U. S. Trading after west texas futures end in negative territory for the first time ever. Ups sees some light at the end of the virus tunnel. The ceo tells us ecommerce is almost thriving compared to traditional sectors. Lets take a look at the oil lets get to sophie kamaruddin, who is taking a look at highlights for us in hong kong. Sophie the relative resiliency of the markets we have seen of late have brought several benchmarks in the region of asia into bull market territory. That will be tested in the face of this oil rout. Futures. Eing mixed nikkei futures in chicago while kiwi stocks are extending mondays drop. Lets switch up the board to check in on signaling perhaps the recent optimism and equities may be unwarranted and this money, gold resuming losses but still closer to its high of the year than it slows that were hit in february and treasury futures are now unchanged after we saw the u. S. 10 year yield with alltime lows on monday and the dollar little changed as well with 2020 already the best year for the greenback since 2015. Lets flip the board to check in on oil amid an ugly role for wti which has exacerbated the driventy with labor contracts. Oil for may delivery is staying under zero, in negative territory, while the more active june contract that is trading above 21, keeping that gap between the two at the widest ever. Shery. Lets bring you someone who has deep knowledge of the oil industry and how this historic lunch will affect it and the market. Dan everhart is the ceo of canary drilling services. President trump earlier today saying he will look into the idea to stop saudi Oil Shipments given the historic plunge in prices. Both due to the lack of physical thee to store oil and just destruction of oil demand out there. What should the United States do . Is i think this catastrophic or apocalyptic if you are in the industry. Look, we are just flat out of storage, so i think we should use emergency measures to stop for an oil from being imported and to force refiners to use u. S. Crude right now and the time of this pandemic, but u. S. Producers have got to slam the shuts on production and wells, not just let the wealth decline and the decline curves kick in like they normally do in a bust. Shery we have an vaccine include explorers shutting down 13 of American Drilling last week. How is that affecting your business . Dan it is affecting our business in a drastically negative way and i think those numbers on account what is happening on the ground. We think about one third of rigs have been shuttered, which is beingof the market count, down 20 . There are a lot that are effectively shut down but our business is being drastically negatively impacted. I think you will see probably 40 of u. S. Service companies file for bankruptcy in the next 150 days if the pricing stays below 30 per barrel. What would you need to see to suggest to you that theres going to be any sort of improvement in these trading conditions . Ii expect trading expect trading to be improved from this a drastically negative number when we flip over to the june futures contract. I think there is more hope that more states will be open and oil demand will ratchet back up somewhat, so i suspect oil i expect this to be a bit of an idiosyncratic onceinalifetime situation with oil being negative. I expect oil to swish the positive within the next two weeks and to be very, very low levels that are basically thirtyyear to 40 year lows. If you look at the companies, you say such a huge chunk of this part of industry is going to be taken out because of these unprecedented levels that we are seeing and the tension between oil prices and a complete lack of Storage Capacity at this point. What would you be pointing at in terms of resilience within the industry in which players are likely to survive . Dan well, i think this really diamondk to the jamie contract of having the Balance Sheet. That is who i would bet on right now. I would look strictly to Balance Sheets and make a decision on that. You will see names like and baker hughes do better and you will see names that are overly levered in the space such as apache or Service Companies really likely to be taken out for the bloodbath that is about to happen. Shery we have an Upcoming Commission vote on tomorrow. What are you expecting, and even , doesdo get a ruling here the commission really have the resources to regulate production . They have the right to regulate production, not actually testified at that hearing last week. They have the right to do that and they have done so. I dont think they have the resources to do it. I do not think they are set up to do it in this time of pandemic. I dont think it matters because i think the market will beat them to it. Seeing int are we terms of the free market just continuing declines in production, but how about some that perhaps need to be mandated for a real impact . Like we saw with the opecplus meeting, they really want the u. S. To make active efforts to cut production. Think that is a good question. The u. S. Is bound by antitrust rules and lack of collusion allowed in the u. S. Market, but companies that respond to the market, Public Companies that respond to the market are actually going to be quicker and have actually beat opec to the punch. It is just not reflected in public data. I expect u. S. Production to be or 9 millionlion barrels, a decrease of 4 Million Barrels a day, which is magnificently large. Haidi we have already seen about 13 of u. S. Drilling fleet being shut down this week alone, about a third have been shut down. Where does it end do you think . How much more Downside Pressure and how many more closures would you expect to see . Dan i think we have still got a ways to go. I think we are going to drop somewhere in the 400 rigs because some people are hedged and some people have got a kind of broader optimism about what happened. What will happen. I expect production to fall among mediumsized independents, 2 billion to 4 billion market cap. Those folks are really going to focus on cash, hoarding cash, and on Balance Sheet strength, so they will stop drilling in the shortterm. Shery really appreciate your time with us. Canaryrhart, ceo of drilling services. We will get much more analysis on oil, ahead, including a conversation with nasdaqs of energy and utilities, who will be with us from new york. Risk of a what, the shaped recovery is very real. We will be speaking with the cio, next. This is bloomberg. You are watching daybreak asia. I am Karina Mitchell was first word headlines. Deaths in the u. S. Were the lowest since the start of the month. Governor andrew cuomo said the data indicates the infections peak may have passed. The top pandemic expert, dr. Anthony fauci, is warning people protesting against the lockdown that reopening the u. S. Economy too soon may cause more serious harm. Meanwhile, Mitch Mcconnell says the senate will vote tuesday on an emergency virus stimulus package worth about 500 billion. Congress and the white house move closer to agreement. The plan would add funds for an exhausted Small Business program and provide money for Virus Testing and for overwhelms medical centers. The measure would require inanimate consent among senators. Employment in Hong Kong Rose for a sixth straight month, hitting its highest level since october 2010. The total figure for people and work slumped by 3. 6 , extending the longest stretch of rises since the aftermath of the financial crisis. The coronavirus and months of antibanking protests have battered the economy with the labor force shrinking by more than 2 . And the city where the coronavirus was first reported is rejecting any role in spreading the infection around the globe amid increasing speculation in the u. S. And elsewhere about the origins of the pandemic. Virus escapedhe either by mistake or was deliberately released, telling Chinese State media that the socalled patient zero had no contact with his staff. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Haidi. The director general of the World Health Organization says the worst may still be yet to come when it comes to the coronavirus. Saying that the crisis is not over and many politicians and advises do not understand the nature or the danger of covid19. Fromackenzie joins us now beijing. What is behind this dark warning from the who chief . Tom saying the worst is still ahead, and again, pointing out that people still do not understand the nature of this disease, and certainly, there has been issues around transmission spread and other elements of this disease that are still largely unknown. He previously warned about the spread in africa, so that could be something he is concerned about. Obviously, countries on that continent do not in many cases have the Health Systems in place that would be able to really cope with a serious pandemic of the scale, so that may be a concern for him. Moves by some countries in this region, asia, but also in europe, looking to lift their lockdown. There may be a warning from him as they start to contemplate that in capitals around the world. He also pushed back against those u. S. Claims that the World Health Organization were not transparent and pointed out that the u. S. Centers for Disease Control officials have he said there is no secrets and we do not keep things confidential. Broadly, the top line is there is still a lot of concern about this virus Going Forward. Shery give us a little bit of an update when it comes to countries trying to ease their lockdowns. Tom one country that is in focus, starting to moderately see the infection rate slow is the u. K. Prime minister johnson is under pressure to ease some of those restrictions but it is they are quite worried about a second wave. The restrictions have caused the economy led to a surge in welfare applications as well. Over in germany, angela merkel, the chancellor, is also cautioning against russian tes to easeions restrictions. They did open small shops in most states in germany. Merkel saying the option to reimpose restrictions if there is a second wave does remain for her and her team. About 2002 hundred 50, so fewer than the previous day. Government officials saying that country is now doing decisively better and the Health System is better equipped. In this region, singapore recorded more than 1000 infections. In fact, 1426, for the first time above 1000 in singapore. It does point to the concerns state thatn a city has gotten this far. Relatively well under control. Shery tom mackenzie, our coanchor in beijing. Lets stay in europe, which is facing its deepest recession in living memory. Widespread job losses. Banks do not need a state backed institution to help them shed bad loans. The chairman told bloomberg that most lenders are Strong Enough to deal with the crisis. It affects only a small portion of european banking system. Compared to what is to be considered normal. So only in certain banks and certain countries. I will not consider this as a systemic package because most banks have enough capital to the new waves of which will arise from this crisis. What exactly is this outbreak . Is it as much of a shock politically as it is economically . Europe . A crossroad for it is unclear if this is emotional because people want solidarity at any cost or whether they really need it economically. I think it is very difficult at this stage to assess the on italy compared to other countries. European countries are affected in the same way, some more than others. The development of the pandemic, if you look at countries like belgium, spain, i think we are all in the same boat. The point is that the situation is different. A lease starts with the higher debt to gdp ratio, and lower italy starts with the higher debt to gdp ratio. It may need stronger support the political issue is more relevant right now than the economic issue in the sense that there is an issue of trust between the leaders. There is an issue of legitimacy of the political leaders with respect to their own domestic Public Opinion. Of they, a large part Public Opinion has lost some trust visavis the european institutions. For a series of reasons, but also which started first in italy, and then once more, the scale of wishes, some would like also to go to a true federal system that would guarantee also but this politically is i guess happenly and cannot without a major change in the trees and the major transfer of sovereignty from the National Level to the european level, so this may be more for the median term rather than last week. Should we talk about splitting Government Debt with Debt Forgiveness . When we look at sustainability throughout the world, i think we tend to underestimate to issues. One is that Interest Rates are going to be low for very long. They were already low before a crisis. They are going to be lower even for longer because there will be an excess of savings for investment at a global level, so low Interest Rates large parts of the public debts. In the Balance Sheet of the central bank. Throughout the world as in europe. A sickly when countries have to refinance, part of this refinancing is taken care of by the central bank. So the pressure on Interest Rates is going to be lower and i debt sustainability will be much improved by the intervention by the central bank in europe. The ecb will hold 30 of the debts of the Member States which means that even if italy has a debt to gdp ratio of 160 or more, 30 of that will be in the hands of which means that in practice, thein the markets is going to be around 100 , 110 of gdp. Bitave to rethink a little this concept of sustainability which needs to be better than what we may think based on indicators. Socgenthat was the chairman speaking exclusively to bloomberg. You can get a roundup of the stories you need to know to get your day going in todays edition of daybreak. Bloomberg subscribers can go to dayb on their terminals and its also available on mobile in the bloomberg anywhere app. You can customize your settings so you only get the news on industries and assets you care about. That matter to you. This is bloomberg. Shery lets get a quick check of the latest business flash headlines. Virgin australia has collapsed, becoming the biggest victim so far. The carrier called its administrators after the pandemic crippled the demand for tickets and cut off all income. Richard branson warned the version operation would not survive without state aid. His offer he offered his caribbean island as potential collateral. Analysts also continuing to paint a bleak picture of the u. S. Airline industry, saying job cuts at the big three american, united, and delta fromcarriers are banned cutting jobs through september 30 as part of washingtons 50 billion bailout, but with industries seeing difficulties into 2021, they are concerned any recovery would come would not come quick enough. Southeast asias most valuable startup says the coronavirus is the worst challenge the company has ever faced and will require what it calls tough decisions. The ceo has written to investors and partners saying the pandemic is the single biggest crisis to face grab in its eightyear life. Macaus weekly growth gaming to 19thpassed april 14 fell 97 year on year according to a report from bernstein. Income of three million u. S. Dollars per day. Water restrictions in macau, hong kong, and china, because of the coronavirus, have seen daily visitor numbers falling to the less than few hundreds compared to 100,000 per day in normal times. Haidi lets take a look at how asian markets are set to start today trading. We have trading in new zealand underway where we are seeing a bit of a reaction when it comes to the rbnz announced saying that it was considering looking at loosening mortgage lending restrictions. Not enough to support the lenders,. 6 lower for kiwi stocks, this as they outlined that ratcheting down for the restriction level to stage three as of next week. Elsewhere, we are seeing ready consistent downside. We had u. S. Stocks falling from the six week i on account of what we have seen in oil trading prices. That historic plummet into negative pricing for the wti may contract. The only story and markets. We are seeing negative trading when it comes to the future session in japan. In australia, looking like we will see weakness as well across the energy and mining sector. Coming up, stage c is missed capital sees some risks. This is bloomberg. Haidi breaking at the moment, Goldman Sachs coming out, warning of a potential further ontress for may wti futures tuesday. Of course, we have pared back some of those losses on the may futures. Barrel. E are at 5 per Goldman Sachs saying the oil pledge is symptomatic of unprecedented oil surplus, saying the june contract to face downward pressure. We are at around 26 per barrel. Lets turn to sophie for another check of the market. Sophie the jury is out as to whether or not we will see a repeat of the extreme moves we saw in u. S. Oil markets. We can see on the board right now, you have wti may futures narrowing that drop we saw overnight as we slumped to 40 below zero. We have it up at around 5 a barrel and we are seeing the june Contract Trading above 21 here. That could be the next contract to face downward pressure but taking a look at what is going on elsewhere, we have Commodity Currencies in focus, pari