Talk as to whether the lockdown will be in place or lifted. More weeks of lockdown. Us, edward stay with morse and David Rosenberg. Aviana Boris Johnson spent third night in intensive care. His condition is improving. The National Picture has turned bleecker. Over a 24 hour period, 938 people died of coronavirus. It is likely a nationwide lockdown will bes is extended for weeks. Spain and italy are on the verge of extending their national lockdowns, expected to push their state of emergencies until april. In the United States, donald is helping coming up with medical criteria to reopen the economy, medical and political advisors kept out of a meeting. House is giving considerations to Health Considerations over economic ones. Oil producers are getting closer to cut output, opec leaders holding a virtual meeting. A reduction could total 10 Million Barrels a day. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. Much. Hank you so let me look at equities and i will let guy johnson give you the update of the importance in the oil space. The equity markets, a flat out jumble but the vix down to 44. Guy european stocks approaching the flatline. We have come off our earlier highs. We are up fractionally as we head into a long weekend with a lot of risk. U. K. Gilt seems to be ignoring the fact that the bank of england will be providing a larger overdraft for the british government. Btps benefit. A reasonably ok btp auction. 310 survey is percent higher. 3 10 of a percent higher. Reduction in Oil Production crater the price of crude . Coming up inorse about 17 minutes. Right now, the most anticipated interview of the day on this ambiguous moment for inflation, David Rosenberg parses inflation like no one i know. Can you call higher inflation . You have been so good about avoiding that. David i dont think there is any inflation coming in the foreseeable future. This is an absolute global and the detonation focus for demand around the world. This will cause Inflationary Pressure to dominate may be for the next year. With the gobs of stimulus when we look beyond the mediumterm outlook, the dramatic increase in money supply will bump against money velocity, but that is going way out into the future. For the here and now and the intermediate term, deflation will reign over inflation. It signal tos David Rosenberg . Ultimately will be a hedge against the two extremes. It has the classic properties of being a hedge against inflation. Maybe that cuts it down the road. People thought quantitative easing measures would translate into inflation the last cycle that did not happen because money velocity kept going down, and gold is a hedge against the other extreme. What does a deflationary environment do to debt defaults and downgrades insolvencies . The one thing we know was exposed is how dilapidated corporate Balance Sheets are, not just in the u. S. Liquidityte lack of and grotesque amount of leverage in the system, so the problem of deflation with debts where they are is it triggers an unstable wave of debt defaults, so gold will also be a hedge on that. Guy if i might pick up on a couple of things you were talking about, we know the claims number will be pretty high later on today. We know unemployment is rising sharply. I am trying to understand how much money is getting the small and getting to small and mediumsized businesses. How many jobs that have been put into hibernation will come back . What is your read, in which data are you looking at . And which data are you looking at . Thed history will show stock markets reaction, we are in early days with a whole bunch of unknowns in terms of what future waves of this virus are looking like. We have to Pay Attention and respect the fact that the markets are not focused on the incoming economic data. If we did look at the claims numbers and payroll data last week, you would have thought last week the stock park it would have been down 20 . Instead, we were down 2 . The markets have priced in a sharp recession or economic depression. In markets have priced that so what is more important now is less the data and more what is going to be in the future. The data that matters the most has not been about the economy. It has been more about the medical and scientific information and models and when array going to get back to work. The most important when are we going to get back to work. The most Important Information will be about data and less about policy pronouncements. Guy i am trying to understand what shape small and Mediumsized Enterprises, the sector of employees that so Many Americans and people around the world are in now, i am trying to figure out how the banks are lending to them, how much isernment monday money getting into the small and Mediumsized Enterprises . Economy,estart the keeping those people attached to those jobs is critical if we are to have a recovery, if those people are able to go back to their jobs. I am trying to understand how that is going. Ofm hearing dire reports out the u. K. And United States that it is not working. What is your sense . What i amavid hearing is it has been very slow and sporadic, but remember, these programs are just really starting now. Basically,elms me and what the market is responding to is how vigorous the response has been. There is no way the government will be able to save everybody. That is impossible. I do think what the markets are looking at and these are early days. I dont think you can look at a day or week of these programs and say they will not work. Ultimately, the cash will get into the economy. Will it get into the right hands . I dont have an answer. Will there be a dramatic moral hazard, will the money go into the businesses and people that dont need it . There is all sorts of complications, but we know that congress and the treasury and the fed will not pull out any of the stops. They will keep going, so if we get to the other side, and businesses have been impaired and shut their doors, after the worst part of the shock, once we identify who did not get the cash, the government will make these people whole. You are looking at it from a imanitarian standpoint so would not extrapolate into the future. They will ease fiscal policy and put cash into the system long after this crisis is over. Question,ore unfortunately i have to be quick. Canadato speak to your and our listeners across bloomberg canada. Alberta is crushed. What should the Prime Minister do . David i actually think in we have notis date, eased fiscal policy enough. We should have had a more coherent Energy Policy in canada is a price taker on the energy side. It is a more fundamental problem on the canada side. The corporate Balance Sheets are more stretched than in the United States, and the income transfer process has lagged behind the u. S. , so canada from a fiscal policy standpoint has more catching up to do. Tom thank you so much, greatly appreciated. With rosenberg research, David Rosenberg. What we like to do best at bloomberg surveillance,s move tom firstclass perspective oil. We will do that with edward morse. This is bloomberg. Opec, you want to know the truth, i hated it. Because it was a fix. Somewhere around the line along the line, it went down. Inhave a tremendous industry the country now and i dont want those jobs being lost. Tom the president of the United States. Spoke moments ago on the royal in riyadh, lets speak on moscow and washington. Joining us is edward morse. Thank you for finding time with us on this historic day. The president speaks of a diminished power of the cartel. Is it saudi arabia alone . Diminished it is given the whole combination. Just look at opec. They have the capacity to produce 35 Million Barrels a day. They had the capacity in 1981 to produce 35 billion barrels a day. Today, it is a 100 billion barrel a day market and domestic consumption is about one quarter of their production depending on how much they produce. They cannot control the market by themselves. We now have three Major Players the bear, the camel, and the eagle, and the eagle has become the largest, Fastest Growing oil country in the planet and it has deprived them of market share. Someif you want to bring news on bloomberg surveillance, i would assume the brief the treasury department, secretary of the treasury, and the president , what would be your advice as they approach this historic day . Edward they have done it fairly well, considering we have a market economy. The market economy is responding to the lower price environment and making a major contribution because we happen to be the swing producer. Prices go down, we are swinging down. We are having a major adjustment in the structure of the u. S. Oil industry. Barrels thellion u. S. Produces a day, about 2 Million Barrels of that should not have been produced and is coming from companies that never should come into existence. This will be a shakedown of the u. S. System and we will see a cut in the base production of the United States before we start growing again. Hasu. S. Contribution influence with saudi arabia and russia, getting them to the table, and we will see through the g20 process tomorrow what the nonopec countries will be contributing. Decline ine a production from canada, brazil, and the United States. It is a meaningful contribution to the whole adjustment process across the planet. The opec and russian side are also in a pickle in the sense that they cannot export oil or sell it in a market where refinery demand for crude has collapsed to the degree it has, so they are making the most of it. This is a defensive response. The here andth now, the president spoke of 10 to 15 Million Barrels a day coming off the market. Plus capable of delivering those kinds of cuts and if we do not get this, what does the market do with that . Edward they are capable of it if you do the numbers. Some of it may look iffy but if you add nonopec it looks doable. If you get other nonopec countries that are part of opecplus making a similar contribution to russia, you can add them up, 3 Million Barrels a day from the nonopec side and the opec side, saudi arabia is producing 3 Million Barrels a day by exporting 3 Million Barrels a day more now than march. , a 4ey take a haircut million barrel a day cut, and it is possible. You have the other gulf countries, kuwait and the uae, that is good for probably another million barrel a day cut. Export theggling to same way the saudis and russias russian czar, they will make russians,l cuts they will make incremental cuts. Need to balance the market given the demand hit we are taking . If we get that, is it enough and how much space is left in the storage tanks . Edward there are two elements, how much do they cut now and what happens in the Third Quarter . They are looking at cuts to start in may going through june and july. That is too late in that we at a minimum see refinery demand for 60 millionby around barrels a day for the quarter as nowole and probably quite in the midst of this inventory process, down 8 billion met eight Million Barrels. The system does not allow for more than 8 Million Barrels a ,ay of putting oil into storage so probably still with the 10 million barrel a day cut, it will be a significant squeeze on what the cost of storage is. We already see it in the forward curve. If you look at the price of brent today versus a month later, that is a good 1. 80 on a spread. Wider, andead is that is a function of the cost of storing oil, so the data with 50 Million Barrels plus going into inventory, we will see record weeks of that and we will see the price going down. We will get over that when we see refineries coming back up in the u. S. As they have in china. Here is where the cuts are really important. We project if they do not cut, the Third Quarter build will be massive, not as massive as now, but in the order of 4 million to 5 Million Barrels a day. If everyone cuts to the tune of 8 million to 10 Million Barrels a day, that is an inventory draw as a build would be in the Third Quarter. It is important to give a signal to the market that the cut will extend through the third and maybe the fourth quarters to alleviate the inventory situation, and put a support level under prices. Tom edward morse with us with citigroup, we greatly appreciate his time. Please stay with us. This is bloomberg. Tom amid this pandemic, we the managing director of the imf on the future. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Good morning, everyone, tom keene in new york, guy johnson in london. We continue with edward morse of citigroup where he is head of their commodity efforts. Guy has some questions on gold but i need to triangulate from riyadh. Morse, when we look at russia and the power of mr. Putin, what cards does he hold on this historic day for oil . Edward the main card is participating in something he has to participate in, so he has a weak hand. If we look at the russian oil sector, it has been hampered by these production cuts. The sector has not grown to the degree it might have. They might have been producing a Million Barrels a day more than they are now or have been because of production cuts that started in 2016. The industry has been hurting but at the moment they cannot export crude. If you look at the pipeline, the way they export into europe, it is full and the refiners have no room to take more crude, to process more crude, so they cannot sell that. The ports are congested. They have one market, china, and they battle with saudi arabia so they are in a pickle. The hand is a weak one so im not sure what clout the russians have at the table. Lets turn our attention to the gold markets. Circa 1700, 1921 the alltime high, there is a lot of conversation about debt monetization given the epic levels of debt that will be taken on as a result of covid19. Where do you see gilt going . Do we get up to 2000 . What is your target . Edward you are right in watching covid and gold is the only commodity that has seen investor inflows, healthy at times. We saw one selloff when the Investor Community was short of cash and needed to monetize that. We see gold continuing to be a buy. The short term is 1725. Targetk the 2020 2021 will be 2000. We think just because of what is happening on the bond market side and because of risks around the world, we are seeing gold go up. There are some wrinkles to it having to do with emerging markets and emergingmarket Central Banks. The only obstacle to gold continuing to rise has been that Central Banks have now become net buyers of gold. This is true of emergingmarket Central Banks, particularly the russian central bank, and they have stopped buying gold with currency depreciation against the u. S. Dollar and euro. We are seeing that bit of weakness, but the Investment Community is on target to keep buying gold. Goldby extension, do i buy there as well, or is problem as to getting staff into mines, deep mines at the moment is difficult . Have issues around whether they can take advantage of that. Edward i wish i could answer the question, but im not supposed to talk about equities. Supplyst in terms of the side when it comes to the gold market. Edward the important part is it creates a floor price for gold, partly because of the fact that you talked about, partly because of a lack of investment in mining. The incremental ounce or ton of gold is costly on the cost curve side and that creates a natural hedge foreign investor, not necessarily on the equities side but on the commodities side. Tom this has been a joy, ed fore, thank you triangulating for us what has been a historic day in the history of hydrocarbons. Quest for me of the the days that will matter in history. , dr. Sharp will join us. Bloomberg speaking with jim jane does chenos. This is bloomberg. Watchingyou are bloomberg surveillance. I am viviana hurtado. Mitch mcconnell wants a quick vote on the next round of boost to pushing a Small Business aid, putting him at odds with nancy pelosi. Thatants a package twice size, adding one hundred billion dollars for hospital and 150 billion to the state and local governments. The rescue package is squeezing the airlines. They expected government checks would begin arriving days ago and are frustrated with the process of providing more financial information. The Presumptive Democratic nominee wants money for workers who lose their jobs during the coronavirus pandemic. Yesterday, mr. Biden getting a big boost when Bernie Sanders announced he was suspending his campaign for the white house. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom thank you so much, and now cavins a really, let me cut to kevin cirilli, let me cut to the chase what power do democrats have with a Republican Senate . What power do they hold today . Kevin they have the upper hand in the sense that they can vote the line, and this issue of centrist moderate republicans who were basing pressure on the pandemic to boost supplies at various hospitals. You saw in the last economic stimulus where republicans broke with traditional policy norms and voted for economic stimulus, Speaker Pelosi banking that will happen again. Getting to money not Small Businesses in the United States and what will washington do you . Kevin they said they would have a large educational push for loans and grants, but the rollout has been botched and muffled, and it has been up to lawmakers in both parties to educate their constituents that mass education efforts did not come. It comes at a time in which Speaker Pelosi and later mcconnell have said leader mcconnell have said access to cash would be immediate. That has not happened and has led to palpable frustration. Fascinating. So you have this important interview with congresswoman waters of california and this goes with the power of the moment. Weine waters will tell you need to take care of nurses and residents and interns as well. How can republicans be against that . Kevin also, it speaks to you beyond that, the issue of immediacy and for Small Business owners, how can they have immediate access to this liquidity . One of the things behind the scenes that democratic staffers in the house in particular have told me over the last couple of days has been making sure that main street and Small Business owners and Small Business workers have access to this just as much as big banks do. Several large Financial Institutions are rightfully trying to boost their funds for main street, however there is a concern they might be taking advantage of that. That is from a democrats perspective and im sure chairman waters will allude to that in my interview at 3 30 today. , chiefvin cirilli washington correspondent. Banks are warning the coronavirus pandemic could rob the economy of more than 5 trillion of growth. Annual greater than the output of japan. About the growing trajectory of that in different sectors after being hit by the virus. We expect a global hit in growth but im not sure the order of magnitude has resonated resonated. We are extremely focused on the question of a rolling recovery. Some sectors will rebound quickly while others will rebound slowly. It is a changed world. I am used to speaking to you after a multicountry tour and all of my information is coming from a desk chair, but speaking to people from every continent pretty much every day, except antarctica, people are looking for the opportunities but dealing with the uncertainties climbing. Industries will take quite a bit of time to come back, restaurant and travel. Any factoring could rebound sooner. We could see rebounds in transportation, although getting back to prior levels will be difficult, and we will see geographic disparities. It makes for an uneven next couple of years, but not one without opportunity. You have done your global tour 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 . Are they concerned with Pratt Capital preservation or are they saying find opportunities with the recent selloff even though the s p 500 is back in able market technically . Talka clients want to about the investment and management opportunities. New ideas, they want to put money to work while having the whole team work remotely as well, so nobody is looking away from the business take on their community. Came into 2020 expecting a challenging environment or recession, and they raised cash so they have money that can be put to work but where . It is a more measured approach in the u. S. It has been more quick coming out of asia and the middle east, and the focus has been on the opportunistic side of it. If you think about where people wear in equities versus where they are today on the institutional and retail sides, there is less disclosure. Patel of Goldman Sachs asset management. Yesterday, my conversation on withay of the pandemic was Johns Hopkins university. We continue that discussion. We speak to dr. Jason farley of the jh school of nursing and the reality of those serving in this pandemic. Please stay with us worldwide. This is bloomberg. Tom good morning, everyone, bloomberg surveillance. We would like to continue our discussion as we have for the many weeks, on this pandemic, as andook at peter hotez people from the leading universities around the world, we focus on the job pot Johns HopkinsUniversity School of Public Health. Mr. Bloomberg is the founder of bloomberg lp and the television and radio effort. He has provided philanthropy to at Johns Hopkins university, and their Public Health school. Spoke yesterday of emergency room realities and we now speak of the frontline, nursing. Jason farley is the head of the phd program in nursing at Johns Hopkins. It is worldclass. He is focused not on the classes but on the survival of nurses. How desperate is it to get funding from washington to protect at the most basic level our nurses, interns, and residents . Jason there is no question there has been a delay in receiving funding, receiving ppe. We are starting to see improvements in that availability, but it is far too long and too late. We have seen Health Care Workers around the world who have succumbed to this virus and been infected. Not only does that increase the morbidity and mortality within their family but it takes them out of the health force, which has a ripple effect. Tom why cant the administrations of these hospitals go to the politicians and say, here is a video as i saw yesterday, of eight ambulances outside mount sinai in manhattan . Leadership of these hospitals explained to the politicians how unsafe this moment is . I think the leadership is doing its best to try to do that explanation. It is all over the media, social media, so i dont think it is an issue of lack of will or understanding. It is a lack of issue of preparedness, so specifically what i mean by that is when there is no stockpile, when there is no substantial availability to immediately deploy to the hospitals, and you have an entire Health System across every state in the country requesting this at the same time, there is a supply and demand issue. All of this has been requested and before the curve started rising, yet there was no supply to offer to the demand. , Speaker Pelosi and others, republican and democrat are speaking about most wartime pay for medical professionals. Why are we having a debate about ss that we see in geriatric positions and entrylevel positions . Why arent we arguing about combat pay for nurses and doctors . Jason it is a great question. Know itet your viewers is not the Health Care Workers arguing, it is the politicians. We are doing our job and are as dedicated as we were before the pandemic, so that is not something the Health Workforce is demanding. That is something we do not have time to demand, so when we think about these conversations, it is something happening for people who are safe and not currently in harms way. That said, when we think about wartime level rhetoric, i think it is. This is a war against a virus, a different type of enemy, and doctors and nurses are putting themselves on the line. I have heard everything from loan forgiveness to increased pay and yet no one has clear guidance on what that means. The Health Care Workforce is not sitting on waiting for that to come through. We are just doing our jobs. Tom dr. Farley, i want you to comment on what you have unitsed in intensive care and hospitals about biphasic illness, patients can be very sick, they do better, and there is a resounding deterioration. Whatyour experience and you are experiencing nationwide, can you suggest the covid virus has a second life . Are you seeing that clinically inhospital . Jason we have seen cases of patients who seem to be recovering and have an acute decline. Is key question physiologically, what is happening . There is a lot of hypotheses around what that is. You have to remember it is not the virus itself causing the issue, it is our immune systems response to it. Our immune system can begin a response and reduced viral replication, and once viral replication declines, the virus has mechanisms to evade the immune response and eventually overwhelm the immune response. The immune system begins to ramp itself up so what you are seeing with acute respiratory distress, patients are having fluid develop in their lungs, not only pneumonia, but the response to the virus itself. That second wave of acute deterioration is a result of our bodies trying to fight back against this virus. So much, dr. U farley of the Johns HopkinsUniversity School of nursing and the Bloomberg School of Public Health. Guy johnson, i love how you lead the morning with oil. Opecwill you look for with news . Guy what will they deliver . Billion 10 Million Barrels a day will be a problem for the crude market. Tom it will be interesting to say the least, and i want to mention the challenge to myrgingmarket nations, conversation at 9 00 a. M. Before use open. Stay with throughout the day across bloomberg. Com. Worldwide is bloomberg surveillance. Alix crude optimism. Prices rally on hopes a historic production deal between saudi, russia, and the u. S. Investors brace for the latest read on u. S. Jobs and look forward to jay powells webinar. We look ahead to u. S. Bank earnings with betsy graseck, Morgan Stanley global head of banks and diversified finance research. Welcome to bloomberg daybreak americas on this thursday, april 9. Markets are closed tomorrow. We all get a nice 72 hour break. For the time being, youre going to want to stay on your toes. All overeing action the place on u. S. Equity markets. As it actually really matter