Surveillance. A bit of a different bloomberg surveillance. It has been 10 days that we have foroadcasting from all of our technical operators around the world. Arefocus is on what we seeing in terms of data. Is the euro area. It will give us an indication of exactly what the economy is facing. Euro area preliminary actually, its not preliminary. Anything below 50 indicates a contraction. Lets get onto your markets quickly. Thee is a lot of focus on banks after regulators have pushed a lot of u. K. Banks. European stocks are down. Im also looking at treasuries. Lets get straight to Bloomberg News in new york city. Died from coronavirus. Fatalities top 1000 confirmed cases in new york state. They have surpassed those in chinas Hubei Province sticking with President Trump, he said to announce the deferral of some payments. Bloomberg has learned he has announced a proposal to the late some levees for six months. This would not apply to tariffs the white house has imposed as a result of action on chinese goods. Topto the u. K. , where officials accept the country has not done enough to test for coronavirus. The Prime Minister blamed a shortage of chemical components. Experts struggled to agree on what to do next. The Health Department says that this weekend, the first new ventilators will be delivered to the nhs. Number ofthe new cases leveled off, hitting a two week low. Its assigned the outbreak in europe may finally coming under control, but spain suffered its deadliest day at. Yet. There are a Record Number of for tallies in france and the u. K. Stocks have further to fall below march lows according to jeffrey gundlach. He says that it wont match highs for a long time. Projections of a quick recovery are too optimistic. Quote feeling of panic will return to markets in mid april. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine thanks so much. First of all, British Petroleum is seeing Capital Spending 25 below prior guidance. There are a number of companies coming out and saying they either have to forgo their guidance or give out dividends. Hilary clark is working on a great chart we will get to you on the program. Lets talk more about the markets and what kind of recovery will see. Ludovic, thank you for giving us a little bit of your time. You what kind of models are you looking at for the economy . Ludovic markets are worried about longer confinement and dumped no what they will be experiencing. Like many analysts looking at the markets, we expect many of these outcomes could last for two quarters, but then we expect some kind of rebound. This is an overshoot because we see a large number being transferred onto the public sector. See, we see risk of infection. Its something the markets will try very differently. It means that as long as the u. S. Is not out of the woods, you wont see this recovery in europe or in states. Francine i dont know whether you call it a recession. I know a number of Central Banks have said its an extension of the economy, but how bad will it get for it gets better . Ludovic with two months of confinement, global gdp will contract. Have 22 in the second quarter. You just take one month confinement, they will avoid the recession for two years. Germany,country like 2020 and 5 8 in recession for two months confinement. Is what is actually priced in and what the activity numbers give us today. Francine when do you start seeing a damage to the economy . Where does it show first . Italy because they were hit first . Unemployment . Problem. Exactly the the second wave of issuance will come from unemployment and bankruptcy. They have taken an insurance policy by announcing trillions in the United States, something to the tune of 150 billion for germany. Is we seeoblem partial unemployment and liquidity issues. Policymakers are trying to mitigate the recession and prevent the impact on the crisis by making sure we can restart the economy. I fear we might see some of these longrun effect because of of prevalence of the crisis retail or construction. Only theion is not policy measures we are taking now but the measures we will take in nine months to make sure we restart the engine. Whenine how do you know or who has the best plan to put the economy back to work . It depends on if you are a governor, politician, or european. It is a very good question. People were looking at how to manage the crisis. I think a lot of people are economic andsing health impact, which i think is a sad trade of. Will have to rely on mass trust building and we may have to choose to rewire parts of the economy to avoid that policy it will be 20 of gdp. Really tracked it yet but we see good examples in and thatf confinement we see isolation is working in germany to protect the number of casualties. I think we will need another couple of months to see where the right policy choices are made. Right now, its all about managing trust and making sure we dont completely put the economy on restart. The u. S. , and i know because we haves spoken about this before, the u. S. Economy moves at its different case or time in the cycle. But the u. S. Is focused on getting cash to consumers. In europe, it is different. Which one works better . Indeed cashu have versus credit. The u. S. Has given a lot of credit through the fed and treasury department. If you look at europe one of the differences is we have a strong safety net in one of the you can see unemployment transfers given to the most vulnerable instead of sending checks to everybody like President Trump. Those are the biggest differences. One is relying on the existing network of social securitys and the other is improvising. Temporary transfers versus cash is a big issue. First is a credit response, the next is protecting households and companies and thirdly, boosting aggregate demand. It is a move to really protect income to households in the u. S. They do that because one of the big differences in europe and ,he u. S. Is that, in the u. S. Job losses are actually increasing, whereas in europe, the choices have been made. There will be no bankruptcy caused by covid19. It is to say they will protect their employees from being fired because of the coronavirus. Help Companies Keep food on the table. That is the biggest difference in the european and European Response and u. S. Response, which tries to cleat keep employees as long as they cant so they dont have to be on social support. Francine ludovic from allianz stays with us. Coming up, we talked dividends and buybacks that may not happen. Bill winters of standard anrtered joins us for exclusive conversation. This is a bloomberg this is bloomberg. Francine this is bloomberg surveillance. We are just getting breaking news out of the ecb. A minister from the ecb headset the eu debt crisis the eu risks a debt crisis if there is no common action. We will have more on that throughout the day. I know that has been more than a fight on corona bonds. Lets get straight to bloomberg first word news in new york city. U. K. Banks have agreed to scrap dividends this year. It follows similar announcements by european peers. They are asking them to cancel payments, them they expect asking them not to pay any bonuses to senior staff. Xerox is dropping its hostile takeover bid for hp, citing uncertainty from the coronavirus pandemic. It marks a blowout to the efforts, though they may revisit the deal in the future. , going toh airlines burn through as much as 51 million in the second quarter. Revenue is set to crater by 53 during the time. They are urging the government is 35x rules buys much billion in cash refunds. 35 billionmuch as dollars relax rules by as much as as 35 billion. Still with us is ludovic subran. Channel,ke german saying they need corona bonds and more support from germany. Germany is pushing back. Is this a make or break situation for the eu . I think this is the ultimate litmus test for the validity of the European Union and the euro zone. Either we let it continue to the National Government or we find some type of institution. Bond, we do a corona which as we discussed, i think it could work but it has to be longer by all the countries. Luxembourg and france of the world have to ask for this. They would need to discuss the what instead of the how. Nots istion we have fiscal transfers. We have to use one of these options. It is economically sound but a political nightmare because it goes back to how much risk sharing we except within the euro area. That is probably the most difficult question to answer. Does it need to be answered now . Ludovic i think we have to do something, yeah. It does not have to be so political. The ecb already put the cart before the horses by announcing the debt trades. I think what is really difficult is the absenceon of any kind of support from international institutions. If you want to be the europe of health, it has to me now. It is activated in crisis like this because it takes quote two years to do something that resembles a corona bond. This is unacceptable and we absently have to handle it now. In 2018, 12, and 14. It will be a political nightmare because people will remember that europe did not step up to the plate when they had to. The u. S. Is having this moment and we need it in europe. Discuss that not other states are more effective because they have fiscal transfers. Try some afford not to of what they are proposing. Maybe it will be aaa rating and maybe it can actually bite to the back door so that it does not risk credit sprint risk. Credit spread risk. Not trying it is criminal. Something. Try just looking at the direction, it will be at 250 at the end of this year. Want to indent the rate of italy, but how long can we sustain these high debt to gdp ratios . I dont know, and i think if we dont do anything, the European Commission is quite silent. The government has come together to fight this and this will be sticking in peoples mind and be a very bad crisis. Thank you so much, ludovic subran, allianz chief economic. Later, we speak to the bank of america chief executive at 5 p. M. London time. This is bloomberg. Write it out and think of it as the flu. But its not the flu. And as experts are predicting, as a lot of us are thinking, we will start to see some real light at the end of the tunnel, but this is going to be a very painful two weeks. When the increase in new cases begins to level off, the secondary effect is less hospitalization. Less intensive care, and then less debts. Deaths. Care, and thee hospitalization always lag behind the early indication that there are less cases in a day. Thats what we saw in italy, and what we are likely seeing right now in new york. So we have got to brace ourselves. In the next several days to a week or so, we are going to continue to see things go up. We cannot be discouraged by that, as mitigation is actually working. Francine that was President Trump and dr. Anthony fauci updating the nation on the pandemic, warning of more pain ahead in the next two weeks. Coming up, tomorrow, an interview we will have all been looking forward to. We speak to the Standard Chartered executive at 9 a. M. London time tomorrow. We talked dividends, payouts, and loans. [ one more time by daft punk ] woo [ laughing ] woo play pop music no way dude, play rock music yeah woah no matter what music you like, stream it now on pandora with xfinity. And dont forget to catch trolls world tour. Lets party people one more time francine a tough two weeks President Trump warns of hard times ahead as u. S. Officials estimate that 240,000 americans could die. Further to fall for markets a course of investors from howard marks to jim rogers warns that asset prices could go much lower. Jeffrey gundlach expects the panic of march to return. And dividends dumped shares in british banks take another hit after scrapping dividends and buybacks urged on by the u. K. Supply regulators. Well, good morning, good afternoon, good evening, everyone. Depending on where you are in the world. I am Francine Lacqua in london, and this is bloomberg surveillance. Lets get straight to bloomberg first word news in new york with viviana hurtado. Viviana we begin with President Trump, warning of as the u. S. Faces a tough two weeks. As many as 240,000 americans could die from coronavirus. Fatalities in new york city confirmed cases. Sticking with president donald trump, he is calling for 2 trillion in infrastructure spending. He wants investment in the nations roads, bridges, and tunnels. He is seizing on low Interest Rates to chiefly finance the plan. He says none of the money should go toward the green initiative. The democrats are calling for. Planning to. S. Be with saudi arabia and russia amid the plunge in oil prices. Early march, both countries are vowing to flood the market with millions of barrels of oil in a battle over market share. And we end in the u. K. , where top officials now say the country has not done enough to test for coronavirus. The Prime Minister 17 blaming the global shortage. Meanwhile, the u. K. Health Department Says the first ventilators will be delivered to the nhs on the weekend. 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, viviana hurtado. This is bloomberg. We are getting a little bit of data out of the u. K. This is for the month of march, pmi coming in a touch lower than expected. Anything below 50 means it is a contraction. That is u. K. March manufactory pmi. In italy, the number of new coronavirus cases have leveled off, hitting a twoweek low. Officials say the nation has hit a plateau. It is a side that the outbreak at the epicenter is getting better. Spain has had its worst day yet. Professor, thank you for joining us. If you look at how the european model has worked, and italy and what kind of recession we will see, how difficult is it at this point to model in out . I think we have just lost the professor, so we will get back to him in a second. This happens when you work from home sometimes, even if our great Technical Team are on it. Sometimes you lose connections. We are getting some news out of oil. Russia is saying it is not ornning to boost oil output, russia is not planning to boost oil output amid the over supply. We will also speak with rita fan on oil dynamics. ,e will speak with javier blas just at a time when demand for oil is going down because of coronavirus. It is having an impact because there is a price war between saudi arabia and russia. Staying with that theme, there is a prediction that airlines will burn through 61 billion worldwide in the second quarter. That threatens the very survival of carriers. The director general told bloomberg that the Industry Needs more support. Here he is. We estimate that the airlines in twon out of cash months, two or three months. So it means that in two or three months, if nothing is done, we could see bankruptcies for half of our airlines. The point is that the government has reacted very strongly. They have put together a very they have put together significant stimulus packages, and we urge the money to be put on the table, to be injected into the Balance Sheet of the airlines. This veryvercome difficult period. Otherwise it will be difficult for many of us. You are saying the money needs to be put on the table. Are you suggesting the governments are putting out fine words but the actions are not backing them up . Do we need to see the money coming through quickly . More quickly . first of all, we are very grateful to the government. They have done a very good job putting together these very significant packages. But now that the announcements are made, the efforts have been done, we need urgently money. Aboute publish a figure the 16 billion of cash flow in the second quarter, it means that we desperately need cash, and urgently. Government, please, now implement the fantastic policies. That you have announced. Guy in terms of how this is going to work its way through the system, we clearly have an urgent need for cash right now for the aviation sector in the United States and europe and globally. But there is a danger that what we see happening is the current actions being taken by government to contain the virus working. We then ca return to normal life. See ath nc but we then return of the virus later in this year. At that Point Airlines would have had their aid, they would have gone back to normal working conditions, and then we get hit again. Hereis the longterm plan if we do see a return of this virus, if we do see problems reasserting themselves later on this year . How much patience do you think governments are going to have . Is this a one shot for the carriers to put themselves back into a stable position, and if they dont come is there a danger we see it returning later this year . it is a matter of being able to overcome a crisis in one way, we hope, it will last only for a few months and that is all. And then a second wave, nobody can be held responsible for that, and we hope that withnments will come back cash. Onal packages for we cannot say that anyone is responsible for that. We have to fight against the coronavirus. We have to overcome the different ways. There are several. One, hopefully, and these are the second again. We will ask for help. But and we think that governments will understand that. It is not the fault of anybody. That was the iata director speaking with guy johnson. We go back to the professor. We had a bit of technical difficulty. Just moments ago. Talk to me about the model you are using for italys economics in the next six to nine months. Model, after some doubt in the beginning, has been completely locked down, and we see the results. That was the third week of complete lockdown what i think is a relevant number, which is admissions to hospital. Number,the only hard the number of contagion many people have been directed to stay home and you cannot count that. Units ntensive care it is going down. This is important because the strain of crossing the virus is in intensi