Busiest in surveillance is maria tadeo in brussels. She is door stopping. You have done a lot of door stopping. How do you doorstop anxious politicians in brussels . Nejra you call out their name with a big smile, you hold out your mic, and you fire your questions as quickly and ferociously as you can. We certainly have seen that this morning. There has been so much optimism priced into the Recovery Fund in terms of european equities, but also the btb bun spread. Some investors say we have been here before in terms of brussels often taking its time to come to an agreement, so you might not necessarily see a lot of pessimism and markets next week if we dont get agreement straightaway. As investors say, it will come eventually. Tom i am an amateur here. In thes that mr. Rutte netherlands is front and center. Is that how you see it . Never echo yeah, as usual, when you go into these meetings, you may get the ascents that we may not get an agreement straightaway. There is a lot of work that needs to be done. This is normal at this stage of the game, but it is going to be a long weekend and a lot is riding on this for european assets. Tom one of our big themes of Queen Victoria street i know Jonathan Ferro focused on the importance of these meetings. For our american viewers early morning, these meetings are different. The first word news in new york city, here is ritika gupta. Ritika Public Officials are warning that they could impose lockdowns again if people do not halt the resurgence to the coronavirus. Miami and los angeles have all floated the prospect, warning that it is not working to stop the number of infections and deaths. Case numbers are climbing in all but six states. Trumpals say president could reject a measure passed by congress if it does not include a payroll tax cut. Democrats solidly opposed and different republicans are cold to the idea. Prime minister Boris Johnson is bracing for a second wave of coronavirus cases. He will announce 3. 8 billion of extra funding. He is also due to undue plans to ramp up Virus Testing to 500,000 today by the end of october. And in china, peoples reluctance to travel and eat out is dragging on the economy. Supplementala report on secondquarter gdp, the industry shrank 18 from a year ago. Some areas in china still have pandemic restrictions in place, and tourism has shrunk has people as people avoid public places. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i am ritikantries, gupta. This is bloomberg. Nejra . Tom . Tom there is something going on you need to know this morning. It is the second line there, with serious curve compression, and it is a twoyear space. Futures up this way, that way, and the rest of the tape is pretty boring, to be blunt. But watch shortterm yields. Four digits, the twoyear yield in the united states, and at twoyear. 11 on the yield. Im really watching that very carefully. Yields have come in in the last 48 hours. Ritika . Tom looking at the date nejra looking at the date on my side, youre seeing european equities pulling back. The e. U. Recovery fund is being discussed this weekend, one of the reasons that for example goldman, barclays, Morgan Stanley come have cited a preference for european equities over u. S. Equities. I think there is a different picture in equities today. Outperforming. We have seen underperformance in tech shares. The dollar hit for a third weekly lost. That weekly lost. Tom we will continue virus and pandemic coverage. I am proud of the team here that puts it together hour after hour, as the pandemic continues. We are not going to speak to someone we are now going to speak to someone with terrific experience on the ground. There are a lot of people who talk the talk like politicians, and a lot of doctors doing it in hospitals, and then there are people who are out there. From the world health organization, to reach us a jasarevic gives us a worldwide perspective to his w. H. O. Thank you for joining us this money. I see the tokyo lockdown, i see india over that her ex number of cases, over x number of cases, etc. What do you see as you go into the weekend . Intensehere is an transmission of the virus in different parts of the world. Recorded more than one million cases now. Obviously some of that is due to increased testing, but we see that there is a lot of transmission in the community in america, southeast asia, in the middle east, and it is very worrying because countries are struggling to put in place measures to try to stop this. With theom outside best possible advice to countries on how to review the mortality and morbidity, how best really to lead this response. We also work from our side on finding a solution. What is so important here, and certainly a focus in america but i would say a focus in tokyo and given a third world country where you guys are focused, is the transfer from cases analysis to death. What have you learned at w. H. O. About the mathematics or dynamics of death following on from these burgeoning cases . Tarik it is something that is it depends on how many cases are tested. As we travel, we see more people with mild cases. What we are seeing in the past week is the number of infections is increasing, but the number of deaths is relatively stable. That can be explained by increased testing, as we see more people who are not necessarily sick. What we are seeing so far with his virus, it has not changed much, but it is on the radar and we need to continue the genetic sequence of virus with different rates around the world. Nejra the concerns in the Investor Community seem to be that even if a second wave emergence emerges and it has in some parts of the globe that we will not see the full lockdown that we saw earlier in the year. From a health perspective, can the virus be contained sufficiently without going into another full lockdown . The big question that we have been saying from the beginning of this outbreak. The tactic would be to isolate, tontify, provide treatment this person and isolate this person as a contact. So we try to isolate the contact of the virus in the community. We dont know where the virus we have to go into this physical distancing through lockdowns, and that is very traumatizing. We understand that countries and most people would like to go back to some sort of normal, but the danger of that is that as we get to see each other more, we will see more infections, which is what is happening right now. Nejra and a conclusion whether the virus is airborne . Arik we are working with number of scientific groups around the world. We have been always saying that the virus can be transmitted areugh aerosols, and there special procedures being conducted such as aerosol generating procedures. Whether or not the virus can really stay in a small aerosol is something that is being discussed right now. Hopefully there will be more research and evidence that will answer this question. You have to remember, the virus is still new. We are still trying to gather the viable and scientifically sound evidence and we are calling for research on that. In the meantime, we know it is being transmitted through droplets. Much, tarikou so jasarevic. We have much more coming up. We are going to brussels in a moment, rhea taddeo Holding Court in brussels as the maria tadeo Holding Court in brussels as the leaders meet. From johnspekosz hopkins university. Futures up six. This is bloomberg. Nejra i am nejra cehic in london, with tom keene new york. The e. U. Is meeting today to settle differences over a 750 billion euro fund to europe leaders are divided over the makeup of the fun. Mark rutte spoke with maria tadeo in brussels. Mark we dont believe in this groundbased system. What we have said is that first of all, crucial, is to maintain rebates at a sufficient level. The rebates are now there, but we still need to negotiate what is a sufficient level. Need to reform so that if the south is in need of help, there is limited scope to deal with that financially themselves. Then i think it is only reasonable for us to ask for a clear commitment to reforms. And if then, loans have to be converted to a certain extent, then reforms are even more crucial. Ensureare you going to that those reforms actually happen . There has been a lot of talk about whether the council is becoming a troika with your proposals. Mark what exactly our proposal is, i hear a lot of rumors but i am not going to comment. I keep them to myself, but i will inform you completely afterwards. What does the compromise look like . Angela merkel has signaled she does not want to see the grants to be watered down. You say you have a problem with that. Will that change ultimately . Mark there are many issues on the table. The mfs itself and to how to make sure that there are net payers on loans and at the end of the day of course, there is the issue of the that themaking sure economies become more resilient. There is a reason for all of this. That is the fact that we need a strong europe in an unstable world. Look at what is happening in the u. S. And china, the situation in the middle east, the role that russia is playing. We need a strong europe, but a strong europe also means that countries left behind in terms of they were markets, etc. , need to step up the game. Summit, youo the are being portrayed as almost the bad guy, everyone versus mark rutte. Europe, inhting for the interest of everybody, including of course the dutch citizens. , which isurope economically more competitive, and can play with confidence a strong role on the world stage. The idea disagree with that it is all against mark rutte at this point . Mark it doesnt feel like that at the moment, no. With maria tadeo speaking mark rutte. Great work, maria, and thanks for joining us on the show. We have had comments from a number of leaders going into the meeting. I would like to highlight Angela Merkel in particular, casting doubt on clinching a Recovery Fund deal this week. Are they always difficult . Maria they are always difficult. What you need to factor here is that this has never been done before. We are talking about a lot of money, 750 million euros, 500 billion of which would be handed out and grants. There are the optics of a deal in europe. When european leaders come to brussels, they negotiate among themselves, but they also speak to their domestic audiences. Someone like mark rutte is playing this and needs to show to taxpayers that he is getting good deals, that there is value for money here. At this point, there are three major sticking points. We are looking at the sites. Just how big is the fiscal stimulus package going to be . What is the format . Are we getting it all in grants or will we see a more traditional bailout. And the idea of governance if italy is saying do this in cash, who is going to ensure that the reforms are carrying through . That is where the problem is at this point. When we speak to officials, there are optics here and nothing is guaranteed at this point. Nejra does that mean that investors should be concerned that eventually say, for example, we dont get a deal and an agreement over this weekend, that what we will see is a watered down version of the original plan . But angelaould be, merkel, who is still the biggest economy in europe and who is very much running the show behind the scenes she was on the phone yesterday with leaders in europe and has said that she does not want to see that 500 billion euros and grants being changed. We also heard from Christine Lagarde at the ecb that she does not want to see that figure changed. You could argue that we are going to get to a compromise. The optics of the difficult deal, but it is very hard to see in terms of the content what could change here. For the italians, they make it clear they are not going to take anything that looks like a bailout. The italian Prime Minister back home in rome coming he is seeing a very unstable coalition. Tom maria, tom keene in new york, good morning and good morning to the traffic in brussels as well. Maria, the building behind you has 42 elevators. I believe it has 12 or 13 escalators and 3000 people moving the can down the road. How far is the can going down the road this time . Maria i think when you look at the actual deadline, what is a real deadline, Angela Merkel, who i stress is really running the show right now, has said that she wants this deal done before the end of the summer, and there is a simple reason for that. When you enter into the third quarter, into the fourth quarter, there is a lot of volatility already. Uncertainty,t of and she is thinking we need to get the negotiations done before the end of the summer. Tom let me cut to the chase. What is the chancellor of germany going to get to the gentleman from the netherlands to get this thing done . Maria money, a rebate. The dutch want to make sure that if they pay too much, they get a financial contribution, and that is maybe what Angela Merkel could be willing to offer, that rebate to countries like the netherlands, who are concerned they are spending too much on the european periphery. That is when Angela Merkel could do. Ultimately it will come down to financial contributions and money. If the dust feel they have a good deal, there is no big issue then. Tom maria tadeo, thank you so much for this first report of a busy weekend in brussels. No question it is going to be a busy weekend with that. Futures up nine. Coming up, this is really anticipated. David blum of hsbc later in the morning. He has been brilliant about resilient dollar. Stay with us. , thisondon, from new york is bloomberg. Ritika this is bloomberg surveillance. Lets get the Bloomberg Business flash. The transformation of netflix into a Hollywood Studio is complete. The streaming giant has named longtime studio operations chief ted sarandos to be the coceo. He will be working along with reed hastings. Delivered a disappointing subscriber forecast. According to the financial times, it would prevent americans from using the video app. Theres growing concern that tictocs ability to gather data on americans is a huge security threat. That is the Bloomberg Business flash. Nejra thank you so much. The weekend head the week has been dominated by the virus and earnings. We look ahead to e. U. Stimulus talks that could give european equities some direction. Not getting any direction out of them right now. Some optimism in futures. Nasdaq futures, the 10year flip, and the dollar heads to a third weekly loss. Up, Geraldine Sundstrom will join us on the program, talking about building amid uncertainty. After five weeks of outperformance. 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. Improvedic activity significantly in may and june. From its trough in april at the same time, Economic Indicators remain well below the levels reported before they pandemic. We know that this crisis may be protracted, so at least for the next maybe two years, we. Ill be willing to accommodate there is a lot of uncertainty around that scenario, but the message is pretty clear that Interest Rates will be pretty low for a long time. We could see a clear bottoming out of goods. In the second half, the economy is expected to improve. This will be heavily dependent on developments in the covid19 fund. Clear if confidence in resuming normal Economic Activities will return. Or at least return fully. I am supportive of the idea of letting inflation get above 2 before we take any action with regard to the fed funds rate. Tom good morning, everyone. Bloomberg surveillance. Aat is extraordinary, testament to matt winkler and our Economics Team to build out overentralbank coverage 20 years, ending with michael mckees important conversation with Patrick Harker of the philadelphia fed. All of them managing the pandemic message. Sundstrom manages the asset allocations of pimco and we are thrilled that she could join if this money. I am managing the bloomberg terminal, which shows me a renewed compression she could join us this morning. I am managing the bloomberg terminal, which shows me a renewed compression. What does that signal . Geraldine it signals the economy could be recovering in general, but the Interest Rate is unlikely to behave as usual. All of the central bankers around the world have promised us similar policy. Tothe curve decides not follow their desire, then yield curve control could be following, and as far as the eye can see, i would say that the market will have confidence that the rate will stay low despite flight becauset of the deficits around the world. And very below volatility in Interest Rates as a result. People take it for granted. Tom a number of years ago when you went from Brevan Howard to pimco, a guy named bill welcome to you to pimco. His phrase was financial repression. Everyone listening to this program knows that this can only go on for so long. How long is lower for longer . There is a beautiful chart on television, folks. How long is lower for longer sustainable for society . Forget about the central bankers. Geraldine i suppose it is a necessity. There are institutions that lead are being agedt around. You can see the price of other assets, which are less sedated by central banks, going up. I would say the biggest example of this is the price of gold. The ultimates currency, the one that is not being printed by the government of central banks, is rising, and this is the sort of corollary of what is happening. In a world of financial repression then, where do you go to search for yield . Geraldine well, there is it depends on your risk upside really, and there are a number of things that you can do. If we go with