How to taper without hitting prices . Polands president ial election is too close to call. We have the incumbent ahead by a thin margin. The result is seen as pivotal for the nations future ties with the European Union. Welcome to the European Market open. Matt is off this week, but just a month under an hour until the start of the trading day. European futures and u. S. Futures for you and both tell a similar story. European equity fund its pointing to the upside, u. S. Futures pointing to the upside. Between. 6 andp. 8 . Weve got u. S. Banks reporting, plenty of those coming through the week. Weve got a few Central Banks giving us their Interest Rate decisions, a little less likely to drive sentiment this week. Looking to the earnings season for any clues. Lets have a look at the gmm to see where weve been overnight through the Asian Session and any clues into the european session. Flying, chinese assets taking off despite caution in chinese papers. The japanese nikkei come also strongly up. 2 up over 2 . Perhaps denial about the virus isdeciding the virus worse behind us, the flareups and maybeof the world, policymakers looking to the fiscal side. In fx, appetite for riskier currencies, the aussie dollar up. 4 . We are getting risk on, which explains why sovereign bonds moved to the downside and commodities, copper showing its longest winning streak since 2017. Exploration behind the most move, supply pushing prices, but the longerterm story has been positive. The longest winning straight since 2017 and with the opecplus meeting this week, we will keep an eye on oil prices. Lets get a first word news update for you. Florida has broken the daily record for all u. S. States with more than 15,000 new coronavirus cases. New york city, reporting no new virus related deaths for the first time in four months. In hong kong, 38 new cases sunday sent fears in the hub. Africa, a curfew and alcohol ban after virus rules went unheeded. Exit polls in poland show the president ial election is too close to call, with both candidates claiming victory. The lead, 5149 by the incumbent doesnt take into account nearly half a million votes by those living abroad that may favor the challenger. The campaign saw the highest turnout since the fall of communism. Businessarter of leaders say their organizations are fully ready for the end of the brexit transition period. Nearly half of the u. K. Company directors polled late last month said they werent able to prepare for a transition now, with many saying they need more clarity. A survey by the institute of directors found the Financial Sector the most prepared while manufacturers had the most stilted and. Still to do. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. As mentioned, asian stocks climbing through the overnight together withope, u. S. And European Equity futures ahead of the start of an earnings season that will provide more clues on how companies are coping with the pandemic. Joining us is our Bloomberg Markets live editor garfield reynolds. You are positioned to paint the picture of what has happened through the asia session. Are you gripped by the optimism we see on display for chinese equities at risk assets, or by anxiety . Little hard to a be too consumed by anxiety at the moment, because that has become part of the furniture. Level ofn elevated commentary about there being concerns that stocks are divorced from economic reality. However, that hasnt stopped chinese stocks from rocketing to fresh highs and helping to take the rest of the equities complex the nasdaq future also stormed upward out of the gate even after a weekend that saw plenty of bad news on the virus front, but there are a few things going on here. One is that the economic surprise indexes are showing Economic Data is beating expectations very strongly. That is helping to validate the stocks narrative we are getting a vshaped recovery. Even as wehing is, have got concerns about the virus accelerating, we dont have any sort of fear there is going to be a rush into lockdowns like what we saw back in march. Meltedck when markets down in march, that was before Central Banks came in and said we are going to flood the globe with liquidity and not take our foot off the pedal on that front until we are absolutely sure we are across the bridge and into help land. F economic anna lots of reason to look to the positive side, the glass halffull, i suppose. What about as we approach earnings season . I know youve been asking which earnings are going to be key for broader markets and i wonder if it is going to be a case of looking for sector stories of resilience or whether it will come down to individual companies and the resilience of their Balance Sheets. One thing that might be important is whether a couple of individual companies that have been such spectacular performers, amazon as a prime example, if they spring any surprises to the downside, that could be nasty indeed. Stood out things that from reader responses and what we are looking at, is financials could be very key and we have those coming up i think starting today or tomorrow. There are a couple of reasons. One is financials underperformed somewhat. The other is they offer the for an uptodate guide on where the economy is going on might be going. One of the loan data showing banks are in touch with Consumer Sentiment through credit card spending, through animal spirits that their customers are showing. How many customers have come to them saying can we borrow more to buy stocks, or we want to stop borrowing so much because we are worried we wont pay it back. That is going to be key and on the flipside, getting back to the picks seen as benefiting more for the pandemic than most. That narrative has been persuasive for a lot of will benefitch from the workathome environment. The initial earnings in the covid period showed an uptick in demand for chips, pcs, cloud services. Is that continuing . Thanks very much, garfield. Have a good week. Markets live editor garfield reynolds, joining us. Some breaking news on the poland story. We mentioned this in the headlines. We are getting lines from the Electoral Commission. The polish president duda wins by 51. 2 of the vote. This is make clear still a partial vote, though having said that, the results come from 99. 97 of constituencies. We reported over the weekend it postalake longer to get votes from abroad that might favor the challenger, but it seems as if most the votes have been counted and duda wins 51. 2 . What does that mean for relationships between poland, eastern europeans more broadly, and the brussels hub . We will talk about that with analysis from warsaw and we have a guest to talk about this in the next hour. Before that, the yield curve control debate carries on. The ecb meets to review measures to rescue the economy. Central banks discuss whether to intervene in bond markets. We will discuss whether we could see yield control in europe. This is bloomberg. Anna welcome back to the European Market open. Still some time until the trading day, 45 minutes. Thepean equities look to upside, 1. 4 higher on european futures. Week onmeets this measures to revive the economy but it stimulus plan isnt yet opening the door to yield curve control. Economists see some Central Banks adopting boj style policy and while John Williams says the fed is thinking about it, the ecbs chief economist philip lane ruled it out sometime ago. We are joined by the senior european economist at jefferies. Let me ask about what is going on with the ecb. This assessment from many investors that yield curve control is going to be adopted in other parts of the world but not at the eurozone. Would that your assessment . Absolutely. Europe is fundamentally in a different place from other countries. Bloc made up of 19 economies and yield curves, and it is difficult for the ecb to be targeting yield curve. The question is, which yield curve are they targeting, germany, italy . The spread between the two . Task that iss a far too complicated and doesnt need to be that difficult. I think the ecb has a pretty effective suite of policies. Form,qe in its present whether higher or lower, the monthly amount, it is just a much easier policy for ecb to pursue rather than yield curve control. Yield curve control. Anna we will wait to see what they have to say on that subject. We have a summit on friday to approve the Recovery Fund, the european Recovery Fund. Do you think that what is your expectation for when we will see that pass, how much the resistance the frugal four will put up and how substantial this will be . Marchel clearly, there is resistance. I think the frugal four are pushing back on the final details. We are not expecting a resolution this week. This is a process that will run and run. Realize most countries whatever is made of this, it. Ill probably not come before 2020 one for now, it is discussion of how you sped the assistance. Is it going to be loans, grants, a balance between the two . I dont think there is not much urgency to get this decided at the meeting on friday. I think realistically,. It will carry on. There will be positive headlines over the course of friday, indication positions are starting to shift. In terms of the final details, i think those will not come out until much closer to the end of the year. Spacewhat kind of fiscal do you think various parts of europe have and what does the term fiscal space mean at this point . Asseems as if our rulebooks to what would be acceptable seem to have been thrown out. What does fiscal space look like for europe . Marchel the answer is, we dont know because we dont know what is happening to budget deficits over the course of this year and into 2021. Gdpreason we dont know is sizes across euro area economies. That is an important theme to watch over the course of the second half of the year. Increased focus on country detergents, divergence. Something referred to in an interview a couple of weeks, the idea being a twospeed recovery in the eurozone. A shutdown across all of europe in april but clearly in terms of how countries are emerging from the shutdown, there seems to be variation developing already. We willse variations, get indication of what is happening to gdp growth or contraction over the course of 2020 and what kind of growth you will getting 2021. Based on those fundamentals of there, economies, from you will get an idea of what budget deficits will be over the course of the next two years and what will happen to levels of debt to gdp and from there, you can talk about fiscal space. A company potentially running a budget deficit of 7 8 this year has more fiscal space than a country running a budget deficit of 15 . That is a debate that will be developed in europe in the coming six months. Anna thank you very much. Stay with us. Marchel alexandrovich from jeffries stays with us on the program. More to come from him. Lets get to a related conversation, eu leaders meeting for their first in person summit in months to hash out the details of her recovery package. Germanys european secretary tells bloomberg that the frugal four will not stand in the way of an agreement. The European Union has to face an unprecedented crisis and that is why solidarity and unity is key for us. We have to send a clear signal to the countries which are most affected by the pandemic. It is never easy to agree on such a huge amount of money, but i fully agree with the Member States which expressed a very strong commitment to the future oriented challenges of the European Union. That means climate, digitalization, strengthening the rule of law. That is in our common interest. What we really need is the willingness to form a compromise. There is some tensions with the socalled frugal four, some Member States who want a degree of conditionality in terms of dispersing the funds. What do you think can be offered to the frugal four in order to get a deal . Michael i agree with the that wed frugal four, have to modernize the European Union and we have to focus our financial activities on climate, digitalization, rule of law, there ishesion, and room for maneuver but at the end, im rather optimistically will agree as soon as possible. As soon as possible means even next week or do you think this could spill into august . It is a special responsibility for all number states. We have to face an unprecedented crisis and need a Swift Solutions need Swift Solutions and an ambitious outcome of the negotiations, so i hope we can reach an agreement which is acceptable for all in july. Anna that was Germanys Europe minister michael roth speaking to bloomberg. Interesting he kept talking about the importance on increasing threatening the conversation of Judicial Independence will come up between brussels and poland into the next polish term because we have the more definitive result, the Election Commission saying duda is set to win the ballot, even though we dont have the exact results, but the Electoral Commission is saying the results will differ much. This looks to be certainly heading in that direction. Having lost 0. 4 against the euro this month, lagging behind emerging market peers. We will get details from poland at 7 30 u. K. Time. We will get more details in just 15 minutes or so. Coming up, jeffries european activities radar sees a pickup in sectors across the continent. We will be back with Marchel Alexandrovich to discuss the clues in the highfrequency data. Anna welcome back to the European Market open, still 40 minutes until the start of the cash Equities Trading day which looks as if it could be positive. Marchel alexandrovich from jefferies is still with us. I want to ask about the jefferies Economic Activities radar. The euro zone economy is at 62 of its previous level. Get a sense of whether this is gaining momentum are losing momentum at this point. The activity radar is something weve developed a couple of months ago, trying to pick up on the more frequent data coming out of the eurozone. Data comes with a long lag and monthly data is not something you can get on a weekly basis so we developed the idea of tracking electricity consumption, things like public transport usage and transport on the road. Trying to get a sense of how the euro zone economy is recovering and we been tracking that since the meaning of may beginning of may, there has been a change. Eurozone consumption is about 90 of where it should be for this time of year. Congestion on the roads is about 80 of where it should be this time of year. Clearly there is a recovery going on. Part of the story, trying to get a sense of the aggregate level and second, a sense of country differences and if some countries are outperforming others. The other kind we are picking up in the data, certainly data for needs to be a slightly higher level and indicators we are tracking for italy and spain. That could be an interesting theme to watch over the coming months. This doesnt pick up the whole story and we need to be quite upfront about it. It is picking up indicators we are used to following. Some of the fact ive spoken about doesnt pick up on peoples ability to work from home, for instance. That wont be picked up by our indicators. Those factors anna if you are not traveling to work but you are working, officially from home at high productivity levels, then that changes things. Europe. Twospeed is this about exposure to hospitality and tourism . Marchel i think that is part of the story. That will be the big develop over the course of july and august, trying to understand how much International Tourism is coming into spain, italy, and portugal, but as we go through september and october, it will be about the fundamentals of those economies. Are they able to keep pace with the recover we we like to see in germany, the netherlands, austria . That is going to be the question. If we move through the coming months, those countries are lagging behind, i think rating agencies will take focus on those countries. Anna Marchel Alexandrovich thank you. Thank you fors, joining us. This is bloomberg. Anna welcome back to the European Market open, 30 minutes until the start of the european cash Equities Trading day for another week, another monday. The political story in europe, polands Electoral Commission said the incumbent has taken 51. 2 of the vote in the president ial election. The campaign saw the highest turnout since the fall of communism, with almost all results now in, the election body of the Electoral Commission says the final result is unlikely to differ much. Lets get more with our executive editor for international governments, rosalind matheson. Duda looks set for a win. Is there anything that could change that . We heard about time being taken to count postal votes or votes coming from abroad. How close to the end result are we . Electionms the commission is ready to call it. They say it is unassailable, but at 51. 2, that is pretty close, within the line of error. They are coming out today to respond to those howing tensions at and tight the race was. The Election Commission says they are expecting not expecting a change a very much. We heard from the overnight we heard overnight from the opposition camp, indicating they think there have been some irregularities. They are signaling that already under the possibility of a Court Challenge or we could see protests emerged in the capital because that is where you saw younger people voting for him in great numbers. Anna what does happen next . We heard from the Electoral Commission this morning, but the possibility of a legal challenge hangs over this. Theres been a lot of talk about Judicial Independence, though, in poland. I suppose that can be crucial if we see this heading for the courts. Emissions thats right rosalind thats right, and , hezej duda has incentive has little motivation at this point to see compromise. We saw in octobers general election, the Justice Party lost continued on their path and the Justice Minister said the Coalition Must do more to eliminate imbalances in the countrys media. You could expect further erosion and keepingof law poland on the fringes of the eu. Anna talking of the eu, what will brussels be watching for in the result . The tension between brussels and warsaw has increased over the pushfour or five years, a toward this morning is to politics weve seen coming from raged and really and lead to legal action from brussels in some cases. Rosalind thats right, so it is a signal. If he retains office, those tensions with brussels and also with berlin will continue. Germany pays the largest slice of the bills and poland is the biggest that beneficiary of eu funds and while poland seems to welcome the money, they say brussels has gotten too involved in other issues they consider their domestic purview, things like the role of law and the role of the courts, and that has been a strong message that poland will remain problem that problematic outside of hungary for some time. President it has been exploiting trade between the u. S. And europe. Is hope wass hoping for something the opposite direction. Rosalind matheson, and our government executive editor, joining us with the latest analysis of the developing story out of poland. Stick with the European Market open for more on that story. Well be live in warsaw in over an hour. Talk to the president of the center for social and economic research. We will get his thoughts on what these results mean. Lets get a Bloomberg Business flash. Some of the top corporate stories at bloomberg. White house traded pfizer Peter Navarro says he expects President Trump to take strong action against chinese owned social media app tiktok and we chat. He said the administration is just Getting Started with the apps and wouldnt rule out banning them. He says the sale of tiktok to an american buyer wouldnt be enough to solve the problem. Credit suisse is said to be considering cutting hundreds of jobs as the coronavirus boosts online operations. A swiss newspaper reports the bank is looking to save money to meet profit targets. To bew ceo is said considering cuts to the lenders Domestic BranchNetwork Rather than splitting off the investment bank, which was the cornerstone of his predecessors plan. Tesla has shaved 3000 off the price of the model why crossover four months after sales began. The cuts see it drop below 50,000. The reduction follows similar moves for teslas other models, 3, which some csi do with demand. Tesla signs of weak demand. Tesla beat forecasts. A big week for Central Banks. Lets look at the agenda. Througho watch out for this week. Later today, the governor of the bank of england will be speaking on a webinar. He will be joined by the new york fed president John Williams. The panel will be moderated by bloombergs francine lacqua. Interesting to get their take. Tomorrow, the ecb publishes its Bank Lending Survey and the u. K. s office for budget responsibility will publish three economic scenarios on the impact of the pandemic. Could be some interesting guidance in terms of sustainability of debt as monthly gdp, industrial, and manufacturing data is released for the u. K. Wednesday, the bank of japan publishes its Monetary Policy decision at thursday, the ecb rate decision. Christine lagarde will hold a Virtual Press conference afterwards. We will look for thoughts on yield curve control, even if they had been ruled out as a strategy at the ecb. The 27 eue leaders of nations will meet in brussels to hash out details of a massive economic stimulus package, the Recovery Fund the focus of our attention on friday. Next on the program, from a culture war between the u. S. And china to this weeks opec meeting. We will take a look at this weeks risks to the seemingly unstoppable stock rally next. This is bloomberg. Anna welcome back to the european open this monday morning. Still 20 minutes until the start of the cash Equities Trading session. 3 to the upside the expectation for european stocks and we will see if we get that bounce at the start of the trading day. Disney has begun opening its themepark in florida despite the state hitting yet another record in new daily virus cases. Earlier, disneys chairman of why he iss told us choosing to reopen now. There is a lot of trust. People trust we will open up in a responsible way. The parking mar cast members. I think we have done a really nice job of that. We have been down for four months. We were one of the first theme parks to close in orlando and we will be the last to open. We spent a lot of time programming to make sure we uphold our responsibility. You have cases and thats in florida hitting record highs. You have people in hospitals that arent happy you are reopening. The question a lot of people are asking is why . Why now . Why not wait it out a few more months or weeks . This is our new normal. This is the world we now live it in live in. Weve created a really flexible operating environment. We are in control. We have new safety protocols in place, everything from people wearing face masks like i am today to temperature checks to social distancing to new cleanliness standards, and even reservation systems. If you want to show up to the agic kingdom today, there is reservation system in place so we can control the number of guests in our parks. This is the new world we are operating in. Seeing photo been circulating on social media, one in particular, the line at the seven dorks mine train. Sevenial distanc dwarves,. Is a responsibility for our guests and operating environment and as we continue to open up, we are modifying where we need to modify. In general, if you were to walk down main street or a merchandise shop, you would see a different experience than you have before. Theme parks globally, china, hong kong, o tokyo. Our protocols and processes are so detailed, everything 100 compliant with cdc guidelines, 100 compliant with government guidance. To speak with medical officials all the time from a National Perspective and within the market we are operating in. We even have our internal medical staff on the disney staff so we are making sure we are in compliance with the protocol and confident. Emily epcot center and Hollywood Studio paris planning on opening next week. What is the plan for california at this point . Josh right now, the government has not issued guidelines for theme parks reopening. What i can tell you is having the benefit of theme parks around the world and watching how they operate, we are very prepared so assume as the marketplace is ready for us to open, we will be opening disneyland but we dont have a date at this time. That was the chairman of disneys theme parks business josh damaro speaking to the bloomberg team. Stock markets are set to start the week with strong gains, futures suggesting higher, shrugging off ears from the florida toses in hong kong and places in between. Also shrugging off a culture war between washington and beijing. Joining us for a roundup of key risks to look ahead to this week, bloombergs Annmarie Hordern is with us. We sound like curmudgeons because stocks are carrying on and we are looking for the risks but it is important to be mindful of the data and what the latest on the global spread is telling us. What is the latest on the disease itself . Annmarie certainly, you have to look at the risks, which are popping up in pockets around the world. In the united states, we heard from the disney theme park chief, in florida, more than 15,000 new cases, the one day biggest rise since the outbreak began in the united states. Tore is worry when it comes the sun belt countries, but overall in the u. S. , this is on the other side, cases rose less than the daily average increase. In asia, hong kong is something we will be watching, 38 new cases yesterday. Fears of resurgence, we will learn today whether the government will tighten social distancing measures. Tokyo has seen a resurgence and india, as well. In the u. K. , i just returned here. I am on social isolation due to the government mandate. Are in line with the last week but the telegraph last week, the Scientific Advisory the telegraph the virus can survive in the air for more than an hour. Undermineso me that a push weve seen from the ministers. It is pockets around the world we are seeing resurgence and that is fueling concerns. Anna certainly one of the conversations, the extent to which it can linger in the air. Another risk to be aware of this week, the u. S. China tensions morphing. Weve seen trade tensions, issues surrounding Financial Services and the extent to which both open up their market to each other and now, we seem to be entering a culture war between the two. Annmarie where do you want to start . The strain on the relationship is coming from a number of directions. On the culture, the National Security front, this has to do with tiktok and wechat. Peter navarro says he expects trump to take action against the apps and says will they are engaging in Information Warfare against the u. S. He didnt rule against banning them. Tiktok has anna denounced these allegations. Navarro ruled that out. The white house isnt the only one that saw Corporate America looking at tiktok. Wells fargo asking employees to remove the app from work phones due to concerns about concert security. Then there is the politics and trade side when it comes to beijing and washington. Friday on his way to florida, donald trump was talking to reporters on air force one and said a trade deal phase two is not under consideration. Breakdown between countries over the year. One thing i am looking at is the South China Sea, the administration plans to make an announcement regarding the South China Sea. We see a competition between the two on military supremacy in the South China Sea and finally, foreign exchange. That was the story on friday bleeding over into today. There has been a fresh push in beijing to promote the global use of the yuan. Drastic action from washington is far from being implemented but this risk is setting off alarm bells. Anna battle on many fronts. On to another risk for the going on witht is opec and opecplus and the meeting set to take place this week. What do we expect . Annmarie they will decide whether they keep the 9. 6 Million Barrels a day off the market or taper which is what the deal called for. To sevend cut back point 7 Million Barrels a day off the market. Essentially increase production a little bit. Demand recovery, gaining traction around the world. That,re leaning toward Major Companies in russia are prepared to increase unless they get guidance from the energy minister. Is comparing it to the fed, which has been done in the past. Volatilityave this as they start to cut back not Monetary Policy, but as they increase the Oil Production so that is one of the worries and the concern now is we are seeing casess of the coronavirus rising in parts of the country and what that means potentially for oil demand. Is casting the virus a shadow on the outlook and they called it a disturbing reminder that the pandemic is not under control and that poses a Downside Risk to the market. With somearie hordern watchful words, some things to watch for when it comes to the trading week ahead and risks that could lie in store. Minutes from the market open. We will bring you stocks we are watching including french luxury stocks as they become the target of retaliatory tariffs threats from washington. The latest on that. Paul sweeney bit of mnd news in europe. Also a bit of m a news in europe. Anna welcome back to the European Market open. A few minutes into the start of the session that looks positive up by 1. 4 on euro stoxx 50 you choose futures. Lets get a business flash update for you. s Electoral Commission said the incumbent andrzej duda is the president ial vote. The campaign saw the highest turnout since the fall of communism. To television was was blastedroduda for impartial coverage. Says theion body opposition candidate took less than 49 . Florida has broken the daily record of all u. S. States with more than 15,000 new coronavirus cases. New york city reported no new confirmed virus related deaths for the first time in more than four months. In hong kong, 38 new cases sunday sent fears of a resurgence to the Financial Hub and south africa renewed a new curfew and alcohol ban after virus rules went unheeded. Than half a million hong kong residents have defied government warnings to vote in an unofficial primary. The strong turnout represented more than 13 of registered voters and is a signal of continued resistance to beijings recent decision to impose a National Security law. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Six minutes until the start of the cash Equities Trading day, and another equity trading week. Lets get the stocks we are watching. Dani burger has the details. What the story . Dani akzonobel with a big beat, especially adjusted operating profit, about 238 Million Euros. The estimate was less than 200 Million Euros so that is a big beat. Their headwinds started to ease or continued rather to ease into the Second Quarter. Theyve implemented a lot of costsaving. Also, saying their Decorative Paints rebounded. Perhaps a lot of dyi projects now that people are are to emerge from lockdown. Another sector that will be key to watch, french luxury goods. Some retaliatory tariffs from the u. S. After macron threatened tariffs on silicon valley. Trump in the u. S. Published a list over the weekend, about 1. 3 billion worth of french goods that could be subject to another 25 increase in tariffs. On the list, handbags, makeup, beauty product. Look for Companies Like lvmh and loreal to move. Finally, m a news. A finnish valve maker, the former being the big swedish industrial giant. The offer is for about 2 billion takeover and it will be a public cash tender offer. Anna thanks very much. A couple of things to watch out for. A lot of the market moving stories. Keep an eye on anything to do with copper. A strong rally in copper prices. Open set, the market for a bouncing european stocks. Anna we are a minute from the start of cash Equities Trading here are your headlines. Stocks rise as investors look ahead to result season with some optimism. Even as investors shake off the corporate impact of the coronavirus, infections rise from florida and hong kong. Oil slips as opecplus is said to be planting seeds out of control in august. They meet midweek to discuss how to tinker without affecting prices. Plus, poland is set to win the countrys president ial election by a thin margin. The result is pivotal for the nations future ties with the European Union. Warshaw in warsaw shortly. Positive on the trading day. Ftse futures also for the upside. Dax, look for some bounce there, because futures there particularly strong. Well wait to see what were given. He was futures also point to the upside, although thats coming of earlier highs through the Asian Session and into the european trading day. A few session seconds into the trading day, and we have a move to the upside, up. The ftse 100 Getting Better gains, as is the ibex, up 1. 2 , ftse 100 up 1. 25 . Despite any concerns around french luxury, tariffs from the united states, that story may be not getting highprofile from investors today. Cac keeps up with the trend. Waiting for the italian market to open up and German Market to open up, but were seeing a bounce at the start of trading, real strength from the chinese equity session, up more than 2 . European equity markets open higher. Stocks in asia started the week on the front foot. Optimism over the eu Recovery Fund and the earnings season ahead control the narrative. Joining us now is stephen king, hsbc senior advisor. Good to speak to you today. Seen quite a lot of data, trying to paint a picture. How useful is the data to you at the moment, in your position . Do you see any real clues in the data or is it too murky at the moment . Steven it is still quite murky. Theres talk about a vshaped recovery. Mobilityt the google data was suggesting things were Getting Better over the past few weeks. But its hardly surprising if you are unlocking things that were locked down. You are going to get some kind of balance coming through. Is berg bigger question what happens in the third and fourth quarters and what economists are now coloring calling scarring, the degree to which businesses cannot return to normal, lack of productivity, significant job losses later this year, and the fact that even as local lockdowns are reversed in individual countries, external lockdowns between countries, in some cases, remain in play, particularly on a transatlantic basis. Lots of things are not going to return to normal, and that raises questions about how much of a bounce well achieve in the months ahead. Anna yeah, so investors putting aside concerns around that, around the latest infection data on the various, and counting on no return to a second lockdown. Perhaps plentyo of fiscal stimulus and physical health. With that and might, i think about europe in mind, i think about your. Think about europe. Has substantial, how much how substantial, how much of a game changer is that . Stephen theres still a lot of differences of view between countries as to what can actually be achieved. The usual european difficulty in some parts of europe, to, i suppose, nervous about giving money away that can be spent unwisely by people in other parts of europe. Countries have been hit hard by covid19, obviously italy. We desperately need to have some kind of european stability support. We have to prove ourselves to be one europe rather than a series of separate countries. The good news is Angela Merkel clearly suggested this should be a game changer that germany has shifted its position. There is recognition there are sharks that come through, which genuinely are paneuropean shocks of covid19. If you are going to have a common Monetary Policy for the eurozone, it makes sense to have a common fiscal policy too. Its been a long time in the making, but i think were going to get there at some point this year. The amount of money is personable. The agreed to which money is given away without strings today, that is questionable. The timeline is also questionable. It may be we get money coming through, but possibly the danger is too little too late. Deep does that commitment go to some kind of fiscal policy . Are we talking about a joint treasury . Some say this is the beginning of something substantial. Others say its a oneoff, a very sizable important oneoff, but it is a oneoff in terms of burden sharing, and it will be the way we return from here. Both of those narratives seem to be running at the moment. Stephen which is hardly surprising. One of the fundamental questions is what sort of political arrangement you have to underpin this idea of money being dispensed across different parts of europe . If you want to go in a deep sense, you think about a comparison between u. S. Federal systems and the absence of those federal systems, physically, within fiscally, within the euro zone. Who would that person report into, so to speak . How accountable would they be . And who makes decisions precisely where taxes would be raised and dispensed later on . In the u. S. , we have a federal system. You have washington, which makes these decisions, and makes sure money is redistributed from massachusetts to mississippi, for one example, because massachusetts is a rich state and mississippi is a poor state. Thats what the eurozone needs to do. But were still a long way away from having a framework put in place. Thats why i think you have a huge difficulty between those who think were going to move rapidly towards a solution, rather than a oneoff that wont take us far into the future. Anna and help us understand what we should look to when it comes to the affordability of fiscal stimulus in various parts of europe right now. Is that what investors are looking for . What does affordability mean now, when all of the other rulebooks around what governments can and should do have seemed to be ripped up and thrown away . Stephen well, its certainly true the master criteria doesnt seem to be relevant anymore, whether deficits or debt numbers are skyhigh. Thats obviously changed quite intimately. Costs,lity is, borrowing whether its the actions of Central Banks or behavior of markets itself, borrowing costs are low. As long as they remain low, its possible to argue European Countries can borrow more at least governments can borrow more in the months and years ahead. And frankly, given the economic shock thats come via covid19, thats probably the right way to go. The problem governments have is theyre all part of a single currency. Its not possible for one euro zone government to print money. You havent got the ability to underpin individual bond markets the way you have in the u. S. Or in the u. K. , for example. Thats where the ecb comes in. The central bank has given inugh freedom to be individual bond markets to prevent sovereign debt crisis we saw in the euro zone all those years ago. So, there are things that can be done, but i think at the end of the day, you want to have some kind of political underpinnings of this. And thats were i would suggest a bit of a vacuum in europe. A what we dont know about this. Stephen king. Stephen stays with us a little bit longer on the program. More from him in just a moment. Coming up, money worries due to concerns around job insecurities. Could ending furlough in october in the u. K. Backfire for the u. K. Government . Well talk about the u. K. Story shortly. This is bloomberg. Anna welcome back to the European Market open, 12 minutes into a positive session. We see the stoxx 600 up a 10th of 1 . Lets get a blue bird 8 10 of 1 . Lets get a Bloomberg Business flash. A longawaited equal pay story at the Supreme Court could see thousands of female supermarket workers seeing better wages. The countrys top four will consider whether they have been unfairly paying store staff less than workers and warehouses, who are mostly male. If the company loses, the cost to the sector could be as much as 8 billion pounds. Hourly pay is the same for mayor lee they say hourly pay is the same for workers. Navarro expects trump to take strong action against chinese social media app tictoc and wechat. It is just Getting Started and what it will out banning them. Fireto an american bile wouldnt bebuyer enough to solve the problem. Began,nths after sales they see it drop below 50,000 dollars. The reduction follows similar and 3. Or the s, x, tesla delivered more than 90,000 quarter. He the pandemic is throwing the world into financial insecurity. Consumers across 26 countries are concerned about jobs and how to budget, potentially stifling demand and growth. In britain, the government emphasized the furlough scheme wont be continued. Stephen king is still with us. Lets talk about the u. K. And the furlough scheme because we have seen it and announced in the chancellor announced the timing of the phasing out. He knew he would meet with criticism. What is the best way rest recent to keep the furlough scheme going . Could you make an argument it is the right thing to do to keep it going for longer . The key argument is the lucked out as a consequence of covid19 and we dont know when covid19 was going to be in proper retreat. We know from the experience from countries elsewhere around the world when you antilockdown, theres a significant risk of coming back again to start the basis, if youthat ended in october and you want to do more lockdowns, under those circumstances, theres a significant chance. But those people that have avoided becoming unemployed will become unemployed later this year if you havent got a popular recovery coming through. You should argue it should be extended to the extent the covid19 lockdowns require it in the event they have to return later this year. Issue that is the tricky at this stage. All it is saying is the epidemiology of this virus is so incredible difficult to predict that means economic forecasts are incredibly difficult to put into place. In that sense, governments should be there to provide a level of insurance against worst possible outcomes. We are expressing that this government, alongside governments elsewhere in the world can borrow cheaply. Thats good news. Anna indeed. To that point, talking about the rate at which governments can borrow, looking at a guilt yield chart, its interesting to see its falling the pace the last couple of years. But intensifying this year. Given the amount of borrowing announced, you can imagine under different circumstances you might expect those gilt yields to spike higher under concerns of affordability. But that hasnt been the case. What are those gilt yields telling us . Stephen first of all, there a tremendous lack of confidence in the economy thats not just true of the u. K. Its true of many other economies, too. Lots of uncertainty contributed to low yields. The bank of england has been helpful, whether a process to transfer orderly markets for a suspicion that a surge of helicopter money, whichever one it might happen to be. Its been helpful in locking down yields. I think theres also a belief within the Financial Market that yields was simply not be allowed to rise under circumstances where pressure begins to come through. In other words, governments must be given the space to do what they need to do in regard to defeating covid19. There are risks with that. One risk is downward pressure on currency. Another risk is the possibility of inflation picking up. I have to say the latter of those risks is low at this stage, but nevertheless we are living in strange times. But when you think about where u. K. Government debt is to the share of gdp, its about 100 for gdp. In normal circumstances, a high number. You compare in wartime, and we virus, you rather a compare it with wartime, the debt we are seeing currently is still relatively low. After the second world war, Government Debt in the u. K. Was above 20 gdp. Theres a lot of stretching this in the story to come stretchiness in the story to come. Anna when you mention Interest Rates might not be allowed to increase, what are you suggesting will be the link between monetary and fiscal policy . Stephen well, part of it is yield curve control, however you do it. Thats part of the tempt of the central bank to shape the whole yield curve rather than the shortened. Another possibility is the central bank stands as the buyer of Government Debt. Now, the issue there is whos in control of that process . Is it the central bank choosing to buy the Government Debt because you can and up with deflation . Or the federal bank telling the debt, whereas you are in a slightly more awkward position in the bank loses independence. When youre at these levels of Interest Rates, basically zero, some cases below zero, then the distinction between monetary and fiscal policy becomes ever more blurred, and under those circumstances, all those arguments back in the 1980s and 1990s that monetary and fiscal policies should never, ever meet begin to be thrown at the window. Ere seeing is a significant merger of the two in these circumstances. Anna stephen, thank you for joining us. Hell be joining us on radio. Ill be there. Coming up before that, theres a new challenger in the brokerage race as a zero fees world announced Retail Investors to flood the market. Well hear from the founder of brokers. Thats next. This is bloomberg. Anna welcome back to the European Market open, 22 minutes into a positive trading session. He was futures point up. Were never far from tensions between the u. S. And china. Today, were hearing about further sanctions from the chinese on various people in the u. S. China sanctioned the u. S. Changing the u. S. Officials. Case. Says thats not the senator rubio is among officials the china will sanction. China will sanction the executive committee on china. Well look to get further details on that. Tensions between the u. S. And china, of course. Back to the story we were mentioning before the break, one week after Charles Schwab cut rates to zero, and asked it will we spoke exclusively with veteran market maker and founder of interact or brokers Interactive Brokers about whether retail trading will become a more significant market force in the future. Guest so, i think this phenomenon will be looked at as existing a longterm trend, exchanges commodity became computerized towards the end of the last century, which enabled the emergence of Online Brokers and a computerized backssing of custodial and office functions. Now, that in turn, enabled accessbrokers to offer to their customers at extreme below cost. So, this process has been going on gradually for about 40 years. Coronavirus, this suddenly picked up speed. Think the virus will eventually, or rather soon i think, the fear is disappeared the creatinghat volumes will subside. But well not go back all the way to the levels they used to be because many people during these periods have opened accounts, learned about investing and creating, and so those peoples activities will end. Emily what does that mean . Who are the people that are really entering this market . Are they much younger people . And do they have the resources they need to be trading this market . Guest well, our customers tend to be the most significant. They tend to be in their mid40s. They have the money and they have the education. They tend to be into technology or financial business, or in management summer. Somewhere. And they certainly know what they are doing. Areall of this nonsense these are people that have no idea what they are doing, maybe its true for robin hood. But its not generally for people in the markets. And these people are not very different than they were a year ago. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Anna compact to the European Market open welcome back to the European Market open. In fact, some of the larger markets are performing by 1. 3 on the dax right now. Lets get he was futures, also pointing lets get he was futures also pointing higher. One stock is under pressure once again, the shares dropping after a guardian report over the weekend about the cofounder of that business. The stock has lost about half its value on the back of negative reporting run the amount of money paid for those who work for the business. Action nobel, Second Quarter revenues beating estimates at that business. We see that stock on the move, moving higher, the specialty chemically chemical makers up 3 . Ubisoft is one of the worst fallers, in fact the biggest faller, down by 8. 4 . Reports surrounding that business, certainly to Management Changes at that business. Polish stocks in focus. We do see a rise in polish stocks, other keep falling, the ck 600 up a tense of 1 8 10 of 1 . Well wait to hear if there is going to be legal challenge from opposition and well get further analysis. Lets get a bloomberg first word news update. Here are the stocks were focused on. Poland says the residential electorate is set to when the vote. Its all the highest turnout since the fall of turn fall of communism. Duty toled in its legal provide balance and in partial coverage, with almost all results in, the election body says he won 52 , with the other candidate in less than 40 name present. Only a quarter 49 . Only a quarter a business 49 . Only a quarter of this owners say they are prepared. They say they werent able to prepared for a transition, with many saying they need more clarity. The survey said they found the Financial Sector most prepared while manufacturing had the most to do. More than half a million hong kong residents defied government warnings. The strong turnout representing more than 13 of registered voters is a signal of resistance to beijings recent decisions to oppose a National Security law. 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. Back to geopolitics now, and china announced it will sanction u. S. Officials over washingtons response to the crackdown on the ethnic group. Lets get the latest with jodi schneider, our Senior International editor in hong kong. What do we know about these sanctions . Jodi we dont know a lot yet, anna. The headlines have come over that china has sanctioned u. S. Officials, and another headline came over that this includes marco rubio, senator from florida, republican senator who was involved in getting legislation passed that has been funded by President Trump that would sanction chinese officials. So, this is very much in this backandforth weve continued to see whenever the u. S. Has done something to raise the tensions. Weve seen it on the chinese side within a week later. This is the latest round of this were seeing. The u. S. Has been condemning chinas crackdown in hong kong by enacting a sweeping security law, and is moving to ban federal contractors from using huawei. So, this is backandforth yet again. Anna and were getting a few more lines coming through, china hopes that the eu will respect its position on hong kong. China will react further based on how the situation develops, and china urges the u. S. Withdrawal what china sees as wrong decisions. Remind is what this is in response to the legal activity weve seen taking place in the united states. Jodi so, the u. S. Has passed several bills, including months that basically would sanction officials for what they view as the loss of autonomy in hong kong, as well as sanction officials involved in the decisions involving she and john and the muslims. And obviously marco rubio is part of that because of his backing of the legislation. This is also extending into other things. Over the weekend, we sell Peter Navarro top trade official with is the trump, who is saying President Trump is going to take strong action against chinas own social media apps, tikt ok and wechat. It almost seems day by day, we have another situation like this. China, on the situation with the sanctions, has about firm cap has vowed firm countermeasures. It was the First Time Ever they had done that so clearly, we are seeing the pushback right now from the chinese government. Anna and tell us a bit more about the social media site of this because weve come through a trade war. Weve had Financial Services. Weve had a Technology Work taking place. Now we see a culture war, as well. As to the latest on social media, chinese social media, globally. Jodi yeah, thats right. Peter navarros comment is that the Trump Administration is just Getting Started on blocking those two apps. President trump last week said they were considering banning tiktock in the u. S. , even though these are very popular, particularly with teenagers in the u. S. Chat chat we wechat. But its also used by users globally. Is strong with u. S. Officials, as far as what the claim could be National Security concerns about protecting american citizens private data. Tok deniedrt, tik that it poses that threat and it distances itself from china. Interestingly, mr. Navarro said even if tiktock was to separate itself asan american tiktok was to separate itself as an american company, there was a big concerns about that. Anna jodi schneider, our Senior Editor between the u. S. And china. U. S. Banks released earnings this week, expected to be the First Quarter since the financial crisis. The results will show exactly what three months of covid19 did to the industry. Joining us to discuss is dani burger. Dani, really interesting to see what the picture is coming through from the u. S. Banks, surging Loan Loss Provisions with a big scene in the First Quarter. Are we likely to see more of the same . The banks working to be part of the salute were keen to be part of the solution to this crisis. Dani exactly. And only will they be the same, but were expecting a higher amount of those set aside to deal with bad debt. Its part of the solution, but at the same time, they have a Consumer Base unlikely to pay down debt. Thats why they have to set more funds aside. Should get a clearer picture than the First Quarter because the banks only had a few weeks dealing with the environment with the pandemic. Second quarter, they had months to see what the results would be. That means we have a more concrete number, more likely of who is unable to pay down debts. And also, the fall in new borrowing, considering Interest Income and the Retail Division things have been a big cornerstone of earnings like service charges, credit card these. Hard to see if this will keep the or a second keep up, or a second wave that would keep people from spending. Were expecting to see the highest loss of loan provisions since the financial crisis. Anna interesting story to watch. Are there any several linings that Silver Linings that could prevent it from falling dramatically . Dani it will be about underwriting and trading in the Second Quarter, maybe tailing off a bit, and then just with low Interest Rates. Were expecting to see Mortgage Rates double next year. Thats according to the bankers association, anna. Anna dani, thanks for a much. Very much. Let me tell you what is going on with shares of a Construction Company in italy. They fell 10 after the Prime Minister rejected the proposal. Just a bit of a backstory, the Prime Minister in italy urging iso estrada autostrade revoked after an embarrassing ther, pushed to provoking promotions held by autostrade, 80 owned by atlantiea. Coming up, andrzej duda has taken 51 of the vote. Well give you analysis next. This is bloomberg. Anna welcome back to the European Market open. We are just 43 minutes into the trading day, positive 9 10 of 1 on european stocks. Polands Electoral Commission says andrzej duda is set to when the vote. They saw the highest turnout since the fall of communism, with almost all results in, the elections say duda has taken most of the vote. Were pleased to we joined from warsaw from the Vice President of the social and economic research. A good to speak to you today. Do we know, definitively, the results here . If you are doing business in poland, interested in the polish story, you assume we have another five years of duda . If so, what does that look like . As you said, this was a very close call. And yesterday, the exit poll was not decided. But today, we already know who won the elections ins the difference between the two is the number of people who are not counted yet. This is a very long Collection Campaign and a short night. But it was quite expected andrzej duda will maintain his its quite sure that the next term will be much more difficult than the previous one as the economy is likely to face strong economic headwinds. Actually, both candidates were casting spells on the Economic Situation and the fiscal yueh, generous in their electoral promises. Want would quite truly materialize over the next wontaterialize materialize over the next few years. In the beginning of february, the government plans zero deficits, so the situation has changed quite significantly. Anna yes. And do you think the coronavirus and the governments handling of it has an impact on the result here . Still a lothere are of uncertainties around the pandemic and further economic consequences, but its quite 55 that the threshold of entrenched in the polish constitution is looming quite fast. So the government would likely tiedis hands its hands the next years. That theimportant popularity of the current take advantage of the popular government and enhance tax coverage, which is unlikely to have them. Anna and in looking back at some of the issues that were highlighted during the campaign, a sort of cultural war seems to be fairly evident within poland, and also between the polish government and brussels. Do you see that that your war will continue . I think that we might expect a little bit of change in rhetoric. Also, keep in mind, in the debate around potential impacts on the rule of law on the Recovery Funds, that is currently being discussed. So, i think that the government facing the strong economic ed to changeght ne its rhetoric over the next month and years. That ok, so you think because the government will want access to the Recovery Fund, have to allow more Judicial Independence . I think that some of the changes might be [no audio] anna sorry, i was just asking you whether you think we will see a change in attitude the judiciary independence in poland. I may think that the pace of change in the judiciary may slow down, as you say, because of the Recovery Fund, economic consequences, and the push from the eu. But still theres a lot of uncertainties around. Ok. thanks. What about those tensions between brussels and warsaw . Do you think we wont see as much of that in the second term for andrzej duda . I may expect the second term of president duda will be different during the first term. President duda needed to maintain support of the ruling camp. In the second term, i think things might slightly change. And also, the attitude and the mayoric towards brussels slightly change. Anna ok, really good to speak to you today. Vice president for the center of social and economic research. Thank you for joining us from warsaw reaction to the Election Results coming in from poland. Coming up here on the program, which are key to the broad markets . We put to laura cooper, who joins us next. This is bloomberg. Anna welcome back to the European Market open, 53 minutes into the trading session, up 910s percent, the dax leading the way 9 10 of 1 , the dax leading the way. Laura, could to speak to you. Markets rallying despite the headwinds. We talked about that a few times in the past and i know you have been looking ahead to the earnings season. Which earnings are key for broad markets . I wonder whether it is going to be specific companies here, or sectors in the pictures they paint, or specific Balance Sheet . I wonder what is on your mind. Laura certainly, kicks off in earnings. It will be a tough test for stocks. Crucially, its less about the backwards looking figures that are going to be released. But its more about Company Narrative about the outlook those and really whether comments will warrant this bullish sentiment that we are seeing christ into stocks. I think stripping it down and looking at the sector levels, given estimates are quite significantly bad, really for consumer cyclicals and energy, we could see some upside surprises that could see some beats, whereas on the other hand, tech stocks are expected to strongly outperform during this period of work from home. Two if we see any disappointment so if we see any disappointment there, that could shake what we have seen. Crucially, it depends on the Company Narrative and whether it totinues to price in or confirm that we will see this sharp rebound in terms of profit outlooks for 2021. Yeah, and we were talking to your colleague, garfield reynolds, early on. If stocks rally on tech, there is going to be a lot of focus on what was tech is this is can deliver tech businesses can deliver. Were going to hear a lot from Central Banks, but perhaps thats not where the actionis. Not where the action is. Laura we have six Central Banks this week, sending their signals about potentially what the recovery is shaping up. But ultimately yes, it is unlikely to be significant markets. We are unlikely to see major policy changes. But if anything, it is a case of how they are seeing the recovery and whether they are actually going to continue to have this whatever it takes mantra. At this case, its likely to be the case, but we are seeing signs of mixed messaging, notably from the ecb, in terms of they are seeing the outlook shape quite well. So whether there is more in the pipeline that markets expect, its unlikely to play out. We could see some kneejerk moves on the back of that. That really, crucially but really, crucially, its likely to be more about earnings and the data this week and whether that continues to affirm we are stalling Recovery Efforts in the u. S. , in contrast with this kind of ongoing improvements we are seeing in your. In europe. Anna ok, laura, thanks so much, laura cooper joining us to run of this hour of programming this round off this hour of programming round off this hour of programming. All stocks in positive territory. Stay with bloomberg television. Up next, it is surveillance. This is bloomberg. 49. 50 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. Xfinity. The future of awesome. Global coronavirus cases approach 13 million, new cases in florida break records, the pandemic shutters schools in hong kong again. s andrzej duda is said to win ae election by a thin margin, result seen as pivotal for future ties with the eu. Beijing will sanction officials in response to washingtons condemnation of the crackdown. Im yousef gamal eldin