evelyn: compensating for that is difficult because the ecb is not have the vaccine, right? so what the ecb can do is support the economy where it is possible with very low financing costs and with the ecb can do next is to explain how they intend to do so, even in the very long term, right? so, we have heard in december the ecb had to do with conditions as they were at the time and the element today, is what they will do. how will they continue, or will they continue to keep interest rates very low for the very long time to allow, basically, a monetary policy support that does not only operate today, but also the of the promise of very low financial cause for a long time, which would allow economic agents to calibrate decisions today with the forward guidance from ecb in mind. that is arguably the bigger part of ecb -- explain to us how they will cope or act in the longer term, so beyond the horizon, basically. that is the more powerful tool. alix: you are obviously seen christine lagarde speak to european parliament. also what we have heard is lagarde talking about it is c

is there anything the ecb can realistically do to nail european ecb down to the floor without that happening on the other the atlantic? james: obviously, yes, there is something they can do because they would certainly describe their power is being close to limitless. we saw there might be limits on central bank balance sheet accumulation or policy. those limits have ceased to exist. the ecb could make an open ended commitment to buy as many yields as it takes -- bonds as it takes to keep yields cap. i think really it would be about slowing the rising yields. central bankers, economists seem concerned with the pace of change. unless the level is far too tight. they can. they probably will do that. if treasuries are selling off reasonably dramatically, then i do not think the european duration complex can be immune to that. if you have more entrenched longs, you can help your max -- you can have. where becomes a position clear out. -- you can have periods where it becomes a position clear out. alix: we are going to look at the british economy next. rishi sunak's budget is coming out next week

the ecb has more ammo. the rba stepping in with an unscheduled operator to buy 3 billion australian dollars in defense. that had a lot of people asking questions about whether other central banks are going to have to step in. it could be difficult for some of these individual earnings stories to cut through. dani: wouldn't it be a weird concept that the fed may need to raise rates to save the stock market? probably not what's going to happen but you never know. when it comes to the individual stock stories today, it's going to be a very weird market. usually when we have these big macro moves, it means that correlation among stocks tends to be higher, dispersion is lower. there are individual stores. one of them being iag, out with earnings today and really getting a picture of just how difficult 2020 was for them -- , booking a big loss. they are not giving us any guidance for profits in 2021. also saying that they do not need more liquidity, that they expect a good summer this year. their capacity for the

alix: ecb. coming up, you have congressman dan tilly joining from michigan, joining "balance of power" with david west. guy: and you and i are going to radio. we are going to talk about these amazing moves we are getting today. ♪ david: from bloomberg world headquarters in new york to our tv and radio audiences worldwide, welcome to "balance of power." jay powell spent two days this week giving his take on the economy. this morning, we got new economic numbers that seem to bit stronger than expected, at least on their face. to tell us what they really mean, we turn to our election politics correspondent, mike mckee. you are really good at going below the surface and maybe we start with durable goods. michael: a little strength in durable goods but not as much as the headlines would appear. these are january numbers and we are almost into march, so there's -- we are a little it behind. 3.4% for durable goods orders which was more than forecast, but look at where the strength came from. boeing s

you are really setting the price if you are the ecb right now. at some point in the future, as the economic outlook gets better, as covid is behind us, as we look to 2022, there will be a point where we are winding down programs. when that happens, we think some assets will need to see a new clearing price. where we are more wary is not changing those bonds the ecb are buying, where prices have been inflated artificially tight and favoring those that are off the ecb radar. they are not buying 81 or coco's. alix: such a pleasure to talk to you. would love to get you back. thank you very much. this is bloomberg. ♪ guy: alix has talked a lot about commodities. her things. she is happy. [laughter] my turn. airplanes. i can hear you chuckling. good news bad news. solid fourth quarter. turning around fourth quarter. $5.9 million in cash flow. cautious guidance on the pace of recovery. the aviation sector's worst ever crisis. i managed to catch up on the outlook. >> when it comes to '21, at the beginning of the year, there is uncertainty and volatilit

christine lagarde says the ecb of -- ecb will look through any shortage in prices. chair bile -- chair powell and governor bailey speak later today. we're all trying to figure out why the stoxx 600 is now down by .1%. in terms of the other assets we are watching, we are keeping a close eye. again, we are on the move today. as you can see, we now have a 49 handle. we have been moving below that 50 point basis move which is a historic line in the sand. we are going to hear from bailey later on and also boris johnson. it is going to be fascinating to see. alix: optimistic outlook, but there is no inflation. it is very confusing. rollover here in the u.s., the bank -- blame is being placed on the algo's. we did see a turnaround within small-cap stocks. no corresponding bid with a little bit of money coming into the treasury market. just for fun, i wanted to highlight what is happening with platinum. if you want to look at inflation/reflation, that is something to definitely consider as well. guy: you do wonder whether blow down in the car sector could cause a headache i

francine: andrew, how does the ecb manage a higher euro? they of central bankers, actually, the irish one, for example, the netherlands, bracing us about a rate cut. does the ecb think that the market's mispricing the possibility of a rate cut? andrew: well, i do think -- i think the ecb is supportive, is going to be supportive, is going to try to encourage a weaker euro. i think they have been, you know, their statements have been focused on the currency's strength to an extent that federal reserve has not been. i think the growth differentials between the u.s. and europe will look to help those aims, because, certainly in the first quarter and the second quarter this year, you should see that growth differential widen as the u.s. gets additional fiscal stimulus and vaccine progress goes more quickly. and, you know, the euro is also up, around 15% year-over-year. it is very strong. i think there is a strong argument that it is now somewhat more expensive. it is a negative carry currency. the relative fundamentals are weaker. so a lot of th

former ecb president mario draghi is tapped to become the next prime minister. he meets with the president today. santander takes a $1.4 billion charge in the fourth quarter amid job cuts and branch closures. we will speak to the chairman. just under an hour away from the start of cash equity trading in europe. take a look at the gains we are seeing in equity index futures. the strength that we saw an hour ago, euro stoxx 50 futures up only .5 percent, ftse futures gaining .3%. in terms of u.s. futures, we see green arrows across the board. about .7% on the nasdaq, futures on the dow and s&p are up, but less than .5%. what kind of risk indication do you see from the global macro movers screen? anna: you've been through the futures and they point to the upside and we see stocks in asia making moves to the upside so we have a risk on reflation trade in focus, up .9% on the msci asia pacific so we are back to thinking about cyclical stocks, about yields moving higher, and the like. you don't see china playing in this rally right now. pboc, draining funds from the f

the ecb is staying put. what ousted you have to say? -- what else did she have to say? maria: she said this is a recovery in which the european central bank very present. this idea that risk to the european economy is still veryc. she ated mutations is a big risk. for governments, we know that european governments are really concerned about mutations. they look at the u.k. and they see a perfect storm that could potentially happen here. she mentioned the vaccines. it's the end of the tunnel, that's her quote, but also said there is very little visibility as to what can be done. there was very little reference to the recovery fund. she said in 2020, monetary policy and fiscal policy came together in a way that was very effective for europe. she said we should try to do the same in 2021. francine: maria tadeo in brussels joining us with the very latest. coming up, as total of our france bucks the fourth quarter, we will focus on earnings. that conversation is next. this is bloomberg. ♪ ♪ francine: economics, finance, politics. this is "bloomberg surveillance." i'm fra

could be ecb do that with their policies? -- the ecb wants no part of what is happening in this bond market. these changes to our new monetary policy network preemptively as headline unemployment reaches low levels. it may will result in unwarranted loss for many americans. tom: the 10 year just came in at 1.45. jonathan: yields up. equity futures, what are we down? we roll over just a little bit more. more still to come from new york, this is bloomberg. >> a new study says the pfizer vaccine -- two doses of the vaccine were overwhelmingly effective in almost 1.2 million people in a study from israel. meanwhile on capitol hill the democrats propose $15 an hour minimum wage. the proposal is part of president biden's one point $9 trillion coronavirus relief bill. the parliamentarian needs to find whether it would be allowable under the governing of debate. the u.k. plans to keep business taxes competitive with the other group of seven nations. bloomberg has learned that will give the chancellor the ability to raise corporation

the ecb never raises rates, the fed raises rates. why isn't that going to attract money back into the u.s.? derek: i think if the fed were raising rates anytime soon, any time soon being 18 months to two years, then your story has credibility. but we are a very long time away from the fed raising rates. the focus right now is about quantitative easing. will they or won't they taper? but i am not convinced that is the holy grail for u.s. dollar recovery. if you look back at the taper tantrum of 2013, when we had that signal of the tapering of quantitative easing, we did have a resurge in 10 year yields, but for the remainder of 2013, the u.s. dollar weakened. it is about short-term rates ultimately, and of course, tapering quantitative easing tends to un-anchor short-term rates. but it is still in the fed's hands to keep short-term rates very well anchored as recovery takes hold. but in my view, that could still weaken the u.s. dollar. alix: what do you make of btp's trading? derek: i was looking at this earlier, and i pulled out the

jonathan: it is a chance for the ecb to contain it. the federal reserve hasn't just yet. we spent most of the show talking about what they should and shouldn't do here just a final word on that. she is talking about the front end through the valley is where they should be concerned. -- through the belly is where they should be concerned. you think they are concerned? mark: they are concerned with the illiquidity in the rate market. no it is unhealthy and have impact on other markets. it is encouraging to see what zack is saying about credit i worry if we see these types of worry continue and illiquidity continue, it will inevitably spillover into credit, or at least i worry it will spill over credit. the fed cares a lot about the credit creation mechanism. they care most about the illiquidity. if the belly is replacing, than the is happy to see that. what they are getting signs of is long end rates, seven-year, 10 year part of the curve is getting to levels it could begin to constrain economic activity and have negative feedback into the housing market and other interest-

. -- of, he was the chief of the ecb. i don't know if we have a minister from politics, technocrats, i don't know, but i am sure he will be able to have a great political leadership. so i don't care about the folks in the cabinet, because i am really, really confident about the roles of leadership and division, because this is the last chance for italy, yeah? 9 billion from europe. probably it is more than the marshall plan, it is more than the marshall plan. francine: if mario draghi fails to form a government, what happens? mr. renzi: this is not a possibility. no one in italy thinks that there is a possibility of failure. also because, let me be very clear, my viva party, we opened the crisis months ago. really this situation in italy was very problematic, because, as we think, it was totally blocked in the vaccine, the economy, in the school, and education, in the jobs. now, the president of the republic, a very wise man, sergio mattarella, created a new government, so there is no possibility and a failure for mario d

it would be cash, depending on the ecb. the top red headline is the restructuring that continues at santander. of course, a brutal fourth quarter in terms of net income. a miss by more than 110 million euros. this is the institution that agreed to cut 3600 jobs in december. branches in spain. this narrative of restructuring is one that will be explained more cogently, the first ever loss at that institution last year in the second quarter, writing down the u.k. assets. there is only one story which is dominating the headlines as the most read. when do you decide to go? jeff bezos is going to chairmanship. his successor, the man who brings home the bacon, aws, cloud services. $6.7 billion. the man who is building the alpha within amazon. annmarie: certainly bringing home the bacon. aws burning $12.7 billion in sales in the fourth quarter. annually that is $50 billion. this is the guy that has been growing that side of the business, now he will take the helm. saying goodbye to jeff bezos, the first thing i thought was, way to

the ecb, the bond market, italy as well. why is what we are seeing in europe and unwarranted tightening of financial conditions? erik: i think you can cut it down to the following. you have a massive fixed school -- massive fiscal expansion coming in the u.s. and a better outlook for the economy than europe. therefore, you are seeing u.s. yields move higher, and the transmission to europe, which is not word to do the same degree by the output of the economy. so you are looking at less fiscal inspection in europe than in america, and an emerging monetary and financial conditions tightening. so the ecb, you see the philip lane statement, they should be worried. jonathan: we had verbal intervention. what is the actual intervention look like? erik: they will use the picture to put firepower behind their words. there's always question about how much you can actually generate things without doing it, but you have to show them the bazooka and the willingness to use it. lagarde tried that on monday. broadly speaking, now philip lane

ecb, i do not like what they are seeing. when does the fed join the chorus? lisa: that's what i'm waiting for. this note out this morning, stress is likely to remain elevated in equity markets until such a time as the fed announces an extension of the maturity of its bond purchases, the expectation in a couple of days. sebastien galy, this was really interesting because it raised the question of, does the fed deal they need to respond right now given that there has been a seemingly uncontrolled move in bond yields but not necessarily in risk assets that followed through today. can you give us a sense of why you think the fed will come in and react? sebastien: they will come in because you have a strong tightening of overall monetary conditions linked to the back end of the curve. you have the options, five and seven year, which happened yesterday, was very poor, so yields have to adjust for all these issuances from a nonpoint -- $1.9 trillion packages. the long end is readjusting to what the fed wants but not at the right ti

will the ecb lien and on that? -- ecb lean in on that? jane: i think they will. they need to see better signs of growth before they pull away from that position, but i think that is going to be an uncommon attitude. i think the majority of g10 central banks have retained that very cautious position. have seen it from the fed, from the australians, from the swedish. some of these economies have been doing a lot better than the euro zone, so i think we will see lagarde wanting to lean in. clearly when she decides not to do that, it will be because the economic data is looking far brighter, and we are through this pandemic, but i think it is too early yet to expect her to step away from that. alix: i just wonder how the timing of all of this -- like, how much time is the market going to give draghi to get together? how much time will be market give the ecb the leeway to keep doing what they are doing? how much time until budget deficits start to become a conversation? what are we looking at here? jane: quite possibly the second half of this year. in terms of budget

the ecb is not going to be lifting its cap until september. what do you make of the european dividends story? >> i think it is very hard to buy bank investments purely on the reflation trade just because we have been burned so many times before. i think the europeans are going to in the first half of the year introduced their stress test and on the base of that, there will be asymmetry between which banks are allowed to pay and which are not. at the moment it feels the ecb is uncomfortable and does not have the data to differentiate between which bank is in a better place or a worse place to deal with the lockdowns. what will happen is when we have those stress tests, they will be the strongest and the weakest banks. the strong banks like ing would be allowed to pay whereas the weaker banks most likely in southern europe i think will be given for the restrictions based on their performance in stress tests which are released in the first half of the year. manus: let's pick up the thought on the stress test. the bank of england are going to stre

the ecb. the story was the fact that savings and savings across the united states and europe are skyhigh. where's that money gone? that is sitting in money market funds. it goes to the commercial paper market. comer prepay sure -- commercial paper issuance has plummeted. buys all of this happening broadly? in fixed income, the balance sheets are getting bigger and bigger at a time when savings are getting higher and higher. there's a real issue here between supply and demand as to why yields are where they are. what i am trying to understand is what that supply dynamic looks like. when the economy reopens, what happens to those money market funds? what happens to those savings? tom: let's do it real simple. what portion of cash is cash forever, or is cash that can go to equity markets? the answer is we don't know. lisa: cash to buy a plane flight to go somewhere. so many people have parked money they cannot spend in the service economy. jon is raising a really important point, and there's anot

what is happening with the ecb. it is a big move lower with yields. how low can yields go if we do see super mario. mario draghi getting a mandate to be prime minister of italy. alix? alix: i think we will get him back. we are also seeing fading and the nasdaq barely positive. the dow is deeply negative. with president biden speaking with the democrats saying that he is willing to let stimulus check eligibility to be limited and still wants the $1400 but may lower who is eligible to receive them and is pushing democrats to go bag and is worried that they will go to small. you have mitch mcconnell saying rushing this is not the way to go, so the tensions are still there. joe manchin key to that. we are also seeing selling in the bond market, yields up two and the euro software. the vix, 12 when he for and elevated. -- 24 and elevated. guy: turning to our top stirrup in europe -- our top story in europe and referencing mario draghi. dragged out of retirement, maybe that is slightly over egging the point. and is set to lead italy, the question is does he

annmarie: what about the set of the ecb dividends? has it set back some of the lenders compared to some of the nordic peers? >> that is a really interesting question. last year, when dividends got banned, it did put europeans and the u.k. at a disadvantage. the americans, some of the agent -- some of the asians did not ban dividends, they limited it. for some investors, this is like another negative. toward the end of last year and into this year, the delta has been positive and that we are now heading back. you have seen some european pig banks, bbva with their buyback announcement, you are seeing some big banks make positive statements. european capital returned this year will still be lower than the u.s. or the scandis. the delta, the trend is positive. we head into 2020 one, q4 2020, things are moving, this is becoming a positive again. that is the key to remember. everything is coming off a very low base. any kind of momentum is good news. manus: turning to the italian story. a new home at unique. the banking landscape consolidat

the ecb continuing to push back. an executive board member not liking what she sees in the bond market. some stabilization particularly in the last couple of weeks on the euro. (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that and more in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you to maintain comfortable, correct form. that means better results in less time. you can do an uncomfortable, old-fashioned crunch or an aerotrainer super crunch. turn regular planks into turbo planks without getting down on the floor. and there are over 20 exercises to choose from. incredible for improving flexibility and perfect for enhancing yoga and pilates. and safe for all fitness levels. get gym results at home in just 10 minutes a day. no expensive machines, no expensive memberships. get off the floor with aerotrainer. go to aerotrainer.com to get yours now. ♪ jonathan: from new york city, this

we find ourselves in a situation where the ecb is already starting to jawbone about higher yields. we saw that yesterday from christine lagarde, saying sovereign yields are particularly important. accordingly, the central bank will be reacting. the ecb is already starting to get concerned about the gravitational effect of higher treasury yields on the bond market and the periphery market in europe. do you think there is a danger that the ecb will end up doing more possibly with the fed program, and at the time that the fed is tacitly a knology rates are ok right -- tacitly acknowledging that rates are ok right where they are? emily: who wants to suppress their rates more? the ecb has a problem now because the fiscal stimulus that has been done in the u.s., now it almost needs to be repeated overseas in order to see that same impact and to have the same impact on the currency markets, so that is really a challenge, that what we are doing in the u.s. is causing yields to rise globally while the fundamental support is not actually there. here in the u.s., the jobs data -- the data wit

it is not what the ecb wants to see. they pushed back this morning. still haven't got what they want. tom: the french 10 year yield, when did i last look at that? i believe i was in paris having a $40 martini at the hemingway bar. but jon, it goes to a positive yield on the french 10 year, another indicator of this seachange. jonathan: we've been dragged higher by what is happening in the treasury market. chairman powell calls this a statement of competence. for the you were -- for the rest of the world, undue tightening. tom: philip lane nailed it. we will see this more and more. what is so great about this, pushing against it is the global labor economy, as we will see in claims and 30 minutes. lisa: it is also the united states, supposedly the resurgent economy. jon said something earlier that i want to that cop on, higher growth expectations, not inflation expect patients. how sustainable is the pound -- in place and expectations. how sustainable -- inflation expectations. how sustainable is the bounce back we are seeing? will there be a bleed thr

janet: the fed is certainly trying very hard, as are members of the ecb. they are basically saying that we know there is going to be an element of pent-up demand that is unleashed, helped along by this stock of savings that has been accumulative by part of the population, even of it is mainly higher earners, and that that on top of some commodity price inflation will mean that we can get this transitory inflation. the question after that is what happens to wages and wage growth in particular. it is possible we just get an extension of consumer credit to support incomes, but a lot of incomes have been hit, and with slack in labor markets, we may not get the wage growth. so the fed is very much explaining that. at some point, we make it to inflation at or above 2% for some period of time. then we will thing about raising rates, but for now, the focus is on getting a revival in growth, and only then can with and about tapering. guy: no plan survives contact with the enemy. do you think the markets will end up forcing the fed and other central banks into earli

the ecb already said clearly that it will continue qe until march of next year. it will not taper before the end of 2023. the fed has given no information on that. maybe in order to calm down the bond market. annmarie: the bank of america fund manager survey said the only reason to be bearish -- there is no reason to be bearish, there is literally no reason to be bearish. my concern is that the market seems to be trading on the fact that economists, societies have already open. i'm sitting in london and that is certainly not the case. so what does happen when economies reopen? will that be a sign to sell in this market? sylvain: when the economies restart, more or less at the same time, the upn and the u.s. economy, will see a reboot of the major economies and that can lead to some volatility and distortion of the economic process in the market. but for now, we still have less demand in europe, in the u.s. than in china. there is less demand in the u.s. than 20 months ago. and we have more liquidity, more savings. it does not mean -- we have a lot more savings. m

i'm the number the ecb and that you're for them getting together and in the end there's like a group awareness which is great. i was. hard up on. some of that stuff but somebody's got to rebuild. and as i step on the moon we. as i step out and up our. bike like a homo. this is the ultimate demonstration. name and we're strong favorites to win the match but they could only scramble a draw. said it's not about who can mean. more of. the salmon got. a lot of. money and i'm. willing to they sent me this now my teeth are going to pick up. for this when i tell them that i've got a gun but funding and then. i'm sorry any amount i thought of. as having i mean yeah yeah yeah i mean. i don't have it like that i was on my. god. it's one of the most recognized sites around the world famed for its support from far and wide but for the families back home it's more than just a football club and you want to polish it should be left out of football you know football is no one politics and. the passion and the politics of liverpool f.c. the defiance giant. part of the fans who make football series on

i guess euro also has more problems for possible inflation expectations as it rises here for ecb. elsa: it comes back to what we were discussing before, which is what can we really do about it. the answer is not very much. we have pretty much reached the limit of what they can do with policy rates, and they can talk about the currency, they can jawbone, and markets are likely to look through that. from the point of view of the ecb, i would expect markets to do the work for them, and that is to say the cyclical story is not great in the euro area. they will be one of the last to get to herd immunity with vaccinations, so they will find that the euro naturally falls behind, just as other countries cyclically will ahead. tom: what do you play against euro? if you have a conviction on euro, and particularly weak euro, what currency do you play against? elsa: one i have been watching for a while and we have been putting it position on his euro card, that the -- the canadian dollar versus the swedish krona. euro-dollar to some degree, unless you are happy to play ranges and pick your mo

the ecb forecast is well short, even over the end of 2023. there you still problems of demographics and, worryingly, used of the downward trend in inflation expectations which makes it all the harder. inflation is geography specific. the u.s. looks like it has started to make headway. jonathan: we are down 42% on gamestop for those of you still following. amc, soft silver as well. do you think europe or japan can engineer a recovery that leads to higher policy rates at the boj and the ecb? jonathan: over the 10 years or any point? jonathan: 10 years. david: we do think over 10 years you can get back to a point where you start to see the rates rise because you see the supply-side responsive as well. in the near term, we fully expect the bank of japan to be on hold. tom: -- jonathan: great to catch up. david page. that would be a key difference if they are able to manage in economy recovery, engineer the recovery. the ecb did not achieve that the previous 10 years. tom: there is no question about it. i want to look up the next 12 months. the ec

jonathan: here's the from the ecb -- here's the next line from the ecb, still concerned about impacts on financial conditions. tom: stocks could become vulnerable to rising real yields . i'm shocked. jonathan: thank you for that one. [laughter] on the rise in yields, we are up three basis points on 30's. tens up a little more than two basis points. getting very close to that 1.30% mark again. tom: my people wrote your people moments ago. what do we do at 1.35%? how do we rationalize? jonathan: if we got there today, i imagine we would have a little bit of disruption. i did receive the email. but i imagine we would get disruption. it depends on what takes us there. is it inflation expect patients? is it real yields? if it is the latter, you've got real concern in this market. coming up on this program, we are counting you down to a hearing on capitol hill down in washington, d.c. it's all about gamestop. we will be catching up with leon cooperman, the omega founder and chairman. alongside tom keene and lisa abramowicz, i'm jonathan ferro. heard on bloomberg tv, this is -- heard on bloo

we have followed the recommendation of the ecb. we understand the reason behind the exceptional measures and have followed these recommendations. dividends are important for shareholders and societies and that is why we now have decided -- the board will decide in february to pay out the first installment of the dividend of seven cents, in line with the recommendation of the ecb, and we will decide on mandates. we will decide on a dividend, first of all, to pay out the main part of the dividend. a dividend of $.39 to be paid out after september. annmarie: are you nervous you will not be able to compete with your swedish peers? >> no. annmarie: short and simple. manus: frank, we -- annmarie: frank vang-jensen, thank you so much for joining us this morning. frank vang-jensen. staying the course for fed officials played on the retail frenzy as they signal the central bank will not be tapering its massive bond buying program anytime soon. that is coming up next. this is bloomberg. ♪ >> at some point, they are going to have to turn th

i watched him in action at the ecb for years. i barely ever heard him speak italian, so we're going to have to get used to that, for a start. matt: yes, he spoke english for the most part at the ecb. i think the interesting thing is his experience is so broad. he's been a professor. he's worked in government at the treasury in italy. he worked at goldman sachs. and, of course, he ran the ecb with the kind of strength that endeared him to a lot of people who were pro-eu, with his whatever it takes speech. so, maybe he'll do whatever it takes when it comes to italy if they give him the chance. it's more a position people need to approve. let's talk about this right now with maria tadeo, our reporter in brussels. she's joined by a guest. maria? maria: let's talk about the european vaccination campaign. we are joined by manfred, the head of the people's party in the european parliament. thank you for joining us on bloomberg. you know, this week has been a difficult week for the european commission, for the management at the top of th

>> because either way if the ecb tighten sufficiently to hold inflation down, then it's likely there will be recessions of the weaker countries in europe and that will raise the concern in those countries. and if there isn't a sufficient typing of the ecb the pressure on the weaker countries in europe may lead to greater risk there. with countries like us and uk public sector is pretty unlikely. when you go to the central bank you can always and that debt necessarily through inflation. we believe in a sense a default because we believe it will come around. so if you look at upheaval with that the fed will declare victory and markets will be very happy because it reduces the real burden of debt but the problem i think with the year after that in the after that and then the question comes about what are you prepared to do if it is persistent higher-than-expected? so i think this will sound like a really good story with financial markets as a triumph. >> at two and a half or 3 percent as a policy victory. and that is how i view it. so i will conclude there. let me recommend that one of

but, the ecb is a difficult place. that economy is softer than in the united states, and the difference in terms of inflation performance is even more profound. it does not surprise me that christine lagarde has been being more vocal about the rate hikes -- rate hikes then german powell. guy: i want to see -- turns the u.k.. we have seen a huge selloff generated back to the vaccine story we were talking about a moment ago. do you think they are a buy at this stage? do you think some of these moves are running out of steam. nathan: the fundamentals there i think are a little bit more circuit -- certainty in a brexit deal and how all of the implications will play out which are in open issue. you also has -- have a very successful vaccination campaign ongoing. and i think that that has contributed to the rising rates. but what i look -- when i look at this move in rates in the u.k. or the u.s. treasury market, it is pretty clear we are at a place where the fundamentals are likely to continue to drive strong economic perfo

how do you take these comments from the ecb. doesn't mean they do something, or do you continue to watch? sandra: we think they will continue to watch it closely. if you weigh the yields, it does not set alarm bells ringing. it does relate to the question of whether all the stimulus from discretionary spending combines with what consumers will do with their savings once economies reopen. and what extent that might lead to in overheating the economies. that is the worry behind this. anna: you are not concerned about inflation, why do you not think we will see worrisome inflation? sandra: speaking for the euro area, my vision is different for the u.s. in the euro area, there are elements where what consumers will do, and we know there are 750 billion euros in bank accounts which could be spent. if we look more closely at those bank accounts, we see in the lower income brackets where the proportion of savings that are being spent is higher. we see those incomes are relatively hard-hit by the pandemic. these are represented in the s

mario draghi, former ecb president, front and center, of course. we will also get the action later from matteo renzi. this is bloomberg. matt: welcome back. this is "bloomberg daybreak: european open." future continues to gain. we also see crude rising. the euro is down below $1.20. we are looking at the broader stoxx 600. energy is the biggest gaining group this morning after shell came out with its earnings, we had missed estimates for shell, fourth-quarter adjusted profit was under $400 million. shell is up, 1.5% with cash flow. auto parts also big gainers today. daimler continues to rise after saying it is going to spin off its truck business and be known as mercedes-benz, which makes all the sense in the world. as far as the losers, personal care, drugstores, grocery stores. the biggest losing groups, chemical stocks are down. anna: we will bring you our conversation with the ceo of unilever shortly. i want to get to the store you referenced, the ipo's and the german truck space. we are looking at an ipo that is doing well. we have the shares,

there has been no comment from deutsche's or ecb. mcdonald's says it is tying executive bonuses to targets including meeting diversity and exclusion. a full breakdown of u.s. employees by race, ethnicity and gender. mcdonald's is looking for more equality in its senior ranks and aiming to achieve gender parity worldwide. walmart fell in new york after forecasting a slowdown in sales and profit for the year. the retailer says earnings-per-share will dip slightly this year. it plans to address shortages by expanding advertising and e-commerce. shery: let's turn to weibo. the company planning a second listing in hong kong. the microblogging service is china's answer to twitter. let's more from julia. really, these chinese homecoming listings all the rage these days. what do we know about this one? julia: they definitely are all the rage these days. further weibo, -- four weibo, it makes sense in following the steps of hours. others. there has been a proposal that could lead to the delisting of chinese companies that do not allow u.s. re

former ecb president mario draghi will be asked to form a new italian government and steer the economy out of crisis. and global stocks extend the rally, this on optimism over stimulus in the u.s., earnings, and fading concerns about volatile retail trading. good morning and welcome to "bloomberg surveillance." tom and francine from london and new york. we have so much news to cover. italian politics has been all over this story. tom: i bet you have. francine: remember the druggie guesses about whether he is dovish? i think that is back. about the recovery. ," can you imagine the first press conference with the italian press? one thing i think is fascinating that i think everybody knows you have huge experience -- i have to fix my tie. that you have huge experience with, francine, is, will the nation get behind president draghi? francine: i think if mario draghi was wearing a red tie, he would perform more aggressively. this is likely financial nerds game of getting the ties. two things. once he gets asked to perform at -- to form a government, it needs to be approved by parliament. we

minutes from the fed, minutes from the ecb, this arctic freeze pushing up the price of natural gas and oil because of this arctic freeze in the mid-we u.s. -- made u.s.. laura: that was the impetus but white -- behind this wti rally, over $60 a barrel, on part of that tight inventory constraints within the u.s. that could take out a few hundred thousand barrels of oil. that is coming on the back of inventory drawdowns in the u.s. already outpacing what many analysts had expected. overlaid on that is strong demand recovery. markets are looking through the near-term risks around potential virus variants and toward economically openings so if demand is helping lift oil above $60 a barrel. the question now is how sustainable is this rally? we had the iea revise lower their demand forecast last week. we are still seeing these technical levels signal wti is overbought, and ultimately, the virus is not yet contained. we are still in lockdowns across the globe, so will we see stumbles in terms of vaccine rollouts that could sap some of this demand optimism that is being priced in? francine: qu

ecb president christine lagarde hints at a soft exit from stimulus once a recovery takes hold. the morning, everyone and welcome to "bloomberg surveillance." i'm francine lacqua in london. let's check on the markets. that is where the action is in the reflation trade after we heard from janet yellen about what they are expecting from inflation and what we are hoping to see in terms of stimulus. the reflation trade continuing, global stocks hitting another record, brent oil topping $60. vaccine developers are working on a new shot to fight the south african variant of coronavirus. early data suggests the vaccine from astrazeneca and oxford has limited impact on mild disease caused by the mutation. a professor says the new shot should be ready by autumn. joining us, the director of research from bloomberg intelligence. great to speak with you. what can you tell us about the south africa variant? astrazeneca saying they need a new vaccine. every time we have a new mutation, is that what we are going to see? >> the answer to your last question is we don't know, we have to wait to f

and former ecb chief mario draghi is hauled out of retirement to lead italy in its times of need. former prime minister matteo renzi tells us expect mario draghi's government to be in place next week. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. we were looking at pictures of mario draghi speaking in italian yesterday. the amount of messages i got from market purchase friends is that i have heard him in hundreds of press conferences and never have i heard him speak italian. tom: there is. what did you learn from your hat trick of prime ministers, francine? francine: i learned that there is too much optimism out there. there is so much optimism that he is the right man for the job -- which he has all the confidences, but italy is complicated politically and it is unclear how he will form a government that will stay longer to actually push the reforms needed. the other thing we need to watch out is the yield curve. this is the reflation story. we have been talking about it and i know you have some great things for us tod

ecb policy makers discussed the issue on wednesday. no official comment yet. senator ted cruz is back in texas after facing harsh criticism for flying to cancun, sicko, while his state faced widespread power outages and energy crisis. adding that the reason was because his children were cold and he was trying to be a dad. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. francine? francine: today there is a great opinion piece from the director of research and bloomberg intelligence sam fazeli. in this piece, and you can read it on your terminal or on the website. he says that despite the political stumbles throughout the pandemic, there is a lot to be admired. if you are a terminal user, you can go to open for an opinion. opin-go. sam, i feel like the fact that britain got the vaccine rollout right is at least priced into the market. why do you think they are not getting enough credit? sam: thank you for the kind words you said. it is less about whet

guy: linking the ecb -- how big a concern is there that if we get turbulence in italy, the ecb will not be able to provide the backstop to btp's that is currently there? is that something that sits in the background? giovanni: it is in the background for informed observers and academic commentators such as myself. i am presently in the building of the european political economy. there been 10 governments made for the weeks and months. there are people who are aware of this risk, but this is not part of the debate in italian politics and in the public sphere. basically because it italian politics today is plagued by short-term-ism. that is not the problem today or tomorrow, it might be a problem the day after tomorrow, but this is not something italian politics is able to look at. alix: we appreciate your insight. giovanni orsina, thank you very much. this is bloomberg. ♪ guy: angela merkel speaking on german television. the headlines are incredible. she definitely has ursula von der leyen's back. the eu did nothing wrong in its vaccine procurement strategy. if the eu had paid more, it

francine: how problematic is rising euro for the ecb if it all has to do with inflation? geoffrey: in the short-term levels will be comfortable with it. again, it is about -- by the end of the quarter, they will absolutely do what they need to do, but if it is closer to one .30 by the end of this year, i don't think that will mess with their inflation targets at all. they are watching the pace rather than the level right now. francine: if you look at where you find value, in europe, do you have to look at first how money -- how recovery funds are spent? or is there more attractiveness elsewhere given how the u.s. is spending stimulus? geoffrey: it depends on the allocation strategies. going back to the flow, we already seeing a lot of flow in european equities. maybe allocators are saying if you are buying european equities, derman equities, for example, you thinking global reflation. manufacturing -- german equities, for example, you are thinking google reflation. if you are a bond investor, given where policy is, they will probably be less desire and value may exist in

do you expect the ecb to act? and you think jay powell will have to sign a little warning as well today when he speaks? sonja: i think the understanding is all central banks will remain on the dovish side and remain supportive. clearly they are very concerned about bond market liquidity and well-functioning and stable market backdrop. i think the verbal intervention is probably what we will expect in the near term until we have more data points and clarity around the recovery, and potentially the inflation overshoot in the u.s.. again, i imagine jay powell will err on the side of caution and support the communication they have had recently. manus: thank you so much. sonja laud joining us with thoughts on the markets and tempering the super cycle mania we have. speaking -- >> hsbc is pivoting to asia in a bid to boost profitability. the lender was able to keep costs in check last quarter with the ceo saying he is cautiously optimistic for the year ahead. hsbc also resuming its dividend after u.k. regulators relaxed

we have a new italian prime minister and that is mario draghi, our old pal from the ecb. he just accepted the offer from the president of italy. he has officially done that and named his cabinet, including foreign minister, finance minister, and ecology minister. that might be a new one. after reporting his fourth order earnings, they created two new products businesses. we are joined by mark vergnano. congratulations on earnings. tell us about the specialty chemicals business. why now? mark: hi. we had a very good earnings report as you stated. very strong finish to the year after a very difficult 2020 for all of us. our product segment is one that has a lot of essential products. it has refrigerants, polymers, membranes, many product lines. we split that in two because we want to focus both segments on high-growth segments but they are very different. different customer base, different technology. they don't have a lot of synergy together. splitting them allows our investors to have true transparency into these businesses, gives them focus, management point of view and

christine lagarde says the ecb of -- ecb will look through any shortage in prices. chair bile -- chair powell and governor bailey speak later today. we're all trying to figure out why the stoxx 600 is now down by .1%.

was not paid will be done after september, 2021, depending on, of course, the recommendations of the ecb. annmarie: what about a buyback program? you're talking about dividends. could we see a buyback program this year? tanate: it's something we have a nest at the market in q3. we're looking at share distribution, and that could be a form of cash or buybacks. we're open to different instruments basically deliver cash returns to our shareholders, indeed. annmarie: consensus right now only anticipates return in equity, raising a percent by 2023. your target is anywhere -- 8% by 2023. your target is anywhere between 10-12%. is this a target you have to dig now? -- ditch now? tanate: good question. judging us on a difficult 2020, but i think what we want to give up the ambition of 10-12%, if the economic activity approves -- improves, as loan-loss recovers. we still have the ambition to go for that 10-12%, but we do recognize the challenging macroeconomic actor and interest rate picture -- picture and interest rate picture, which is bearing on us, as well. but we do intend 10-12%. annmarie:

mark: the ecb balance sheet is expanding faster than the feds. you are seeing the broad balance of payment in the euro zone's deteriorating, which is regardless of the current capital account surplus. i think a big part of this is if you are thinking about reflation dynamics improving in the second half of the year, the euro becomes the mechanism from which you buy, largely because the ecb is likely to do more rather than less, and the fed is likely to be neutral rather than hawkish. what you are expecting comedy bottoming in u.s. real rates, potentially higher nominal rates off the basket for -- off the back of fiscal stimulus, the balance sheet is becoming the quasi-driver of risk assets around the world. lisa: potentially more people are interested in what you have to say now more than ever. we've always been interested. but there was a great story yesterday talking about people who have 60/40 bond portfolios are taking a look more at currencies because bonds are so boring and they are investing more and more in trading currencies. are you see