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tv   Bloomberg Daybreak Europe  Bloomberg  December 17, 2021 1:00am-2:00am EST

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anna: good morning from bloomberg's european headquarters in london. i'm anna edwards. these are the stories that set your agenda. central banks that inflation is a bigger risk than omicron with the boj stays cautious after surprise bank of england hike. up next, the bank in russia. pandemic risks and tightening,
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become the new normal again. the united states pushes the eu allies from broader sanctions against russia as the block fails to agree on a solution to its gas prices. welcome to bloomberg daybreak, 6:00 in london. let's get things started with a look at a chart i wanted to focus on this friday morning because it's really important thinking about the omicron variant. markets are also focused on central-bank policy. let's spare a moment to think about omicron and keep focusing on what is going on in south africa. we have seen the numbers in omicron cases take up. that's not a new story. we are not seeing a big pickup in deaths. it is important to say because there is a lag. we see that in the charts. it's worth keeping that in mind and keeping our eye on whether we see the uptick in deaths. we do know is not the same age profile in south africa. we don't have the same. it has been different in south
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africa and not the same vaccination levels as some parts of the western economy. the northern hemisphere western economy. worth keeping an eye on because of humanitarian tragedy of at all and also if they gives us clues how omicron will spread around the world. and let us go from that to a focus on the data, a focus on the markets. the mochas -- markets are focused on omicron. we seem to be going back to that as a mode of operation, not just in london, but in new york to some degree, increasingly so. but markets also focus on tightening policy from central banks as a result of both of those things. we don't have the energy to go higher on friday as we get to the end of december. we see markets to the downside in asia, down .9%, nasdaq futures representing some of those fears, certainly the fears
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around central-bank tightening even if we are not going to get very tight levels of policy. it does show in nasdaq futures some downside risk. the pound and the euro also in focus. i want to show you where those are, given we've seen movement. let's get to that story right now. after the central-bank decisions, some of the world's most high-profile policymakers weighed in on the inflation debate. >> the economy is so much stronger now and so much closer to full employment and it is running well above target. >> inflation is to remain elevated in the near term, but should ease in the course of next year. >> more persistent prospects, that is a concern to us. >> it is very unlikely that we will raise interest rates in the year 2020 two. >> we are phasing out our purchases more rapidly because of relative inflationary
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pressures, the economy no longer needs increasing amounts of policy support. anna: we've got our reporters standing by. lizzie, let's go to you first. the bank of england surprised markets for a second month running. many are asking, why is it different this time? we didn't get the hike we expected last time. that made everybody rethink december. we were caught off guard. lizzie: yeah, my inbox is full of notes from economists saying they had a communications crisis and they tend to be an economist who holds the decision wrong. if you look at the communications for the past six weeks, the governor did say the bank was going to have to raise interest rates to curb inflation's, that it will be focusing on stock growth. we have the cpi for november, five .1%, the highest in more than a decade. and multiple mpc members are going to do medium-term risk.
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if this decision came down to omicron versus inflation, inflation is the medium-term risk, and clearly the bank has decided it's going to live with the short-term economic disruption of covid. and that's what's change to this month. anna: it seemed some of the inflation just too high to ignore. to the credit of the bank governor -- what is next from the bank of england? lizzie: well, if the government can get omicron under control fast, then the bank of england will stop the tightening cycle. bloomberg economics sees a 25 basis points hike in may and another one in november and another one in february, 2023. markets, as ever, are a bit more eager, a percent chance of that move to 5% in february. but if the government can't get omicron under control fast, the
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other consequence of yesterday's decision is the ball is in the treasuries court. the bank of eglinton tossed it back. anna: we do know richie's -- bank of england tossed it back. anna: we do know richie's act [no audio] that's the bank of england side of things. now to jan a, the ecb, we did see the euro rise at one point on the back of, comments from christine lagarde set it upside risk to inflation. but what were the key takeaways? >> right, good morning, anna. so the ecb basically said inflation allows for a gradual reduction over the coming months. what they decided is they will slow the pace of purchases under the pandemic program in the first quarter and and that
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program in march to soften the blow, they extended the reinvestment of maturing debt until the program for a year, so those will run until the end of 2024 at the minimum. and they also decided on a temporary increase to the regular asset purchase program just to make sure that markets are not spooked by removal of stimulus or by a reduction in stimulus. but they already outlined a return to normal pace, the pace we see now of 20 billion euros a month. and as we had -- heard the president saying just now, policymakers offering inflation is not at a point, even though it is improving and forecasts show that it's not sufficient -- sufficiently in line with their goal that interest rates will actually rise next year.
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anna: we saw markets pushing out interest rate hike expectations, as a result. there's a push back to the dovish end of this. what do we know about that? jana: that's right. there was a significant number of policymakers that were very critical about this extension of reinvestment. and they only agreed to it because it was presented as part of the package the ecb decided on. their concern was clearly inflation. the updated projections the ecb published, they showed inflation will be above 3% next year but will slow to 1.8% in 2023 and remain there in 2024. now, they say there's a lot of upside risk to those forecasts. there are a few things that aren't even included yet. the ecb said it will take a much closer view at owner occupied
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housing, wage dealers -- deals that have been announced are not factored in. and of course, they are also concerned about making a relatively long-term commitment in this current situation where the outlook is incredibly uncertain. anna: a lot of uncertainty. thank you very much in frankfurt. central banks seemed more concerned about inflation but omicron is still very much on everyone's radar, as well. covid cases are searching in many places around the world -- surgins in -- surging in many places around the world. let's bring in rachel chain, bloomberg's health reporter in hong kong. does this seem a day where the narrative change in the united states, maybe this is what is spooking investor sentiment a little bit? we have a lot of talk of work from home. what is the concern we have
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about the spread of omicron within the u.s.? rachel: yeah, we're definitely seeing the number of covid infections surge up, day after day of record cases. but at the same time, the situation hasn't necessarily changed that much. the vaccinated need to get that first shot. the booster shot will bring the protection against omicron. at the same time, what we're seeing is people are not willing to go back to that situation a year ago. at that time, we didn't have the vaccination so it was really a lockdown situation to keep people's -- people say. right now it's about holding the line and trying to allow people to have their holiday, their family gatherings over the holiday period while maintaining that adequate care. so what we're hopeful to see is
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that deaths will not follow. anna: absolutely. for that reason, we keep an eye on south africa because they are ahead on this particular curve. friday morning, i feel like we have to ask a big picture question if i can. where does this all end? where do you see this ending? we can get vaccines out one part of the world more quickly. but all it takes is one sick person to come down with the virus and it mutates and becomes something different, and then a variant goes global again. how do we get on top of all of this? rachel: i think the picture is more optimistic than people think. infections go up, but serious illness and deaths don't. we are not going to see the same kind of strain on hospitals. at the same time, the global
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vaccination picture is not that bad. we were only about five minutes away of vaccinating 75% of the entire world at the pace we are going. we see which countries, especially with boosters, that prevent the supply from getting to africa and things like that. but we are capable of making vaccines and getting vaccines to everybody in the world. so the picture can improve next year. anna: racial, -- rachel, thank you. nice message to leave on. let's get a first word news update. boris johnson has suffered a political upset, losing a key parliamentary election. the liberal democrats took the previously safe conservative district of north -- with the majority of nearly 6000 and a special election after a lobbying scandal. the prime minister's party won the seat in the midlands with more than 62% of votes. we're told the biden administration is pushing european allies to finalize sanctions against russia.
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these would target the nation's banks and energy companies if the kremlin attack ukraine. president biden discussed the crisis with vladimir putin. however, moscow has showed no sign of pulling back the troops amassed on the ukraine border. bloomberg has learned the bank of montreal has expressed interest in buying bnp paribas. they have held initial talks with the bank of the west unit, which has a book value of about $18 billion as of the end of september. a wave of foreign lenders -- airbus is handing boeing another defeat, this time with a deal with air france klm. the franco dutch carrier has agreed to buy 180 ne-yo aircraft from the playmaker. the order is worth more than $10 billion before typical industry discounts. that's just after australian airline qantas picked airbus for its fleet upgrade.
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and that is your first word news update. coming up on this program, one of your biggest weeks for central bank decisions is coming to a close and some of the central banks bet inflation is a bigger risk than omicron. we delve into those decisions. was later in the program, european leaders gathered in borders warned of severe's consequences if president putin orders an invasion of ukraine. what enlists -- biden list potential sanctions. this is bloomberg. ♪
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>> actually, the market is very tight at the moment and this is the number one story.
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secondly, there are talks of inflationary pressures. how persistent is likely to be. there are fines now of more persistent and that is a concern to us. anna: that was the bank of england's governor and you're barely speaking of yesterday's interest rates rise. joining us now, elinor taylor, cohead of swiss and global equity at ubp. very nice to have you with us. we want to start with a broad picture. we heard from the fed earlier in the week, the broad picture of what a tiger -- tighter race apartment had you feel about risk appetites as we enter a new tightening cycle as tighter policies doesn't necessarily mean tight policy? >> indeed, i think it really depends how long that inflation lasts. we are seeing discussion coming from the central banks, saying there's more transitory than originally hoped and is probably
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the inflationary side of their pressure, which is the biggest concern. and potentially, that's the one where it's a little bit harder to pass on that higher cost. usually you've got contracted companies will you go straight through to year end consumer. we've seen that with very good earnings growth so we get the impression that the inflation is just going into earnings growth, which is stopped. the question is how easy you are going to be able to pass on the higher labor costs and how seeking that might more negatively affect stocks going forward. anna: yes, and how is the transmission mechanism supposed to work when it comes to that. the central banks tighten policy. obviously that doesn't mean they produce more chips. that doesn't mean they unblock supply change. there are a lot of supply-side
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questions on inflation that they don't necessarily directly tackle. do they just hope that if companies are having to spend more on interest, they won't spend more on wages? is that how they hope to break that cycle? eleanor: certainly, we are in a situation where many companies, for the most part, are in a quite comfortable situation. that's the first thing, we do have higher interest rates in the interest rate hikes probably will be relatively modest. several hikes will be smaller steps, not going to affect them too badly. on the labor side, obviously if you have inflationary pressure, you going to have to put some wages going, as well. the trick is going to be for companies to pass that higher cost on, companies which have strong pricing pressure, which demonstrate their product is innovative and will be able to
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do that. place which struggle on those -- companies that struggle on having that will find it more difficult. anna: do you still think, given what we've learned about central banks around the prioritization to inflation right now, we will pivot from the fed on dovish market response initially, but some further hawkish and as to what the fed is telling us? then we got the bank of england, norway, the scene here, we've seen it in smaller central banks already. with all of that, how do you play stocks with inflation in mind? do you think you feel you want to own those stocks that do well and in inflationary environment? for deeper confidence in central banks to bring that down or perhaps elsewhere? eleanor: i think again, you're going to have to look at the stock level. i'm never particularly attracted to investing in a company which is dependent on external factors
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in order to show stock-price performance. that suggests to me there's something wrong with the strategy of the company. i'd much prefer to invest in accompanied which has a strategy which is in place, which means it can withstand anything which is happening around it. that's why i'm saying you look at companies which truly do have that pricing power, which enables them to pass on any extra costs. look at those companies which truly are innovative look at the companies, if you like, which are respecting short-term, what their future is. and that's important. those of the companies which are going to perform, whether the environment -- as if you've got the companies which just need that very, very strong global economic growth which may be accompanied by inflationary pressures. that silly thing that helps them
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perform. as we reach -- that the only thing that helps them perform. inflation starts to come up a little bit. you might have a disappointing performance from that. anna: eleanor, think very much. stay with us. eleanor taylor donaldson from ubp. more from eleanor in a moment. continued demand for treasuries may reflect worries and omicron strain could the economic outlook. we -- could dim the economic outlook. more on that next. this is bloomberg. ♪
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anna: this is bloomberg daybreak: europe. i'm an edwards live in london.
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we go back to the chart i started the program with, the rise of the omicron variant in south africa, but no new deaths. do we know sufficiently enough to not need to say that word? we are getting word from the south african health minister, saying only 1.7% identified covid in the section week of the -- second week of the fourth wave admitted to the hospital, compared to 19% of the third wave. two hospitalizations are much lower is the conclusion we are getting -- so hospitalizations are much lower is the conclusion we are getting. let's take that on board and let's get back to eleanor, cohead of swiss and global equity at ubp. of course we think first about the humanitarian crisis that covid has been. but from an equity market perspective, risk management perspective, i'm sure you are watching the risk management news flow. do you think central banks are
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right to prioritize inflation and say we don't know enough may be about omicron right now to count on it being a big downward drag on global growth, and therefore more focused on inflation at the moment? eleanor: well, i think if you look at the central banks have hiked, there are banks which all have slightly different stories to tell, if you like. we look at the fed, the hawkish language i'm getting from the fed, you have to put in the context that powell still has to be confirmed as he may be wishing to push a more hawkish message to make sure that message does go through. norway is obviously a different economic situation than what you have for other countries, as indeed is the u.k., which is got very, very high inflations for regions which is perhaps more particular for the u.k. than other things. i'm not particularly surprised, certainly in the case of the bank of england, that they are talking. has the u.k. done their hike
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earlier? they are in a different, albeit personal, situation, if you like. every situation is different. anna: are you concerned about supply chain? china with their zero-tolerance for covid. now we have a much more smallish. contagious drain are you concerned about what that does to the global economy? eleanor: absolutely, supply chains have been one of the reasons we are cost inflation at the moment. we are seeing some easing in some areas on the supply chain. and we have this problem with the supply chain. it's not a huge problem when you consider we basically stopped the economy. we've never really done that, certainly not outside wartime. wartime actually produces demand, or rather a particular kind, unfortunately. so we've never had a situation where we locked anything down. we stopped the supply-side. we had the supply chain problem. anna: thank you so much,
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eleanor. thank you so much for joining us. coming up, the biden administration is said to be pushing eu allies to ready sanctions against russia in case of invasion of ukraine. that's next hey, angie! you forgot your phone! hey lou! angie forget her phone again? yep. lou! mom said she could save up to $400 on her wireless bill by switching to xfinity internet and mobile. with nationwide 5g at no extra cost. and lou! on the most reliable network, lou! smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season.
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anna: good morning from bloomberg's european headquarters in london. i'm an edwards. this is number "daybreak: europe." but the boj stays cautious after a surprise bank of england hike. up next, the bank of russia. pandemic risks and policy tightening hit stocks. tech temples as work from home becomes the new normal once again. plus, turning up the heat. the u.s., which it eu's allies
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brought sanctions against russia as the board agrees to sanctions against gas prices. welcome back, just 6:30 in london, an hour and half from the start of european trading day. let's think about where we are from the omicron variant. we talk about south africa this morning. we saw some time looking at the example to the extent of which the data is comparable to other parts of the world. we had an update from south african hospitalizations, which the margin looks much more promising. let's think about what we're seeing in the here and now in the u.k. economy, as the big focus on omicron and the messaging from government has been to not necessarily change behavior that much. but from the medical professed -- profession, it's been difficult. that's reflected in u.k. dining levels, this one pass of the high-frequency data set you can look at to see omicron is having an effect on the u.k. economy.
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we could also look at travel plans, as well, at some point. let's get to a data check, show you where we are on various asset stocks, pressing about omicron, perhaps some of the coverage in the u.s. getting further into the investors like -- investor psyche. nasdaq futures on the back of the latter. the pound in the mix, 133 after the surprise hike, 113.38, not much movement. lagarde citing inflation. let me just tell you that governor kuroda is currently speaking in tokyo. you can follow the latest from this press briefing. you can also watch the news conference live if you would like to.
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live go is the function. no change in interest rates from the boj. they are paring back some of the support from the larger companies in japan, but increase other companies. european leaders warned of massive consequences for russia if it were to is -- invade ukraine as president biden pushes allies to finalize a list of sanctions. >> we have agreed that if there's a military aggression against ukraine, consequences would be massive. we are disposed to coordinate concrete operational measures together, with all of our allies. anna: that was european council president charles michel. for more, let's go to brussels, maria tadeo standing by for us. good morning. a fresh morning then from europe. what could that entail, talking about these consequent is for russia? maria: yes, and we have this language from european leaders that i certainly haven't heard until now. to some extent, it was much more
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aggressive than the usual lines we were concerned. they said massive consequences for russia if it were to invade ukraine. they said the cost of any military intervention would be immense for the country. and then again, reiterated that anything that happens needs to be done, and the main agreement is the way to go. their story we are reporting overnight at bloomberg that the u.s. wanted to see concrete and specific list of potential sanctions from the eu when it comes to russia to use that as a deterrent that could go after russian banks, but also big russian companies. yesterday, the head of the european commissioner said they were working on a list and there would be concrete action. shooting go into specific needs, but it does show there's an alignment in the two countries and warnings the fed would come, but now they are specific. for make, it's a highlight to see the sanctions have said they were a beam massive consequences
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for the first time. anna: ok, so some fairly robust language, and maybe some details to follow on specific companies you suggest. away from russia,, connected to that, european leaders debated prices. do they see rest by insurgent costs -- respite in surging costs? maria: they don't see any yet, at least for the medium-term. but they are not able to deal with the energy crisis that we're seeing in europe this winter. and it's a very cold winter, i could say. last night, one is nuclear energy and the whole issue about whether or not that could be included into the economy from brown into green. of course, if there is no agreement, they could not get to a joint conclusion. there's also concerns about the system. there's a number of countries that argued there is speculation going on and that's one of the reasons prices are pushed up.
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again, when it comes to nord stream 2, it's interesting to note there is open speculation it is not going to get certified by the regulators in the first half next year. until that, there won't be any nord stream 2 gas being pumped through. we are seeing a lot of disagreement in a lot of different areas. no joint european response. there was no agreement, and also tension from a number of countries that suggest europe should have already stepped into this market, but it's not doing it. and the result, this is now translating international bills and it's translated international discontent for government. anna: certainly want to watch as we go through that winter. stay warm, maria tadeo joining us from brussels. let's get to your first word news, an update on the top stories were covering at bloomberg. boris johnson suffered a political upset, losing a key parliamentary election. the liberal democrats took the previously safe conservative district of north -- with the
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majority of nearly 6,000 in a special election after a lobbying scandal. after a previous election, the prime minister's party won the seat in the midlands with more than 62% of votes. u.s. health officials are back to using pfizer and moderna covid shots over j&j. a panel voted unanimously to make the vaccination for adults, this after the j&j fact sheets should one of the links to a rare clotting syndrome. the cdc director rochelle walensky must ok this. officials opted to extend the covid funding program for small and medium businesses until september. the boj says it will gradually reduce its holdings of corporate debt to pre-pandemic levels starting in april. bloomberg has learned that barclays is planning to reduce bonuses by more than a quarter. that's amid record results and
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intense conversations of top talent. the increase would be a significant shift from 2020, when payouts rose about 10%. it comes after the government and jp morgan announced similar plans. the u.k. reported more than 80,000 new covid tests a consecutive day of record, breaking infections underlining the spread of the omicron variant. daters show almost half of workers in the city of london didn't go to the office on monday since september. new york city's health commissioner meanwhile says covid-19 numbers show an alarming trend in infections. that is your first word news update. we will get more on that u.k. covid story as the omicron variant spreads. that's next. this is bloomberg. ♪ ♪
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anna: new zealand stepien prime minister and finance minister grant robertson said he is optimistic about the nation to bounce back from covid. he spoke to bloomberg earlier on daybreak westerly. grant: as you note, you know, we're an open trading nation in new zealand. and so the large-scale spread of omicron around countries we're seeing at the moment has the potential to move through to new zealand. but all the indicators we've had so far is that the people are learning to deal with covid. they know that they will come to the other side of it. and obviously, we continue to provide a large economic support to get us through this most recent wave. shery: could follow-up omicron also involve the government
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delaying reopening of borders in 2022? grant: at this stage, we're sticking to the plan we have. we have those restrictions. and then by the end of march, others coming into new zealand. obviously, we will continue to monitor the spread of omicron and the severity, as well. but for now, we're sticking to the decisions that we've made. we've got some reviews put in place, one of them in early january before we begin that process.
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shery: the biggest challenge for policymakers has been rising inflation, cpi inflation headed toward 6%. a lot of new zealand is mystically generated. are you concerned a little? are you confident the omicron variant can get a handle on inflation without growth? grant: obviously in the forecast the treasury put out, inflation peeking in the first quarter of 2022 and coming up from there and getting back towards the reserve bank's target ban of 1% to 3%, a lot of the inflation we are seeing is driven by those considerations. we've got higher oil prices, howbeit some of those have been coming up slightly, but also supply chain disruptions. for new zealand being where we are geographically in the world, we are affected by things like building materials and so on. so we'll have to manage our way through that. but the forecasts are we are near to the peak of that inflation and it will start to come off. clearly, the reserve bank has the trajectory that they've already announced around interest rates. but we do have to remember we are at historically extremely low levels, up 0.75 right now. if you took us back a few years, that would be seen as a low level. shery: some would criticize it as very mixed messaging for the beijing winter olympics. should the government have gone one step further in confirming a full diplomatic boycott?
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grant: well, we've already let the got -- the chinese government no in october -- know in october. there was a range of reasons for that. new zealanders certainly can raise their concerns about human rights issues in china. in fact, in the conversation where the prime ministers are, we were letting president xi know we wouldn't be sending ministers. there is a conversation where he raised human rights concerns. we had already taken our decision. you can be sure that new zealand will continue to raise the concerns we have about human rights in china within the context of a wider diplomatic relationship. anna: new zealand's deputy prime minister grant robertson there. for more, let's bring in bloomberg markets live european team leader kristine aquino and think about what we are seeing in the asia session right now, what that means for the european session ahead and into the u.s. good to speak to. we've seen weakness come in,
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some of these markets down substantially. you see that in u.s., nasdaq futures, as well. we conclude markets are more concerned about tightened policies in central banks than they are about the threat of the omicron variant? what you think is front and center at the moment? kristine: well anna, we did see a concerted hawkish tilt by the bank yesterday with the boe and ecb adding to what the federal reserve has indicated, which is essentially that they're less willing to tolerate inflationary pressures at the moment. and i would say yes, at the moment, that is particular the front and center for investors because it is this disconcerted move toward less tolerance for inflation and more type policy heading into 2022. when you see such a coordinated move in the way that would quite
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produce quite a large reaction around markets, that's probably what we're seeing flowing through the asian session at the moment. tech stocks probably one of these asset classes that are probably in danger of a little bit of a correction once investors start digesting those news from central bank and realizing that yes, we really are heading into an environment of tighter policy in 2022. anna: and that is the global narrative, tighter policy from central bank. the turkish story stands out as being a little bit different, more idiosyncratic. we've seen rate cuts. they flecked the and of that easing cycle, which isn't quite a big deal in the asian story. we see the turkish lira continue to move lower. i have seen banks start to cover the turkish lira. what do we make of these moves? kristine: well, it is very ended -- interesting that indications
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from the central bank that this is the end of this cutting cycle. this was the fourth consecutive rate cut they delivered this year. and i think it's a question now of credibility for the central bank, as it has been the last few months. it's a question of whether investors do believe the central bank when they say this is the end of their easing cycle, especially given what we've heard from the president himself, president erdogan of course earlier this year indicating that perhaps the country doesn't need a strong there anymore and won't try to attract foreign flows via a strong there are, rather. there is questions still swirling around investors minds as to whether this is the end of the easing cycle or whether we're likely to see more heading into next year, which would be a continuation of this orthodox policy against inflation. anna: back to the tightening cycle we're seeing elsewhere, i
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want to ask about the bank of russia. our colleague, mark cudmore, just send me an email with one word. it was russia and it had a lot of inflation marks. we are expecting another one similar, same story again, 100 base points. i suppose what is going to matter, because everyone is expecting this, what will matter is whether we get that, but also what guidance whether this will be the end or there's more to come. kristine: absolutely, anna. [no audio] when it comes to monetary policy, i think that part of the reason why investors have reported it, the ruble for instance, is one of three emerging market central banks that has maintained gains against the u.s. dollar this year. and this is largely due to the fact that the central bank is perceived to be getting ahead of inflation. and so the question is, what are we going to do heading into
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2022, and whether they're willing to keep doing what they need to keep doing to get ahead of the inflation story there? anna: kristine, thank you very much for joining us. coming up on this program, barclays, goldman sachs, j.p. morgan all plan to boost bonuses as banks seek to gain an age in the deal boom -- an edge in the deal boom. more on that next. this is bloomberg. ♪
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anna: this is bloomberg daybreak europe. i'm anna edwards live in london. for your first word news update, u.s. health officials are backing the use of pfizer and moderna vaccine over johnson & johnson's shots. this after u.s. regulators announced revisions to the j&j vaccine fact sheet to warn of a
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rare clotting syndrome. bloomberg has learned the bank of montreal has expressed interest in buying the u.s. business of bnp paribas. sources say bmo have held initial talks with the bank of the west unit, which has a book value of about as of the end of $14 billion september. a wave of foreign lenders have been exiting u.s. retail banking as of late. airbus handed boeing another defeat. the franco dutch carrier has agreed to buy 180 ne-yo aircraft from the playmaker. the order is worth more than $10 billion before typical industry discounts. that's just after australia's qantas also picked airbus for its fleet upgrade. that is your first word news update. barclays has become the latest big bang to put in plans to boost bonuses.
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follows similar moves by goldman sachs and jp morgan as they all vie to gain a competitive edge in the tight labor market. for more, we are joined by nebula ahmed. great to have you with us. barclays is the latest to boost the bonuses. what are they doing? >> good morning, anna. barclays, like the other banks, have had a bumper year. and it's been driven by investment bankers. what barclays is doing is talking about doubling the bonuses they paid out last year, which was about 10%. and this year, they are talking about paying out more than 25% of rise in bonuses for their investment bankers. and it's coming as we've seen lenders across the u.s. and europe benefiting from huge profit surge. many of them are recording record results at deutsche bank -- result -- and deutsche bank is another one dumping its by
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more than 2%, as well. goldman is the biggest rise we've learned at the moment. they are talking about a 50% rise, j.p. morgan talking about a 40% rise. anna: is this all about deals? is this offer investment bankers? what has been driving these -- this month of bonuses? nabila: you've hit the nail on the head. this is driven by deals. we've seen a record yield -- year. we the first year ever it is topping $5 trillion, which is mind-boggling number. you've got that on one hand.and you've got the need to retain bankers. you've got performance and retention. in that deal cycle, in that deal frenzy, what we see is anchors being poached by rivals. so these bankers have to be really careful about that. and bonuses is just one way to keep people.
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anna: ok, so that's what they're trying to do. it's being driven by m&a. we just mentioned that there's a possible deal between bmp and bmo, bmps u.s. asset. what do we know about that? nabila: that's right, bmp, like a lot of the european banks, are cashing out when valuations are quite high. we broke that story last month. and the latest we've learned is that the bank of montreal has expressed interest in buying those assets, as you said, just before. we're talking about a market value of $14 billion. and what we're seeing here is bmp is one of the banks that are looking to exit. you've seen other banks from countries like spain and israel and japan trying to take advantage of these high evaluations and leave the u.s. the thing, though, here is what
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regulators think about it. as you know, regulators have been quite slow and reluctant to approve bank deals, and that's what we're waiting on ecstasy. by no means is that -- on tuesday -- on to see. anna: thank you very much, nabila ahmed with a look at the banking sector. the bonus impact of deals and talking of deals, banks selling parts of banks to other banks. that's the focus for us in the banking sector. let's get to some of the latest news in the market, the asian session down .9%. is this about omicron or is this about tighter policy from central banks, globally? that's been part of our narrative, nasdaq features in negative territory, setting policy not the story in turkey. the turkish central bank cut the repo rate by 100 basis points.
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they did say the easing cycle has ended, but it hasn't stopped the downward pressure we've seen on turkish lira late to another all-time low today. up next, bloomberg markets europe. they will get you set up with the trading day ahead. this is bloomberg. ♪ ♪
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anna: good morning. welcome to "bloomberg markets europe." central banks but inflation is a bigger risk than omicron. tech tumbles as work from home becomes the new normal again. plus turning up the heat. the u.s.


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