 gains in european futures. U. S. Futures had a mixed picture. Nasdaq futures were down and we were seeing gains over the last 30 seconds. We are seeing u. S. Futures climb wellwell ahead of the open in new york. Johnson haser boris spent a third night in Critical Care where we are told his condition is improving. Officials are drawing up plans to extend the lockdown in a bid to control the crisis. Scientists predict the u. K. Will be headed into the peak of the outbreak over the next week. Biden is thejoe Presumptive Democratic nominee for president. Thats as Bernie Sanders ended his run, thanking supporters for helping create an unprecedented grassroots campaign. While he competed, he said he will stay on the ballot help push closer to his vision. Dow jones includes ecuador, shell, total, and others. It says the shares were bought on the open market in recent weeks and Public Investment they continue to buy more. No jones says there is comment from the oil companies. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Now, asian stocks were mixed thursday following the threeday rally as investors mulled when economies would be able to ramp up. Climbed after algeria confirmed the opecplus meeting for thursday. Lets get into the markets right cooper, our mliv strategist. We saw mixed asian trade but positive futures here in europe. Our equity markets rallying as well on hope that the market can meet an agreement . Have seenly we sentiment driven more by crude oil lately. There are hopes we will see a deal come out and that will help support the energy industry. , europeanmorning equities are getting somewhat of a lift. We are seeing guidance being shifted away from peak infection rates and more towards hopes we will see a lifting of lockdowns. So speculation we could see italy begin to take measures to lift the lockdown, and more broadly, it could be pivotal going forward. What do you think about the coronavirus cases . Theres so much talk about whether the curve can be flattened or leveled off. How much of that is driving the markets . Shift in these rising mortality rates. Whether that is the case remains to be seen. When you look at the fed meeting riskes, one key downside is the potential that the spread of the virus might intensify beyond those areas that are currently hardest hit. It would once again turn sent sentiment negative. They are expected to post another sizable print, and as we get to the magnitude of the economic shock at hand, i think there is room for the pricing of that in markets. Next week, earnings season kicks off so it will be good to get some insight into just how hardhit companies are and how they will potentially try to recover from this. Matt how big a piece of the conversation is whether or not companies will pay dividends . We are seeing headlines from saying it will not start the next phase of its buyback during 2020. We had news this morning that ubs and Credit Suisse are still going to pay some dividend. How prevalent is this conversation . Something that is on the top of the radar for investors. If they are having to reprice, how will they value some of the stocks . Thats whats crucial to look to u. S. Earnings next week. Theres no gauge right now to value a lot of the equity markets. , they are p e ratios just above the 17 level. About the 13. 3 low we saw in march. Reflectiveats not of the economic challenges facing these companies. Crucialhy it will be for a wide range companies. Matt its interesting we are seeing from the audio from them that they will pay their dividends. Its going to push the start of the next phase of their buy to at least next year, but it is going to pay dividends to ordinary shareholders as scheduled. Let me ask you about the fed minutes and what you expect for the initial jobless claim. Powell is going to speak later today. What are you looking for . What came out of the Meeting Minutes yesterday was the fed saw it was a profoundly uncertain Economic Outlook that prompted them slashing rates to near zero. Withinas some dissension the members who saw the need for a 50 basis point cut versus 75. They wanted some room should Downside Risk materialize further. Crucially, markets will be looking for what more the fed can do at this point. There is potential to see measures to support Small Business lending and potentially what their perspective is on qe purchases. Whether there are more explicit measures coming out, for example yield curve control, which the fed has somewhat alluded to. Theres certainly a lot for markets to chew on today. Initial jobless claims are expected to be quite high. How markets react to that is quite clear given how they have reacted over the last two weeks. I think its difficult for markets to digest because theres no precedent to gauge the death. Gauge the stock at hand. Shock at hand. Matt laura cooper is an mliv strategist joining us this morning. Coming out, stocks rally dire despite dire warnings and an increasing death toll. We talk with an asset manager about why now was a good time to list the company. This is bloomberg. Matt welcome back to Bloomberg Markets europe. 46 minutes away from the start of cash equity trading this morning. We are seeing futures up right now. This is even after the coronavirus claimed another daily Record Number of victims in the u. K. As well as in the hardhit states of new york and new jersey. The number of new cases in italy and spain crept up after several days of decline. Global tally now stands at 1. 5 million, that we know of. Faucian expert anthony says the start of the turnaround could come after this week. Thats as wall street banks are warning the pandemic could rob the Global Economy of more than 5 trillion in growth over the next two years. Thats greater than the annual output of japan. And yet stocks are in rally mode and our next guest decided this was the time push ahead with the london listing of its asset manager. Joining us is the ceo at 91. Investec, you as gave the company a new monitor and pushed ahead with this new listing. Why now . Good morning, matt. The very simple reason is we mergersy with the i. T. Splitting the Investec Group into. In two. We werent investing, we had shareholder positions and we particularly wanted to give staff and clients some certainty about what we do. The 16th of march was a pretty strong down day. The market has somewhat recovered but it is not driven by market dynamics. Its to simplify and focus the investec. We are very happy we push through because we are in a position to deal with the corona challenges as a pure standalone asset manager and the banking side could deal with its challenges, which are very different in these times. Founded orctually built the Asset Management arm of the south African Banking group back in 1991, hence the name. You have been through a lot of phases in this market from the. Com bubble burst to the great financial crisis. How would you compare that to right now . Russiancould add the emergingmarket crisis in the 90s, i could add the political transition in south africa. Yes, we have seen a few. Ut this is different it was a very, very Sharp Financial correction followed by much more significant intervention and stimulus than ever before. You seed the fiscal and monetary actions driven to the policy response to ehealth pandemic. In that sense, theres a humanitarian aspect on the other hand, this is a real economy we arend the moment dealing with liquidity challenges. We will have to deal with the potential credit risks during the line and the impact of the vulnerable on society. Matt absolutely. I wonder about the daytoday business of running your Asset Management. Do you see everything going back to normal after the crisis passes . Or, is it really going to change the way you do business anyway . I dont think the world look back to normal. Recoverywe do see is a thats gradual in markets and we do see the financial economy being a part of the solution, rather than the problem. 2008 not combining the necessary oxygen and lifeblood the real economy. We are going to see major disruptions particularly in the Small Business and certain. Ndustries you have done a fantastic job keeping the channels open, but we could move 1000 people to work from home with the flick of a button. A coffee shop or hotel cant do that. The question is, how well will policy responses be coordinated . I just want to agree with the vis call it the way we come out of this will be dependent on how well Global Policy is coordinated. This is the time for the g20 to stand up. Matt what do you it expect in terms of todays meeting . Time with a difficult the pandemic and more to come. Absolutely. Em is attractive, but theres a big differentiator between markets that can withstand this and those that cant. Concerned,as oil is we have seen the worst of the russiasaudi dispute. , but thelowly get back genie is out of the bottle and it will take a long while for the markets to recover. Thats where i get back to global coordination. We had good signs this week from the Imf World Bank there needs to be coordinated intervention to stabilize. Matt are you ready to go in and buy assets . You already have a Shopping List . Absolutely. We have been in the market all along, but clearly it depends on asset by asset. Veryredit markets had some clear disruption of markets and credit the quality. Policymakers intervened there in fast, almost on 2008 levels. Its not a time just to buy the beta. It may look as though they are doing well this Tech Leadership is continuing, but if you dig deeper. There is this differentiation. It will be from here on much more of a bottom up. Hinrich hendrick, thank you for your opinion. Lets get your newburgh corporate flash. Coronavirus pandemic has derailed a significant amount of its new business, postponing projects and denting new sales. It was the first major warning signal of a broader slowdown in the software industry. License revenue dropped. In addition lowering forecasts, sap says it will be lowering hiring and reducing spending. Starbucks says things will get worse before they get better based on its experience in china. Financial impact extends out as far as september. Despite the outlook, they say the headwinds are temporary and can be reversed. Disneys five month old streaming service has topped 50 million paid subscribers relying on a low price and wealth of familyfriendly content. Disney plus has launched in eight European Countries and india. The platform is part of disneys three pronged plan. That is your Bloomberg Business flash. Coming up, Credit Suisse and ubs delay half of their Dividend Payments, but they are going ahead with the rest. We bring you the details next. Plus, dont miss our interview with the ubs ceo. This is bloomberg. Matt welcome back to Bloomberg Markets europe. We are 36 minutes away from the cash trade and still seeing positive futures across European Equity indexes. Lets turn to Swiss Banking right now. Both Credit Suisse and ubs have proposed delaying past their 2019 Dividend Payments. This follows mounting pressure from the swiss financial regulator on the nations banks to reconsider distribution. They say payments to shareholders would be deducted from the b relief the capital relief. Me like the interesting thing is that they are going to pay a dividend at all and sacrifice part of the relief package to do so. Thats correct. I think it is kind of a compromise here, to say we want to keep shareholders at least a little bit happy. And on the other hand, if the regulator is putting a gun to your head, you cannot fully ignore that. Mindlso have to keep in that nobody really knows how this whole economic hit will play out. For every bank, its prudent to keep some powder dry. You dont want to get into a situation where you have paid out to shareholders and then have to ask for fresh capital if things turn sour. Yeah, and its going to be different in different regions. U. K. Banks are, for the most part, canceling dividends. Apparently, the bank of queensland cut its dividend completely. What do we know about european and german banks . We have Deutsche Bank here. Theyre not paying a dividend in any way. Commerzbank, we have not heard how this is going to play out. In general, european banks are in good shape in terms of capital. Just this morning, analysts at Morgan Stanley said the whole thing will be more than an earnings issue and more of a capital issue. But nobody really knows how things will play out. I think theres no harm in suspending dividends right now. You can always go back and pay later if you come to the conclusion that things are all right and you can afford to make those payments. Matt thank you very much. Janpatrick wrapping it up for us. At 9 30ceo joins us a. M. Keita. U. K. Time. Matt welcome back to the european open. 30 minutes away from the start of equity trading. Take a look at some of the key events to watch out for. This afternoon, we get the account of the march ecb meeting. Investors will scour those minutes for any hints on further action to tackle the economic fallout. Get 30 p. M. U. K. Time, we the initial u. S. Jobless claims. Economists forecast a total of 5 million clams, the second highest reading on record. Around 5 p. M. , we get an update from the British Government on their daily coronavirus briefing. Us this ison tells likely to be a key question, though his health is likely to improve. Turning now to the federal reserve. Minutes show the fed was buying time when it made an emergency rate cut in midmarch. That was so it could introduce new programs to mitigate the impact of the outbreak. Point, mitigate or saw Downside Risks as mitigating a forceful response is a record of their unscheduled meeting. U. S. Stocks are back in rally mode now and technical traders will be keeping a close eye on where they finish the week. A close in the s p 500 above the would be aaverage strong sentiment boost to the equity bulls who believe in technical analysis. Ofning us is the head macroeconomics at axa investment managers. Fed minutes were shocked at the impact of the fight to stop the spread of the coronavirus, and indeed this huge global stock looks likely to provide something we have never seen. I think thats right. Even though they are only four weeks old, they do look a little dated. I think all of us have moved on rather quickly. At the time, it was a massive shock. The fed is in the vanguard trying to cushion some of that stimulus. Initially in terms of economic but very much trying to keep markets going. The fact that the intense scale of asset purchases is now over 1. 2 trillion treasuries. It reflects the dysfunctionality they were seeing in those markets. I think an incredible shock has come through. Talking about the profound uncertainty, i think we have seen a fed that has as much as anything, try to address the plumbing of the u. S. Economy. Matt what do you think about the plumbing . There was a great column out this morning talking about how difficult the decision is. Economy, is ithe too soon and too dangerous . What do we risk if we dont, what do we risk if we do . He has pointed out that Central Banks have tried to address liquidity issues in somehow dealing with things like soaring unemployment but that we have not had the best delivery pipes. We still need to think of ways to create them. To getgoing to be able the money out to people who need. T the most the economy has stopped so suddenly and quickly, and so have people. The speed of the response is important. Repeatedallenge we see across the planet. It is difficult to get that going through. The fed has also had relatively unprecedented moves into trying to step in and help deliver that fiscal support. Returning funding to the Pavement Protection Program to try and get thanks to takedown loans in the first instances. All of that is part of getting money through the door. Its challenging. Larry summers a couple of days ago that this package would be extremely difficult to deliver even for the most competent of governments and it is a difficult issue to get that through. Matt we are getting headlines across the terminal from Christine Lagarde. The ecb head said that each onth of the lockdown cost 23 of gdp, saying that small, Vulnerable Companies must be helped. He says that debt must be paid back gradually. Im sure her emphasis is on gradually, when i see that debts must be paid back, i wonder, does it make sense to you . The government orders a stop on all revenues and incomes to the most vulnerable businesses and then load them up with debt that they have to pay. Should those debts somehow be forgiven . Shouldnt those credit lines actually be gramps . Grants . She is not just referring to private sector debt. We would expect governments to be taking on significant additional borrowing, and ultimately, every borrower and a creditor, there is a reckoning that comes through. Its hard to see how you do forgive debt over time. Thats why we are stressing the gradual repayment here. What we clearly need is not a situation but we saw where governments quickly rushed to bring that debt level down, which had very negative economic and social consequences across europe. Now, we need to think about a much longer term because this could take a long time to pay down from a government and private sector perspective. Matt thanks very much for joining us. David page is the head of macroeconomics at axa investment management. One we get back to the studio, i hope to see you live in real time. Thank you for your insights. Lets get first word news from the terminal. Todays top stories start with boris johnson. He has spent a third night in Critical Care where we are told his condition is improving. Officials are drawing up plans to extend the lockdown in a bid to control the growing coronavirus crisis. Scientists dicta the u. K. Will be headed into the peak of the outbreak over the next week. A rise in new infections in italy and spain. The restrictions are having a devastating effect on economies. Germany is expected to slump almost 10 in the Second Quarter , the most since records began. Global cases have now topped 1. 5 million worldwide. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Coming up, sliding towards a deal. Russia signals its ready to make output cuts and make producers face up to something global oil demand. What you need to know ahead of opecplus. This is bloomberg. Matt welcome back to Bloomberg Markets europe. We are 18 minutes away from the start of cash equities trading. Gains across equity index futures. This, ande driven by unprecedented accord between the Worlds Biggest Oil producers. They face up to slumping oil demand and russia has signaled it is ready to reduce output i 1. 6 Million Barrels a day. Lets get more with annmarie hordern. Where are we now on negotiation . Make 10 million . Annmarie thats a really good question. Many are warning, is that really meaningful . 10 million coming off the markets, it could potentially be a fudge like we have seen in the past. We know there is some progress. Russia saying they are ready to cut by about 15 . We have to remember the kremlin said with the u. S. Is doing in terms of these organically driven cuts is not enough. They want real cuts, or potentially putin trying to get more cuts or potentially sanctions. Something else we need to watch that saudi and russia are for sure going to be bearing the burden. What baseline are they cutting from and what is the duration of this unprecedented deal . Matt annmarie on physical contracts, we are very low on actual barrels of loyal oil, some places even negative. To 14. 4and dropped Million Barrels a day. Thats the lowest in some 30 years. About 7 Million Barrels a day preoutbreak levels in india, demand is dropping. April saw nearly 70 refiners telling us. Theres just no demand. Refineries are having to cut the amount of crude they process which means all of this oil is going to storage. Say that 10 Million Barrels a day is enough but its too little too late. Matt thanks very much. Annmarie hordern talking to us about oil. She will no doubt be covering this oil meeting every step of the day. Lets talk more about advertising spending. One of the worlds biggest agencies has already announced. Ostcutting measures companys are shifting back to traditional raise of researching consumers. Ake a Listen Companies are going to cut back on spending. But other areas and spending will hold up. Are watching more television then you have ever seen before. Youre seeing a shift to traditional tamils but television is holding up relatively well. What we say to those companies that can afford it is they should continue to invest we believe they will learn this proportionate rewards disproportionate rewards in this market. Annmarie do you see differences when they shift to online . Us, digitaly for media is more laborintensive than traditional media. In many ways the shift to. Igital helps the wpp business its really making sure weve made the necessary investments in technology. To that point, lets go through the steps you guys talk. In particular, i want to focus on your staffing. You have freed new hires, you are looking at freelance expenditures. How long does that template sustain you and wendy you have to talk about job cuts. You have to talk about job cuts . In theave raised much last months and come in with probably the lowest debt in the last 10 years. We are in a strong position in our view is that these companies with the strongest position will come out in the best place. We face the same uncertainty as anybody does. Is it a one quarter or two or three quarters . Cannot rule out tougher measures in the future. Where we need to get to remains to be seen. Can you give me a sense of what the priority of tough measures are . Of people, including myself, had taken pay cuts for the third or fourth quarter. Ways of peopleat working four or five days a week. Job cutse to look at in parts of the world. My goal is to protect as many. Obs as we go through this staff has been critical. He said 100,000 people to work from home three weeks ago. If he said we could have done that, i would have thought you were mad. But the work has been done effectively remotely. Our responsibility is to our people and we will take all the steps necessary to protect his. Oney jobs as we can annmarie annmarie i am broadcasting from home and have not gone black yet, so thats a good sign. I wanted to get a sense from you of if you are being extra cautious with your cash buffer where if you see something the analysts have not seen. I dont think we see anything analysts have not seen. An uncertain time as it has been during 1945. We dont want to look back in a years time and think there were steps to be done that we have not done. So we have suspended the dividend and the buyback and things recover, we can revisit that during the year. Who come in with the strongest Balance Sheet come out with the strongest position. Thats we were determined to do for wpp. Matt that was our exclusive conversation with wpp chief read, alix steel doing that interview. We continue to get lines across from Christine Lagarde. To is saying we would like see a bit more inflation. Im not sure if that was tongueincheek, but thats the kind of thing we have been hearing for a solid eight years now. Beenization as it has dashed globalization as it has been will be questioned according to Christine Lagarde. If you are watching the currency , Kristie Lagarde is saying she is not unhappy with the level of the euro. She finds the movement to be stable. A lot coming out of the ecb right now. I thought it was probably the most interesting thing we learned so far. She said that each month of a 3 of gdp,osts 2 referring to the euro area, per month. Is saying that debt has to be paid back gradually. Of course, everyone from average consumers to Large Businesses are amassing debt right now. We are minutes away from the open. Up next, the rally that started the week has hit a wall. Although, we do see futures higher and we do see u. S. Futures moving higher as well. Maybe that wall is mobile. Discuss the various bets unwinding and not the coronavirus. This is bloomberg. Matt welcome back to Bloomberg Markets europe. About 6. 5 we are just minutes away from the start of. Ash trading lets get you top stories from the bloomberg terminal. Diageo is not starting its buyback program, saying it is not yet in a position to assess accurately the impact of the coronavirus and im like and is withdrawing its guidance for the year. 1. 5 had already returned billion pounds in the first phase. Switzerlands two biggest banks are pushing down Dividend Payments, saying they will pay half of the dividends and the rest in the later of the year. Ubs plans to pay into installments and also expects firstquarter earnings of around 1. 5 billion that is your Bloomberg Business flash. Equities are on track to end the weekend higher. Only the second weekly advance since mid february. However, the rally may have less to do with the virus threat lowering. Here to explain is dani burger. Dani its definitely difficult to buy this narrative. But the evidence does suggest when there is so much uncertainty. But the evidence does suggest that the real move higher seems to be investors exiting from parish positions which had reached extremes. That means this might be more purely technical and most investors are still on standby. Week, speculators held above average levels of debt and you can see that. Someding to nomura investors reduced by as much as 45 . That would certainly be enough to power markets higher and receive the most shorted stocks outperforming cannot which means we might not have yet reached the bottom. Matt thank you very much. Dani burger there with the reasons for the moves we are seeing. When we come back, its the market open. We are one minute from the opening of cash equities trading. Let me get your top headlines off the bloomberg terminal. Delay suisse and ubs will half of their Dividend Payments on advice from the swiss regulator, but they will pay out half. We will speak exclusively with the ceo of ubs at 9 30 a. M. U. K. Time. And, a 5 trillion hit. Wall street warns the Global Economy could lose a chunk the size of japan, as coronavirus cases top over 1. 5 million over the next two years. And Oil Extends Gains ahead of todays opecplus meeting as Top Producers move closer to a deal to curb output. Russia says it is ready to cut 1. 6 Million Barrels per day. Altogether, looking at a possibility of 10 Million Barrels. You can see futures pointing higher on this thursday. In the u. S. , we have futures higher as well, so it does look riskon opensee a this morning. Lets go ahead and look at the indexes as they come out the gate. Spains ibex up 1. 3 . The ftse is up a little over 1 , and climbing. So we are seeing the kind of gains on equity indexes, amsterdam up 1. 2 . Were also seeing the risk indicators that show investors are less worried today. For example, the 10year yield is not moving higher, at 74 basis points. The dollar is a little stronger against the yen, but weaker against other currencies, and about 0. 5 as oil rises as well. European markets opening higher after the s p 500 jumped into bull market territory yesterday. Alone on theain s p 500 was almost 3. 5 . The dollar index, as i said, trading pretty flat this morning. Joining us is a dollar bear, the global head of fx strategy for union bank. Peter, thank you for your time this morning. Rua dollar be are you a dollar bear, or are you more in the ray dalio camp of cash is trash . Bear am not a dollar i am a dollar bear. I am not in ray dalios camp yet. I think i will need a few more years and a few billion dollars for that. [laughter] theres a few reasons for bearishness on the dollar. First of all, at the beginning of the year, the market and dissipated rate cut by the fed. They have cut 150 basis points. You see the fed engaging in a large qe program, 500 billion in treasuries and openended qe for the credit markets. And finally on top of all that, agreements,fx swap for the First Time Ever with emergingmarket Central Banks. What thats doing and will continue to do is reduce dollar demand in the stock market. So when we see recovery, which i anticipate in the second half of the year, probably from june and july onward, what were likely to see is the dollar used not so much as a funding currency, but certainly the safe haven of haven allure of the dollar and it will be a carbon copy of what we have seen, short the dollar and buy carry. Matt you think gold will continue to rise. Is that in the same time window . Peter gold is more of a secular story. First of all, we know when the dollar depreciates, gold goes through the roof. That is a longstanding correlation. What is more interesting this time is that we have a number of Central Banks around the world cuttingpercent, or Interest Rates and engaging in quantitive easing. That gives gold a left. However a lift. However, whats important is gold offers tremendous tail risk at the moment. One, a reflection of u. S. Negative Interest Rates, but two a possibility of further easing. Because were deep in qe territory, the next step for easing for Central Banks will be some form of monetary financing, either explicit deficit financing, helicopter money, call it what you will. In that situation, gold will perform pretty well. We could see levels around 1900 next year, and id anticipate risks are firmly on the upside at those levels. For me, gold is a very solid story. Ecb Christine Lagarde, president , came out today and said shed like to see some inflation. Kind of the understatement of the decade for an ecb president. But i wonder if she thinks shes going to see it, then . Peter i kind of agree on the understatement. Ms. Lagarde has a history of stating the obvious. But when it comes to seeing inflation, good luck with that, frankly speaking. Look, we will have a demand shock and aggregate supply shock. The demand shock will have greater bearing on inflation. When you look at whats happened to the oil price in recent weeks and months, it is arguable that will continue to decline in the euro zone and headline inflation without. So were unlikely to see improvement on inflation. More interestingly, the fact we will see very large spikes in unemployment means the nascent wage growth we saw in the euro zone in the last year or two will basically fall out of bed. So overall, the prospects for higher inflation at the moment i think are pretty low. Matt peter, we will keep you with us. We have a lot more to talk about. A, global head of fx strategy for Union Bancaire privee. Coming up, we talk more about the possibility of an oil deal. Russia signaling it is ready to upe output cuts as they face to slumping oil demand. Will that be enough . Will it save the ruble . This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. Thee almost 10 minutes into session now and you see gains on this thursday. It is the last trading day of the week for most markets across europe, because of tomorrow being good friday. You see gains on the ftse, 1. 9 , and gains of over 1. 5 pretty much everywhere else in europe. Let me give you the Bloomberg Business flash, todays top corporate stories. Owner fast retailing is lowering its fullyear profit outlook by 41 . This is the second guidance cut for asias largest apparel company. The retailer reduced its forecast in january, citing geopolitical tensions in south korea and hong kong. The coronavirus pandemic has retailers unscathed, forcing most retailers to close. France is preparing massive support for flagship carrier air france as the coronavirus outbreak paralyzes the airline industry. Air franceklm is in talks for loan guarantees of about 6 billion euros. France and the netherlands are the biggest shareholders. A. P. Says that the coronavirus pandemic has postponed projects and new sales, the first major warning sign of a broader slowdown in the software industry. License revenues dropped over 30 in the first quarter, in addition to lowering its revenue forecast, s. A. P. Says it will be slowing hiring and reducing spending. Thats your Bloomberg Business flash. Now, lets focus on oil and the impact on fx. Accord betweend the Worlds Biggest Oil producers has moved closer as they face up to slumping global demand. Ahead of tomorrows opecplus meeting, actually todays opecplus meeting, russia is signaling it is ready to reduce output by about 15 . Ofer kinsella, global head fx strategy for Union Bancaire privee, is still with us. Im pretty sure they are having that Virtual Meeting today. What effect will this have on the ruble . The two of course are very close. Peter they are. I think it will have a reasonable effect on the ruble. Eyrtainly what we saw, when th took the decision to flood the oil market, the dollarruble moveas high as 82, a huge in a relative and absolute sense. The ruble is trading just below 75 now. The market has definitely priced in a deal, priced in production cuts. The question is what will be the scale, extent and duration of those cuts. We dont know. The market is going with the around 10a cut of million to 8 Million Barrels a day. That kind of just gets us back to where we were. We still have a significant overhang of supply for the market. We couldthe oil price, see 35 a barrel, i dont think it will go much higher. For the ruble, that means we could see a little more appreciation from here, but 70, 72 onut it, dollarruble, and the outlook after really depends on what the dollar is doing. To make a long story short, a lot of the gains have already been priced in. A little more ruble appreciation from current levels, but not a lot. Matt lets keep on your dollar call. Which currencies do you see gaining the most strength against the greenback this year . Peter its a question of two cycles. The first is where you think the most cyclically sensitive currencies are. If you look at sterling trading dollar,against the thats absurdly low given u. K. Valuations and given the likelihood of a reasonable recovery in the second half of the year for the u. K. Economy. Certainly, the sterling and cable will trade a lot higher. That context, looks good. The euros also likely to rally in my view, modestly. 1. 15 by year1. 134, end. Dollarswiss should decline. We see ongoing capital inflow toward switzerland. Also from continuing private investor interest in swiss equities. I anticipate euro, swiss, sterli ng will do well. Japanese yen, given the decline in u. S. Japanese real yield differentials, we should see dollaryen trading over 100. Given a decent improvement in risk sentiment, theres less room for aggressive appreciation at this point in time. For emergingmarket currencies against the dollar, i think the mexican peso and ruble will do ok in the context of a weaker dollar and slightly higher oil prices. Difficult, e. M. Is particularly the likes of the South African rand, turkish lira. Companies with decent amounts of dollardenominated debt. 80 or 90 countries have applied to the looking for some form of aid. E. M. Will be in a difficult spot for the next couple months. Unless we get a broad solution towards the issues, e. M. Will be a difficult place to invest. Here,closer to home Christine Lagarde saying the euro is stable, the level is fine. She does say a collective Reconstruction Fund would be great. How important is collective debt for the currency . Or let me ask you this, if we get an agreement on coronabonds, what does that do to the euro . If we dont, what does that do . Peter if you get an agreement on socalled coronabonds, and by that i mean mutual is asian debt, iation of dont think it will do an awful lot to the euro, if i am frank, simply because i think nobody expects it. It, you mightt see a modest widening in german, italian spreads. I dont think the ecb would allow italian debt levels to really rocket that much. I think its well known ms. Lagarde would favor mutualization of debt. Over the longer term, thats really the only way you sort out the e. U. s fiscalmonetary dynamic. Little, noneeres these purple countries want of debt, but when you explain it to them they are not as keen. The only way they will do what this is through the ems. My expectation is we would see esm loans with low conditionality, but the dutch government is pushing for higher conditionality, which i think is shortsighted from the dutch at this point in time. We could see very significant discord in the e. U. , not for months but for years to come. Matt peter, thank you very much. Really appreciate your insight today. Peter kinsella, global head of fx strategy for Union Bancaire privee. Peter will continue the conversation with me on bloomberg radio, 9 00 london time. Dabhe london area, use radio. Anywhere else in the world, use the internet. Dont miss our exclusive interview with the ceo of u. B. S. , joining bloomberg u. K. Time. E at 9 30 this is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. Right now 21 minutes into the trading day and seeing more than 2 gains in london and frankfurt. Different sectors Recovery Project raise after getting hit by the virus. The Goldman SachsAsset Management chairman touches on the current market environment and what Goldman Sachs clients are looking for and investing in at the moment. She spoke with bloombergs nejra cehic on daybreak europe. We expect a global he to growth, but im not sure the magnitude has resonated with us yet. As we look at what we know versus what we dont, we are extremely focused on the question of rolling recovery. Some sectors will rebound more whichy and others investors are seeing themselves. Im used to speaking to you after a multicountry tour. In this case, its coming from a desk chair. But having spoken to people on pretty much every continent every day except maybe antarctica, people are looking for the opportunities, but dealing with uncertainty of timing. Theres no question, some industries will take quite a bit of time to come back, say the Restaurant Industry or travel. On the other hand, manufacturing could resume sooner. We could see some rebounds in transportation given that current levels are so low. Getting back to prior high levels will be difficult. We will see some geographic disparities. I think it makes for a very uneven next couple of years, given those unknowns, but not one without opportunity as well. Nejra absolutely. Sheila, as you have done your global tour, albeit perhaps more remotely at the moment, what are you gauging from clients in terms of their appetite for risk . Are they wanting to hold cash and sit on the sidelines right now . Are they concerned with capital preservation . Or are they saying, no, please go out and find those opportunities for us with the recent selloff we have had, even though of course the s p 500s right now technically back in a bull market . Sheila i would say every client wants to talk about the investment environment and opportunity and management environment. They are all struggling to support their teams and vet new ideas, having the whole teamwork remotely. On the institutional front, many of our clients have come into 2020 expecting a challenging environment or even a recession, and had raised cash. So they came in with some money that could be put to work, but now you need to consider where. Id say a more measured approach in the u. S. Money has been put more quickly to work coming out of asia, parts of asia as well as say the middle east. The focus has really been on the opportunistic side. Where peopleabout were in equities versus where they are today, on the institutional side and retail side there is significant a less exposure. Patel,hat was sheila Goldman SachsAsset Management chairman, talking with our own nejra cehic. Lets turn back to Swiss Banking. Credit suisse and ubs both proposed a delaying half of their 2019 Dividend Payments to later in the year, following mounting pressure from the swiss financial regulator on the nations banks to reconsider Dividend Distribution plans. Joining us from zurich is bloombergs banking reporter, patrick winters. It seems like a compromise, but the banks essentially do get to pay dividends and eventually all of them, right . Patrick thats right. What investors will like about this, both banks, ubs and credit their full pay dividend, just a little later rather than scrapping the whole thing. Whats interesting about the timing, theyre the last banks in europe to mention they are changing the dividend. Some of their peers like readyedit, santander, al said they would be delaying dividends after pressure from the ecb. The swiss regulator, not the ecb, so they felt they were able to stick to their guns for some time and were not changing anything. Now, the swiss regulator has upped the pressure a little, giving stronger hints they should change something, so theyve come to the solution. Is going to come out of the relief funding they get, right . What kind of package is that . Patrick they have been given a fairly substantial package, which meansffers, they have more money available to lend to companies in switzerland. Outver, if they payu dividends this year, the regulator previously said that will be taken away from the packages offered to them. So it seems negotiations have been heating up over a perio d f time, but they have now managed to amicably settle it. Matt patrick, thanks very much for joining us this morning. Bloomberg banking reporter patrick winters out of zurich, on dividends. Coming up, as Telecoms Companies adapt to unprecedented consumer demand, dont miss out interview markthe bt consumer ceo, alero, coming up. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. 30 minutes into the trading day, we see gains on this thursday, the last day of a shortened trading week. The s p 500 gaining 1. 6 . Figure than 2 in a lot of, in a few of the equity indexes. Frankfurt on the dax, and london on the ftse looking at a stronger than 2 gain. Splits, industry forp movers, the grr shows the day we see travel and leisure stocks doing the best. Of course, they have been hit the hardest, so any come back is as goodomeback is not as it looks because they have lost so much value throughout this crisis. Insurance and banks are doing well today, as well as i industrial goods and services and basic resources. Oil is the name of the game, with that virtual opecplus meeting today. Let me also give you your bloomberg first word news, top stories from the terminal this morning. Inise in new infections italy and spain is raising questions of how quickly nations can relax lockdowns. Restrictions are having a devastating effect on economies, obviously. Germany is expected to slump almost 10 in the Second Quarter, the biggest gdp drop on record. Global coronavirus cases have more than 1. 5 million. In the u. S. , former Vice President joe biden is the democratic partys presumptive nominee for president after senator Bernie Sanders ended his run, thanking supporters for helping create an unprecedented grassroots campaign. While sanders conceded, he said he will stay on the ballot to help push the democrats closer to his vision. European president Christine Lagarde renewed her plan for a strong physical response to the coronavirus. Gets purging governments to over their differences and prepare for a second round of talks. Her comments were in an oped published in newspapers across thepe, and come a day after euro area finance ministers failed again to agree on a rescue package. Global news 24 hours a day, on air and at quick take by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Bt says none of its employees will lose their jobs, at least in the next three months, as a direct result of the coronavirus disruptions. The company will offer an annual pay increase of 1. 5 in non managerial staff in the u. K. , as Telecom Companies adapt to Unprecedented Network demand and consumers work from home amid the pandemic. Joining us is marc allera, bt consumer ceo. Marc, talk to me first about what demand is looking like. What kind of increase are you seeing . I know everyone i talk to his spending a lot more time online zoom, because on thats where i talked to everyone now. Marc thats right, matt. Morning. Were seeing huge demand, as you say. Weve got pretty much everyone running businesses large and small from home now, and thats putting a lot of pressure on the network. Of course, we have School Children being schooled at home, and all our Entertainment Services as well being consumed. Thats pretty much doubled the network load on our infrastructure. Im pleased to say it is holding up well. Its interesting, the apps like they dontype, really cause too much pressure on the network. Its gaming for example, and video, two areas that put the load on the network. Gaming traffic has almost doubled. That shows with everyone working nite,home we see fort call of duty, football manager, the top three games causing load on the network, and of course netflix and youtube as everyone is looking for more streaming video. A lot of pressure on the network, but it is coping very well. On the mobile network, because we have less people commuting, the mobile network really gets put under pressure in the morning on the way to work and in the evening on the way home, and we dont have that dynamic now with significant the less travel going on. The mobile network is under this pressure. Tonight in the u. K. , when we do the applause for our key workers in the nhs and people want to share that, you see spikes on the mobile network, but so far our team has done an unbelievable job keeping the network up and keeping the country connected. Matt i admit to spending a few hours a day on call of duty warzone. Inamer tag is shower fan case anyone wants to battle. [laughter] are you still going to be able to roll out the network, 5g . Marc thats one of the areas under constant review, of course. Were only a few weeks into this were working closely with the supply chain on the demand side. On the supply side, we work with handset vendors. There is no current change to their roadmaps and plans. Wethe infrastructure side, have had to prioritize of course sites like hospitals, care homes, places, these new hospitals being set up in the u. K. , getting them stood up with conductivity. That has of course had an impact on things like our 5g rollout in this period. Thing thats also unclear on how long the crisis will go on, the demand side, how is the consumer going to react, how much demand are they going to have to these more highend smarthponehones . It is early days, unclear at the moment, and i am sure in the weeks and months the pictures will get clearer. Matt how much investment, how much is retaining your workforce eating into your ability to or desire to pay dividends . Regulators are pressuring a lot of companies. Bybt is doing the right thing by workers. Are you going to have to cut your dividend . Our prioritysay, has been on our employees, and Telecommunications Workers are seen as key workers. They have been working around the clock, the engineers, engineers, network making sure the country is connected with all this new demand for connectivity. We have thousands of people in our Service Centers as well, dealing with customer needs and demands, either for new devices or conductivity. As a team, we really wanted to ensure they felt secure and safe and acknowledge no roles would be impacted as a result of the coronavirus, because they are working so hard and dealing right at the front line with customers. So thats really been our priority and our focus. Dividends are not a decision for me, but a decision for our board and one that we will do as part seeing results and guidance in a few weeks. But my priority and the leaderships priority has been looking after our workers to keep the country connected, and the Telecommunications Industry right now is doing a wonderful how important we are as an industry and the contribution we can make. Matt marc, let me ask. Or our viewers, our clients, at bt sport will you be able to claw back lost revenue from uefa, premier league . How will that play out . Marc this is another sort of ambiguous area, because of when we wil get will get support back on tv, in what format, and which sports will come back online when. Are inand the team constant dialogue with the two big sports for us, the premier league in this country and Uefa Champions League in particular, but also rugby. The whole sporting world has been impacted. We have millions of paying customers impacted by the lack of sports. Weve had to pause or give customers the option to pause their billing relationship with charity,ate to the nhs and i am pleased to say many customers have chosen to donate their monthly sport fee to the nhs, and we have facilitated that. Of course, we are in discussion with the major leagues and rights holders we have relationships with about what this means for us in terms of compensation. But until the situation gets the season will resume in what format or if it will be stopped completely, that really changes the game in terms compensation. Of its an ongoing dialogue. Matt marc, thanks very much. Of btllera there, the ceo consumer, talking to us about what the company is doing for its workers and for the nhs as well. Great to have you. Up next, ready to cut. 1. 6ia says it will slash Million Barrels of crude production, but will any deal by opecplus producers be enough . This is bloomberg. Welcome back to Bloomberg Markets. This is the european open. We are just about 45 minutes into the trading day now, looking at 2 gains on the ftse, 2 plus gains on the dax in frankfurt, and across europe pretty decent equity index gains. Lets get more on the oil story right now. Crude is extending gains, probably part of whats behind equity moves as well, as the worlds Top Producers appear to be moving closer to a deal. Ahead of todays opecplus Virtual Meeting, russia now signaling it is ready to make cuts as producers face an unprecedented drop off in demand. Joining us now is a Senior Research analyst at sanford bernstein. Good morning, and thanks for joining us. What do you expect from this meeting . Neil we expect cuts. They have to cut. The question, will it be enough to offset demand weakness in the market . The expectations are somewhere around 10 Million Barrels a day of cuts to come out of opecplus. Those would be for somewhere between three to six months to mitigate some of the downside demand risks. Were likely to see demand contract by close to 20 , or 20 Million Barrels a day, in the Second Quarter. The issue is that unless other parties join with opecplus, it may not be enough with the demand destruction in the market. Matt what kind of demand destruction, and what kind of recovery do you expect, and when . What if you look at happened in china, we see air down, vehicle travel down. Demand drop at least 30 , 40 in the worst month. Over a quarter, that would be around 20 i would expect in the Second Quarter. Second quarter. In the second half of the year, we will see demand start to normalize. They expect a man back to normal levels by the second half demand back to normal levels by the second half. The question is what recovery we see globally given the impact we see on air travel and general mobility within the population. Matt assuming we get an agreement here, and recovery globally lets say by the end of the second half, where do you see prices by the end of the year . With the inventory overhang we see in the Second Quarter, it will keep a lid on prices. I think the best we can expect is a recovery to around 40 a barrel in the second half of the year, and thats predicated on a pretty good demand recovery. Theres at see that, risk we stay in the low 30s the remainder of this year. See prices a lot lower than when we went into this crisis. I think 40 would be a good outcome, but we should also be prepared for a downside case of between 30 and 35. Matt how involved in the u. S. Get . They clearly cant get involved in a cartel, but can they coordinate with opec . Neil thats a good question. Naled they were reluctant to cut unless you saw the u. S. Participate in some there will be some Natural Production decline given the lower prices in the market. Its difficult to see organized cuts within the u. S. Texas Railroad Commission alternative options could be an export ban. We have seen that in the past from the u. S. I think thats unlikely as well. Trump signaled the possibility of putting tariffs on imported oil, to protect u. S. Producers and keep prices more stable in the us. S. Theres a range of things the u. S. Can do, but i think its unlikely they will formally join the opec cuts. Matt we are starting to see, we saw china starting to buy more barrels for its reserves. India, atting to see least it said they will be buying more barrels for reserves. The u. S. , the president wanted to do that but wasnt able to get agreement from congress. Is that going to eventually make this, make prices more stable if countries are able to boost their reserves . Neil yeah. The, there will be every effort to stockpile as much oil as possible with those prices. China buying up a few million a day, india buying. You have Something Like 500 Million Barrels of crude, between commercial and tanks. If you add the product inventory, that could grow to 1. 5 billion barrels. With an oversupply in the market, you could exhaust that inventory in 60 days. The risk is that if we dont see seeal happen, then we could matt all right. Thanks very much for joining us. Appreciate your insight o such an important day for the market. Beveridge. Neil coming up, as the long weekend approaches, it is a fourday weekend for a lot of markets and investors are left weighing when economies can ramp up again. So what can we expect over the Easter Holiday . We will discuss. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. We are 55 days into the trading day and looking at 2 gains basically across European Equity indexes. Equities on track to end the holidayshortened week higher, only the second weekly advance since mid february. As the long weekend approaches, investors are left weighing when economies will be able to ramp up again. In fact, theres a fantastic oped piece written by Mohamed Elerian that i will recommend to you. Discuss theo outlook this easter and passover, dani burger. What kind of asset behavior can we expect over this extended weekend . It looksst of all, sick a lot of traders will try to frontrun the early close. Theres a lot of things that could happen over the holiday extended weekend and you dont want to leave anything on the table just in case something happens, which is becoming more and more possible with volatility in the market. We are likely to see volatility. Volumes are low. Some people are already likely off on holiday. Tomorrow is a weird one, because it is a holiday for Financial Markets in the u. S. , but is not a federal holiday, which means data will still be coming in. We have cpi data, and the u. S. Reopens on monday, but europe does not, meaning european traders will likely have to play a game of catch up. Matt lets take a step back and talk about the bear market weve seen, the bear market rally weve seen. How does it compare with others . Dani one of the weird things thats happened, typically in bear markets you see leadership shift. But that isnt happening. In fact, expensive tech stocks are still beating the market. The nasdaq 100 reached a new peak. It happened on march 23, which was the bottom of the markets. Again, this is very rare. It shows us theres still a lot of overvalued stocks out there. According to one brokerage, it means the bottom half could still go further down from here, matt. Matt thanks very much thanks very much. Dani burger talking to us about what to expect over the weekend. Yesterday, we saw the s p 500 get back into bull market territory. The european open. Up next is surveillance. This is bloomberg. These days you need faster internet that does all you expect and way more. Thats xfinity xfi. Get powerful wifi coverage that leaves no room behind with xfi pods. And now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device thats connected is protected. Thats a 72 a year value. No one else offers this. Faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. Can your internet do that . Delaying the payout. Ubs and Credit Suisse pushback half their dividends on advice of the swiss regulator. We speak exclusively with ubs ceo sergio ermotti. Global coronavirus cases top 1. 5 york and u. K. Ew report their deadliest days yet. And Oil Extends Gains ahead of todays opecplus