tv Bloomberg Markets European Open Bloomberg January 26, 2022 3:00am-4:00am EST
signal a march hike. the question, how big? plus, raising the stakes. president biden ways personal sanctions against vladimir putin if russia invades ukraine. germany seeks exemptions for energy. i's in italy. the second day of voting gives no winner in the presidential election. prime minister mario draghi remains the lead candidate. fran is on the ground with all the details out of italy. let's check in on futures. modest gains across the european equity space yesterday. then you had the picture in the u.s. again. another day of incredible volatility. the s&p 500 ending at its lowest point since october. the story around microsoft is always fascinating. just how ready investors are to punish these big tech companies if they don't meet across the board. microsoft ended in terms of post market trading higher on the back of some reassurance around its cloud business. here is how the markets are opening in the u.k. as we lead
across to that fed meeting and the decision. will we get a dovish tone from jay powell given the volatility we have seen across these asset classes? does he reassure or do we get a more hawkish jay powell in light of the four decade high inflation? the cac 40 is higher by 64 points. the spanish ibex is gaining, 0.7%. there is a view that if you want to find a safe haven, you can find it in european equities with the tilt toward value encyclicals. are playing out across assets. -- let's look at how things are playing out across assets. the warning from joe biden that putin himself could be for the first time targeted with sanctions. the ruble, we will get that shortly. futures stateside pointing to gains of 0.3% after the s&p 500 ended at its lowest point since october. watching the short end of the curve.
brent is currently at $88. the geopolitics plays into that question about energy supplies and demand. bitcoin at 37,003. hundred $95 some relief in the crypto space. francine: i have to say this energy question about how to deal with ukraine and how to do it putin is at the forefront in rome. we had a discussion in november. there was this virtual conference call called by a lot of chief executives in italy with vladimir putin. this yesterday was meant to go ahead, but we had the italian government saying, this is a private initiative. they urged companies to not join that call. it is a little bit of a hot potato here at the moment in rome just when we are also watching the presidential election, whether mario draghi becomes president or stays prime minister, whether he leaves altogether is a big question for the markets because of the
relative stability we have enjoyed in italian markets for the last 12 months. tom: absolutely. such a stabilizing force in well-known face. we have seen as italian assets -- we have seen italian assets being relatively unconcerned so far. that is why fran is on the ground for us. mario draghi is the frontrunner. we will hopefully get more clarity. francine: yes, and it really is all about the eu. they were put in place to help countries like italy. the amount of money that it receives and also the austerity measures they put in place. if he leaves this prime minister, it is very difficult to fill those shoes to make sure the grants and loans are your dispersed. tom: the future of that reform agenda in italy in question as we face these political changes.
let's get the bloomberg business flash with laura wright. >> microsoft shares recovered in late trade after the software giant reassured investors that its cloud computing business has the potential to drive growth. the company posted second-quarter sales and profit gains with revenue climbing 20%. sources say deutsche bank is weighing a 15% increase to its bonus pool as it looks to compete for talent while keeping costs low. still, there will be a divergence and pay across units with raises for the investment bank and cuts to some of the backend staff. investment banking generated almost double the profit of deutsche's three other divisions combined last year. bank of america is rewarding almost all of its employees with $1 billion in restricted stocks, further boosting compensation as financial firms compete to retain and attract workers. it goes to staff who earned as
much is $500,000 a year. that is according to a memo from the ceo brian moynihan. in a sign that live events are back, it tech platform has raised $227 million in a funding round led by goldman sachs asset management. the company that sells access to in person attractions, such as an emergent -- immersive van gogh exhibition, is now valued at over $1 billion. the ceo tells bloomberg that it has a clear path toward an ipo. that is the bloomberg business flash. tom, i can see you at a bridge or 10 themed ball. -- bridgerton themed ball. tom: not too into it. my wife and i had a big dispute. a bridgerton themed ball. we will have to improve the outlet -- outfit.
let's get into it with kristine aquino and our guest from bank of america global research. the market reaction stateside. we talk about equities. the volatility again resurfacing yesterday. i thought the reaction to the microsoft earnings was fascinating. what was the take away for you from the equities move? >> there is definitely a tussle here between the strategy that has been popular over the last few years versus the fact that potentially this idea of the fed put is fading if not already dead. i think this is what we are seeing whether it is the microsoft example is a microcosm or the broader equity move. there is this struggle between the idea of equities kind of recovering consistently from dips like this and the idea that the support the equity market really enjoyed in the form of
super easy accommodative policy over the last decade is really fading away. it is a moment of reckoning for investors at the moment. the jury is still out on which strategy is going to win moving forward, but it is something investors are starting to struggle with and take into account right now. francine: i know the fed, what they are expected to do for the rest of the year, but let's remind everyone the stakes are really high. if they move too fast, you could have a recession. if they move too slow, you could have this entrenched inflation. what is the right way for the market to be positioned ahead of the big fomc? >> i think investors are thinking about the short term. thinking to the march meeting and what they are going to do in terms of the mood. is it going to be 25, potentially 50? but also thinking longer term. we are talking about 18 months ahead, where we are starting to
see some signs of markets thinking about the longer-term implications of a fast pace of fed tightening and what that will mean potentially for longer-term growth and inflation prospects. i'm talking about this potential idea of a policy mistake. definitely what you are talking about if the fed moves too fast, there is very much this real risk of longer-term growth being hurt by such a tightening pace, but if they move too slow, there is definitely the question of whether inflation will really run away from very high levels. it is very much a high wire balancing act for the fed and definitely investors watching both short-term and longer-term implications adding to that. tom: do you think the fed blinks in the face of the volatility we have seen in the last few days? >> i would be surprised. i think the way the fed is looking at it is to make the case that equity markets are still up comfortably from where they were a year ago. they are up even more
comfortably from where they were pre-pandemic. if we have some interim correction in the face of the inflation challenges that they faced, it is difficult to make the case that what we have seen so far is enough to make them blank. francine: what would you be buying if anything right now? we have some great technical charts that we have put together. depending on what we hear from the fed today, how does the market essentially move? >> i think the key question is still whether the market needs to reprice the total number of hikes that are likely to be delivered for this year. we have spent an awful lot of time talking about whether it is 25 or 50 more likely in march. we can talk about whether there is a risk that they hike as a follow on in may or july, but at the end of the day we are pricing in less than four hikes for the year as a whole. that i think still strikes me as being conservative.
the distribution of risks in my mind is quite clear, but the risk is that they end up doing more than that, not less. it is a choice to my mind, the key variable to watch for tonight is where december fomc is trading. what are we pricing in for where the fund is going to be at your end? francine: i want to bring you back in on the question of earnings. the earnings picture has been mixed. the reaction to microsoft, they beat, but there was concern about the cloud business. they had to get reassurance from executives. >> absolutely, tom. it is a great in -- example of them reporting to a higher standard. now that we are in this environment of easy monetary policy going away and higher yields, i think investors are demanding more in terms of these companies presenting their fundamentals. i think microsoft was a great
example of that. it wasn't necessarily a bad set of earnings. it was quite encouraging, but the initial reaction to that until they reassured in their investor call was quite negative. it speaks to the current jitters in the market that are here at the moment, but also how investors are thinking about these companies moving forward. it will be about the fundamentals and whether they can stand on their own without the help of super easy fed policy. tom: closer scrutiny and the bar has been raised for many of these companies. kristine aquino, thank you for breaking down the key themes we are watching today. ralf, i'm pleased to say, stays with us. coming up, russian troops remain stationed by the ukrainian border, but the dance of threatening sanctions and requesting exemptions is in full flow. geopolitics next. this is bloomberg. ♪
tom: welcome back to the open. we are 14 minutes into the european trading day. the markets across the benchmark gaining more than 1%. building on the modest gains we saw across the equity space yesterday. everything goes sector in the green. travel and leisure, basic resources atop the list. we are awaiting fomc guidance from jay powell. will he be clearer in terms of
the rate hikes scenario? march looks likely it will be baked in, but will we get more aggressive commentary or will it be a dovish tone? also looking for anything in of the balance sheets, as well. let's check in on some of the stocks on the move with dani burger. what are you looking at? >> i'm first looking at wizz air. this one has been very volatile when it comes to its action this morning. right at the open, wizz air fell more than 1% after their earnings. they projected some difficulty still going into march considering that there is some uncertainty about when people are going to be happy and comfortable getting back on flights. we are seeing value type stocks turnaround in general. might be benefiting from that travel and leisure as you pointed out. vestas wind system down 1% giving their guidance for the full year. that range missing estimates. the estimate was for 16.6 billion euros. low-end was 15 billion euros.
citing the continue the supply chain crunch and higher cost. finally, tod's. luxury goods still going strong. up 8.9%. everybody wants to buy watches, shoes, leather bags. citi pointing out this is a confirmation of their strategy of improving their merchandising, continuing to take effect. tom: on all things, the corporate scum of the stocks we are watching, and the education when it comes to luxury, dani educating me on the sector, particularly around the shoe space. thank you very much indeed. let's turn to the ongoing tensions around ukraine. president biden has mentioned serious economic consequences of russia goes through with what he says would be the largest invasion since world war ii. russia has repeatedly denied such intentions and the kremlin has the -- accused the u.s. of breaking down relations.
germany has pushed for an exemption for the energy sector if there is a move to block russian banks from clearing u.s. dollar transactions. let's go to our europe correspondent on the ground in berlin. maria, we know that they are trying to present a united front , but the granular details of that unity is up for question. what do we know so far about how aligned the leaders of france and germany are with their partners in nato? >> that is so important. yesterday, we know that emmanuel macron had a working dinner in berlin. the image they wanted to present is that we are very aligned, we are very united on this. this is facing criticism that europe has been all over the place when it comes to russia and foreign policy. they have said, we are incredibly coordinated, there will be sanctions, there will be a price to pay, but nonetheless this to believe there is a diplomatic path ahead. there will be a call tomorrow
between emmanuel macron and vladimir putin. behind the scenes, there are tensions that are escalating because not every country will be affected the same way and economically speaking, this will be much more painful for a country like germany than it would be for the united states. that also goes back to the point you mentioned earlier, the fact that germans are saying, perhaps we need to make exemptions for energy related costs if russian banks are not able to work in dollars. the other thing i would point to again is that risk of personal sanctions on vladimir putin which is a fascinating line. we don't know what he owns, how much assets he has under control. in many ways, good luck going after vladimir putin. francine: this is also one of the reasons why i'm trying to figure out the relationship between vladimir putin and italy. trade increased some 50% year on year from january to november. in the same time, what italy has sold to russia has increased.
at the forefront of everything is looking at whether vladimir putin is trying to put pressure on big companies and chief executives to be on his side, which is why this: rome is very controversial between vladimir putin and certain chief executives. is this is tactic? trying to divide the west? >> it is and that is exactly what many would say he has been doing for a while now with the energy, with the economy, with the troops, with the mixed messaging we get from the kremlin. it is also interesting that he wants to have this call with italian ceo's and the italian government is saying to not do it. this is something we have heard from a number of other countries, suggesting it is not the time to do business with russia for the time being. that is the irony of the whole thing. pressure growing for business to take a stand on where their operations and russia are heading. tom: ok. maria on the ground for us in
berlin following all the twists and turns around the geopolitics of this. the alignment or lack of alignment between european leaders and nato on the question of russia and ukraine. ralf is still with us. does any of this change the calculation for the ecb? when we talk about the economic impacts on europe, if we get the worst case scenario, if we get a russian invasion followed by severe sanctions, what is the economic impact across the euro zone and does it change the calculus for madame lagarde? >> that is a very good question. these additional shocks you just mentioned would come on the back of a very significant supply shock, which is the driving force behind the changing messages we have got from central banks. if we were to see a significant additional hit to energy prices and therefore upset pressures to inflation, all of that is
probably going to do is further divide those who argue that would justify the beginning of a policy normalization and those that argue this is a significant shock to household income and therefore could generate downside risk to inflation further down the line if it is not followed through by higher wages. it would certainly make madame lagarde's job considerably more difficult. relative to what is currently priced in, i struggle to see how we can meaningfully accelerate the pricing a policy normalization for the ecb any further. francine: i was going to ask you in terms of this pressure on commodity prices overall, how much of it is already priced in by the market? how much of a possible ukraine invasion is priced into the market? >> i would say quite a lot. if you look at what the breakeven mark at all, inflation
beyond 2022, both consensus and market pricing expect inflation in europe to come back below 2% in 2023 and 2024 and 2025. where the market is pricing this and consensus is viewing this quite accurately as predominantly a supply-side shock to only leave a temporary imprint on inflation, so inflation markers are priced probably correctly i would say. with the market is then doing his it is translating this temporary supply-side shock into the beginning of a hiking cycle that is quite -- we are pricing in the end of negative interest rates by the middle of next year and then the hikes keep following. that is not really what is consistent with what the consensus and the market is
tom: welcome back to the open. we are 25 minutes into the european trading day. risk in. -- risk on. the big corporate story at the moment, microsoft reporting earnings after the bell. a record quarterly revenue with bullish forecast that paired initial post market losses. joining us now is laura wright. what were the key takeaways from these earnings? >> record quarterly revenue for microsoft, surpassing $50 billion. for the first time. the market is on edge. even though the intelligent cloud part of microsoft posted numbers in line with the street's forecast, the azure hearts fell short of extremely bullish numbers. 46% revenue growth year on year. the activision blizzard deal we learned about last week, no
tom: welcome back to the open. 30 minutes into the european trading day. here are your top stories. fed day. futures climb ahead of today's meeting. jay powell will almost certainly signal a march hike. the big question is how big? raising the stakes, president biden ways personal sanctions against vladimir putin if russia invades ukraine. germany seeks an exemption for energy. plus, eyes on italy. the second day of voting gives
no winner in the presidential election. prime minister mario draghi remains the lead candidate. francine lacqua is on the ground in rome for us. a very dull backdrop, let's face it. we want to talk about mario draghi. [laughter] we want to talk about the reform agenda. i want to ask what you had for dinner last night in rome and whether you have loaded up on your roman espresso this morning. francine: espresso, yes. double espresso number two. it is fantastic. well caffeinated, hydrated, ready to go. i arrived too late for dinner. i know it is an important story about italy. we need to talk about it. but get out of the shot, i just want to see beautiful rome. it does not disappoint. rome never disappoints. that is the number one rule in europe. then we can talk about the stability in the markets. then we need to talk russia,
energy, and the fact that the italian government would rather tell state owned companies to not get another call with vladimir putin later on. tom: i know you have a great guest two is going to dig into these topics. the question is whether the markets have been complacent about mario draghi and his position within italian politics. francine: absolutely. if you look at the stability of italy that we have enjoyed, it is all relative because it has been the last 11 months since mario draghi was in charge, but it is because a lot of these fractious parties, the 10 or 15 we need to take into account gave them the support he needed. whoever comes next, even if they are just as well-regarded, may not enjoy that support because politics is a fickle thing. people are then thinking about elections and then maybe will be less cooperative regardless of who becomes my minister. tom: we will be back with a freshly caffeinated francine lacqua in rome with us in the next few minutes, but let's get caught up with what is happening
in the markets with dani burger. it is a risk on in europe. you would have thought maybe investors would stay on the sidelines ahead of the fomc. >> surprisingly bullish. i think that is a great way of describing what is going on. we have seen a lot of chop in this equity market. we have seen this yo-yo of market. positioning washed out. you would expect that you would sit on your hands waiting to hear what the fed would have to say. not so in europe where the main index is up some 1.5%. what is leading that? it is the cyclical regions. the dax up 1.8%. followed by the cac 40 and the ftse. let's dive into the sectors. this is where it gets interesting. in most everything sector is in the green, save for this one on the bottom, consumer discretionary and goods. this is a very bullish picture. everything from text to travel and leisure up. when you look at what is on top,
there is a distinct cyclical play. travel and leisure, even though we had wizz air reporting disappointing numbers, seeing some trouble ahead until march, even that stock is higher. we are also looking at energy, banks. technology is in the middle of the pack, up more than 1.5%. we had microsoft and texas instruments earnings. some support coming. it would seem that despite the fact that we have a fed decision that could really shake things up in these equity markets, plenty of folks out there happy to go in and by. tom: as you say, underscoring the cyclical tilt. earnings still in the thick of it. tesla coming up later today. we will talk microsoft and the reaction from investors there. let's get back out to francine lacqua in rome. fran, you have a fantastic guest to break down the implications of what is happening politically, but also the
geopolitics of russia and europe. francine: yes. we want to focus on russia a little bit. a reminder to everyone, don't be too jealous. it is a beautiful background, but it is also very cold. two degrees celsius. italian lawmakers have failed to elect another president. that has been two votes so far this week. both failed to agree on a consensus candidate. there is another vote today and then we go into tomorrow and friday if we don't get a vote today. what is also interesting is the phone call organized back in november between vladimir putin, we found out it would go ahead today. vladimir putin with a number of italian chief executives. i'm delighted to be joined by our guest. he really knows everyone in italy and has a very good sense of this energy conundrum we are seeing at the moment between russia and the west. thank you so much for coming on. there is a very controversial
call which was basically arranged in november by private chief executives with the italian russian chamber of commerce to start a dialogue with putin. does it look bad for italy compared to its western allies? >> it looks a little bit inappropriate at this time, but it has been organized a few months ago, so people think they should keep the engagement. now, this shows that every time we talk about russia in italy and generally speaking in europe, we are kind of puzzled between the will of being in line with the united states, but also remembering that russia is so important for us. francine: what is the right way? first of all, you know vladimir putin. you have done business in russia and have met him personally on a number of occasions. is he trying to divide the west? is this a political move to get into ukraine or splinter allies that have a strong hold against him? >> for my point of view, putin
is very much a nationalist. the ukraine has been part of russia for the last three centuries, so the fact that today ukraine is separated from russia, it might even be part of nato, is something that is understandable for putin and russians. from this point of view, europeans have to cope with this in one way or other. francine: germany is a lot more friendly to russia than a lot of other countries at the moment. his putin going straight for the u.s.? >> i think he cares about the eu. there is so much commercial activity between the eu and russia. at the end of the day, gas is the key issue. it makes very difficult politics from europe toward russia. francine: so what does that mean going forward? we have had a number of conversations with a lot of chicken for executives saying we
need an energy policy, because that really underpins any economic growth, it underpins any returns for companies. why do we not have that now? >> it is not something we can invent in a few months. in the last 60 years, we have been moving toward gas. we import 30% of our gas from russia. some countries like austria and finland import 100% of their gas from russia. our houses, our hospitals, our electricity depends from the russian gas a lot. we have to understand that if you are not independent in terms of energy, you were not politically independent. this is what is happening in europe. how do we restore and independence politically and energetically? it will take many, many years. it is not something which might happen in the next few months. francine: if the u.s. is so intent on keeping a handle on vladimir putin, why is it
selling a lot of gas to the asian markets and asian countries instead of to europe? >> it is selling to who is paying the highest price, of course. asia is paying a much higher price. to give you an example, 15 million houses in china moved from coal to gas. this has increased consumption dramatically. prices have been shooting up. private companies in the u.s. are sending the gas where they get the best price. francine: but then europe does not have a chance. >> europe, it is not easy to say, it is not very nice to hear, but europe politically is not independent toward russia. this is the major issue. i'm still hoping that nothing
happens in the ukraine, but if something happens and if the gas coming from russia stops coming to through the ukraine, it is not a big problem, but of all the russian gas would stop coming to europe, we would have a major problem to deal with. francine: talk to me a little bit about the presidential election. at the market, the market -- at the moment, the market is largely ignoring it. some people think there is stability because mario draghi is prime minister. are we underestimating the instability that could come with this vote? >> i don't think so. the italian presidential elections are little awkward for a foreigner. it is a very calm >> mechanism. at the end of the day, it always produces good results. we are very happy about our president. i can tell you that if we had met one day before the election, he was not on my list of potential presidents. it is a complex mechanism that generates good results.
it will be the same thing this time. in terms of instability, i don't see any instability. nobody apart from one party wants to go to elections in 2022. any government will have approval from the parliament from now until march of 2023. francine: would you put mario draghi as president or prime minister if you could choose? >> i probably would put him as president because i think seven years of mario draghi as president of the republic would give us an international credibility that nobody else can provide us. but still, i understand also to have mario draghi as prime minister which will ensure us to be well-managed in the next crucial 12 months. francine: thank you so much for joining us. we are freezing. he is a trooper for joining me on this terrace. always straightforward in answering his questions. plenty more.
throughout the day in rome. we don't know whether this phone call between putin and the chief executives and italy will go ahead, but it is one of the most interesting political things we are looking at in italy. tom: as you unpack with your guest, it really points to the complexity. what a fantastic and fascinating interview. go warm up. with fed day upon us, we will be asking [indiscernible] how his firm is positioned. this is bloomberg. ♪
tom: welcome back to the open. we are 45 minutes into the european trading day. markets across europe risk on. gains across the benchmark. every sector bar one solidly in the green. travel and leisure up almost 4% now. basic resources gaining around 3%. is this an assumption you will get some dovish messaging from jay powell or is it more of a buy the dip? markets are pricing in at least four rate hikes in 2022 with a 25 basis point increase looking
likely in march. investors have to look to the geopolitical risk with the crisis in ukraine. joining us now is the global head of asset allocation and head of client portfolio management at oobhf asset management. they have just released to their annual outlook. thank you for joining us. we have francine on the ground in rome. let's start with the market volatility and how you adjust your asset allocation in the light of the kind of moves that we have seen over the last few days as we look ahead to the fed. >> good morning. i think what is just happening is the market is trying to work off some headwinds which have been building over the last couple of weeks, like inflation appears more sticky, central banks becoming more serious. we had this ominous spike in real yields of 40 basis points. add to that, lofty valuations
and a bit of complacency. you have a nasty cocktail. this is what is haunting the markets right now. francine: when you talk about complacency, is that also because a lot of traders are too young to remember the volatility of the early 2000's? is it going to be a fun year to stock pick or what is your biggest concern out there at this point? >> my biggest concern actually is inflation and the function of central banks. you have to be quite humble. nobody exactly knows how inflation is going to evolve, how sticky it is. is there really a decline like most pundits expect? or is there even an increase? with that, there might be mistakes from central banks who are facing increasing political pressure, as well. take a look at where madame
lagarde is mentioned as madame inflation. there is a lot of pressure on central banks. tom: is europe a good place to shelter at this time? european equities? >> not exactly to shelter. i think we can catch a cold. i think this rotation theme, what we have seen over the last three weeks or so, was cyclicals outperforming. this is something which has legs and could lead to a continued outperformance of europe because we have a completely different sector distribution, like in the u.s. there are chances there, and i would stick to europe and i would stick to cyclicals for the time being. francine: i have a million
questions about italian politics and ukraine, but my underlying question is what are we misunderstanding about energy prices? if we have shocks because of ukraine and what is happening with russia or because of something in -- unexpected going on in politics, is the market prepared for it? is the market already priced in? >> the market is not completely prepared for some sort of invasion in ukraine. but that would come at a huge cost for mr. putin, as well. the coin is two-sided. if gas imports stop, russia will not make any money on that. this risk has not been completely priced come -- has not been priced completely. i'm still hoping for some sort of solution on the political
scale. tom: how do you fold all of this into your views on fixed income? where do you want to be across the yield curve and how are you factoring the fed's decision to start to unwind at least the balance sheet at some point maybe june, july of this year? >> i think in the short term, it is sort of maximum hawkish mispriced in. -- hawkishness priced in. the market is pricing and 50 basis points in march, i don't think i would support that, but longer-term, the question still remains because markets expect quite a repertoire of action. four hikes in 2022. three hikes in 2023. there is a big gap still between
the fed thoughts on the market expectation. this is something where the market has to adjust. this is a slow process which we will see as the fed starts hiking during 2022. for fixed income, i still think the real yield increase, so i would position cautiously. for europe, for the euro zone, i think we will see some steepening as the short end is still hammered at this level. the ecb has much more leeway than the fed and will not hike rates in 2022. maybe later in 2023, but not before that. tom: ok, so yield curve steepness and a bias toward the cyclicals and values in europe.
thank you for those insights this wednesday morning. let's get the bloomberg first word news with laura wright. >> french far right leader marine le pen who is a front runner in april's presidential election opposed sanctions on russia and warns against a new cold war led by the united states. >> i don't believe in sanctions against russia. they are counterproductive. a new kind of cold war has been created and the eu followed the united states. the reality is that russia has been pushed into the arms of china. i think there is far greater danger and pushing russia into the arms of china then in maintaining diplomacy with russia and instead absorbing it into a european process. >> new york state has seen an 86% decrease in covid cases since it's january 7 peak. the deaths and hospitalizations remain elevated, rates of severe
illness fell during omicron. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom? tom: thank you. up next, we will be scrutinizing boris johnson and his future. more details. this is bloomberg. ♪
tom: welcome back to the open. let's focus on u.k. politics. boris johnson will face more questions in parliament about alleged parties at downing street held during lockdown as police are investigating the potential breaches. busy burden has the latest. what are we expecting today? >> it is two investigations. you have the criminal investigation by the metropolitan police announced yesterday. those results will take weeks. then you have the report by senior civil servant sue gray and much of that can be published while the police report is ongoing. boris johnson has said he will make a statement to the house of commons and take questions when it is published, but it does not look like that will come in time for prime ministers questions at noon because downing street had not received it overnight. where does that leave us? bear in mind that johnson has already admitted to attending the garden party in number 10
>> our base case no disruptions. mutually assured destruction is not in the interest of any party. >> employment is still well below the pre-pandemic trend but everything else about labor markets is very tight. >> as i said there will be serious economic consequences. >> this is "bloomberg surveillance: early edition."