This is what the markets are doing. The focus will be on the u. S. Data. The latest in the u. S. , the focus has been on what the European Central bank has done. Hero trading at 113 against the dollar. Theres a lift to the euro trading at 113 against the dollar. Theres a lift to the market. We could have the extension of these action cuts. Production cuts. Brexit not going as planned. ,f you are expecting for a deal pound is moving. Lets get straight to the bloomberg first word news with leighann gerrans. A night of largely peaceful protest has americans gathering for george floyd, the unarmed black man whose death sparked unrest. The extended security theft is across fences across the white house. The kronos reported a Record Number of deaths. The nation departing italy to become third in the world. It has become an epicenter of the virus, with over 600,000 confirmed cases. Fears of deflation warranted European Central banks decision to ramp up stimulus. Thats according to the policymaker. Yesterday, the ecb upped its bond buying program, buying bigger than expected 600 billion euros, cutting expectations for growth and inflation in the process. We judged that it was necessary to increase the size, and i can assure you that it was our unanimous view in the governing council the action had to be taken in the face of that inflation outlook. Action had to be taken. Leighann global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Im leighann gerrans. This is bloomberg. Francine . Francine thanks so much. Lets kick it off with a u. S. Jobs data. Unemployment is expected to rise as the pandemic takes its toll. Joining us is the cohead of official institutions group. Thank you for joining us. When you look at what the fed has done so far, the ecb announced yesterday, is there a limit to was a jim banks can do . Central at what Central Banks can do . I think what they have been showing us is we shouldnt think there is a limit to what they can do when they are determined to act. That would be the short answer. They are acting in different ways, but they certainly, it would be foolish to bet on the limits. Francine when you look at u. S. Jobs and u. S. Economy, how worried are you we are getting the kind of depression like spiral, which will last quite some time . Isabelle so, the u. S. Jobs data, and like all mainstream data, the problem is it is backward looking, and telling us something we already know, mainly it is a substantial part of the economy. It had to shut down and is gradually reopening. To be honest, were focusing more attention on alternative that give usys more quasirealtime information reopening thee of economy, the pace of which consumers are going out there, spending money again, and so forth. Traditional macro data is relevant at this stage. To answer your question about how worried are we, i would say not too much. The massive policy response that weve seen in the u. S. , and europe, in japan and elsewhere, suggest that policymakers have taken the measure of the shock they needed to counter and that we should, in fact, be seeing should be able to avoid the deflationary spiral and see the economy rebound, maybe not in a perfectly shaped, but so far we seem to be on track for that. And there is more true in the u. S. Than your, the risk of a fiscal cliff because the number of measures that have been approved are set to expire relatively soon. Clear that policymakers will have that in mind. Welle politics of that, deal with it. Francine he are tracking the economy a different way. In the figures, what does it tell you . We are at the bottom range of the forecast . Or we could get away with a little bit that are . Look at the jobs number in the u. S. If its at 19 55 , how much of the 19. 5 , how much of these jobs come back when the lockdown ends . Isabelle thats the key question, and well get a much clearer read on that in the u. S. Than in europe, including the u. K. We pay employees attached to the company, even if they are not working. The u. S. Has gone into on employment. And the risk is a number of these jobs will not come back, certainly not immediately, but perhaps not for not ever. Jobs in retail, some of the hospitality sector, some of the businesses may just shut down forever. So, that is indeed a critical concern. So far, the data were seeing is consistent with reopening the economy, frankly, in line of the more optimistic forecasts. Now, were still going to see the u. S. Economy, the european economy down around 10 over the year, but still, so far the data suggests were touching a trough around may and picking up after that. Isabel, is about, are we going to have vastly different european recoveries depending on how much fiscal stimulus there is, but also how much central bank have done . Or are they comparable . Isabelle at this point, it is looking very comparable. It is looking comparable across the developed world, and to some extent, china, although china has done relatively last stimulus than out less stimulus than others. It is not looking too bad. Where stimulus, the scope of stimulus is in the emerging world. But across developed markets, i think until maybe last week there were a number of . Marks europe question run europe stability, and now ands europes ability, now the questions have been answered, and of course by the ecb. And were likely to see, in part thanks to the ecb package, more stimulus from individual member countries who not know they will be able to afford it. This is very positive, in terms of policy response. Francine thank you so much. She stays with us. Stay with surveillance. Plenty coming up, including economic recovery. Dont miss our conversation with the European Commissioner. Thats at 9 30 a. M. U. K. Time. This is bloomberg. Francine economic finance politics, this is bloomberg surveillance. Im Francine Lacqua in london. Lets get to Bloomberg Business flash. Heres leighann gerrans. Leighann the fence at leaving germany for the First Time Since the benchmark started. Travel restrictions has seen shares for 38 percent this year. That makes it the 60th largest German Company by market value. It is reversed for the top 30. By aansa will be replaced Real Estate Company june 22. Tesla chief elon musk is escalating his view with jeff bezos, feud with jeff calling for amazon to be broken up. He tweeted, monopolies are wrong. It came after a book of coronavirus was removed from the cross from amazon. They are competing in space exploration. American airlines surged the most on record, after saying it would boost july flights 74 , compared with june. As design he was flights are its a sign u. S. Flights are returning sooner than expected. Thats 40 of capacity a year earlier. Thats your Bloomberg Business flash. Francine . Francine thank you. Opec and its allies are set to extend production cuts. A delegate told bloomberg russia and saudi arabia clinched a deal with holdout member, iraq. They were pushing the producer to stop shrinking in its responsibly and cheating on output cuts. An agreement needs to be ratified. Us . Elle, what is oil tell partly, demand, is this a good indicator to see how growth will perform . Isabelle so, the oil story had two stories in one. One was the collapse and demand caused by the global shutdown inactivity. The other one was this feud among opec producers, which led to a spike in supply when you needed it. The second part of the story is on the mend. And so is the demand side. So were actually reasonably optimistic in terms of the outlook for oil in the second half of the year. That will be, frankly, helpful certainlyng markets, on the fixed income side, are oil exporters. It will also help rekindle, a little bit, the very dire Inflation Expectations that prevail in most parts of the global economy. So, at this point, its a positive, and is partly telling us the demand picture is improving. But it is primarily run opec and suppliers getting in their act in order. Francine you are saying it will be helpful for emerging markets. Would it be more helpful for stable markets than to have a range that is good for the . Good for them . Isabelle let me caveat that. There are some very large ones, including china and india, who are Oil Importers and dont benefit from higher oil prices. The for those who are exporters, i dont think stability is helpful. It sets a low level for them to have money for finance fiscal spending they are accustomed to. Is one stability around 40 is one thing. Demand is likely to recover far more quickly than supply in the second half of the year, possibly beyond that. As long as the range is not too worry for oilt a producers. The bigger concern is meeting their breakeven point and their fiscal spending needs. Above, and below. Francine i also know that you basically increased the likelihood of some of your main risks. , know you highlight them southeast tensions south asian tensions and that and policy. If you look at the price in commodities, how deep will it hurt emerging markets and foreign risks . Isabelle so, i mean that really points to another theme we have been emphasizing. Within emerging markets, there is a lot of it. Long story short, asia is looking more solid. White . Why . its emerging from the covid crisis sooner. Its able to reopen its economy sooner, mostly on the Oil Importing side of the ledger. It has benefited from the weaker oil prices. Noted, is the epicenter of the pandemic. Theres a lot of political discontent and a lot of commodity exporters hit by this double whammy. So, really, you have to follow this on a casebycase. But i would say, generally speaking, the u. S. China tensions is one that is going to force every tension in the world to potentially choose who they most want to be partnered with, and thats going to be a particularly tricky balancing as,for countries in asia, in fact, the Prime Minister of singapore pointed out, because this country built their prosperity on having strong relationship with both u. S. And china. Thats a conundrum for that part of the world. Hugeine were also seeing civil unrest in the u. S. , partly because of these huge inequalities. If you look at the world inequalities world economies, our markets in ordering are markets ignoring some of these issues . I think markets are intensely focused when i say markets, i mean the people in it and this is from clients and from longterm investors. They are focused on what the future, post covid, is going to look like. And i think this issue of inequality, but also increased nationalism, increased government intervention, are absolutely front of mind. Whilen a, you know, its clear, in the first phase, the covid crisis has aggravated social inequality where it already existed, it could also trigger a reaction. Thats true in the u. S. , where the november election will be a key determinant. But even in europe, were going to end up with a much larger role for government, were going to end up with social subsidies, mechanism to put money in peoples pockets, and corporates pockets, there are going to be hard to unplug. Phase one is inequality. Phase two, possibly much more economy, where the politics are. But if you look at even the u. K. , where we have a conservative government in place, there is talk of raising corporate tax, raising tax on people who can pay them, and much more interventionist government growing out of the crisis. So, theres going to be several phases to this, but markets are going to point to this. Francine when you talk about european fragmentation, what does covid mean . We talk a lot about the ecb Standing Firm and doing as much as it can. We have this huge plan. Its unclear whether this will go through because countries have to vote on it. Do you worry its exposing how unequal these countries are . Isabelle so, in terms of the inequality within countries, not so much. What we were deeply worried about going into this crisis has been the covid chart would amplify covid shock would amplify divergence in fundamentals within the euro zone, in particular, with essentially germany being hit less than the periphery and having the capacity to react much more rapidly massively. The largest of any european country. We were worried we would end up with more divergence in growth prospects, in debt to gdp rescues ratios, and that would be a huge threat to the cohesion of the eurozone. What weve seen as a massively positive policy response, completely unlike the financial crisis. A view is between the response in the recovery fund, which probably will not be adopted exactly in the shape the commission put on the table, but will end up in a place that is essentiallys, essentially similar, we are confident these centrifugal forces should be able to kept in check as long as the politics remain supportive. But we think we are in a better place to deal with these centrifugal forces now. Francine thank you for joining us. Now, coming up, minneapolis holds a memorial remembering george floyd. Is killing caused outrage and sparked protests across the u. S. Up next, we discussed the latest. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. Coming up our exclusive conversation with the European Commissioner for the economy. This is what the markets are doing now. They are waiting with bated breath, what happens with the u. S. We have that and employment figure. The focus is on the central bank, they did yesterday. And then opecplus, set to extend their cuts after a breakthrough with direct. We with iraq. Well have four market action. And then we speak to the commissioner. This is bloomberg. Finance, economics, politics. This is bloomberg surveillance. Lets get to first word news with leighann gerrans. Its alliesopec and are set to extend production cuts after a breakthrough in negotiations. A delicate told bloomberg a delegate told bloomberg russia and saudi arabia have reached a deal. Agreement still needs to be ratified. Endu. K. And e. U. Are set to this weeks negotiations with little progress. Officials are far apart on crucial issues ahead of the key deadline at the end of the month. The e. U. Hopes to persuade oris johnson to compromise at the next summit. But according to number 10, that may be wishful thinking. U. S. Trade representative Robert Lighthizer says he feels good about progress of the phase i deal with china. He says beijing is honoring the pack, refuting a report it was not living up to its commitment. His positive views come despite recent temp chins battalion that tensions between despite recent tensions between the two big economies. A mass gathering setting the coronavirus pandemic and a vigil in victoria park. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, leighann gerrans. This is bloomberg. Francine . Much,ne thank you so leeann. Lets get to our exclusive conversation. The ecb has stepped up its pandemic stimulus program. The additional Monetary Policy adds to the Commission Set up a plan for a 750 billion euro virus recovery package, but within lead now joining the frugal four nations opposed to the e. U. Plan in its current form, will europe be able to agree on a way forward . Joining me from brussels is Paolo GentiloniPaolo Gentiloni, former European Commissioner for the economy. Thank you for giving us a little bit of time to our broadcast. The Commission Said there would be a 7. 7 contraction in output this year. Since then, economies have reopened. Would you stick to that forecast, or could it be better or worse . I think the forecast was reasonable. This was the baseline. At the have risk downside and even with the better situation. For the time being, this forecast is rather reasonable. The ecb has a similar forecast with 8. 2 negative growth this year. The real question mark on this forecast is what we are predicting as a rebound for next year. We are predicting forecasting a seven, or six points, and this is connected to how theng and fast will recovery be. This depends on how the consumers and the population will react, but also it will depend on decisions. As money decision such being pumped into the economy . We had this proposed economic recovery plan, which was important in terms of figures, 750 billion euros of joint debt issuance. Foreign countries are against it. Will it be able to be voted through anyway . Yes, definitely it will be. It will be voted, it will be approved. We will have negotiations as always among Member States, but i think it was impressive how how quick and strong was the reaction of european institutions and Member States. If you look hind us, in fact, we have only less than three months from the initial decisions that were taken in the middle of march, from the ecb, from the European Commission, and then from Member States, and then in measures have National Level and european level, are clearly, as we say, on residence it. Only nationalve reactions that are impressive. Yesterday the german plan was presented, and as you know, it plan. Very strong but we have for the first time, so to say, european, and fiscal , and thishis recovery will be discussed, but it will come at the end, be approved, and i think it is really an opportunity for the union to be more competitive and stronger together. Francine mr. Commissioner, what makes you so confident that this will garner unanimous approval by Member States . Will they have concessions . These countries that so far have been very reluctant on the side. Paolo the reaction i sought to and, i repeat, unprecedented initiative, because we are talking of the fact that the European Commission will go to the markets and borrow 750 billion common debt to finance the recovery. Confronted with this proposal, Member States reacted in different ways, but i have to not every member state but the majority of Member States are in a negotiating the unionadd knowing and the negotiating position brings at the end at an agreement. At what when you look the Commission Proposed in terms of a series of new e. U. Taxes to finance the repayment of the 750 billion euros of joint borrowing, it requires unanimity but it is joint taxes like fiscal tax, financial transaction tax, than in the past we were so it was so difficult to agree on, why do you think member countries will agree on that . Paolo i would say two things. One is that the repayment of tool will be in maturity willthe be very long, and repayment will , and in 2058. We have verythat cheap money now in the markets, and so this will not be such an important burden for our finances. Having said this, yes, we need to strengthen our own resources. Dohink we will be able to this, especially in the environment side. Potentialo groups of new owned resources. One are the two issues discussed , digitalcd level taxation and minimal taxation, and on these two issues we have committed to find, or at least to try to find a global solution, and then we have the environment of energy taxation, and i think that having the commission decide that this priority of the European Green deal, we will have a good decision on this kind of taxation. But what incentives is the commission willing to negotiate in the countries that will be more problematic . Are we talking about budget rebates . How much leeway do you have in terms of incentives and how aggressive will those incentives be . Paolo well, i think that the countries,n these ,hat we have a Common Future and the prosperity of their citizens, is strictly connected to the prosperity of the european single markets and of the european economy as a whole. I think that the real game changer in this discussion was this awareness. Without anyyears possibility to decide some common fiscal tool, and we were able to decide this now because this terrible crisis increase the awareness. So i think that also in the business communities of the more reluctant countries in the working unions of the more reluctant countries, this awareness is very strong. So some details will be changed and negotiated, but the core proposal will be approved. Commissioner, what timeline do you think these proposals will be agreed on . I think it is possible that the agreement of the european council, the member july. , will come in by the way, in july 1, we begin the six months of presidency of the council from germany, and this will also i think help the agreement. And then we need the improvement the approval of national parliament. Few monthsl take a more. What is clear is that being this linked to the multiannual budget of the union, it will be the first ofnning january. Francine a final question on brexit. Talks have ended this week in a stalemate. How worried are you that a no deal brexit would further put economic stress on the commissions forecast . Forecast we were some, so toedicting say, Downside Risk to our baseline scenario, and among the Downside Risks we had trade tension at the global level, we attack on waves of the pandemic that are not there at the moment, and we have the risk of a no deal. I have to add that this is a greater risk for the u. K. Paolo gentiloni, thank you for joining us, European Commissioner for economics and Financial Affairs for the e. U. Economy. U. S. S climb alongside futures. Investors are cheering fresh stimulus measures to help the global economy. This is bloomberg. Francine this is bloomberg surveillance. Of the rally resumes, the stoxx 600 index jumped at the open, and there is a rally for the ninth day. Aid themonetary Trump Administration expects to spend up to another 1 trillion to battle the effects of the pandemic. While investors are cheering fresh stimulus, we are awaiting the latest u. S. Jobs figures. The phone isom paris an end. Thank you so much for giving us a of your time. When you look at how markets are reacting, just to see there does seem to be a difference between the fundamental economy and what equities are doing. How would you describe the Current Situation . Is there too much risk being taken . Morning, francine. Great to speak to you. I think what we are seeing in markets is a very strong policy of reaction to a couple of things. One has been the scale of the Central Bank Intervention at the level of stimulus, both the monetary fiscal stimulus that had been announced. , and i think some of the data that we are seeing as the economy starts to emerge from lockdown. But i think it is fair to say that when we look at the gap andeen the asset prices still being in that very early stage of being able to define exactly what is happening just with fundamentals looking at corporate earnings, it feels like the position we often talk about, which is wall street diverging from main street. It feels like we are in that territory at the moment. Francine when you look at the risks and there are many geopolitics, the recession, and what kind of form the recovery will take with social unrest in the u. S. , what do you worry about most that markets may be bits pricing may be mispricing . Paras a couple of things i would. 2 number one is that we continue to see that that positive response from markets to Monetary Policy, centralbank action in particular, and i think what concerns me about that is that we have seen over a number of years that the level of impact of that sort of monetary stimulus into the real. Conomy is often much lower so i guess one of the things that concerns me is that sort of reflexive reaction of asset prices to keep on a shortterm intervention. I think the second point that i would make is i think we are entering into an environment where sort of making broad generalizations or rules of thumb becomes harder. Things become fundamentally less predictable because even when we talk about a move to fiscal stimulus, the weight of that fiscal stimulus will be deployed will be highly different from one region, one country to the next. I feel that we are in an environment where there is just going to be this much greater level of dispersion. So i think there is no shortcut for investors other than to really do their homework and look at the value of the fundamental assets and the securities they are investing in. Francine where do you see the most value, given the nuances you were just saying . Do you break it down by country, by region, by sectors or by asset class . Paras if i talk about a couple of areas where we would see value, clearly on within asia and emerging markets more broadly, the first thing to remember is they entered this withd of volatility particularly extended levels. There was concern even prior to the period of the pandemic, and the market volatility that we have seen about the outlook for growth, from asia as a region and emerging markets more broadly. As a result, i feel that we look at fundamentals, we look at prospects with corporate earnings in the region versus what we have seen in prices. We do see these emerging values. One of the things in that context is that when you look at the scale of both monetary and fiscal stimulus in asia and china in particular, there have been some, but it pales into insignificance relative to what we have seen and what we are going to see in europe and the u. S. It just means that when you try to assess the underlying growth, you feel that there is more sustainability, more duration in the data you are looking at because we are seeing less and the way of meaningful stimulus. Area. K that would be one i think the second area that i would. 2 is that we know that i would point two is that we know that traditional sectors in the market have continued to perform badly as people are , anded about the economy people are very used to this notion. But i think there is growth out there as well, potentially opportunities in value sectors as we look forward. So valuation becomes an important thing for investors to focus on. Francine what do you do with some of the havens . We have been talking recently about gold. Given the uncertainty out there, are there havens that you think would be a good thing to own right now . Paras i think gold has an appeal, especially in the context that there are so many parts of asset markets that are really all in on the state of the world, where inflation remains subdued in the future. Yet we look at all of these things that are happening around the world, the scale of stimulus, the scale of issuance, deglobalization. I think it is important for investors to consider the idea that we may be moving into a more inflationary environment. I think the assets that hedge against that are good place for investors to look. Francine thank you so much for your time today, paras and on anand. Nras we will look at the key events to look out for. This is bloomberg. Upit is time for us to stand in georges name and say get your knee off our next cks i talked to andrew cuomo today in new york. We did to know that if they stopped you, they find out everything you ever did. Why dont we know when policeman have a pattern . Reverend alat was sharpton, delivering a eulogy for george floyd at his Minneapolis Memorial Service yesterday. Working the latest round of talks conclude. It seems the European Union at the moment is pinning hopes on a dramatic intervention by Prime Minister boris johnson. We expect to hear from the e. U. Chief negotiator at around 12 00 p. M. U. K. Time. Germanys sovereign debt is being rated after Angela Merkels coalition agreed on a 130 billion euro stimulus package to boost Consumer Spending and get business investing again. May numbers are expected to be better than aprils 25 million job losses. We look at the markets as well and social unrest. This is bloomberg. When you say what youre in the mood for, the xfinity voice remote will find exactly that. Happy stuff. The groups happy, im happy. You can even say a famous movie quote and it will know the right movie. Circle of trust, greg. Relax, the needles are jumping. You can learn something new any time. Education. And if youre not sure what youre looking for, say. Surprise me. Just ask what can i say to find more of what you love with the xinity voice remote. Francine jobs day unemployment is forecast to rise above 19 in the u. S. , the highest since the great depression. Breakthrough opec plus set to extend production cuts to prop up the oil market. The alliance holds discussions tomorrow to formally approve the deal. And united in stimulus europes monetary and physical and fiscal titans are walking in step as the ecb ramps up its Purchase Program and germany injects big money into the economy. Good morning, everyone. This is bloomberg surveillance. Tom and francine from new york and london. The focus, the main question that people want to hear is even if the u. S. Jobs market gets bad, how quickly it can recover when the lockdown is gone. Bondscus is also on because of what we heard from the ecb, and in the u. K. A lot of the focus is on exit. We expect a briefing in two hours on brexit. Tom