european stocks gaining. the markets a lot cooler about the coronavirus. importe focusing on this seen by china for u.s. products. 1.67.s. 10-year yield we will have more throughout the show. that's get to the bloomberg first word news. in the: we begin here u.s., president donald trump has been acquitted and is impeachment trial -- in his impeachment trial. mitt romney was the only republican to break ranks. he cleared the president of the obstruction charge but voted to find trump guilty of abusing power. than 560. more than 28,000 people are infected. some figures grappling with the largest ever lockdown. hong kong now says it will quarantine all arrivals from mainland china. talks between asked -- experts -- that is as and russia remain split over the threat of ages coronavirus. -- over asia's coronavirus. while russia is willing to resend the current cut it doesn't want additional measures. the uk's economic growth targets are being called into question. national institute of economic unrealistic."uite they want to lift economic butth to almost 3% a year the proposed policies are likely to offset the impact of brexit. hollywood legend kirk douglas has died at the age of 103. starting in over 80 moment -- 80 movies perhaps he is best known for his role as spartacus. -- ending the blacklist during mccarthyism. mr. douglas said that decision was one of the proudest of his life. 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. i am viviana hurtado. this is bloomberg. withine: let's start bloomberg look at trade. china says it will have tariffs on $75 billion on u.s. imports starting february 14. the action applies to two sets of tariffs and it is time to put aside moves by washington. global death toll reached 565. we are joined by tom mackenzie in beijing. brendan murray is joining us for the hour. all. you we have full team coverage. tom, let me kick off with you. how many deaths have there been and how many people affected? numbers in the next few weeks are going to continue to rise on the death count. the official number of 565 globally and the number of cases which is above 28,000. it is worth reiterating 98% of those deaths are and have been reported in the province in this -- in the city of wuhan. on the testing front there has been progress. the center for disease control in the u.s. sends out -- sent out testing kits. officials trying to speed up their assessment of people who are showing the symptoms that relate to this virus. testing is crucial. gilead sciences say they are going to start testing their antiviral drug and china. state media says there's been some progress from medical officials here using a , antiviral of drugs and anti-hiv drugs. there world health organization says we are a long way from a vaccine given the need for trials and regulatory -- that any vaccine would be required to cross. anderms of testing of this progress on potentially getting somewhere towards curing some of these patients as it gets rolled out. of course, it is over the next few weeks given the incubation. -- incubation period. the numbers are expected to continue to pick up. francine: tom mackenzie in beijing. let's get to brendan murray and andrew wilson. brendan, this is a bloomberg scoop saying that china will have tariffs on $75 billion goods coming from the u.s. this is an implementation. brendan: we are seeing the market breathing a sigh of relief that all the this deal was signed weeks ago, there has been -- there hasn't been a lot of comment from china about the follow-through they were expected to do. they are fighting this health crisis and markets have been anticipating china's followthrough and things like purchases of commodities. what we are seeing today is china following through. this would be a good sign to the administration. they will look at china as holding the pledges they made. overall, the market is really just breathing a sigh of relief. francine: brendan, talk me through this. there something called force majeure. if there's a natural disaster than they do not have to comply. the chinese hope because of the coronavirus that the u.s. will go easier on them. >> it was signed january 15. the fact that china is making moves to follow up our really good once. what the chinese and the signals we are getting from the chinese is they are going to be looking at flexibility. there is an escape clause for unexpected events. we will see if that happens. francine: andrew, how bad is this? it is early days and i know the situation is fluid. andrew: the interesting piece is how much will impact q1. everyone is looking at swine for commissars and ebola. is it just one quarter and then we bounce back? it seems like markets are like, this is going to be contained. they are looking beyond this. the moves by the chinese authorities are positive. it does seem that they are taking steps, not only to contain the virus but to provide some liquidity and stimulus. francine: is the market wrong to react like that? andrew:. andrew: it is too early to tell. we really do not know. markets certainly seem to be discounting a pretty mild situation here. not a huge increase from here. on a day-to-day, the risks are more skewed to the downside. it is speculation. francine: if the u.s. or to be more flexible with china, do we know what they would do in terms of trade? andrew: they would cut them a little slack, the size of the purchases they have pledged. after looking at those estimates and saying they are not feasible, there could be some scaling down of soybean purchases and other agricultural commodities. the wildcard is, is donna trump feeling sympathetic? is donald trump feeling sympathetic? he ran in 2016 against the impact of china. francine: does the virus not changing -- change everything? >> you would think it would. it becomes a global economic drag, then sure, you would think there would be some consideration. francine: andrew, what this this mean for trade? we have someone yesterday who said it just gets worse. andrew: we saw a big rally. we came off the lows of yields by 10 basis points. if it does deteriorate, things you would expect to see treasury yields -- the fed may even come back into play. stage, two cuts were priced in. slow down is already factored in but if we have much more of a slowdown, beyond china, it becomes a global issue, then treasuries are the beneficiaries. could we see 1.5 on the tenure? francine: we will talk about treasuries. thank you both. wilson murray and andrew . we also have a talk later on the bloomberg terminal. that is basically what we will be focusing on when we look at the coronavirus and the impact on the economy. assetan etf's have now management of almost one trillion euros. bloomberg's news show etf iq europe tomorrow at 9:30 a.m. london time. coming up, christine lagarde wants central banks firepower. -- warns on central banks firepower. this is next. ♪ francine: economics, finance, politics, this is bloomberg surveillance. let's get to bloomberg business flash. viviana: we begin with -- pledging to boost shareholders return as it shifts the cash dividend policy. --s coming after the french also signals it is set to miss a key target. in a credit may accelerate its plan to share a bigger portion of profit with investors. spokes the italian bank to reward shareholders. they payout from 2020 earnings may rise to 15% of underlying profit. it will be delivered through a combination of buybacks and dividends. in fourth-quarter earnings, ing suffering a bigger than expected drop as higher compliance costs income.he increase in the lender is investing in clients and improving anti-money laundering efforts. it is also facing pressure from negative rates. that is your bloomberg business flash, francine. francine: european central bank resident christine lagarde says of crisis fighting has left central banks with few options. speaking to the european parliament she says the domestic economy remains resilient. earlier, former ecb chief economist warned about the side effects of negative rates. >> you also have to consider the economy as a whole. little employment gains, the unemployment rate in germany is 3.5%. if you have a job that is more important, notice it is true, i don't deny that in the future you have to think carefully about the persistence of these policies in the future to continue qe, continue with negative rates. i see it more as a cultural problem that the negative rates are persistent for five years, six years, seven years? in ave been educated civilization where we say time is money. years, withhan 10 negative rates, is really a cultural problem. the question of inequality, as you mentioned. francine: that was the former ecb chief economist. still with us, andrew olson. we heard christine lagarde say the ecb has run out of options. does it mean she will not do anything and focus on fiscal? andrew: they are going through a review. i think some of this is softening up a little bit. unlikely toit is take rates further negative as peter was talking about. there are negative consequences. he talked about the cultural side. we look at it from the financial perspective. there'sare conscious not a lot of ammunition and regard to interest rates -- in regard to interest rates. she is trying to broaden out and getive and try activity going again. -- fed central banks now is going to review. what other tools can they use? francine: this is something that mario draghi needs to do at every single press conference. if you look at the euros, figures yesterday were not too bad, but you also have concerns. do you see value in european bonds? u.s.-china phase one deal. andrew: we are going to ghosn -- going to go in. we got the election coming up in november but the idea of increased trade tensions, it is not going to be good for the economy. i think the u.s. is going to be weary about ramping up that rhetoric but it is still there in the background. what will these tariffs do? most economies are running around trade. even aside from the coronavirus issue which has been a dampening lagarde, but christine is resilient. see somely want to increase in activity in order to try and enable getting rates back to more normal or at least zero. francine: thank you so much. later today, we will be taking on the a live blog impact of the coronavirus. terminal subscribers can send their questions i going to tliv. it. looking forward to coming up, trump has been acquitted in his impeachment trial. we will talk the politics and prospects for the world's biggest economy. we will go back to that treasury call. this is bloomberg. ♪ francine: this is bloomberg surveillance. i am francine lacqua. president trump has been acquitted in his impeachment trial, cleared. mitt romney was the only republican to break ranks. he cleared the president of the obstruction charge and found him guilty for abusing power. on the economic front, we will get -- still with us, andrew wilson. andrew, without talking politics, the election will be one on the strength of the economy. andrew: it is resilient. -- it isnning at about about trade growth. and wepayrolls tomorrow have seen a pretty solid run of jobs numbers. not spectacular but enough to numbers employment lower. wage rates have not gone up as much as you would think given how low unemployment is. growth overall is going to run somewhere around 2%, maybe even a shade below 2% but good enough to keep markets on edge a little bit. can the fed cut that much more? the fed will be on hold throughout this year. it is resilient. there are things that could be relit. -- that could derail it. trade tensions, look like we have taken those down quite a few notches in the last month or so. taken off the agenda. francine: what happens to inflation? andrew: it is suddenly low. the u.s. is relatively high. far away here in europe, far away in terms of japan. inflation looks to be due. and a seen pricing in slow inflation world. francine: we will get charts next with andrew wilson. we have a chart looking at real yields. how do you take advantage of investment opportunities? we will talk about that next. this is bloomberg. ♪ francine: china lowers tariffs on $75 billion of farm imports as stocks rally across the world. central bank's madame lagarde is running out of ammo as she warns global worries advance, but risk-on is the only game in town, and european stocks hit all-time highs. and, acquitted, donald trump is cleared in the senate impeachment drama. in iowa, buttigieg and sanders remain neck and neck. good morning, good afternoon, good evening, depending on where you are in the world. this is "bloomberg surveillance ." just over 1.5 hours into the trading day, let's check in on european stock movers with annmarie hordern. annmarie: a big day for earnings in europe. optimistic for 2020 and they are seeing a limited impact on coronavirus into the industry. that is helping shares this morning. unicredit up 5.5%. they may accelerate the plan to get back cash to investors, whether it is dividends or buybacks. as their capital balance sheet in strengthening. and dassault to the downside, 3.13%.ree point -- down the first quarter is one that we have to be skeptical of, given the virus and impact on china. let's check the boy. i want to see what is going on premarket in the united states -- let's check the board. i want to see what is going on premarket in the united states. an epic roller coaster right after the past six afterwhere it hit 100% the rally. you can see it tumble in this five day chart. many analysts are pouring cold water on their outlook. a lot of them are saying now just hold tesla or potentially sell tesla. there are two things -- there is the factory in shanghai, worry thet vulnerability to coronavirus. we had some a short positions, we are seeing bearish trades. hordern withmarie your bigot stocks to watch let's get to first word news in new york city with viviana hurtado. viviana: we begin with a decade of firefighting leaving policymakers with few options, this coming from ecb president christine lagarde. she warns global threats could hit europe's economy. central banks might not have the ammo to help. this low interest rate, low inflation environment has significantly reduced the scope for ecb and other central banks worldwide to ease monetary policy in the face of an economic downturn. viviana: at least three people died after a boeing 737 800 split open after landing in turkey. 179 people were injured. the jet veered off the runway in what weather. the rear of the plane catching fire. it came to rest upside down. bernie made off asking for early --ease for his 150 year bernie madoff asking for early release for his 150 year prison sentence due to kidney failure. he has one year to live. he's served 10 years of his sentence. the company says the coronavirus outbreak will materially affect this year's profit and sales. in total, 30% of its restaurants across china are now closed. it does not know when they will reopen. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. francine? francine: thank you so much. let's bring in exclusive conversations. pledging to boost shareholder returns and bring in a new cashiering policy. executive spoke exclusively to our correspondent in paris. concerned that we have an good business model. generate revenue is there, and we will get the benefit of this restructuring, the full benefit in 2020 on the plus side. that is why we are confident to prove effectively the profitability on the capital. dark of what could be, in your opinion, the biggest headwind for the biggest franchise in 2020? >> when we look at the shares, it is probably out of than people anticipated. six months ago, you have to say there is this virus issue in china. it is not at all the exposure that we have in china. that is small. like any company, what it could mean for the global economy -- that would be a solution for that. but beyond this, we are pretty -- as we have a slowdown in the economy, again, we can have a better performance thanks to all of the hard work. >> the growth forecast for china could be cast as just two points for the first quarter. with that have a big lasting effect the echo >> i think the question is how long it will last, the last two or three months, there might be an impact, but it is not such a big deal. beit lacked more, that could a significant for many companies. >> socgen was among the banks studying the conditions for the security in china given the new regulations there. do you think the situation is delaying this? >> we talk about a long perspective, the development of the capital market, and we talk about the shorter impact. there is no direct impact on this project that we want to pursue. francine: that was societe generale's chief executive. tice,g us now, jonathan european bank's senior analyst, and andrew wilson from goldman sachs. i have a million questions on a million banks, but first, if you look at a bank like societe generale, like a lot of the other banks doing well in some places but a lot of cost cuts to come in others. andrew: absolutely. we talked about revenue struggling and the need for more costs. on the plus side, the revenue out but -- i think the best thing for unicredit and socgen, if you said -- , you are getting cash dividends. francine: does that mean the share prices will go up? we still ask so many questions about what these banking models are in europe. jonathan: look at the best-performing banks in europe, there was the french and unicredit. what is the underlying run rate? mostly flat revenues are done on costs. any credit, it is not that much of a surprise because all they have done is taken targets that we knew were quite global and messed it up a little bit. get andrew want to in the conversation on negative rates in a second. a lot of executive say it is a nightmare doing this -- doing business in this kind of environment. excuse? true, but they have to do more on costs. francine: but at some point if you do too much on cost, you cannot really operate. andrew? torew: i thick it is hard believe we will get to a situation where the ecb will be able to get rates back to zero. francine: two years, even more he echo andrew: i think the prospect of seeing rate hikes in 2021, 2022 is possible. it is obviously predicated on the global economy doing better than the european economy. we are seeing reasonable growth but not enough to suggest inflation goes up and therefore rates need to increase. francine: is there such a thing as too much cost cutting a ?uropean banks he ech jonathan: no, it is a long painful process. networkl have a legacy of buildings that people don't go in anymore to put money in savings account. aredmp's of the world talking about 30%. give it 10 years, that is where francine: francine: it will be. -- francine: in 10 years, how many european banks will be left? not many. germany really has to have a lot of -- francine: what would you do with deutsche bank? jonathan: i suspect nothing. worldicredits of this going to the next phase are looking at cross-border reasonably material assets. francine: andrew, you look at the economy, you look at central banks, they also have to fulfill the function of transferring -- transmitting the monetary mechanism. is it being fulfilled? andrew: that transmission mechanism of negative rates really happen by the banking system, and as long as banks are not charging consumers, to some extent the policy is not as effective as it could be. can we see a situation where banks pass on the negative rates to consumers? it is happening in pockets with certain balances over large amounts, it is starting to hap