Leading the way. We await any kind of agreement out of g20 Energy Ministers meeting tomorrow. Vincent absolutely guy absolutely. I think it is going to be absolutely fascinating today and tomorrow. Where are we in terms of expectations from the market . I hear anything less than 10 Million Barrels a day in the market is going to think that aint enough, and as a result of which, we could see crude, which is catching a decent bid right , coming off a bit. I think youve got a whole bunch of things still coming towards us. Jay powell is going to be speaking very shortly. I guess hes got a bunch of questions he needs to answer. It is getting awfully comp located in terms of the number of fed programs out there awfully complicated in terms of the number of fed programs out there. Normally you probably sell a bit of risk going into the weekend. That is not happening. Keep an eye on the norwegian krone, heavily geared towards the oil price. Eurodollar trading 1. 09. The dollar under little bit of pressure. The bank of england is extending the British Government and even bigger overdraft, and we arent getting much reaction in the gilt market as a result. Monetization is a subject being heard on many lips right now. Alix and we are waiting for more european potential monetization. Angela merkel saying any agreement is close, whatever close means. Going us now is bloombergs michael mckee, International Economics and policy correspondent. You did an amazing job with me breaking down the immense action from the fed. Give us a lay down of what the fed actually did. Michael we are watching for Jerome Powell, so i will do this as quickly as i can. The fed is going to buy ppp lo ans, as much as they can. Banks will put them towards their special purpose vehicle. That gives them more loans to buy out. Backed by 75 billion from the treasury, they will increase the Corporate Bond buying to 850 billion, backed by 85 billion from the treasury. Within the secondary markets they are buying and jay powell is just starting, so i should probably turn it back over to you. Guy lets take a listen. Mike, thanks very much indeed. The fed chair. Watch chair powell we watch intellective awe as servants puted theirs in selves at risk for the public good. People have been asked to put their lives and livelihoods at hold at significant cost. We are moving with alarming speed from 50 year lows in unemployment to what will likely be very high, although temporary, levels. All of us are affected, but the burdens are falling most heavily on those least able to carry them. It is worth remembering the measures we are taking to contain the virus represent an essential investment in our individual and collective health. As a society, we should do everything we can to provide relief to those who are suffering for the public good. The recently passed c. A. R. E. S. Act is an important step in honoring that commitment, providing 2. 2 trillion in relief to those that have lost their job, low and middle income households, employers of all hospitals and health care providers, and state and local governments, and there is additional legislation in the works. A critical task is delivering ofse who use their power taxation and spending to make decisions about where we as a society should direct our collective resources. The fed can also contribute in important ways by providing a measure of relief and stability during this period of constrained Economic Activity and by using our tools to assure that the eventual recovery is as vigorous as possible. To those ends, we have lowered Interest Rates to near zero in order to bring them barring costs, and committed to keeping rates at this low level until we are confident that the economy has weathered the storm and is on track to achieve our maximum employment and price stability goals. Even more importantly, we have acted to safeguard Financial Markets in order to provide stability to the Financial System and support the flow of credit in the economy. As a result of the economic dislocations caused by the virus , some essential Financial Markets had begun to sink into dysfunction, and many channels that households, businesses, and state and local governments rely on for credit had simply stopped working. We could forcefully to get markets working again, and as a result, Market Conditions generally improve. We are the programs undertaking to support the flow of credit line on emergency lending powers available only in very unusual circumstances such as those we find ourselves in today, and only with the consent of the secretary of the treasury. Lendingeploying these powers to an unprecedented extent, enabled in large part of the financial backing from the congress and the treasury. We will continue to use these powers forcefully, proactively, and aggressively until we are confident that we are solidly on the road to recovery. I would stress that these are lending powers, not spending powers. The fed is not authorized to grant money to particular beneficiaries. The fed can only make secured loans to solvent entities the expectation that the loans will be fully repaid. In the situation we face today, many borrowers will benefit from these programs, as will the overall economy, but there will also be entities of various kinds that need direct fiscal support rather than a loan they would struggle to repay. Measures are reserved for truly rare circumstances such as those we face today. When the economy as well on its way back to recovery and private markets and institutions are once again able to perform their vital functions of channeling credit and supporting economic growth, we will put these emergency tools away. None of us has the luxury of choosing our challenges. State and history provide them for us. Our job is to meet the tests we are presented. At the fed, we are doing all we can to help shepherd the economy through this difficult time. When the spread of the virus is under control, businesses will reopen and people will come back to work. There is every reason to believe that the economic rebound, when it comes, can be robust. We entered this turbulent period on strong economic footing, and that should help support the recovery. In the meantime, we are using our tools to help build a bridge from the Solid Economic Foundation on which we entered this crisis to a position of regained economic strength on the others. By thinking the millions on the front lines, those working in health care, sanitation, transportation, grocery stores, warehouses, deliveries, security, including our own team at the Federal Reserve, and compass others. Day after day, you have put yourself in harms way for others to ensure we have access to the things we need and to help us through this difficult time. Thank you, and david, i will look forward to your questions. Can you hear me now . Chair powell yes. I am the director of the Hutchins Center at brookings. I appreciate your remarks, and i particularly want to enforce the point you made at the end that a lot of us have the luxury of working from home remotely, but there are a lot of people who dont, and they are often forgotten in the past, and i think we all celebrate the work they are doing. I have a number of questions of my own, and some we have gotten from people who sent them in by email or via twitter. In the past three weeks, more than 50 Million People have filed initial claims for on employment benefits. That is huge. We all know that the Second Quarter is going to be awful, but i wonder if you could help us look ahead. Formidabler economists, what did they see for the rest of this year . You talked about a robust recovery. Do you expect that to begin this summer or fall . Have powell we do terrific economists with different specializations. If you asked them what their expectation is for the economy over the course of the rest of this year, they would tell you it really depends on the path of the coronavirus. How quickly does it spread to, how quickly we get it under control, how quickly people can go back to work knowing business knowing it is safe, how quickly businesses can open knowing it is safe. I would say that generally, my expectations is that the Second Quarter will be a very weak one because businesses are shut down. Workers are either working from home, furloughed or laid off, or the businesses they worked at is closed for the time being. So we do expect to see a very low economic output and big increases in initial claims for unemployment and an unlemon during the Second Quarter. Run its virus does course and it is safe to go back to work and safer business to open, then we would expect there to be a fairly quick rebound as people go back to work and start resuming normal levels of Economic Activity. That after expect the quarter that ends on june 30 two try to be on june 30. Two try to because ice two try to be precise about when that will be would not be appropriate. I think we do everything we can to keep the virus under control. The more we do that, the safer it will be to get back to work. Thank you. Butou know, the fed has hundreds of billions worth of treasury bonds, launched a for bet soup of lending programs, including some new ones today for state and local governments that blend up to 2. 3 trillion. Is there any limit to how much money the fed can create, how much it can lend without having some unwelcome side effects like inflation or asset price bubbles . Chair powell i would just say these programs we are using, under the law we do these with the consent, as i mentioned in my remarks, of the treasury secretary, and with fiscal backing through the treasury secretary to provide credits to households, businesses, state and local governments as we are directed by the congress. We are using that fiscal backstop to observe any losses. E have thats essentially what we are doing. We can keep doing that as long as those needs arise. Our ability to do that is limited really by the law. We have to find unusual and exigent circumstances, the treasury has to agree, and where using the fiscal backstop, but there is really no limit to how much we can do as long as it meets the test under the law as amended by doddfrank. There was all this money coming out of congress. Will it end up with more inflation or asset price bubbles . Chair powell inflation has been an interesting phenomenon. Back 12 years ago when the financial crisis was getting going and the fed was doing quantitative easing, many people feared that the increases in the money supply as a result of quantitative easing would result in high inflation. Not only did it not happen, the challenge has become that inflation is below our target, so that is globally be challenged, that inflation is below target. It is not a first order concern for us that too high inflation might be coming our way in the near term. Far from it. There are certainly, i would say, these are programs that we are developing at a high rate of speed. We dont have the luxury of taking our time the way we usually do. We are trying to get help quickly to the economy as it is needed. I worry that in hindsight, you will see that we could have done things differently. One thing i dont worry about is inflation right now. A number of people wrote questions that goes Something Like this. Think about somebody who works at a small restaurant. She has lost her job. The restaurant is closed. For how long, nobody really knows. All of the things you are doing, how do they help people like her, the owners of that small restaurant, and the millions in that position . Chair powell she sounds very typical of what many people are unfortunately enduring at the moment. I would say the most important thing that she can do is to stay home and stay healthy. The more people do that, the sooner we will get control of the spread of the virus, the sooner we will be able to get back to work. It is also important that our Health Care Authorities develop a plan for that to happen in a careful way that doesnt result in another outbreak, and then we have to go back to square one. The biggestar term, relief you will get will probably be from the expanded Unemployment Insurance under the c. A. R. E. S. Act, which i think under the per week end limit insurance benefit. There are so many newly , but she iseople entitled to that money and she will get that money. Longer than ite should. To point of these remarks is try to provide some stability and relief during this period when the economy is partly shut down. That involves keeping interest see lower so she will interest payments. Also, as you mentioned, weve used our tools to keep the Financial Markets functioning. That is going to avoid significant further damage to the economy. Really, the most important thing we can do is, while providing stability, will be to support a robust recovery when it does come. That is what our tools are most important for. You mentioned that congress has done quite a bit. You mentioned directly that you dont do taxes and spending. Congress does. But everyone, including members of congress, look to you for advice. In your judgment, do we have to do a lot more on the fiscal policy front in response to this crisis . Chair powell i just a stress that, as you know, we are not. Esponsible for fiscal policy as i mentioned in my remarks that what people really need is direct fiscal support rather than a loan, and what we can do is loans. So there is a need for fiscal policy. I hear many voices on both sides of capitol hill and both parties talking now about further support. I do think that is likely to be appropriate. They will have to decide is elected officials what that might be, but you already here, for example, further funding for the Small Business sba loans, and also perhaps more direct funding for the states and for hospitals. Again, not our job, but i would see that is more likely not to be needed. As more likely than not to be needed. Broadly, people are undertaking these sacrifices for the common good. To the extent that we have the ability to make them whole, we should be doing that as a society. Their business isnt closed because of anything they did wrong. They didnt lose their job because of anything they did wrong. This is what the great fiscal power of the United States is for, to protect these people as best we can from the hardships they are facing. Allocated 450 billion to backstop said emergency lending. Today you used 195 billion of that for the various programs you announced this morning. What are your priorities for the rest of that money . How do you think about how you will use it . Chair powell our priority really for all of it is the same, and that is whats happened is, and our big, complicated economy and Financial Markets and banking system, we rely on those who have funds to lend through various channels to those who are borrowing. Oft happened when the spread the coronavirus around the globe became clear is investors all over the world really struggled to assess what that meant for the economy, so they pulled back from other kinds of investment and really went to the safest shortterm investments like tbills. The result was that many parts of the capital markets, and lending more broadly, stopped functioning. Situationactly the that our Emergency Powers are meant to address. So we have moved in, as i mentioned, and our priority are those areas of the markets that are most fundamental to supporting the real economy. You see the programs. Nineve now announced different facilities, and those are the Priority Areas where we thought that help was needed. As we identify other areas, we wont hesitate to move into those areas. In addition, we may find that some of the programs weve announced need adjusting, and need to be larger or didnt need to be as large as we thought. We are going to be watching all of that, and are very much willing to adapt. Consensuss, i think, during the financial crisis that banks were allowed to deplete capital by paying dividends for too long. They temporarily suspended dividend payments. I wonder if they were recommended to suspend common dividends as well. Chair powell i should start by saying that businesses distribute earnings to their shareholders through buybacks and through dividends, and it is just a way of saying that the owners may have better use for those funds in the business does. It is a perfectly normal thing in our capitalist system. Our largest Financial Institutions do about 70 of those distributions through share repurchases. All of our most systemically important institutions have stopped distributions through that channel, as have a number of regional banks that account for a big part of the banking system. And that is a good thing. They havent stopped dividends. I donty of thinking, think that is something that needs to be done at this point. I think our banks are highly capitalized, far more highly capitalized, with more highquality capital, than they were before the financial crisis. We will be watching to see how things evolve, but i dont think that step is appropriate at this time. One of the things that this period, which is pretty extraordinary, is what is going on in the Mortgage Market. Theres questions about the mortgage servicers. Do you think there are steps that need to be taken by the government, broadly defined, to make sure that a mortgage crisis doesnt make the economic recovery slower than need be . Chair powell first, i think the c. A. R. E. S. Act does provide a moratorium on payments for some time for some mortgage holders, but you are absolutely right, the Mortgage Market is at the very center of our economy and very important for the real economy. That is why we bought some any Mortgage Backed securities at such an historically aggressive pace over the last few weeks. If you like that market, which is where a lot of individual home and other mortgages wind up, is now functioning more properly. We are watching carefully the situation with the mortgage servicers, and i will just tell you that we certainly have our eyes on that as a key market ,hat does support households and consumer spending, which is 70 of the economy, so we will be watching that carefully. Few understand that a minutes ago, the treasury secretary Steven Mnuchin said that parts of the economy might be ready to open by may. Does that seem right to you . Chair powell this is not a judgment that is assigned to the fed to make, and that is a judgment that has to be made, i think, starting with health officials. I do think it is time to have a serious public conversation and a lot of analysis about that. We need to have a plan nationally for reopening the economy. We all want it to happen as quickly as possible. We all want to avoid a false start where we partially reopen, and that results in a spike in coronavirus cases, and then we have to go back again to square one. We all want to avoid that. We are not experts in that here in the fed. I would really rely on the medical experts principally, and then that will be a decision for other parts of government. I would like to think a little bit about on the others here. Going to be looking at two decide whether or not it is time to pull back these lending facilities and maybe begin to tighten again . Chair powell as youve noticed over the years, david, we tend to move gradually and productively. We think it is a good way to do things. We will be looking to see certainly that the economy as well on the path to recovery. We will be in no hurry to pull back on asset purchases or on that aregrams tentatively scheduled to stop lending on september 30. If they have to go longer than that, of course they will. I think the thing we will be looking at is to make sure the economy is on really solid footing before we start pulling back. And as you know, when we start pulling back, we do so very gradually. When using about the way we handled quantitative easing in 2013, 2014, we did it over the course of a full year. You can fully appreciate and expect we will follow that playbook of well telegraphed in moves,d, quite gradual and we wont start them until it is time to do so, a time at which we are confident the economy is on solid footing again. David a number of people have rely on a capyou on shortterm Interest Rates, a yield curve control type of thing, when you come out of this. Have you considered that . Chair powell we have done a lot of thinking about what Monetary Policy might look like guy youve been listening to fed chairman Jerome Powell give economic updates. We are going to take a short break. You can continue to monitor the chairman using the function live o on your bloomberg. This is bloomberg. Chair powell the principal focus now is not on unappropriate stance of Monetary Policy for the next couple of months. The printable focus is on the lending programs and making sure that credit does flow in the economy. We saw what happens when the Credit System breaks. It can really inflict much greater damage on the economy. From london, im guy johnson. This is bloomberg markets. Lets get back to fed chair Jerome Powells economic update. Are scared now. This is not something any of us have lived through in our lifetimes, a pandemic that causes the economy to stop and makes people afraid of interacting with their neighbors. I think people want to know that our leaders, people like you, are confident that we will get through this. I want to give you this opportunity, if you like, to reassure people about what lies ahead. Chair powell thank you. I would say this is going to be a very difficult time for many people. People are getting sick. Their loved ones are getting sick. People are getting furloughed and laid off. People who start great businesses are seeing them shuttered. I wouldnt want to say anything that diminishes the suffering that people are feeling at all. It is going to be a tough time. But if the government continues to give people the support that they need, that includes us, congress, other parts of government, and if people stay home and stay healthy until it is appropriate to go back to work, and if the Health Care Policy experts devise a plan for a good way to go back to work and reopen the economy, if we do all of those things, there is every reason to think that we can be back on the road to a recovery fairly quickly, and that that can be a robust recovery. I actually thought chairman bernanke said it well the other day and he said that if we do those things, you will be looking back on this and you wont see much, only modest effects on the economy from this event. I think that can be the case if we do the things i mentioned. David well, as they say, from your lips to gods ears. Chairman jay powell, thank you very much for your time today. I thank everybody for watching and the good questions we have received, and we wish you all a very safe few weeks as you continue the important job of steering our economy through this terrible storm. Thank you very much. Chair powell thank you, david, and thanks, john. Guy youve been listening to an economic update delivered by the Federal Reserve chair jay powell. Just in terms of what we are getting and what we are understanding about the nature of the response that the fed is delivering, very much touching all areas of Economic Activity now, and we are getting an alphabet soup of what is happening in the economic sphere in the United States. You just wonder if it is getting to the stage where it is so complex, you wonder whether that complexity is going to be a problem. Tox we saw that as we tried eskew the Small Business administration loans and how complicated it was for banks. There may be some infrastructure issues and logjams that need to be worked out, but the message clearly from jay powell is we are here, we are going to support the economy. We are not going to pull back on bond buying, we are not going to pull back on the loan programs. They are worried about any false starts to the economy. He mentioned that a couple of times, that when the economy reopens, that we dont go back to being in lockdown. Some big steps being taken, and i got to say, risk is flying. S p is off the highs of the session, but still, the dollar dropping like a stone. Just a little bit of buying on the bond market. Oil flying as well. All of that adding to risk, in particular when it comes to the junk bond market. If you were at the lower end of ig, you are now considered ok for the fed to buy you. I wonder longterm is something what that is actually going to play out. Guy i think theres a question about how weight is all going to play out, and ultimately with the longterm impact is going to be. The fed chair talking about getting to a place where you dont see much economic effects. I think that is highly doubtful, considering how deep we are now reaching into the toolbox. Lets get analysis now with bloombergs mike mckee. We are adding to the off of that suit. We have now got a whole to the alphabet soup. We have now got a whole range of programs offered by the fed. In terms of the complexity question, are we getting to the point where it is actually going to be really hard to understand what affects one program is having, how effective the whole game at is turning out to be . Have we simply got too much here now to get a full understanding of what is going on . Michael i dont think its too much. It may be very complex, admit may be a thing that congress once to take a look at. We came out of the great financial crisis with doddfrank. Maybe you set up a different what theut basically, fed is doing is going into each corner of the Financial System and offering assistance in the ways it is legally allowed to do so. So what youre going to have to do is take each corner of the Financial System and see how it is going. The first measure is going to be did the banks and the sba, with the feds help, get Small Businesses up and ringing again . We have the fed buying these ppp loans. Then you have mediumsized companies. They are going to basically buy 600 million in loans to those companies. Did they keep people on payroll . That is going to be important. Then we will see how the Larger Companies, the ones that Corporate Bonds the fed is buying, how did they fare throughout this whole thing . Then you get smaller areas like commercial mortgagebacked securities and collateralized loan obligations. Each one of these pieces of the Financial System kind of work together, so if the Financial System holds together through this, we get to the restart of the economy, and banks are able to make loans and people are able to get credit, than the fed in general will have succeeded. Obviously there will be problems within each segment, but we wont really know until after it is all over. Alix michael mckee, thank you so much. You have been so great on all of this analysis. Just to break some headlines for you, basically, what we can tell you is fed democrats are going to block the 250 million Small Business aid plan. Minority leader Chuck Schumer and House Speaker nancy pelosi wanted to add even more money to expand the Small Business loans. Mitch mcconnell is sticking firm at 250 billion. It looks like the democrats have successfully blocked that. Now the question is where does it go from there. Do we wind up getting what the democrats want . The fact is, the Companies Need this money yesterday. The fed doing it part. Congress kinda been locked and right now. Lets get to michelle meyer, bank of America Merrill lynch head of u. S. Economics. Theres been so much to digest in the last few hours. What is your biggest take away from what we heard from the fed, from jay powell, and now from d. C. . Michelle i think it is very clear that policymakers are committed to supporting the economy. The fed has taken action after action to prove that they are doing everything in their power to not only be the buyer of last resort, but the lender of last resort as well, and get credit to flow through the Financial System with hopes it can flow more broadly through the economy. The fed has not hesitated to , tost the programs introduce new programs, and take signals from how the market is responding. Fed chair powell was very clear in his webinar that they will continue to do so. Their printable focus is on these lending programs, and they wont hesitate to adjust as needed. I just want to actually break a headline here. We were debating when we wanted to do this. It happens to be opec. It seems like opec and the delegates have reached a deal on opec cut. Reuters saying it could be as big as 20 Million Barrels a day. Oil is obviously flying on that news. The under was 10, the goal was 15. This would actually be material. Again, you are not going to see that until may affect the markets, but there could be more shortterm downside. Guy i think we could find ourselves in a situation where this comes a little bit too late, considering where we are with storage. You brought us the Inventory Data yesterday. It feels like an age ago. Inventories are filling up superfast here. As a result of which, even these cuts, even if they are delivered, may come too late, so the Storage Facilities may just be getting fuller and fuller. Then there is this whole question about is everybody going to stick to it. Is everybody going to be up for delivering upon this . Opec and opec have a history of maybe not being completely able to deliver on the promises that are made up front. We will see. Alix what . You mean russia is not 100 compliant . That is just rude. Michelle, lets get back to you. Jay powell also making the distinction between lending and spending. That the fed is all about lending, and government should be about spending. Then we see that the democrats have blocked the 250 billion for Small Business aid package. How do you model any kind of growth forecast when we are dealing with all of these factors . Michelle of course there is going to be a backandforth when it comes to fiscal policy. It always takes a bit longer to get the fiscal policy response. The Monetary Policy response is often seamless and quick. But we do think we will get there. We do think there will be another stimulus bill. Not only will be lending programs be expanded for Small Businesses, but we also anticipate more directed funds to household sectors and state and local government. It is a multifaceted response both from the fed and from congress. How do you model it . I think in the near term, you can look at some of the highfrequency data to understand the degree to which the economy is falling today. The bigger challenge, of course, is what that recovery would look like. There i think you want to put into place what the policy response is. So how much will be pumped into the hands of households through these programs . Will come but hes be able to keep their doors open . What is the size of their workforce . You have to be pretty brave with euro sumptions, but there are simulations that we are working on very hard with your assumptions, but there are simulations that we are working on very hard. Are the banks going to deliver . Verylle you are seeing a quite a response from the Banking Community as well in terms of trying to launch this payroll protection program, now with the latest facilities from the fed that should further support the ability and willingness of banks to lend. I think that clearly, it is very important to have the Banking Sector as the ones to facilitate the flow of credit. The fed is not a commercial bank, and it cant pretend to be one overnight. So you need to support of the depository institutions, but it seems like that is happening. Guy in terms of the complexity of everything that is happening here, how easy is it to understand, if you are looking at this from main street, from the corporate sector, how easy is it to understand how you should approach this, how you should get the best out of this, how i can take advantage of this . Because people have been describing it as an alphabet soup of different programs, both on the physical front and monetary front, and some of this is overlapping. I wonder if we are getting to the point where complexity is becoming a little bit of an enemy. It is michelle well, come located, but the policy response has to be complicated because the shock is complicated. It is hurting different parts of the economy at the same time, and policymakers are trying to respond. The reality is that for small and mediumsized businesses, the programs through the Small Business association in terms of payroll protection programs, all of those are really targeting those companies. The Credit Facilities the fed has put in place for investment grade, now touching on high yield, that should support the Larger Companies in terms of getting a flow of credit. I think that, given the nature of the shock and how widespread it is and how acute it is across different parts of the economy, the policy response is as well. Alix really great to get your perspective, bricking down some super complicated topics. Michelle meyer of bank of America Merrill lynch, head of u. S. Economics. Coming up, an update on what is happening with the virus and the impatiens for the market. This is bloomberg. Loomberg. Guy this is bloomberg markets. You are at the principal room. Coming up later today on balance of power, richard trumka, the aflcio president. This is bloomberg. Guy you are watching bloomberg markets. A little bit of breaking news over the last few minutes from the Airline Sector. British airways, which is part of iag, the business run by the umbrella for a series of airlines here in europe, including iberia and aer lingus, British Airways has been cut to junk by fitch. I dont think this is going to come as a massive surprise, considering what is happening in the Airline Sector right now. Fitch has downgraded to share ways to bb . Interestingly enough, it is maintaining its outlook. A piece earlier indicating that it things american, lufthansa, air france, easyjet all need capital. It is interesting that iag is not on that list. Iag coming into this with one of the strongest Balance Sheets. To alex cruz,king who runs British Airways, to ensure the Balance Sheet was in a position that it could withstand a certificate source of stress such as what we are experiencing at the moment. It had been a major effort ever since the financial crisis. Effectively, that was job number one. So the Balance Sheet may be looking a little bit better than some of their peers, according to ehrenberg. In terms of what we need to know, lets find out about the virus. Lets get an update with viviana hurtado. Begin with want to dr. Anthony fauci revising downward u. S. Fatalities from up to 200,000 to around 60,000, but this is this the curve keeps flattening in new york, the u. S. Epicenter, and social distancing continues to be practiced across the nation. Still, in the u. S. , cases are accelerating, and is on track to overtake italy as the world epicenter of covid19 mortality. Some nations globally reporting a spike. We are talking about indonesia, iran, and russia. Spain reporting a downturn in deaths, and it is set to extend a nationwide lockdown. So is italy and the u. K. In the u. K. , boris recovering in the icu, according to his spokesman. Before imposing restrictions, the economy was on shaky ground. Gdp falling 1 from january, fronting the question of how steep the coronavirus lockdown pain will be and what the road back will look like. To mitigate this kind of dynamic , here in the u. S. , the fed announcing another series of sweeping steps, providing 2. 2 trillion dollars in additional loans to state and local governments. Americans6. 6 millions applying for jobless benefits in the week that ended april 4, the Third Straight week of record jobless claims. If you were to do a tally, that is nearly 17 million workers in the u. S. Without jobs in the three weeks of jobless claims reports. Economists are estimating in the reports, not jobs jobless claims, we could see up to 15 unemployment rate. This is bloomberg. Alix time now for futures in focus. The ninthdes, we have extraordinary opec and opec meeting starting now. The rumor is you are looking at 20 Million Barrels of oil cut on the market. Joining us on the phone is todd goldman. Are you playing this for some more upside here . We already have crude flying by 8 . Todd crude is making a pretty big move. If you go back to when we were hovering around 20 a barrel, it is even more considerable. I think the range we have seen suggests there is optimism in the market, but really, what it is going to come down to is demand, and when is that demand component going to come back . That is a very gray area we get to in the markets. We talk about when we are going to get people back to work and get travelers back out when what they do, and that is something we are probably going to see oil stuck in a little bit of arrange until that is more clear. Alix no doubt, and we see pretty steep contango still in the cards, but the whole of the curve, particularly on the backend, has really rerated us a touch higher. Is there a better trade to make to play some upside later on . Todd i think there is definitely going to be some upside here. If you want to look at calls above the old levels we were looking at, we had the 40 and 30 puts marked as the lows of the lows if oil were going to drop. Now weve got a lot of paper and 15 puts, 10 which i still think are a little out of the realm of reality unless these production cuts dont go through. I think the upside to oil is dependent on when we get the Global Economy back to work. Right now, demand is at a standstill, but demand will come back when it is allowed to. It is more of a timing play. I thing later in the year, oil prices definitely have an upside. Guy how much space do you have in opec to, when push comes to shove, deliver on what is promised . Storage tanks are filling up rapidly. Get these not getting completely adhered to, that is going to be problematic. Todd where is the oil going to go is the question. Right now, the containers are filling up quickly. The cost to hold them and not sell them is obviously going to be a pain on any producers Balance Sheet. At this point, how can we get through this . Theres a lot of hope being priced into this meeting, and i think that what we have seen previously from production cuts, with maybe the saudis and the russians not seeing eye to i, you bring the u. S. In on that as well, youve really got your hands full. But given the pandemic and the stresses on the Global Economy, they have no choice but to work together. So my optimism is higher than it would be under normal circumstances. Guy just quickly, i am seeing this dow jones headline coming from reporting there. Opec needs a deal between pressure to cut 2 Million Barrels a day and saudi by 4 Million Barrels a day. Does that 6 Million Barrels a day get you i am wondering 14, 15, 16 come from to get us towards 20. Where are we . Todd it seems like that could be a preliminary headline. At this point, where did the saudis start their cuts from . They surged production well above 12 Million Barrels, so if they go back to presurge, it may give a little bit more. You have smaller countries that are going to be contributing as well. Everyone is going to have to pitch in on this if they want to Keep Oil Prices from isnting, and again, this about a lack of demand later in the year. The demand has stopped. So some of these cuts may seenlly prove to be well given that oil prices have gone down below 20 a barrel, and that is a key level. I am optimistic that they will get some more on board and get close to that 20 million barrel cut that they are anticipating, but anywhere between 15 to 20 is positive. Guy i am just trying to back out on where we are starting from, what this tells us, and where that is going to leave us. Have a great long weekend. Thank you for taking the time to join us. Todd colvin joining us from chicago. , bnpg up, viktor hjort paribas global head of credit strategy, joining us in the next hour. We are counting you down to the european close. 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 . Guy from london, im guy johnson, with alix steel in new york. We are counting you down to the european close on bloomberg markets. Lets take a look at where we sit with european equities. We are off our earlier highs, but certainly the fed providing a pullup into the weekend. Normally with a long weekend like this, given where we are, people may be tended to take risk off the table, but it is turning out to be another very strong week for European Equity markets, equity markets around the world. The norwegian krone very good for the oil story, catching a bid. Eurodollar also trading higher. The buck down today. Theseilts, we are seeing come down as the bank of england extends a much larger overdraft to the u. K. Treasury just to make sure the bills can be paid in short order. Alix