What is so important is a massive shift and the quality of the riskuncle relations this morning. I dont want to over of the riskon relations this morning. I dont want to oversell it, but it is that type of monday. Francine we will ask how some of these countries are doing with lockdowns in a second, but first lets get to first word news in new york city with viviana hurtado. Viviana as soon as may 15, that is the date could begin reopening. Governor cuomo laying out a phased plan that starts with construction and many factories. He said he would probably begin upstate before moving to the new york city area. Yesterday the state reported 367 deaths, the lowest in almost a month. To the u. K. , where Horace Johnson is back at work. The last cup where Boris Johnson is back at work. The last couple of weeks he recovered from coronavirus. In his first public statement, he urged people not to give up on social distancing measures. He said ending the lockdown now would risk a second spike of infections and would do more damage. Barrel,ging below 15 a stopping a fourday gain. Saudi arabia already started cutting back on output. There is concerned it could lead to a rerun of last weeks crash. We end with a surprise from Deutsche Bank. The german lender joining other investment banks beating First Quarter profit expectations. At the same time it wants provisions for bad loans they have hit the highest in more than six years. Butcher bank also cautioning about the unpredictable impact which a bank also cautioning about the unpredictable impact on wednesday. When the results will come out. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im 50an 120 countries, and hurtado. This is bloomberg. Francine . Tom . Tom viviana, thanks so much. Equities, bonds, currencies, commodities. Really interesting out there. Highs on the dow or the sps. What is creek here is weaker dollar and weaker gold as well. What is critical here is a weaker dollar and were gold as well and weaker gold as well. West texas intermediate really in sharpley versus brennan, showing some of that tension in oil, particularly in cushing, in the central part of the united states. Francine . Tom, i am looking at the dollar weakening a touch. Stocks in europe gaining. We saw a lift to the market in asia. The dollar weakening, oil is slumping, and of course this morning we had the bank of japan risking stimulus measures. We look at the corporate results, for example, Deutsche Bank joining other investment quarterlyting earnings expectations. We have to look at when Central Banks will what Central Banks will come up with later in the week im a whether it air is concerned about something uglier happening, maybe a credit crunch or other type of financial crisis. We will have more on that. Lets get straight to erik nielsen, who is the group chief economist at unicredit. When you look at exactly what is going on in the economies, we were hearing Prime MinisterBoris Johnson say he does not want to reopen the economy too quickly. Is that the main concern, that the lockdown ends the number of infected spikes up, and then we go into full lockdown again . How damaging would that be to the economy . This is what a lot of people in the market are worried about. On the one hand, there is an increasing appreciation that may be the complete lockdown will not last quite as long as some, including myself, had thought. But i the same token, there is also an appreciation that this is not something that will come to a complete end suddenly, but probably there will be some sort of distancing, socially or physical distancing for a very long time, unfortunately. Francine what does it mean for the economy . Are we going to see a recession, like we understand Christine Lagarde told leaders, around 15 . Retraction in15 european gdp, how do we get out of it . Average forecast an decline in gdp in the eurozone about 13 . We have the same ballpark, and we think the u. S. Will be very close to that number also, to be a tad less or something to that effect. You can think about it in three stages. The Immediate Impact we are seeing now with the numbers coming out, whether it is the and the rest of it, and as far as i can judge, it is a fair if not worse, more bearish situation than we in the market thought. We think that may be picking up a little bit, and definitely a bit of positive news there. You can get some activity started again. Longf course, it will be a difficult draft back, the third phase, where we come back where we will in some day, and it will be two or three years in our numbers before we store the levels of gdp that we had before the crisis began. , good morning, in a week of centralbank action and nonaction, i have to ask a philosophical question. Are the Central Banks fighting the last war, and that the risk here is we get to recovery, we get to some control of this horrific pandemic, and they are worried about 20 gdp, when we get back and then when we get back quicker than anybody presumes the echo erik i dont think we are fighting the last war. It is more like the famous picture from the fed, that during the financial crisis you are slowing everything we have never seen anything like this before. But i would give the Central Banks and a lot of credit for doing two things. Can indoing the best it terms of keeping markets alive, and broadly speaking, functioning. They are explicitly or implicitly the coordinating policies this time around with fiscal policy, because at the end of the day, it is mostly a fiscal story about providing guarantees and subsidies to people hit by these by this terrible situation. But the Central Banks have stepped in in america, europe, britain, japan, to commit that otherwise unavailable Monetary Policy tightening with all of this enormous increase in issuance. Francine is tom is the idea of european mutualization slipping away . Is that the first thing to go in any kind of optimism with a combined bond for europe . Erik that is a super interesting question, tom. To step back and say i think this caution is a bit misleading , there is no conceivable way of debt wouldtion happen to an extent that it makes any material difference to anybodys debt situation. First of all, there is mutual 800 million not something that doesnt exist already, but you cannot imagine suddenly in the middle of a crisis that this moves to a level that fundamentally prevents public debt to gdp ratios increasing by 15 , 20 . Out the oxygen in the air that otherwise should have been used to construction really two constructively think about how to get through this firefighting episode and build better growth afterwards. Francine in your morning notes, you talk about the misguided focus on european solidarity. A lot is actually happening. It has been so much talk and i guess disappointment. Can you correct what you see happening, that you think a lot of people have done a lot . Erik yes, a lot has been done. First of all, the solitary the solidarity that has been done, that patients have been flown across the country to be treated at hospitals, so there are masks and equipment being shipped around. For me, that is the part of solidarity. Then there is the big monetary solidarity, that is the ecb. When you think about what the ecb buys, the fact that they are diverting substantially now from capital keys, that is a huge sign of solidarity to me. Recovery fronte that is going to be designed inside the commission that will help down the line. For me, in a sense, as i wrote yesterday, i feel that this sort of discussion has been mixed up with this underlying issue that a lot of people feel that there should be federalism inside the eurozone, because the solidarity, why is switzerland not part of this conversation . Why are denmark or sweden not part of this conversation . It feels to me like it is not really solidarity, it is about the opportunity to do something in the eurozone that we otherwise could not get through. Francine you also talk about the narrative over debt sustainability being wrong. Erik yes. This is the extension of this conversation, that public debt goes up, and italy being the case in point, everybody says, my god, public debt to gdp goes to 165 or 180, whatever you make up. But it is the wrong analysis because debt to gdp is a stock mover flow concept, and when Interest Rates are low, this affects the whole conversation. In my opinion, what is the Interest Payment as a share of italy, even on the most significant negative way, goes 7 to 9 . Bit over is that really a big issue . It is not great, but it is certainly nothing that can persuade me that it is fundamentally unsustainable . With us fromlsen unicredit, and we will continue. Fascinating to see some of the dynamics over the weekend. Get back into to lessform of socially distance amid this pandemic. Coming, look for ian bremmer of eurasia group. An update on a cheap euro world. This is bloomberg. Good morning. Tom good morning, everyone. Frommberg surveillance, london and new york. In six weeks county, maybe five, maybe seven i think six weeks lift, an interesting correlation in the market. There are some exceptions. I would point to brazil as well. But nevertheless, an interesting and optimistic start on a monday. Erik nielsen was thus with us from unicredit. There are eight ways to go here. And i can focus on italy and the unicredit mandate and all, but i really think on a monday it is time to focus on Christine Lagarde. What are her degrees of freedom right now in the political economics she faces . How constrained is madame lagarde . Think, tom, that you probably have a central bank with amazingly free hands at this stage. And you have seen it through the extraordinary programs that they invented on the spot. We were all, including myself, screaming for the need for whatever it takes, and she did not like it and it was very clear there was some big hangover about this, and then comes the that program, and after they announced the 750 tpp program, where they buy everything, and the Stock Investment grade, it gives them the folks ability to buy whatever they want in this space. So they have a letter freedom now. Fascinating tois me is jay powell, chairman powell, as a secretary, munition, and he has a secretary munition who says to republican senators secretary mnuchin that im going to speak with secretary pelosi. Lagardesistine secretary mnuchin . Place youe is not one call up. The good news is in some ways it gives the central bank more freedom because of their flex ability, and it doesnt have of their flexibility. It doesnt have one person like President Trump breathing down your neck. It confuses markets, obviously. We had the conversation about mutual debt and the rest of it. In europe you have had as much if not more fiscal expansion. But it is done by the individual countries. And therefore people can sort of get confused as to how it works. Bad set up, and a but it is what it is. So far it seems to work very well. Francine what do you worry most about worldwide . If there is a spike in the second wave of lockdowns, how does that impact the rest of the world . Erik this is exactly right, francine. This is a health crisis. People are dying and people are scared. This is obviously what has to worry about, both for humanitarian reasons, but it also has a direct impact on the economy. By the lockdown, that is needed, or because for business reasons governments are pushed to open up earlier than the Health Situation allows and we get a second round. We see it in asia, in the middle east, particularly among the populations that are less dorms and living in in close proximity to each other, where you cannot practice social distancing, if that is the word here. This to me is by far the biggest concern, that one way or the other this goes on and keeps Economic Activity down until finally we have a vaccine or the critical treatment for this terrible virus. Do you worry about a credit crunch . Yes and no, it is very clear that the banks are part of the solution, not part of the problem. We came into this process with much stronger banks than before. That said, there was no stress pushing this type of gdp balanceonto the banks sheets. If this goes on for a while, even with the guarantees, you can certainly see problems with the banking system. The Balance Sheets in the middle of the otherwise, you get a situation where the credit crunch, and the fundamental Underlying Health of the Financial System will become a question mark. Francine thank you so much for joining us. Erik nielsen, the Unicredit Group chief economist. Later today on bloomberg, ed hyman evercore, the chairman, at 10 00 a. M. In london, and this is bloomberg. Viviana you are watching bloomberg surveillance. Lets get to the business flash. We begin with bayer, which could have big liquidity problems. Over the week, killer losses in the u. S. They claim round up it is claimed that round of weedkiller causes cancer. The big question is if bayer will settle and for how much. There is speculation a settlement could cost around 10 million. Bleeding cash it is a warning from the ceo of airbus, telling employees that the Company Needs to quickly cut costs to adapt to a radically shrinking industry. Airbus customers are fighting to survive. Boeing isle to preparing to slash reductions and jobs. And historic collapse in prices claiming another victim. Company is controlled by corporation. Drill into water that is to scope that is two milesteep that is two deep. That is the business flash. Tom thank you so much. We want to look at the data. The major thing you need to know on the equity markets, back down to 39, maybe a 41 Central Point on the vix, a measurement of equity enthusiasm. We have decisively broken to a even downistic tone, to a 35 handle on the vix. A further lift to the market this morning. Sort of that where we were before the collapse, the negative pricing. Brent crude somewhat resilient, 20, 21. West texas intermediate having a tough day of it, american oil decidedly off the mark this morning. Coming up, possibly the interview of the day on oil. Kingdom ofn the aside as we look at the collapse in oil. From london, from new york, this is bloomberg. 49. 50 daddy, i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies, even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Francine good morning. Spent a good amount of time, if not all of last week talking about the price of oil. Bale ing under 15 a 15 a barrel. It has been difficult for leading producers to keep pumping. Started production cuts earlier than expected. Talk about output cuts, the price of oil, lets get straight , associatekianakis fellow of the middle east and north Africa Program at cambridge university. Thank you so much for joining us. I dont know that there is anything opecplus can do to sustain the price of oil. We were promised g20 would play a role. Where are they . Right now, opec has to cut downw more can be and how willing they are to see this through. The implementation is always the problem, that has always been the case. Would, saudi arabia reduce more or increase more. Now it is not just saudi arabia, it includes russia and everybody. As we see downward pressure will downward pressure on oil. Francine given what we saw last monday with certain futures going to negative territory, is this going to be a factor in the coming months . Sure ortterm, it shortterm, it should be. Mediumterm, once we get out of this lockdown globally, i am not saying we are going back to the heydays of precovid. The world is going to be different, even for hydrocarbon and oil. I believe we are going to see an increase in the price of oil. Brent is more important for most of the gulf Oil Producing countries because that is how they calculate selling price. Levels, stays on these this is far better than what they would be expecting. I see an increase in the price of oil sometime in the summer, not anywhere close to 45 has many analysts are predicting. I see we are at the bottom side of the price cycle. An you and i could talk for hour about your uncommon knowledge of the kingdom of saud , the culture on the culture and fabric of the family. I want you to summarize how alone the family is and how alone the young gentleman is trying to lead them forward when you look at sunnisheer saudis relations with mr. Trump. How alone is the . He . Ow alone is john you describe it very well. Be of theman seems to view now that he is correct in trying to reform saudi arabia. Vision, he did have a that oil is going to sink and they need to change their cut rate. Youth ofto bring the saudi arabia with him. I think he has succeeded. At the same time, a lot of people in the u. S. Are against saudi arabia, against the price e they could have enacted the price war they could have enacted. It was just bad timing on the side of the russians, they didnt see covid. Is in a challenging situation, but i think he has been is indicated in some ways, telling people i have to change my country because oil is our only resource and that could sink. This is what we are seeing before our eyes. Priceice of oil as the of oil has sunk and it is not good news. Nowhat is his relationship ,ith the rest of the arab world particularly the adjacency of the United Arab Emirates . Relationship with adjacent countries is challenging because they are predominantly looking traditionally for saudi help. Saying,l be looking and much can you support us . I think this is what jordan is looking for. Their situation is dire. Egypt is not doing well. They just reached out to the imf , they could be looking to saudi but saudi cannot bail them out. Supported bying saudi and the neighborhood. Is relationship with the uae interesting. It has gone from highs to lows ishighs, now i think there more proximity but there are also differences. Although they are loving cousins, they have differences predominantly about the geopolitics of the region, the role of a ron the role of iran and the situation in yemen. Francine what does this mean for the price of oil . Brent could go to 10. I dont see it going that low unless we begin to see a lot of fundamentals coming out, the likelihood over the next few weeks. Athink that could be possibility for oil at 10. That is bad news for oilproducing countries. , stayohn sfakianakis safe. I appreciate it. With chatteris is house in london. Now, viviana hurtado. New york state is looking at may 15 to begin reopening. Governor cuomo saying many construction could resume. This before moving south to the new york city area. State reported 367 coronavirus deaths, the lowest in almost a month. President trump called his health hence Human Services secretary and told him his job is safe. Many were saying he might out alex azar because of criticism of the administrations coronavirus response. To italy, the nation plans to ease lockdown restrictions one week from today. That sets up a test of europes effort to restart public life. The Prime Minister warning a second wave of coronavirus could cause irreversible damage. We end with the mystery over kim jongun. Chinese a report medical team, another says the leaders armored train was spotted near a compound. Kim has not appeared in state media in two weeks, but south korea maintains rumors he may be dead are untrue. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. The chaos over the weekend of the prospect for the leader of north korea. Coming up, they chaos and prospects of the Republican Party in washington. In the heartland of mr. Trumps future election, french chillers from arkansas. Mark and saw francine good morning. York, this and new is bloomberg surveillance. Him about how much funds or cash he needs. There was controversy in germany about some of the buybacks they have done before the lockdown. , theare asking the State Government to help them a little bit. Second Quarter Sales likely to fall 40 . More than two thirds of Adidas Stores are closed. Close to one billion. We should be equipped on our Balance Sheet. Is, how quick will the recovery come . Indicatorbeen a good in the First Quarter when we saw Online Business growing rapidly. From a cash standpoint, we are going to go through a difficult year. You toldreason us previously in march your Balance Sheet looks good. To the work you have been doing, is there any reason you would need to tap state loan programs for help . In march. That we were able to get a state backed loan where the frontrunner was unique credit. Is closed in april, we couldnt receive that when we had the conversation in march. We are seeing a slow opening. That means we need a different Balance Sheet were the views are different. The rightve done is precautionary measures. You say things have changed in the last three weeks or so, yet you had a lot of insight because of what you had seen in china already. Would it be safe to say you had been caught by surprise in sense of how bad things have become for europe . That would be a gross misstatement. When we went to the third week of march, i dont think anybody would have predict the world close down. Everyone would have acted differently. Indicatorser early what we saw were early indicators, but shutting down i dont think anyone could foresee. We have put a Balance Sheet in place that will withstand to issues. I have to disagree. Had a flight home march 15, i knew the week previous was going to have to cancel because i was afraid i wouldnt be able to get back to germany. You were still buying back shares at that point, that has made germans pretty angry that you are buying back shares into march when we all knew the world was going to shut down. And then you are borrowing money from Government Programs the next month . That is a concern for germans and for shareholders. Buybackop our share march 16. That was the week the world closed down. I do think we have done enough precautionary measures. Our industry is hit harder because we are retail. Now the i think right world has been surprised about the speed and rapid and this the world closed down with. What are you going to be doing now to shore up cash reserves . Are you going to be taking on debt . We need to get operational business back on track. Online,5 growth in increasing also moving into april. And then we are looking at what are alternative financial first thebut operational business has to get back on track. Nicely framed question by matt miller on the dynamics daytoday thinking in march between prosperity and reality that the consumer had disappeared. We have got much more coming up. Jeffrey curry will join us from Goldman Sachs on oil. Looking forward to that update, that will be in the 7 00 hour. , an west texasn intermediate slowing down as well. A lot more to come. Also, it is a risk on trade today, no question. We see that across the country. This is bloomberg. Francine Richard Branson may pour more money to save Virgin Atlantic airwaves. Far, theay spirit so British Government has resisted. How much mr. Branson would put in is unclear. Richard bransons version group is seeking bonds or preferred debt. Business groups want to put minimum wage increases on hold. They are pressuring officials to delay them. An midst of an crisis economic crisis, they cant afford to give workers a raise. Virginia agree to a delay but workers will need to pay hike when they return. Francine thank you. We have an exclusive ,onversation with Douglas Flint chair Standard Life aberdeen. A good conversation about them and a he said it is on hold. Talked to him if it was turning into a deeper crisis. Who are suffering most, in those who are retired feel no ability to add to their savings. Their savings is remunerated that much less than it used to be whether it is Interest Rates which are further shortly nothing with her dividends have been curtailed for businesses that are in difficulty in terms of cash flow and funding have no choice but to cut dividends. Companies seeking support from the public purse cannot in any degree of readability paid money out to shareholders well seeking public support. For those companies that can pay a dividend, and we were , it says pleased something about resilience, but we were able to buy to pay our final dividend, i think companies that have the strength to do so should. Those that put their business the jobs off for their colleagues at risk should not should not pay dividends to they should make their Balance Sheet more resilient and prepare to resume dividends once they have got the Business Model in the new world post covid operating successfully again. There is going to be a new way of operating for virtually all businesses after this. Of the consequence of this crisis that those who relied upon their capital performing in the way they expected are going to be disappointed that it will be less than they hope for. Hopefully, the measures taken by government Central Banks and companies themselves means in the longterm it will be a better position for those who have their capital invested in the markets through pensions and savings. There was a mutual funds solid asian and the assetmanagement management sector this year. Think things will be on hold until there is greater is going towhat happen after covid is dealt with. The nextof moving to stage it wouldnt be possible at this stage to due diligence. The revenue and cost model moving forward i am sure when this is over. Butuse all businesses, particularly our sector will look at the benefits of the first patient, having a better product range, having a greater geographic distribution, greater ifle to absorb the cost base markets stay at levels lower than they were. Im sure there will be some consolidation that takes place in order to adjust Business Models but i think we are well ahead of that being possible to do work to be contemplated. Our responsibility in the moment is to make sure our workforce is well looked after and do diligence in terms of how they home and understand families circumstances are going to depend on what their partners are doing and whether they have parents they have to look after. We have to be followed we have to be following our colleagues. Now, is with us from Deutsche Bank. Very quickly, why did Deutsche Banks slide positively . We dont know that. We are waiting for the details. The suggestion it is they did well on Investment Banking side as we have heard from ubs. Said they are on the losses. Tom im sorry for such an abrupt visit this morning, there is just so much to talk about. Francine, it is extraordinary. There is decidedly Something Different in the air. I dont know what you saw in europe, particularly london, but there was a primal scream coasttocoast in america of the public saying we have got to get outside and get on with our lives. Francine it was interesting. Hear Boris Johnson on his first day back at work saying he knows this is tough but we need to hold on steady. He seemed to suggest a lockdown in the u. K. Would be extended but went on to say he would have plenty more dates else in the coming days. I think it is a crunch point. We are seeing some economies slowly reopening, but slowly, and really specific sectors. People are worried that once he reopening get reinfected, deaths sore again. The tom tom next few days will be critical. The World Health Organization a belief friday tom the mystery of it as well. No mystery about the markets, it is of on this morning. Nice correlations including weaker dollars. This is bloomberg. Morning, it is not coney island on pause. Shining sea, america tries to figure out how to reopen. U. S. Deaths approach that of the vietnam war. Risk on, the dollar is weaker. Watch credit spreads, not earnings. Things will be ever more dominant. Decide how tomust not fight the last war. Good morning. From london, still in our homes as well. Dramatic i noticed a change in the island of manhattan this weekend. People really trying to figure out how to get outside, how to be social distancing, and yet a dramatic