as well as europe more broadly. the central bank in europe, the ecb and the bank of england, maybe not quite as dovish, but generally speaking still on the dovish side, has allowed real interest rates in europe to remain extraordinarily low. contrast that with what's going on in the u.s., with real interest rates having risen, we are seeing this decoupling that we have been expecting between real interest rates in the u.s. and those in europe. the investment buyer meant -- investment environment in the u.s. looks more attractive from an interest rate and growth perspective. those factors do raise the attractiveness of the u.s. dollar as a currency with which to ultimately put your money to work in. we think that's why the dollar has been appreciating of late. jonathan: that raises some questions about how any move to the upside would be on 10 year yields in this market. in terms of foreign participation in treasuries. your thoughts on that currently? matt: i think all year, we have been expecting interest rates to r

decent it is europe? do you think ash do you think it is europe? d -- do you think it is europe? do you think it is the united states? yvonne: i think it is both. the estimate in the u.s. is that they are going to raise $500 billion over the next 10 years, 580 in europe, so i think this comes out in the wash. the question is where i see the opportunity is what are we doing with this money. i think this is also a question of can we trust government to do something smart with the taxes that they pay, and i think it was janet yellen who also emphasized that after the meeting, but the europeans have been saying the same thing. if we make a smart investment into infrastructure and if we use the money wisely, this will create a great environment for companies to operate in. it is not only about taxes when companies expand into the u.s. or into europe. guy: we are going to leave it there. thanks for the input. yvonne bendinger-rothschild, u.s. chamber of commerce new york chapter executive director. let's figure out exactly whether markets are right to ignore it right now. norman's elem

jon: what is your take on europe? greg: because the rollout of the vaccine has been slow in europe, the economy is not opening up as quickly. there will be a drag on economic growth and you will see a very accommodative ecb to make sure they are doing all they can to stimulate the economy and boost the market. we are not expecting much to come out of that meeting. until vaccine rollout starts to take hold and have more of an impact and the economy starts to get back to normal, you will continue to see very limited growth happening in europe. jon: it has gotten better and we hope it gets better. mike, final word. i would love your thoughts on what happens in europe. mike: i think europe is already stuck at negative rates. even after the rebound, europe is one of the few big regions of the world that is going to continue to be in negative growth for the entire two year period. there basically going through a two year recession, indicative of a potential growth rate, which is really muted. japan has been stuck in 0420 ye

europe is a capital-like model. the medical business in europe, it is absolutely legal in the eu, so we don't have to build these operations. we can build a centralized operation in portugal and spain, which is where we are, to distributed through europe. romaine: once you get the distribution level, you're not worried at all about impediments with regard to member states deciding they want to set their own parameters? you're certain we will have that blanket rule coming out of the eu? >> under the united nations charter, medical is legal and the eu has taken the position you can cross borders with it. there is no impediment today on medical. it can go from germany to italy to spain, to france, and to israel, so there is no impediment in europe. but i don't use, as you have heard recently, switzerland and holland announced adult use pilot programs. the reason they call it pilots is because of the u.s. charter. recreational and adult use cannabis is not yet recreational, but if you can -- if you call it a pilot, you

tom: the timing is 3:00 in europe. that is central europe. in eastern europe it is 4:00 p.m. about at the point of pre-conferences and agreements. i would think in the next six hours we will have a lot more to talk about. lisa: this comes at such a delicate moment internationally and economically. the idea people are just starting to travel again. we are seeing president biden try to set a new agenda for the united states and prepare for his trip to the summit in europe. such a perilous moment in some ways. a crossroads for 70 different aspects of the global economy. this highlights them in one swoop. tom: no doubts we will have comments from the white house as they wake up at 9:00 washington time. markets are range bound, but then they are not. the vix in nicely with enthusiasm. s&p 500 up 23 point. jon called in from coventry, wanting to quote the dow. 4292 on the dow. a nice lift to the markets. on "balance of power" the cogent voice on the republican side, glenn hubbard with republican -- with columbia business school. stay with us on belarus. this is bloomberg on radio,

europe struggling, the u.s. flying, and a question we have asked, how well priced are they in foreign exchange? jens: in the introduction you talked about all of these cycles of optimism in the u.s. that have been around for a while and it's no surprise that we have a big stimulus package coming out. in europe we are waiting for the all clear, the vaccine rollout has been disappointing to say the least so far and we have spikes in cases in the middle of march in many countries. we don't have the all clear and we have not had the reopening yet. in terms of us pricing aggressively a global reopening, that is still something that will happen in the next one to two months. in terms of the catalyst for verbal lift to global risk assets comes in confidence the vaccine is working in the u.k. and in the eu, and the spikes we have in latin america and india are going to get under control as we get vaccinated and take other measures. that's going to be the final catalyst the big global reopening is here, not just in israe

guy: what are you seeing in europe? it looks like it will be difficult for americans to fly over here, but within europe, what is the picture? peter: as you remarked, europe recently has been much more locked down there the u.s. for a variety of reasons, it's been less controlled. what we are seeing in europe is these lockdowns can be severe and serious. they really limit travel. as we open, we see many of the same trends that we see in other parts of the world. people doing more accommodative rentals. they are doing it more locally, driving rather than flying. so it is basically the same phenomenon. the borders are closer together, but the same phenomenon. when they can cross borders, they certainly do, but it's a lot of driving, what we would call near travel. not as many people flying clearly. we are seeing pretty much the same trends, just the country is smaller and the borders are closer. kailey: in theory, i'm supposed to be going to ireland in july. guy doesn't think that will happen. peter: i have faith that you

in europe we still have a reopening ahead of us. the delta variant is spreading, but as you were saying, hospitalizations are at low levels. in our playbook, the growth rebound in europe continues, and that should be good for another 5% upside in equities. guy: economic companies today out of the europe is at a 20 year high. that feels like it is something that is going to be hard to top. as you say, the pmi data were superstrong. what i am really curious about, do you think you've got another 5%? the market should be looking six months, nine months ahead. where are we then? what is the downslope of this pe -- what does the downslope of this peak in data look like? sebastian: the first thing that matters is the rate of change. all of the work suggests the rate of change matters. you want to own equities for as long as growth accelerates. you need to buy them when growth is in a hole in q2 last year and ride this rebound. the second question, is the market looking ahead? data shows the market reacts to the data that comes in. that is

variant in europe, which is really terrible. i think it is in all of our interest to help europe pull out of this. latin america also still has a lot of cases. other parts of the world. it really is necessary for us to be thinking about that. the u.s. had the worst outbreak. it is totally understandable we focus on the u.s. first, but now, as vaccines become available to everyone and we continue to push into areas and communities that need the vaccine in this country, we have to also be increasing our focus on the rest of the world. lisa: in the u.s., we did just exceed 4 million doses put into arms and one day. the number is exceeding rapidly, which is great. how soon after the first shot can someone say they had any protection? that is what people are feeling when they walk out. joshua: it is not 10 minutes. it is more like two weeks. two weeks, you start to get protection. the protection really is not full until two weeks after the second shot. there are situations of people getting quite ill and even dying after the first sh

the pronounced dollar weakness we have seen against say the aussie and europe, i think europe has a bigger problem. they do not want to see this. tom: where will you get a data check on radio and tv worldwide? we will translate that data into the economic view. she is quite good at adapting and adjusting to the changing linkages of markets with economics. you change your economics because of the markets or do the markets change because of the economics? francis: they are closely tied together since covert occurred. we are at the stage where we see the tightening of financial conditions. it will matter to the economic outlook. this is what central bankers are watching. i watched every minute of powell's speech in the last couple minutes -- days, i learned nothing new. overnight, a huge amount of information from central bankers worried about their economy because of the financial decisions including australia, who tried to expand purchases and saw yields rise. the ecb coming out and saying we are uncomfortable with it. it includes the bank of canada trying to imply that they are more nervou

guy: -- >> the countdown is on in europe. this is "bloomberg markets: european close," with guy johnson and alix steel. ♪ guy: 29 minutes to go until the end of trading in europe. for equities, let's give you a snapshot of where we are. the stoxx 600 poised to retake for 70. utilities doing well. travel is bouncing back. the energy sector on both sides of the atlantic trading strongly. the dollar is on the front foot. we've got a $1.12 handle. next week the big week, really. ecb, fed, bank of england. foreign-exchange markets paying attention to that. crude coming back. energy stocks on both sides of the

let's turn our attention toward europe. waiting for information from the commeverage economy, p.m.i. data. the prime minister saying it is fundamental that the e.u. fiscal stance remains expansionary. coming crisis, getting up the vaccination levels clearly a lag between what's happening in the u.s. and what's happening in the eurozone. >> we are seeing a lag at the moment. but i think the great rebound is in the pipeline from europe. we know the european economy is more exposed the biggest exporting region and exposed to global growth and it is experiencing the lag, and yerksd draghi trying to lead the charge, we have seen a much more expansionry stance from the germans. we need more of that. we'll see whether it emerges. countries like the nust particular, the policy very, very -- u.s. in particular, it is much hardener europe. we are beginning to move through the recovery in anticipation of recovery to managing recovery and sustaining recovery and the americans are going to keep it a. -- at it. anna: we have seen the pol

. -- out of europe. we have seen the same dynamics play out over europe that we have seen in america in the last couple months. greg: i would say the u.s. is a couple months ahead of europe when it comes to the health situation, reflected in the economic situation. what we see in the u.s.'s rapid rebound in demand and supply is taking time to adjust, hence the price pressures. the inflationary environment we are seeing now is a feature of the strong demand and fragile readjustment of supply. it is not about -- it will be with us for some time. tom: oxford is acclaimed for acute gdp analysis. are you gonna recalibrate your view on gdp for the next 12 months? greg: we will certainly do that at some point because we know it will be provided over time, but i think we are on the right trajectory. we have an outlook quite optimistic. we have growth approaching seven -- 7.5% a percent to 8% this year and moderating 4% next year. overall, a good take on the economy led by consumer spending, driven by use of exce

but with europe as the biggest trading partner. the rest of the world slows down and it hit confidence. the idea that the delta variant is moving fast and having that impact has hit what we have seen in our economic data so far for the month of august, the university of michigan number on friday was a big role over. also -- rollover. also, consumers and businesses worried about what's happening. alix: thank you very much, bloomberg's michael mckee. the s&p retreating after finishing the 48th record since the end of 2020. ritika: kara murphy kara murphy -- --kara murphy will be joining us next. this is bloomberg. ♪ alix: u.n. security council started emergency session on afghanistan. you are looking at the secretary general speaking. he is calling on the taliban to exercise restraint. afghan females need to remain and we must act together and use all tools at our disposal. the question mark is what western countries can do. the story of the markets, we look forward to jay powell and sell retail earnings as well paired abigail dool

the leisure stocks in europe of 20% year-to-date so far. if the euro has got wooden -- has gotten weaker recently but we priced in a better outlook not just in america but europe too. it's not just the banks that have been rolling in america but the european banks too. on the travel and leisure story, up 20% given what we have seen in europe still, which is countries, cities still in lockdown and travel not picking up anytime soon, according to guidance from france and germany. it is pretty remarkable. lisa: i wonder how much bipan pointed to liquidity is the issue here. a lot of stocks are coming off of low base. if you look at what european banks and travel socks have been doing in the months prior. before last year, when you take a look at that, perhaps it is a liquidity story. people looking at the most oversold themes and saying they will not perhaps go bankrupt. the bar is getting lower at least on a macro level and for the whole year, not necessarily in the last couple weeks when it comes to what to invest in. lisa: it's been that wa

you cannot come from countries in europe where covid rates are lower. when it will open up, i could not tell you. it is something we continue a dialogue on. it is hard to predict how they are thinking about it. >> we are going to need wage inflation. there are signs of that. in some countries, wages are going up a lot. it is difficult to forecast. the answers are not always obvious. jon: going into the payrolls report. a federal reserve decision. we are up nine on the s&p. yields are in by about half of basis point. euro-dollar firmer. crude positive. $68.90. tom: 28 days to the quarter end. gina martin adams to apprise earnings, revenues, and the points in between. every research note talks about a guesstimate of earnings. >> companies have baked in their estimates. analysts -- they are just a little bit cautious, they have remained cautious. the only risk is still about the margin lines. those are the most important lines to watch. it is about margins and how companies are contending with inflation pressures. tom: migrating down the income statement,

europe it's not a laggard on stimulus that europe is not a lack art on stimulus -- europe is not a laggard on stimulus, but they have not put in as much. caroline: the ecb has been talking about listening more to the fx rates, concerns about where this is going. what are they thinking about sending pat, is particularly since fed chair powell? tom: there will be a meeting coming up in june. the first question for them, how is the recovery going? if things are moving in line with our forecast and the vaccinations are rolling out, that's going to embolden the hawks on the ecb board. even so, we think what we are going to see is the pace of ppp , pap purchases, coming back later in the year. we think the european central bank, if the recovery is in place, if there are new concerns about bond yields, they wie confident to pull tack little bit. joe: when you think germany, cars, we know the global situation with cars is not going to be resolved anytime soon, and that's the way semiconductors are hampering production. how big of a drag is that, the industrial disadvantage due to all the things we

, and other parts of europe. you look at other countries, the u.s., less restrictions, obviously. when you look at economic activity and the restrictions and trying to inhibit the spread of the virus and you look elsewhere, just look at parts of asia, for example, there has been a huge improvement in gdp growth in countries like china and elsewhere. i feel like countries are getting bored, and the vaccine rollouts are different rates. it remains to be seen the efficacy of the vaccine and how much it really will help economic activity to improve. we think once the vaccine has been rolled out in a meaningful way, we really will start to seize a very positive growth coming through -- we will start to see some very positive growth coming through. nominal growth we think is going to be very strong as the labor market continues to improve, as sectors like the service sector start to gain momentum. so we do think we will see some positive growth going forward globally. but i think what you say is 100% correct, it will b

the drama this morning in europe. the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: from new york, we begin with the big issue. another brick in the wall of worry. >> covid is back is a big risk. >> covid is back with a vengeance. >> there are risks on the inflation front. >> definitely pockets of green. >> you have this wall of liquidity. >> everybody is nervous. >> the fed is your friend. >> this is where you make money. >>

guy: europe in many ways is geared to that cyclicality. if you are a u.s. investor, or a dollar investor, let's take -- you would make 16% but if you are a dollar investor, you would make 8% so the currency has hurt this year if you are a u.s. investor. the money has been pouring in your direction. >> last year, you didn't hear anyone talking about an off year for the dollar. sanali: thank you both, this is bloomberg. ♪ kriti: time for the bloomberg business flash. angel: find a jp morgan 200 million bowser breaking rules involving employee communications. bank executives were supposed to make sure that workers were compensated but even the rules they were supposed to enforce didn't happen. amazon's customers in the u.k. will now be able to pay monthly installments as a result of a new tie up between the online retailer and barclays. purchases of $133 or more on amazon will be eligible for the new payment method. buyers will spread out the cost for three months to four years. shares of rivian automotive are tumbling afterwards earnings report as a public

part of that is the percolation in europe your -- in europe. jonathan: one thing that has shifted is the move away from the one-way global growth trade. there are so much more dispersion worldwide, not just the divergence between europe and the u.s. through q1, but elsewhere outside of europe. lisa: there was also complacency we were going to exit the pandemic route -- exit the pandemic with relative ease. that is being called into question by the nature of the infections. we are talking about india and brazil. the international airline association coming out and increasing their potential losses for the airlines this year. there is a feeling that these losses will be ongoing that has not been adequately figure four. it is a more complicated recovery than just synchronized. jonathan: could not agree with you more. the airline business this week has captured the story so well, between a domestic story, which has recovered fast on the leisure side, and the international story, including big business, which continues to struggle. tom: you put out

europe does not. is it simply the structure that the ecb has to deal with that they cannot generate a boom economy to help out? eric: i think that is part of the story, tom. we have been wondering about this this inflationary liquidity trap -- disinflationary liquidity trap that europe has been struggling with. we don't think negative interest rates made things any better. it probably made things more difficult for the banking system. you have a world where policy rates are at zero and the financial institutions do not have a lot of incentive for just riveting that excess liquidity to the broader economy. -- for distributing that excess the liquidity to the broader economy. people talk about the structure, but for me, one of those differences is the nature of the financial system in the banking system. kailey: there is a difference in fiscal policy as well in europe. it has not been as robust as in the u.s. when it comes to stimulus. when we are talking about monetary stimulus and we talk about the de

this week it is natural gas prices in europe. but today, the ukraine is negotiating with russia to provide a big discount to pipe natural gas into europe, to provide supply. so the markets will find a way, supply will eventually come online. i think the surprise will be how quickly supply and demand adjust. years from now, we might be talking about disinflationary trends coming back. jonathan: you say if we get to 2%, back up the truck and add duration. what about 1.75? mike: there is a lot of value in the long rates. the 30 year, we have loved it. i was looking at my notes from being here years ago, a yottabyte of 2% on a 30 year treasury would be a museum piece. and here we are all the way back to 2.10. today, you are seeing the price action. the front end is selling off and the back end is rallying hard, because of the fed hikes too aggressively, they will shut down the global economy and inflation will the rule of law. jonathan: i remember the cushion that led to the answer, i asked how you will look back on this bond market

he was flirting with this idea of europe doing ok. he said they would be buying. >> honestly, a lot of people are looking at the idea that they will not be tightening. coming out of the pandemic, i do want to make a point if the fed will be able to pivot. there was a forecast yesterday saying the effects of rate hikes next year will be gdp growth reduced to a beach around one and have percent annualized in the second half. first is the 2.7 percent baseline report, to me, that is a warning flight. i want, people would agree that. >> for anyone just tuning in, it's a game were playing. play along. december 9, birthdays. famous people with a december 9 birthday. judy dench, kirk douglas, you've got a guess number three. who is number three? there will be clues all hour long. >> and try to think of what went wrong. >> if you got any guesses sentiment. from new york city, this is bloomberg. >> legislation will create a way for the debt ceiling to be waged quickly. a partial government shutdown next week, and the bill would cancel cuts from

ready to move back to europe. tom: i would be honored to have your perspective on these headlines of the final agreement of the canadian pacific company with kansas city southern. this has involved to canadian giants, canadian pacific and canadian national in a u.s. company, strategic and railroads. is this what is to come in this odd economy we are in? more mergers and combinations? david: i think you will see more mergers because people have high value stocks. when you have high value stocks, you can use that as currency to make acquisitions. the antitrust authorities in the united states try to deal with some of these problems but very few major acquisitions are being blocked right now. there is no antitrust official in charge of justice department because no one has been confirmed yet step it will take a while before you have the antitrust authorities catching up to the acquisitions being done. maybe they are good acquisitions but i don't know if we have the authority focused on these. tom: these private capit

vaccination progress is better, much better in europe now, and europe is also going to be driving some of the global activity as well. that has helped the global exporter economies. jon: that story is not new for europe and well appreciated. we are seeing german bond yields inched toward 0% on a tenure majority, yet euro-dollar has struggled to break through 1.2 unsustainably. what do you make of the price action? daniel: i think it reaffirms that europe is different from the u.s. in a sense the central bank is unlikely to reprice the way the fed was repriced. the dollar did so well in -- the reason the dollar did so well one was this reprising a fed outlook. not this year, the fed is on hold, but for the back years. for the ecb, even if europe looks better, there is a lot of skepticism that you will see any move toward -- any exit from negative rates. that makes it hard for the euro to get as much support from that recovery story as the dollar did last quarter. it does help relative asset performance, equity markets, things like that, but currency doesn't get much benefit. tom: good t

europe is looking like japan did 10 or 20 years ago. lisa: "blue -- tom: "bloomberg surveillance on radio and television, when we put together the show we were going to call it nerd police, but it got voted out. we have got to remember the basics of investing. we can do that with sebastian page. he is a geek and he does cross asset, multi-asset, and all of that, but his book, "beyond diversification," is critical and it is a number one mistake people make when investing portfolios, amateurs and pros. i am honored to ask this question. what did you learn when you look at gamestop and the madness of the last six weeks? sebastian: you know, i have been thinking about your nexis, and i would like to take a shot at reconciling that. i think as an industry right now we are conflating two things and they are hard to separate, but we are conflating the effects of liquidity with investor sentiment, and we are talking a lot about froth, and that can lead to the failure of diversification when bubbles pop. what is really creating the froth? we are

europe got off to a much slower start on vaccinations. the virus performance ha sn't been great, but we are seeing some signs of stabilization on infections, although some of the data is kind of noisy, so that is not a high confidence view. where i have more confidence is that europe is doing a lot better than they were a few weeks ago on vaccinations. the daily number of vaccinations has really increased a lot, and deliveries of vaccines to the european union are really picking up and have further to rise, so over time, that is going to enable the european economies to really open up in the service sector much more. it is pretty depressed in those areas. the level of gdp, especially in the service sector, is much below normal than the u.s.. so it's white a lot of room. i do think it is probably somewhat underappreciated. alix: does that room lead to anymore inflation than what the market is expecting right now? jan: i think it will be very slow for inflation to come back in europe. what happens to inflation really depends more on the lev

europe is at the forefront of this effort. we have a commitment to be climate neutral by 2050 and reduce our greenhouse gases by 55% by 2030. what are we doing? we are shutting down all of our coal electricity plants. we said we will do it by 2028. it will be possible to do it by 2025. we are contributing towards decarbonizing. we are adding renewables. in the interim we are going to be dependent on natural gas. we are retrofitting our businesses at a record -- our buildings at a record pace. we are putting in place an ambitious plan to encourage electric vehicles purchase. we agreed to what we call the next generation eu package. we are talking about 32 billion euros of grants available to greece in the next six years. a significant amount of those will be directed towards -- lisa: a lot of this is important. there is also imminent concern about rising gas prices throughout the european region. what would you like to see some of your member states to with respect to countering some of the price pressures that seem to only be

no doubt about it, europe is really behind the u.s. in terms of covid today but you have to think long term. global businesses are headquartered there. the great reopening in the u.s. will drive outcomes there materially. lisa: what is the biggest bet you see right now as undervalued in a world that seems completely overvalued? beata: i will argue active investing may be the biggest bet we are making. the idea that you cannot just on the index. the s&p last year, incredibly concentrated, the top seven stocks representing the highest concentration we have seen in the index ever. we know what those companies are. they are intact. the work from home beneficiaries. with this reopening, work for work will matter more and cyclicals matter, industrials matter, small caps matter, utilities. the sectors so underperformed last year and our theme with clients was balance. let's not pivot. let's maintain exposure all the time but let's be active. let's make sure security selection and focus on fundamentals is our guiding light and that remains the

what do you need to know out of europe? european stocks hitting fresh record highs earlier in the session. investors very much betting on the fed and the view that inflation will be transitory. europe's largest m&a deal of the year sees a shaking up. we will hear from the german finance minister on how the deal could see more regulation to control rent. the skies over belarus empty as european leaders tell airlines to avoid the country's airspace. we will have the latest from the eu summit in brussels in just a moment. first up, let's get back to the markets. the stoxx 600 fading

we reduced allocation to europe at the end of last year. and maybe reconsidering some of the small-cap moves. we think it needs to take a time of retention. lisa: what are you looking at to decide if there will be more retrenchment in the russell? is it the idea of the retail investor not being as present? is it the idea that growth won't accelerate as quickly? what are the signposts? sheena: i don't think it as -- it is as straightforward as it has been. retail investors are clearly important. there has been market complacency around the cyclical trade. the consent starts to trickle in. i think that is what we have seen. it will probably be a few more weeks before we are confident getting back in cyclical areas. jonathan: are you looking at u.s. or on a global basis or the regional story? sheena: there was so much consensus view coming in about which ones would do well, about the value trade. when you have a consensus move, there will be a moment where things break down. i think that is where we are. we want to look at the long-term invest

annmarie: what about europe? is it caught in thed my snl >> i think it's in isolation for the moment, the vaccine rollout is better than what was expected a few weeks ago, i think growth is starting to re-emerge where it was late before. so europe has been going fine for the last week and obviously in comparison to u.s. stock markets, european marks are more tissue less highly valued. i think there's a nice trade there which could be the benefit for the euro and stock market. annmarie: what did do you expect from the e.c.b. this week. do you think it's time they start drawing it down? >> i think it will remain relative in the discussion. they have different tools they can use. the balance sheet, the yield control, they have a lot of things they can do to keep yield at the level which is accommodative because the growth in europe is more fragile. what we could see is some friction between different countries in europe which will have different growth strategies, typically germany being advanced compared to other c

cpi, potentially up to handle for europe -- potentially a two handle for europe. that explains why the fed might have some work to do. matt: the question is not only how that affects asset prices, but how it affects the economy. how do americans react to bigger inflation numbers, especially if they more persistent, what kind of behavior will that change? jonathan: and you will be living at. kailey: how lucky he is. matt: every time the fed -- every time someone says the fed needs to raise rates to increase the price of mortgages, i listen up. jonathan: it is personal, as michael jordan said. jim bianco will join us later this morning at 9:00 eastern. in lines, matt miller -- kailey leinz, matt miller, jonathan ferro. this is bloomberg surveillance. ritika: i am ritika gupta. coronavirus infections jumped over the weekend. china reported the highest number of cases since january. australia reported more than 10,000 daily cases for the first time since the start of the pandemic. daily omicron infections in the u.s. have now surpassed those in the delta wave. in pola

europe has really turned a corner. i have been bullish my whole career on europe but they are turning the corner and we are seeing good fundamentals coming in. i am more optimistic and i really think that the southern periphery, they are going to outperform economically and in the markets as well. i don't like i've ever said that . jonathan: and nobody talks about brexit anymore. joe quinlan, merrill and bank of america private bank head of cao orchestra g -- cio markets are the g -- market strategy. tom: folks, jon ferro delivered the goods on brexit. the shock of brexit was on 14 hours straight. i was at charlie's. jonathan: i know where you were. i've talked about that story many times. our member sitting in front of the bloomberg with you, and what was important about that moment, it felt like a moment, like something big was happening, and then the clock just started ticking and nothing happened for years and years, and here we are. the pound against the u.s. dollar, the low is !.1485. that had nothing to do with

jonathan: the issue around acceptance in europe is something that needs to be tackled in europe. even if you tackle the former, you've got to do something about the latter. that is what the struggle is in places like france. it is really interesting in the last couple of days just to see euro-dollar break back down and maybe threaten to break through $1.18, after we had all of this news pilot. and we've had a break this week. lisa: detention here of whether the opening later in the year, which is inevitable, the pandemic will end, but if the delay is going to cause frictions that will cause less growth in that region at the same time that the u.s. is proposing more stimulus, and the u.s. dollar potential he has more upside, a growing contrarian theme we are hearing among fx strategists. jonathan: it about 90 minutes, we will get data and america. your equity market positive by 0.2% on the s&p 500, up 0.3% on the nasdaq. in the bond market, yields behaved after yields have been pushing higher week after week, going all the way back to the end of january. yields unchanged, 1.61% on

or in europe. this side was originally meant to supply critical raw material, so it hasn't been used yet for commercial supply. the ema still needs to approve this. so i think there is no need for that. jonathan: you've certainly been dragged into the politics over the last year. you and i need to talk again. thank you for catching up, sir. from new york city this morning, good morning. alongside lisa abramowicz, i'm jonathan ferro. equity futures up by around 1.02 on the nasdaq, up 0.1 put -- up 0.8%. the euro starting to advance now. euro-dollar up to $1.1916. getting the attention of everyone in the fx market is what has happened with the dollar lira. the lira weaker against the dollar, up by 10%, and we are just down and ate handle. a hike from turkey, brazil, and may be more to come from russia. from new york city, this is "bloomberg surveillance." ♪ (announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen

tom: europe is one of those regions. it is not the bet into q2 but the complete lack of visibility into q3 or q4. lisa mentioned india and the challenges there. it is such an interesting stew. it is why i go back towards these earnings. talk 10% real gdp, you have to look at these juggernauts. they actually matter this time around. jonathan: some convergence maybe . that is captured by the 121 handled by the euro-dollar. lisa: i do wonder how much that could be stymied. jonathan: from new york city this morning, good monday morning. i am jonathan ferro. this is bloomberg surveillance. ♪ >> in india, coronavirus infections hitting record highs. the government reported 352,000 new cases. crowded hospitals are turning away patients because they are running out of oxygen and beds. european union is set to allow american tourists to visit this summer if they have been vaccinated. the president of the european commission tells the new york times americans need vaccines approved. the fed is expected to taper its bond buying p

going to europe, where the lockdowns are back. derek halpenny saying the ecb has an excuse to be behind the curve. >> if there is any central bank that has credence her credibility in terms of its guidance of being toward the back of the queue in terms of rate hikes, it is the ecb. it has a solid, fundamental reason for being much more delayed and tightening. i think that has further to go. top of that what is happening with covid, and i think you could get another readjustment. jonathan: let's bring back in the team. priya, i want your view on this. priya: i think the whole covid case surge is a reminder the pandemic is not exactly over. for the ecb, they have suggested the emergency program is going to end. program is still ongoing. we think in december they are going to increase that app program. the ecb has a new framework in place. i think they want to separate out the end from the first rate hike. they do not have as much of that inflation fear. we think they are going to suggest being well behind the curve in terms of infla

from you western liberal democracies here in europe. lisa: what is the significance of a four or five hour meeting between vladimir putin and president biden? the idea is that the kremlin did indicate it would be that long. maria: they did say it is going to be 45 hours. there's a lot to talk about, and it is always better to do it in person. vladimir putin, today there was no power move from vladimir putin. he was on time. his security was much smaller, and he had a handshake, saying i'm happy we are doing this in person. they are stuck in this building right behind me. we are expecting a four hour meeting. a lot of things to go on in here. the significance, it shows that there's a lot on the agenda, but for the u.s. delegation, this has been such an exhausting trip. vladimir putin here today. president biden has been on the road since friday. you can imagine that the u.s. delegation is extremely exhausted here. nonetheless, the americans say they are really ready to go for four or five hours if that is what it takes. romaine: maybe gi

the reopening trade in europe seems to be going strong. if you take a look at high-frequency data, it is already bleeding into second-quarter data. it is not necessarily even waiting for europe to find some sort of agreement on travel. will it be enough? does the u.s. exceptionalism story withstand or do people start to care about this record trade deficit that only seems to deepen as we get chip shortages and delays in shipping times? jonathan: george sarah vallow's at deutsche bank looking for 1.25 at some point over the next year. lisa: mark mccormack x-ray was saying he could see this eventually becoming -- yesterday was saying he could see this eventually becoming where you see an ongoing story of weakening in the dollar. timing has always been such a tough issue. jonathan: dollar strength of the story this morning. good morning. let's get you some price action this wednesday. equity futures down 0.9%. i always think, have i got that right? bond markets, 1.6540. talked about the dollar strength this morning, replacing the dollar weakn

battle lines drawn in europe. finance ministers diverge on whether spending limit should be imposed. u.k. growth grinding to a heart as the delta variant hits the reopening and consumer spending stories. today we are down a little. we are down by .2%. it has been a flat

versus listed in japan or europe. the more traditional sectors that are not tech oriented is where i am. matt: i am sure you are not betting against the united states but on other countries where you see undervalued assets. where is that? patrick: i have been talking about it for a year. the companies have performed incredibly well and every time i have been on your show the last 15 months i talk about -- i don't get my head around trading four times earnings. how negative do things have to get for shipping rates to really make it be a four times earnings? it is probably up 60% per earnings are growing as fast and it is incredibly cheap. i do think if a structure spending will happen in the united states. i think europe will get around infrastructure spending, japan as well. i think steel is cheap. companies trading at six times earnings. there are companies benefiting from the global recovery but they are trading at very low multiples and they have higher potential in my opinion. jonathan: of those companies, some of

, most of europe is still closed. but wi -- but when boris johnson announced his plan for reopening the u.k., easyjet saw 330 4% increase in bookings that night. because people are sick of being home and cooped up, and they want to get out and about. we are more worried about europe then we are about u.s. airlines because of that, because europe has been so locked down. i think also, people don't want to wear a mask for eight or 10 hour flights. jonathan: they are totally done with this. before we move on, we've got to look back at where we were. i remember talking to you in the depths of this crisis. it was depressing. the likes of warren buffett dumped his airline stocks and said the world has changed. so many people got this wrong because so much is coming back so quickly. why is it so difficult to get a read on this industry? helane: it always has been, for almost the four decades i have covered this industry. two or three good years, maybe one great year, and then four or five so so or bad years. it is so cyclica

so it is not unique to europe. it is happening because we have not been making substantial investment in the ability to supply and deliver power and natural gas around the world. guy: we have made huge investments in europe in the form of nord stream 2. it is finished. it is about to be certified. my real surprise at the moment is there's not a lot of nat gas coming out of russia. is that going to change? how much of this is political? jeff: the disruptions were due to technical failures on pipelines now the big question is when will those be resolved. you have to ask how much more gas is sitting behind those pipelines. you're seeing the same issues in oil as in other markets. we have not been making big investments in other types of long cycle activities around the world due to poor returns, lots of uncertainty about the forward. what do you know to invest in when the uncertainty around climate change is as high as it is? all of that has discouraged long cycle investment. so what do we favor? short cycle investmen

jonathan: we've got to hope europe is open. in the united states, a conversation about pushing forward with widening eligibility. tom: international travel, what are we doing about jfk as a start? jonathan: maybe we start opening things up on the international front. from new york city this morning, good morning. equity futures up 13. yields lower by a couple of basis points. this is "bloomberg surveillance." ♪ ♪ >> savings rate i expect to stabilize at a much higher rate than it was before the pandemic. >> while traffic may continue to be weak, sales are improving. >> at some point in the second quarter, i think we hit that peak. >> where there is danger is in some of these markets that have been swept up into a speculative frenzy. >> we are early in the economic expansion. we are still officially in a recession. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: some bond market stability. from new york city for our audience worldwide, good morning. this is "bloomberg survei

anticipating better days in europe. not quite the way we did in the united states, but getting there slowly. tom: we will see how the trend goes through earnings season. a lot of good economic data on this friday, labor data this morning. right now, sarah house with us from wells fargo, their senior economist. we're thrilled she could join us. i really want to go to one part of your note which takes me back to john taylor stanford and that is anchored unanchored. how close are we to unanchored inflation? sarah: i think we might be closer than the fed really thinks right now. i think, importantly in terms of how much lead time the fed has in terms of whether inflation expectations are getting away from that, it is short. it is very short and they do not -- inflation expectations for all of the focus the fed gives on them is not a reliable indicator in the short-term of how quickly inflation -- it is very much informed by the current inflation environment. as we see inflation heat up, expectations could get away from the

it's the same thing in europe. it's the sum total of europe subsiding. what does that mean for chairman powell? jonathan: that's the european situation and we reopen the bond market stateside. this treasury market has been totally whipsawed. lisa: the expectation is for that to continue. the implied volatility and treasury yield have risen to the highest since the height of the pandemic. why are stocks not responding more to the volatility we are seeing in bonds and the rise we have seen in short-term yields? jonathan: any fed speak today? lisa: john williams is speaking from the new york fed stop jonathan: let's get so the new york market was closed. yields are higher by three basis points, higher on the front end as well. we will touch on that a little bit later and crude is down for another week. a third straight week of crude grinding lower. that goes back to march of this year. tom: i looked at the chart this morning and it is a grind lower. the sum total of inflation seems to be a lesson learned this week. not just about oil or rent, it's the sum o

to europe. sure enough, the approach to play the uneven pace of restart also replicate a difference in material earnings growth in europe and the u.s., and now looking ahead to 2021, the uneven pace of restarts is washing through a little bit. if you look at the earnings expectations difference across the u.s., europe, ranging from 12% to 15%. so instead, we see actually what i just talked about, this combination of the real rate and dynamic growth in supporting equities across the board. we want to think about the cyclical sectors, as well as central growers like technology and health care. we l -- wei li, thank you. the s&p 500 up 25.4% year to date. lisa: the most outdated call heading into next year i think is overweight europe. we have heard this from some people, that europe is going to be on hold from a policy standpoint. how this plays out will be pro europe. jonathan: we will get the policy view on the fiscal side from isaac boltanky. we have a record high to start the week on the s&p 5

on europe, and i think it is because europe realized too much on low interest rates -- europe relied too much on low interest rates, and low interest rates are not helping them. alix: i wonder if saying the word significant, even though there is no definition, is that enough to keep on yields low enough to wait until we get that fiscal zone at the end of 2022? david: i think europe is going to recover as the pandemic comes to an end. this is a guaranteed recovery all over the world as the pandemic were seeds. you never get -- pandemic recedes. you never get that, but we are getting at this time around. they will borrow and make investments ahead of rising rates. monetary policy is most powerful when people expect rates to go up, not when rates are low and people expect them to never go up. i don't think it does one ounce of good for stimulus. i think the ecb ought to be working more closely with european governments on trying to figure out ways of accelerating a reopening and vaccination program for europe, but also perhaps they could take a leaf out of the u.s. book on low inflation