Weaker as you have no agreement over finance chiefs on what to do over the crisis. Russia doesnt think a 2 million barrel a day cut is enough to get anyone to the table. In the bond market, 17 billion worth of supply coming online at about 1 00 today. It is time for todays market moving news from our london and new york offices. European Union Finance ministers now failing to reach a deal on a unified strategy combat the economic damage of the coronavirus. Germanys finance minister olaf scholz did give a press conference shortly after talks ended. I think it is absolutely clear that the recovery of great will be a very activity. We have to organize together. As anyone knows, i think it is absolute possible to do this within the framework we already have. Alix bloombergs Michael Mckee joins us now. I couldnt believe it, but i could believe it this morning when i woke up and saw they could not agree, and it was north and south. Michael it seems that way to a lot of people. Talk is cheap. It is the countries of the southern half that dont agree this is going to be easy. They did spend more than 16 hours on a Video Conference yesterday and failed to agree on their plan to mitigate the effect of the crisis. This is big news for europe because the southern hardhit countries are pitted against hawkish northern states, and be doesnt seem to agre there doesnt seem to be agreement on the horizon. They would offer credit lines of up to 2 of the countrys gdp, create a paneuropean liquidity guarantee fund, as well as an implant as well as an reassurance scheme. The european stability mechanism that lends money up to 2 of the gdp is supposed to come with conditions attached because it is usually granted when a country has run into Financial Difficulties of its own making. The netherlands once italy to agree to conditions, but the italians dont think it is their fault and dont think the eu should be running the country right now. Germany remains opposed to financing this whole deal by a ornt method, corona bonds Something Like that. You heard olaf scholz making polite noises about confidence. Another call is scheduled, but right now, hard to see how they get through this. All of this comes amid the backdrop of a german think tanks and the economy there is going to shrink this quarter at the most at more than twice the pace of the worst quarters of the financial crisis, 9. 8 . That would be the most since records began for quarterly gdp in that country in 1970. For the year, they say german gdp will shrink by 4. 2 . The bank of france out with its economic forecast, and they say the economy shrink the most since world war ii during the First Quarter. That would be 6 . Across the atlantic in the United States, the Trump Administration making plans to reopen something they didnt close. The president reportedly frustrated that the virus is crimping his reelection plans and once the country to get back to work as soon as possible. Business groups are arguing for may 1. He seems to want to do that. The nascent plan at the white , if they have be the antibodies, let them go back to work. Medical experts still say that matt knight that might not be possible, and there are enormous risks that we could get a second wave. There are also a lot of bottlenecks in testing, so it is not clear they could even do this. Trump had no role in shutting down the economy, so it is really going to be up to the governors of the states to make they protect their populace. Alix thank you for that come brands of wrap up. Thaty, the comp comprehensive wrap up. Dani burger joins us now from london with more. Dani the narrative at the beginning of week had been that that is a slowing rate driving markets higher. Turned. Kly things have europe falling more than 1 . Some of that is what michael was failureabout, the of euro area ministers to agree on a package. Many companies are scrapping payouts. Then you look at the data positioning, which suggests a lot of what we have seen over the past few days when it comes to rallies was just technical, just shortselling. People buying back shares, hoping to lift up markets, which means there are a lot of investors still on the sidelines. Data shows that last week, shorts had started to reach an extreme. All of the u. S. Equity index thationing had flipped to shortselling. Euro data says that a type of leverage quant had to reduce their short positions in some indexes up to 45 over the past few days from very extreme levels. That would certainly be enough to power markets higher, but again, this is technical, not a change in sentiment. Jp morgan also saying something similar, saying that short measures on etfs have been reduced from extremes. The most shorted stocks have been outperforming. All of that evidence stacks up to say we are not at the point where we can say that sentiment , whichned a corner brings up the frightening reality that even though u. S. Today, are up 0. 5 another bottom may well be in store. Alix thanks very much. I really appreciate that. One other story i am watching this morning is what is happening with the oil market. Yesterday you had the Energy Information administration out with their forecast. They saw 2020 now cut by 22 Million Barrels of oil a day. 1. 6 also cut next year by tommaso plummeting demand all hitting the nations producers so plummeting demand all hitting the nations producers. On friday, theres going to be a group of 20 Energy Minister meeting. Russia out this morning, saying that this cut from the u. S. Is not going to be enough because they were going to have to do it anyway because prices are so low, so it doesnt really count towards a global coordinated cut. Coming up, much more of your morning trade, news and analysis in the markets in todays first take. Happy wednesday, guys. This is bloomberg. Alix time now for bloomberg first take. Here to discuss, michael, plus Damian SassowerMichael Mckee, plus Damian Sassower. Mike, theres so much economic information coming out, whether its france, whether its germany, whether its the u. S. Here. What is the most important thing on your radar . Michael at this point, we are still looking at jobless claims in the United States because it still has the potential to shock. When we get that, the question turns to where unemployment is going to be when we get the payrolls report because it will give us an idea of the depths of the recession to come because it happened so fast. 10 Million People so far applying for unemployment. There are forecasts for 7 million more tomorrow. If you get that, youre looking at unemployment north of 15 . We only got 10 during the financial crisis. Predictionsl these from the think tanks in germany, from the difference from the bank of france. Us an idea of what we have to do on capitol hill. N, what are you watching . Damian for me, it is this shift of fundamentals that should take place. If you look at the whole of developed market economies globally, debt to gdp is going to rise something on the order of 140 . What economies had to do following world war ii. They had to inflate their way out. All of this talk about Deflationary Forces bringing rates down, we may see inflation where its ugly head at some point. Alix thats a great point. It also raises the question that all think a lot of people are trying to talk about, that we are at some point going to have to forgive these debts. The companies arent going to be able to pay the loans. They dont have sales. Forget about the actual countries, particularly when it comes to emerging markets. Damian it is not necessarily about the level of debt. For the past 30 years, weve levered up so much that it is going to be a relative gain. A bunch of people flexing their muscles this morning. I think Morgan Stanley is technically bullish on a number , so people ares definitely taking the rally in beta assets and trying to run with it, certainly in emerging markets. Alix alix mike, what do you think . Michael interesting column this morning from bloomberg traders notes. Traders really dont know what they want to do because they dont know what is going to happen, but they are doing what they have to do. I think that comes into what damian is saying. People are looking in emerging markets and saying we can say this one is going to be better than this one on a relative basis, but at this point it is just a guess on everybodys part. We dont know where the next outbreak is going to come. The msci emerging market index weighted heavily to china. China going back to work, underperforming u. S. Large caps. U. S. Large caps have been the ones rising the most over the last week or so. In a real recovery, you would expect emerging markets to lead the way. You would expect the russell, the small caps to lead the way. People are trying to differentiate, but still staying with safety. Nobody really knows what to do at this point. Alix totally. I had to laugh when i came in this morning. We saw qatar was raising 4 billion, but there was 45 billion of orders for their 10 billion bond sale. Damian you beat me to it. We are seeing em primary activity recovering. Credit spreadse have really performed rather well in the last few sessions. I think we are down to 263 basis points on the Bloomberg Barclays investmentgrade index. Inwas as high as 373 bips midmarch. Raisingare right, qatar 10 billion, 4. 5 times oversubscribed. Israel was five times oversubscribed. We had slovenia issue eurobonds this morning. Primary market activity appears to be coming back. Issuerst em highyield looking to come to market with bonds. Lion in fiveyear theres definitely activity and a bit of a rebound in technicals here. Airbnb also raised 1 billion. The money is there if youre willing to pay for it. This is as the government tries to rollout the Small BusinessAdministration Loan program to funnel money through. Michael we are seeing some banks take a lot of applications, and other banks take fewer. There are still questions about whether or not you can get a loan from a bank unless you have a strong business lending relationship with them. A lot of people complaining that is not happening. There seems to be a problem with the financial crimes enforcement network. It is supposed to protect against Money Laundering and terrorist financing, and they have very strict rules about business financing. You have to investigate the true identity of everyone who is an equity owner of a business. That can take up to 30 days. The banks have asked for relief from this. They said this is going to be a problem. It has not done anything at this point. People are kinda frustrated with Stephen Mnuchin and the treasury department, saying they are holding all of this up. The other issue is if all of the applications that have gone through get approved and the money goes out the door, they are out of money. So they are talking about tomorrow come on capitol hill, voting for another 250 billion dollars for the Small Business program. This would not be phase four. This is topping up the glass so they can get through this, and then they will work on the phase four issues. In terms of stocks and things like that, we really havent seen money going out the door to the Big Companies yet. There are arguments about whether the government should take equity stakes. Mnuchins to wants to take equity stakes in airlines. The airlines do not want that. A lot of money passed by congress that is yet to go out the door and hit the economy. Alix and hence, why you end up having futures sitting nowhere. Really appreciate it. Thank you very much. Coming up, you have oil trying to figure out what it is going to do and if we are going to have a coordinated opec cut. Be joiningf rbc will me next. This is bloomberg. Viviana you are watching bloomberg daybreak. The company that assembles most of apples iphones is going to start making ventilators in the u. S. Foxconn will work with medtronics on the develop at of the devices. No word where the ventilators will actually be built, but foxconn does have a factory in the state of wisconsin. Now to heineken, abandoning his forecast for this year. The dutch brewer sees demand falling 2 . In the Second Quarter, it expects the fallout to be worse. In thewith Oil Companies u. S. Warning there could be widespread insolvency in the industry. Near 30 aes remain barrel, about 40 of oil and Gas Producers may be wiped out according to a new survey by the kansas city fed. Energy Companies Say they cannot keep pumping oil at a loss. That is your Bloomberg Business flash. Alix thanks so much. Lets stay on oil right now. The u. S. Energy information industry she warning that crashing prices and plummeting demand will be shuttering production. Joining me now is michael tran, Rbc Capital Markets commodities strategist and managing director. They are looking at a 1. 2 million barrel a day cut for this year. Do you think that is a little optimistic . Michael u. S. Producers can either come willingly and volunteer now with a cut, or they can come with a whimper in several months after feeling the wrath of Lower Oil Prices for longer. Like you said, the eia put out their Shortterm Energy Outlook yesterday, and they are essentially saying that by the end of the year, we could see crude production dropped to 11 Million Barrels a day. That is nearly 2 Million Barrels a day from where we are now. What we are seeing in the u. S. Camps,ow is to divided diametrically opposed. On one hand, you have the texas commission. You did a fantastic interview with Scott Sheffield last week, with Matt Gallagher yesterday. Their companies have been publicly advocating for a cut. The other hand, super majors have been pushing for free markets. It is extremely difficult to handicap how this ultimately plays out, as trump is certainly finding out right now. I think a lot of what it comes down to later this week is how the u. S. Energy secretary dampers the ability to get thetive, really branding cuts with current shutins. Is that enough to get a deal done, to get opec to a table . May, particularly if the u. S. Offers sanction relief as a sweetener to the deal for russia. Maybe that is what gets it over the finish line. Alix what is your expectation opec sday, when the when the g20 ministers meet on friday . Michael several countries have seemingly rhetorically answered the call, so countries like norway, brazil, canada, and others. The key question is what is ultimately going to please the russians . Russia wants to things, one of them being sanctions really for some individuals and some russian corporates that have been heavily sanction since 2014. The second thing is u. S. Shale to come to the table. Make no mistake, when we look at what the deal was contingent on, it is really all about the u. S. Other countries like canada, brazil, and others are nice to have. The u. S. Is an absolute must have, and it is a potential dealbreaker if they dont show up. I think we really need to get the u. S. To come to the table. We will see what those numbers ultimately looked like, but there have certainly been large numbers tossed out there from some of the producers in the camp of advocating for production cuts, and some of those companies are talking about 20 from the u. S. Those get to be pretty large and meaningful numbers pretty quickly. They are basically from the well capitalized ones. You get the really bad drillers is too much leverage that will get the majority of this cut. That arehave the parts willing to cut. How does that ever come together . Michael well, that is what makes it so difficult. The u. S. Generally doesnt participate in discussions like this with opec, but this is ultimately what comes down to now. Are tired, and perhaps the saudis are tired, of further production cuts to make room for u. S. Cheo for u. S. Shale. From that perspective, this is what it is really coming down to , seeing whether or not they will be able to put together some kind of deal to be able to satisfy the russians. I thing a lot of it comes down to the u. S. Energy secretary ability to get creative in terms of highlighting some of these numbers, and given that the eia came out with the Shortterm Energy Outlook with pretty drastic numbers coming off by the end of this year, i think that gives them more ammo to be able to put together a deal potential he. Alix really great to catch up with you. Thank you for joining me. Coming up on the program, it is not time to give the all clear forfor market markets. That is according to Mark Mccormick. He says it is time to take a little bit of offense. We will break out of that down. This is bloomberg. Nowadays you do more from home than ever before. The xfinity my account app puts you in control with Digital Tools to give you the help you need when you need it. Get fast and easy answers with personalized help 24 hours a day, 7 days a week. Change your wifi password to a phrase thats easy to remember. Even troubleshoot your services on your own. Were working to make things a little easier for everyone. Download the xfinity my account app today. Alix welcome to bloomberg daybreak. Im alix steel have a divergence happening between the eu and the u. S. Agree on how not to handle the virus fallout, different from the u. S. I have to wonder if that is playing into it, or this is just how we are going to roll. If you switch of the board, you can see Something Interesting as well, and that is eurodollar. Euro is one of the worst p