boris johnson and ursula von der leyen meet over dinner tonight. will it be enough so they can reach a brexit deal. a new stimulus deal could be on the way. treasury secretary steve mnuchin presents a new $916 billion relief proposal. it's the first move by the trump administration since election day to break a months-long standoff. and investors day at deutsche bank. -- he willr from the be quizzed and quizzed about consolidation. good morning, everyone, and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. you i am going to spare just because it is your birthday. everyone is excited about your birthday. i know you are hoping because it is 2020 it doesn't count, that you don't have an extra year. but, tom, happy, happy birthday, not only from me at from the whole bloomberg surveillance team. can wearman in -- you

a bowtie with class. how are you celebrating? are --e tom: we are celebrating by living the pandemic. live incredibly romantic lives. we get in a car and go to the office, get in a car and go back home. francine: i'm trying to get you music. ♪ happy birthday we will, tom. one i will give you birthday story, and this goes off of bob dylan's $300 million deal with his publishing yesterday. the national skyline, which when it came out i believe in 1968 or 1967, i can't quite remember, absolutely changed my life. it was an extra neri benchmark in music recording, and it was great to listen to that -- it

was an absolutely extraordinary benchmark in music recording, and it was great to listen to that. we gave youthink like the -- maybe we have a brexit party. let's get to first word news with ritika gupta. good morning. the trumpet ministration is making its first move since election day to break a long standoff over coronavirus relief package. treasury secretary steven mnuchin plans call for $916 billion in spending. it would include aid to the states and liability protections business. nancy pelosi called it progress, but she said it should not disrupt negotiations already underway. the u.s. government has an ambitious plan to vaccinate most americans by next summer, but it rests heavily on two coronavirus shots. u.s. regulators will not get to rule on them until early next year. astrazeneca and johnson & johnson together would provide

up to 200 million doses in the first quarter. the supreme court has dealt a sharp blow to president trump's efforts to overturn the election results. it rejected a request by allies to overturn joe biden's victory in pennsylvania. the high court decision came in a one sentence announcement and didn't say whether any justices dissented. british prime boris johnson heads to roast -- heads to rescues today on a mission, meeting with ursula von der leyen as both sides tried to save brixon negotiations. if there is no deal by the end of the year, u.k. faces a number items.ging 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, i'm ritika gupta. this is bloomberg. tom: thanks so much. deutsche bank out with some headlines. we will have more on deutsche bank through the morning. it is their investor day, and

they look for a better tone. what gets my attention in terms of data in deutsche bank is their advantage by the alpha we are seeing now, october trading revenue up 10%. november trading revenue up a solid 23%. you see it in this great bull market. upures up 10, dow futures 1.09. the vix did not come in yesterday. it should be a 19 vix. it is not. it will be fascinating to see what the vix does today. 20.57. stronger, newso strength, 19.72. an honor to have augustine carson's with us. a couple of things on the banks. we expect that interview from deutsche bank chief executive coming out shortly. it will be interesting to know what he wants to do with the i.b. if there is any mention of some of the bonuses for traders in the investment bank.

the other news story is that the chief executive officer literally just started, also faces an investigation related to money laundering at ing where he was formerly chief executive of the dutch bank. global stocks climbing. there is hope of the u.s. stimulus, and that seems to overshadow fears about resurgence in the coronavirus, tom. tom: that will be interesting to see. why don't you bring in the gentlemen of the low interest rate environment? francine: i'm delighted to be joined by steven major. stephen, i was going to let tom argue the first question on treasuries. it is appropriate for him to speak with his favorite guest first. and you look at what we have heard from a number of policymakers, what is the case right now of holding treasuries into 2021? what is the return going to be like? ofwe are probably at the top the range, francine, and you have to show some strength to

your conviction here, because it is difficult to imagine, in my opinion, a sustained break above 1%. if we are in a range of 50 to 100 for the next six months, and i want to buy every time we are near 100, that could be a winning strategy in the first half of next year. i don't think that treasuries can sustain a move above 1% because that would be openly challenging the fed's current forward guidelines -- for guidance. they are telling us they are on hold for three years or maybe even longer. they are looking through the inflation bump that is going to come in the next few months. so the market is challenging that. thei am going to go with lower for longer thesis that we have had in place for a long time now. steve major, one of our listeners chimes in.

let's show the comments of jamie dimon yesterday. what is so important here, jamie dimon, who is a really shrewd guy, said i would not be a buyer of treasuries. i think treasuries at these rates, i would not touch them with a 10 foot pole. then you go back a few years in a statement you had better be prepared to do with rates 5% or higher, it is a higher proper ability than most people think. not to pick on my good friend james dimon, but steve major, this has been the zeitgeist across her modern career, and you have nailed this. what do the inflation is does -- istas get young -- get wrong? who took that position have lost a lot of money, i can imagine. -- with aview mrs. is -- misses is the strength of

what that view misses is the strength of the fed itself to keep rates low. in fact, i don't think the fed has a lot of choice but to keep the rates lower. the inflation isn't really there to justify higher rates, and then they are saying, even if it was, they are not going to hike the rates. the point is the u.s. and most other big developed countries cannot afford higher interest rates because they have borrowed so much money. there is a very clear association between increasing debt levels and lower interest rates. that has been going on for 20 odd years. i don't think that has suddenly broken down in 2020 or 2021. arehat the inflationistas missing is that important link, and nobody has explained to me exactly how inflation goes up, apart from showing me some chart of money supply of inflation from a 1970's textbook. we need to hit here the

explanation as to how the inflation rises. it has to be to do with wages. it is not going to be ordering enough food or fx. it has to be about the thing that matters, and that is wages. how do wages go up when so many people are out of work? tom: this is the heart of the matter, and i want to make clear that jamie dimon has underfoot research tip ability, and joyce chang and john normand and the rest of them have called for sustained lower rates, like mr. major. steve major, you are saying the output gap is there, conventional economics works, and the wage gap cannot move. right? steven: until you close the output gap come until you have taken the cycle away, it is difficult to see how inflation goes up. as recently as 2012, the fed had a forward guidance in place. inflation went comfortably above 2%. unemployment was stuck at 8%. they did not hike. we have the same situation now.

so they are telling us that they are ready for inflation to go above 2, to try to drag the moving average toward that 2% number over time. unemployment is not going to go down. with janet yellen in her new position, the expert on labor market economics, you would have thought that people would start to get this by now. it matters to get the unemployment rate down. it matters to get all the minority groups back to work. only then, and with inflation above the average, can we start talking about higher rates. but we are a long way from that, tom. qe actuallyat does do? does it stave off deflation, or does it spur inflation? , jeff gundlach from double line was expecting -- as spokethe inflationist

about money supply with qe and inflation a decade ago and they were completely wrong. how itave changed as to works. most of the academic work on more practical, seeing qe is a signaling device, a channel of signaling. i look at it as skin in the game. the central bank is not going to hike rates to a certain position. i don't think qe is any kind of magic potion. it is just -- there is no magic money out there or any silver bullet. inflation just doesn't come through when you have got such a large output gap. just because the balance sheet is bigger doesn't affect inflation risk. tom: steve major with us here. we are thrilled he is with us from hong kong, from hsbc. he has been absolutely brilliant over the years, with interest

rates lower for longer. we will have extensive conversations with christian sewing, literally and 20 minutes. that will be must listen for all of global wall street. a better picture for deutsche bank as they pick up the pieces out of difficult years. dell futures up 91. -- dow futures up 91. this is bloomberg. good morning. ♪

tom: good morning, everyone. "bloomberg etf iq europ surveil" important, viewership for football has gone through the roof on the pacific rim,

particularly as hong kong and hsbc leaves with their best and brightest. steven major relocating to hong kong for hsbc. quite a statement from the bank on their research capability going forward. we have the political issues of hong kong. i don't want you to comment on that. i understand that's inappropriate. but i want you to comment on the dollar as a compensating factor given interest rate movement. you do follow foreign-exchange. because of that, do you buy weak dollar given the calls for higher yield? a very interesting fact, that total return for dollar-based investor, whether he be holding chinese bonds, european bonds, u.k. bonds, u.s. bonds, whatever, in dollar terms has been between 7% to 10% this year so far. so with a broad-based index of everything, you have had 7% to 10%. in the case of buying china,

recently of course, you will know that a good 5% of that has come from the currency because the chinese currencies have had a good run. that is after the dollar probably went too far. so for a fixed-income investor, fact that there is no yield apparently, apparently there is no yield on offer, you can still make 7% to 10% total return because you have duration, fx, and sometimes the spread. so, you know, that is how i am setting up for 2021. i'm thinking with a bit of skill and careful judgment of the ranges, we can look at trying to generate 5% to 10%. i was thinking about this with the treasury markets. 50 to 100 is probably the range. a dollar-based investor does not have to worry about the dollar. obviously an investor in asia or europe does have to. the unambiguous

rise of the dollar that we saw in recent years -- that is now being challenged, and it is becoming a lot more nuanced, a lot more complicated. lunch at the ritz-carlton or the hong kong, the mandarin, the ritz-carlton close to the water, with a fancy mandarin redo, what i remember clearly, steve major, is counting every basis point in 2006. we had this disease of trying to do better. if i go to hsbc, i will go -- i will make for more basis points than at j.p. morgan. are we back to that silliness now? steven: credit is starting to get there, actually. they are quite compatible with that period. it all happened in 2008. so we look at the probabilities, and we think that it is not a bed point right now to chasing investment grade spreads

tighter in europe or the u.s. in fact, you're unlikely to get paid well for that kind of trade at the moment. may be selective investment in high yield looks good, and we are thinking maybe we have a preference for europe over the u.s. at the moment, because you have a kind of zombie fixation -- the paradox is that companies are not failing because governments of central banks are supporting them. that is good for the creditor, good for the investor. it is not very good for the economy because you've got unproductive companies surviving. so there is the paradox of zombification. but the credit point you made us right. the ig investment rate looks too tight. francine: thomas having lunch at the -- tom is having lunch at the -- steven and i will have lunch at the real place.

the ecb and what they are doing with a lot of these yield curves, have date effectively and effective become a yield curve controller? steven: yeah, they said they are not doing it, and i think the lady doth protest somewhat. they keep saying they are not doing yield curve control, but they are, aren't they? they have control over the short rate, they have good insight into the duration of the bonds they hold, one month before we are -- before we in the market know what they've got because they report a month later. they have a huge amount of influence on the shape of the curve. by their own purchases going up and down the curve every day explicit yieldt curve control like the australians or japanese, where you have a target and a pure number. tableey have an under the

kind of yield curve control, yes, and they can move up and down the curve. francine: only steven major of hsbc can actually quote hamlet, and i think spoken but queen gertrude, when talking about -- tom: hamlet got the third shot yesterday. hamlet got the third shot afterwards. francine: it's amazing that a person from coventry called william shakespere, got the second shot of the vaccine. hour, up in the next gabriela santos, j.p. morgan asset management global market strategist. we will talk to her about emerging markets and treasuries. sick :00 a.m. in new york, 11:00 a.m. in london, -- 6:00 a.m. in new york, 11:00 a.m. in london, and this is bloomberg. ♪

ritika: this is bloomberg surveillance. japan's softbank is debating a new plan to go private, the plan calling for gradually buying back shares until thunder masayoshi's son has a big enough stake. then he could squeeze out the remaining investors. softbank is not commenting. elon musk is tired of being taken for granted, so he is moving from california to texas. billionaire cofounder of tesla told the wall street journal that california has become complacent with its status as an economic giant and is taking too much for granted. tesla is headquartered in northern california, but musk is

building a factory in austin, texas. that is the latest bloomberg business flash. francine: thank you so much. we are getting breaking news out e.u. recovery proposal. we understand polish deputy premier, poland and hungary have agreed on an e.u. deal. we are trying to figure out how it ended and what the discussion was on and what the agreement was on, but they were discussing a possible end to the new budget standoff, which could mean that the block stays as one. we could see a possible end to the standoff, but unclear at the moment to me what was agreed on. i would dig deeper and bring it to you as soon as i find out. tom: a little lift to the euro on that, ever so slightly, euro stronger there on those headlines. we can see if we can breach ..2145-ish dell futures up 80. part of that theme is better

global finance, which means better deutsche bank. we will have a conversation with christian sewing of deutsche bank. look for them momentarily. thrilled to bring that to you on bloomberg, with the sharp questions on the status of his investment banking, state of his trading, and his relationship with the institution of germany. these stay with us. futures up eight, dell futures up 86. i look up the real yield because i have to, -.97%. this is bloomberg. good morning. ♪

francine: this is "bloomberg surveillance" with tom and francine from london and new york.

the trading unit surged in the christian sewing sat down with our german bureau chief. christian: i am proud what we delivered in stable businesses. because of covid and a headwind of the interest-rate, it was a difficult year. in-line withwell; our plan on the revenue side. the underlying growth in the stable business is strong and resilient. reporter: in the investment bank, there is a clear outperformance. potentialtimated the when we came up with the strategy. christian: we performed well in

those businesses where we decided to be strong; to stay in the business. we reengaged with client. the halo impact from exiting , thethe equities business sustainability of revenues is very strong. we are happy with the performance. it does not change the strategy. reporter: if we talk about the outperformance of security -- late october, you increase the revenue to significantly higher. the fixed income trading business, the fourth quarter, has the good momentum continued? could we see double digit growth in the fourth quarter? christian: we still have a month ago. the momentum was satisfying. we have seen continuing good

momentum in the investment bank. one year is over when 12 months are done. we have to go through december. i am satisfied at the time being. reporter: it could be another good quarter for the trading business. christian: we are always trying to get better. of course, it is our goal. october-november, good momentum. now, we have 22 days to go. that is what we're doing. therter: are we nearing peak of the trading boom we have seen? what does it mean for revenues and the investment bank in 2021-2022? christian: it is clear some outperformance has been covid related and market induced. no doubt. fact in thosethe

businesses where we made changes last year, and fixed income, the financing business -- where we said this is the strength of deutsche bank -- it will be a global trend, there is more financing demand. deutsche bank is a powerhouse in financing. we clearly outperformed. today, you will see in detail what kind of revenue stream is sustainable in this regard. a good part of the outperformance we have seen in 2020 is sustainable. we are confident for the investment bank in '21-'22, though acknowledging, some of the outperformance was clearly driven by the situation. reporter: the corporate and private banks; there is an impact by the pandemic and there continues the low interest rates. how much more pessimistic are you about those areas compared

to two years ago when you started thinking about the strategy of deutsche bank? christian: both have shown how resilient and strong they are in their markets. they have done everything to inigate additional headwind, particular from the interest-rate environment. the corporate bank has passed on negative interest rates to more than 70 billion deposits; far more than we anticipated last year. that makes us confident the underlying growth we have seen in 2020 -- if we continue to do we will achieve revenue targets for both units. further on, the headwinds from the interest-rate will soften in '21 and in the following years. daniel, onean with of the great great stories and corporate finance, commercial sewing, starting

as a 19-year-old trainee with deutsche bank long ago and far away. matt miller joins us now, out of berlin. i look at the success here. is it all clear for deutsche bank? reporter: definitely not. they have done really well. largely due to a jump, on the , and this is a ceo who wanted to rely less on the investment bank and more on lending. the lending continues to be problematic. deutsche bank cursed by the negative rates of the european central bank, long before christian sewing took over the top job. that curse continues to hurt them on the lending side. 91,000 employees.

how many more to go? you are in the heart. the motion of domestic germany and deutsche bank. where will the headcount be in five years? us howr: they have told many jobs they want to cut. they are ahead of schedule on that. on the cost-cutting side, he is doing really well. in fact, he has been helped by the pandemic. they need to spend less on office space, on travel. i have spoken to him about this in the past. they are ahead of schedule. they are doing great in terms of debt trading revenue. it is the lending side they have got to change. they need a change in the macro picture before they can do very much about that. francine: good morning from london. will we see consolidation talk again of entities within

germany? reporter: it is never going to end in europe. sure so much about germany. permanentlyas nixed after they went through the initial planning stages. you will see more talk about consolidation across borders. none of the ceos who run the biggest banks are willing to take the first step because they don't think europe has taken enough steps toward consolidation itself. francine: is deutsche bank too over reliant on the trading arm? reporter: i am not sure. them, been a tailwind for they help at a time when analysts thought savings targets were too ambitious and this has

helped them meet those targets. can he continue that performance? one of the most interesting things out of daniel's interview; great interview, by the way, my bureau chief, talking to the ceo -- you will continue to get paid making these gains for deutsche bank. at a time when bankers are wondering if they will be rewarded for their work, christian is saying they can expect to be rewarded by him. tom: i could care less about deutsche bank right now. you, more than anyone i know, has nailed bitcoin, the move up, the skepticism, another move up. is the move up this time in bitcoin different than the move up the last time? where you created the miller fortune? reporter: if i could remember my password, i would have added money. [laughter] stable or ats more least that is what i hear in the

bitcoin community. because of the underpinnings. by the way, i want to say, i will never forget -- completely unrelated -- when i first met you 15 years ago, you visited me at finsbury square, you had just finished flying on one engine, you took me over for the beverage of my choice to alomar one and explained the game of hockey to me -- i want to say a heartfelt happy birthday to you. tom: the magic of birthdays. francine can speak for this. after the first child, there is immediacy of getting to the next child to support the first child. francine and i expect news here at any moment. francine: i remember the first time i met you. it was over a drink of our choice. [laughter] every 30 seconds, you would say, you have to read about economics and turn around and say, where

is libor? where is libor? i always associate them. tom: that is even worse. associates libor as well. libor doesn't matter anymore, neither does my birthday. matthew miller, thank you. ritika: happy birthday, tom. stephen mnuchin is trying to break the deadlock over a new coronavirus relief bill. he called nancy pelosi with a $916 billion proposal that andudes aid to states liability protections. progress.d the offer they are unhappy at does not include enhanced unemployment benefits. democratic lawmakers balking at joe biden's choice to run the pentagon.

congress would have to approve a waiver that bars military officers from leaving the pentagon within seven years -- from leading the pentagon within seven years of retiring. theu.k. will drop tariffs eu imposed on $4 billion of u.s. goods as part of the long-running dispute over legal aid to mayor cap and factors, boeing and airbus. it will set its own tariff policy when it completes the split from the eu at the end of the month. global news, 24 hours a day, on air and on quicktake from bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. tika gupta. a grou this is bloomberg. francine: tom and i really looking forward to this one. policy,talk monetary liquidity, bubbles. great conversation coming up with mr. carson. this is bloomberg. ♪

tom: "bloomberg surveillance" good morning everyone, francine and tom in london and new york. thrilled you are with us. lots going on, particularly in washington. we will dive in. enjoy. carstens, we talked on bitcoin, cyberspace. right now, where we are in monetary theory. we can do that, because of course, his heritage with mexico and their monetary efforts, particularly going back to university of chicago, long ago and far away, where he took his

theis on the mexican peso; dynamics of the peso. we are thrilled he could join us. research facility for the central banks. dollar about the weak and how it will enfold central banking. is it a destabilizing force for 2021? agustin: i really don't think so. it is a phenomenon to be watched. it is a natural result of monetary policy by the fed. yieldlects search for particularly, totioned to the peso,

eastern nation emerging-market cor currencies. part of the appeal is bringing .ssets, portfolio investments a very immediate manifestation is the appreciation of currencies of these countries. for these countries to see appreciation of their currency, tends to be positive, because ,hrough the financial channel the depth becomes less and the debt becomes less and the financing of investments tend to be better. that comes with risks. at some point, there can be a change in sentiment. there can be news coming from monetary policy.

so far so good. tom: dr., the money question right now is within this pandemic in the application of all the debt going on, will we see smooth transfer to a better world? will the reaction functions of central banking be controlled and stable or do you worry about instabilities and juxtapositions? agustin: we have to recognize central banks have gone out of their way to help us make this move. if we compare the way monetary thecy is made today, central feature is there a lot of information, there is a lot of forewarning. when i studied in chicago, he mentioned this, my professor used to say for monetary policy to be effective, you need to

generate surprise. now, it is the opposite. you want people to understand what you're going to do. you are going to anchor expectations based on the actions you undertake. the central bank authorities, especially the fed and other central banks have been very agile to, more than , noting, disrupt markets to disrupt markets. if we see a limit, i think with the central banks are doing is to try to stay true and whether the scenario into the future, the main shock generating the dynamics and the economy, and

the pandemic is solved. francine: how much of a risk is there because of the liquidity by central banks and the search for yield, we are seeing bubbles? are central banks and policymakers aware of these risks? agustin: there is no escaping, if you don't have the critically it canidity, certainly, expose assets to mispricing. the authorities are aware these are risks. it needs to be watched. everyone is being very careful. someinly, today we can say assets may be mispriced, some more than others. is wes stage, the reading don't have systemic problems in our house. this is a risk. this is something that needs to be recognized and watched very very carefully. francine: is there an economic

case for central banks canceling bonds they bought during the pandemic? agustin: no, there is not ground for that. i come from a region where sometimes that has been attempted. it has been catastrophic. it might be good politics, short-term. it is very bad economics. worried: what makes you about terrible of economics? there is a recovery fund. is there anything you see as a main risk on the horizon we are not paying enough attention to? the political sphere? damaging credibility in the economy? policy mistakes from central banks? guess what you are referring to is the proposal around that the holdings of central banks harboring debt should be canceled. thate same time, if you do

at any financial institution -- central banks of capital -- if you go on in this course -- at the end of the day, what keeps credibility to the central bank is the backing, either implicit or explicit, but if you are to do that, at the end of the day, you are eroding the trust of the system we have today. thank you so much for joining bloomberg today. much more coming up. futures up seven. dow futures up 89. important interview on the state of private equity. david sandberg with apollo in the next hour. this is bloomberg. ♪

francine: this is "bloomberg surveillance" with francine and tom in london and new york. is on thehe focus

news of the stimulus. a lot of focus on what will happen with brexit. boris johnson traveled to brussels to have dinner with the european commission president. stocks overall rising. near record highs in certain countries, touching records. hopes for this stimulus deal overshadowing fears over coronavirus. treasuries with the dollar. pound. euro-sterling, for the moment. tom: dinner tonight on the 13th floor in brussels. wonderful building. love it. write down from where we usually broadcast in brussels. foreign exchanges. we have under talked it today. pacific rim stronger. adx, blended indexed butting up against new strength, much like the equity market. mexican peso, keynote this

morning, 19.71, to remind you, four years ago, it literally traded off the trump-clinton debates in the vicinity of 20.4-20.6, something like that. strength,ull stick of showing some of the dynamics of the key dollar. gabriella santos, j.p. morgan asset management. international investment. she will explain the courage. this is bloomberg. ♪ every year, we set out to do one thing:

help the world believe in holiday magic. and this year was harder than ever. and yet, somehow, you all found a way to pull it off. it's not about the toys or the ornaments but about coming together.

santa, santa, you're on mute! just wanted to say thanks. thanks for believing. continues,ull market

2020, up 12%ays, per year for the past decade, near 11% per year since i was born. let's get it straight. it is not a single digit stock market. america, well, they need more within one vaccine. perhaps, johnson & johnson to the rescue before summer. order, all right, i have a few questions for this mr. trump, what is this? judge judy? the supreme court says we will not hear the case. good morning. "bloomberg surveillance" with tom and francine in london and new york, dinner on the 13th floor, i cannot pronounce it -- whatever the beautiful building is -- in brussels, it is really cool. she lives there in a private apartment. tiny tiny private