francine: "prepare for no deal." that is the warning from boris johnson as the mood sours on both sides of the channel. both sides warn no deal is now likely. pandemic support. european leaders approve a 1.8 trillion euro stimulus plan after resolving a standoff with hungary and poland. and chinese the 30's have detained a bloomberg news staff member in beijing on suspicion of endangering national security. this is "bloomberg surveillance." good morning, everyone. i'm francine lacqua in london. tom keene in new york. the news flow is absolutely terrific. we look to a no deal brexit, which is what we have been briefed by both sides. we were also briefed i people inside the government here. we'll have to see if there is the political will to find an agreement. it could happen in the next couple of days, it could not happen at all. leadersat the e.u. summit. i know the council president is

briefing reporters about the deal, about the recovery fund. he will touch on brexit and talk about climate change. the two-year yield in the united states, finally stuck at .14, -- which was stuck at .14, finally gives way. shocking yields in europe, it is a most unusual time. is.cine: it certainly yesterday what took me by surprise was a pretty big swing when it came to crude prices. let's get to first witness with ritika gupta. ritika: the u.s. is one step closer to getting a coronavirus vaccine. a panel of government advisors has approved the shot developed by pfizer and ban tech. -- and biontech. the fda could give it the final word in days. on capitol hill, another book for the senate relief plan. mitch mcconnell and top lieutenants are signaling it will get support from a majority

of republicans. the stomach block is how to limit liability of employers in connection with coronavirus infections. and a warning from british prime minister boris johnson, saying business and the public should prepare to leave the european union single market without a trade deal. johnson says the u.k. will continue to seek an agreement, but he warned the e.u.'s demand that interchanges in his rules is a major obstacle. authorities in china have detained a bloomberg staff member on suspicion of endangering national security. haze fan is a chinese citizen, seen escorting from her apartment monday by officials. the caseuthorities say is under investigation and haze fan's rights have been fully insured. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm karinauntries, mitchell. this is bloomberg.

tom: thank you so much. let's do a data check. it is the oddest december. i always say that, but this year really unusual. we will talk about washington in the next hour, 11 brussels in this hour. i know maria here in the moment -- .12 would be really something. we have not seen that yet. stick, 23.68,full showing some of that thursday-friday tension in the market. dollar with a bit of strength. 1.0398 -- 103.98. thatine: it is very clear markets don't really know what to grapple with. prospects for a stimulus deal in washington is probably fading a touch. coronavirus cases are spiking, and we are seeing stocks retreating. i also want to show you oil. we just managed to put it in. we are treating for a

pre-pandemic high on the dollar rising. the other thing is brexit, and the brexit play is either cable or euro-sterling cable at 1.3204. there is a lot of talk that there are too many differences between the u.k. and the e.u. boris johnson warned late last night that we should prepare to leave the e.u. without a trade deal. overhauling most of the gains after the e.u. approved a historic stimulus package. efforts to strike a deal -- a brexit deal before sunday, continuing in brussels despite faltering negotiations. we heard from ursula von der leyen, warning of a no deals lit in the u.k. as -- of a no deal brexit in the u.k. let's bring in maria tadeo from brussels. it seems that the e.u. is playing it cool. under the surface, are they panicking that there is a no deal, or are they just fed up? maria: they are playing this very cool.

--opean leaders have been in have been locked in for 20 hours. it has been an all-nighter. they just spent 10 minutes talking about brexit, and this is an intervention from ursula von der leyen, the head of the european commission, briefed to say i believe at this point no deal is more likely than a deal. so european leaders have not talked about brexit at all, and that is a big contrast from what the prime minister said yesterday, saying we are ready for a no deal, but i'm willing to go to paris, berlin if that is what it takes. he is willing to get the political leadership here in brussels involved. but that just didn't happen. they have been talking about everything but brexit. tom: there seem to be three stumbling blocks. fishingwant to go to because you saved me yesterday turbo as well.

are they miles apart? key fores, and that is the europeans. it really is about trust in the u.k. can you trust orest johnson, that the u.k. government -- boris johnson, that the u.k. government will be faithful? can you trust that they are going to play by the playbook? the answer right now is just not clear, and that is a problem for the europeans. it is not the fish when it comes to brussels, it is about the equivalent of being able to trust the u.k., and so far they don't have what it takes. and a lot of this is the optics. it is about trust, and right now the european leadership will tell you that they don't trust it. a lot of this has to do with u.k. and a number of regulations that are put on the table. they put it away, they brought it back on. perhaps that is the reason where boris johnson wants to speak to boris johnson -- two angela merkel, but that moment did not

happen today. francine: when you look at what some of the diplomats are breathing in, we are hearing from angela merkel and it will be interesting bashar briefing and, we are hearing from angela merkel and it will be interesting what she says. when you look at some of the concerns that diplomats are saying, when it comes to brexit, they could just delay it by a couple of weeks and months and then go back to negotiating in 2021. who has the appetite to just keep on dragging this? francine, based on the information we have, no one. the brits do not want to get trapped in theresa may's cycle of extensions that were never ending, and the europeans don't want to do many deals. they don't want to get into 2021 having to negotiate in a bilateral way, doing many deals on a number of sectors. that is not how brussels works. they also want to tell you we want to move forward, we care

about green deal, coronavirus. it is not about exit in brussels or continental europe, and that is what gets lost in translation between the two of them. tom: maria tadeo, thank you so much. an exhausting week for you, no doubt. maria tadeo in brussels. coming up on jon ferro's "the open," mohamed el-erian in these tumultuous times. this is bloomberg. futures -20. ♪ the usual gifts are just not going to cut it. we have to find something else. good luck! what does that mean? we are doomed. [laughter] that's it. i figured it out! we're going to give togetherness. that sounds dumb. we're going to take all those family moments and package them. hmm. [laughing]

that works.

karina: this is "bloomberg surveillance." netflixs projecting

growth rate streaming services. kelly says it could have up to 300 50 million subscribers worldwide by 2024 due to an onslaught of program from marble, star wars, and -- from .arvel, pixar, first doordash, than airbnb. the two startups went public and their valuations skyrocketed. that is assigned that both companies could have raised more money than they did. airbnb opened 115% above its ipo, the biggest debut rally on record for a large u.s. listing. experts say the reason for the extreme pops was demand for retail investors and a scarcity of shares to buy. that is the bloomberg business flash. francine? francine: thank you so much. let's talk about everything else going on in the markets, and talk about brexit, the e.u. deal, the stimulus in the u.s.. joining us is peter dixon. we are spending so much time on brexit, and we can see the end of this very long and protracted

negotiating process. but does anyone apart from the u.k. actually care in the markets what happens to brexit? peter: i think in the markets they care. because of the impact on company earnings. if you're a german, french, or italian producer, which has a decent presence in the u.k., then you care. but i think the problematic -- the problem has gone on so long, it has dragged on politically and economically. the people are somewhat bored, and i think you look at market pricing, there is concern at the moment, but the market has only got to act when we see the whites of the eyes of the deal. in other words, you might see a strong ratcheting in sterling, which up to now we have not seen. francine: what does that mean for equities in the u.k.? is this a good time to get in? do you think we will get a deal

at some point? peter: the working assumption has always been that there will .e some sort of transition obviously that is a fairly huge assumption because of the pressure at the moment. so it is probably not a good time to step and he do u.k. that step into the u.k. at all. you want to see where the chips fall. ingres term come if sterling were to collapse, the normal expectation would be large cap stocks perform well, but this time around it feels there are too many unknowns. a lot of businesses will have to rethink their operations, and that will have major impacts on cost and on the bottom line. i think investors will look at the u.k. thinking there may not be a good time to be involved right now. tom: let us listen into the events in brussels. would remain free and

sovereign, if you wish to decide what they want to do. we would simply adapt to the conditions to access to the market, according to the conditions of the united kingdom, and this would apply vice versa. on fisheries, here also we continue to have a gap. we have not yet found a solution to bridge our differences. we understand that the u.k. aspires to control its waters. the u.k. must, on the other hand, understand the legitimate expectations of e.u. fishing, built on decades and sometimes centuries of access. on these and other points, negotiators are working. sunday whetheron we have the conditions for an agreement or not. in the meantime, the commission has proposed four targeted contingency measures today.

they provide a short-term fix to conductivity -- to nativity -- to nnectivity.c cont one way or the other, and less than three weeks? francine: this great -- tom: this great discussion from the continent across the channel to the united kingdom. peter dixon with commerzbank is with us. peter, on and on we go, the overwhelming signal of the theme of this week lower yields top to bottom, including the two-year u.s. giving way, and the german two-year yield is not so castaic. it is not that -- it is not so castic. what does a greater two-year

signal? peter: it is a consequence of the fact that central banks, the ecb, very much at the forefront, are engaging in a policy of financial repression, very much in the way that the fed did in the 1940's and 1950's. they are doing their utmost to keep rates low in order to stimulate the economy and, b, to ease the burden for the government. that is what it signals. that is what -- that is the result of this process. but it is not going to come back anytime soon. the era of low and possibly negative interest rates will be with us for a very, very long time to come. thank you soxon, much. peter dixon with commerzbank as european leaders manage this intractable issue for the united kingdom, the gentleman from , atce managing his message

this historic moment. coming up on "balance of power," historic moments, i should say come in washington. he is a general experience in finance and state department affairs. this is bloomberg. good morning. ♪

francine: this is "bloomberg ." tom and francine

from london and new york. authorities have detained a bloomberg news assistant in beijing on suspicion of endangering national security. on monday, haze fan was seen escorted from her apartment building. according to security officials, she is a chinese citizen stop officials say her rights have been fully insured and her family has been notified. citizens are not allowed to do independent reporting. a spokesperson from bloomberg says the company has been speaking to authorities to get more information. let's get an update from john micklethwait. this we found out recently. what do we know happened? john: what we know happened is that at 11:30 monday, that was our last contact with her from an editor's to view. late that day -- from an editor's point of view. escorted day she was from an apartment by plainclothes officials. since then we have been doing our best to try and find out

exactly where she is, what's happened, to try to get her back. hayes is aery clear, very talented person, very integral part of our newsroom, and we are deeply concerned for her well-being. francine: has bloomberg been able to speak to authorities to understand exactly what they were looking at? john: we have spoken to a lot of people on a formal basis all across the world, in washington, the chinese embassy there, all the way across to china itself. we have tried as hard as possible to find out exactly what we have got. we finally have got the statement from the authorities detailing why they are in involving her the way they are. we have reported that. francine: what do you think will happen next? john: i think what happens next is not entirely clear. we will continue to work as hard as possible to help her and her

family at this time. as i said, she is a very talented and integral part of our newsroom. francine: will it change the way bloomberg report on china? john: not at all. we continue to plan -- we plan to continue covering china and exec the same way. francine: thank you so much. he is our editor in chief and we will bring you up-to-date with any breaking news. chinese authorities detaining this bloomberg news staff member in beijing. tom: thanks so much. let's frame up for you on this friday -- the tradition is to get through friday and read into the weekend. we do not have this luxury at bloomberg news this weekend. there are too many stories around the world. recapitulate the moment as we set up for this friday, and also into the weekend, certainly front and center across the channel is the battle in brussels and on brexit. we are watching that carefully, and we do so with sterling,

1.3223, with some stability, maybe weaker over the nest -- over the last couple of days. story,emely important maybe underplayed here over the last number of days. we look forward to getting an irish perspective here on this great moment. in the united states, particularly for those of you in europe, by the news, for thosewa movable piece including the president of the united states, tweetie well past midnight, i believe as well -- tweeting well past midnight, i believe, as well. number one come our question, as we go to martin shanker at the top of the hour, is the supreme court and what they will act on and do on friday. it is a mystery what we will see out of the judiciary of america on this friday. e.u. leaders pulling in all-nighter.

what we also know is that leaders are brief income as we speak, we heard from the commission president that a no deal split with the u.k. is the likeliest outcome on december 31. i have to say the meeting that lasted overnight was not focused on brexit at all. they were focused on the recovery fund and the green recovery with quite ambitious steps taken by europe as a whole to get a handle on gas emissions. we also heard boris johnson morning u.k. businesses need to prepare for the strong possibility of a no deal spate. the rest of the block is going ahead with ambitious targets on a number of things. if you look at stocks, there is something with the dollar rebounded. oil retreating. there is a big wave yesterday, retreating from pre-pandemic highs and movement off the pound because of brexit chatter. tom cole: the brexit chatter is

out there, and these are intractable issues. one than anything, i see it in bond pricing, fixed income market. -- thes -20, -19 in the u.s. two year yield has given way, and i'm watching the swiss 20 year yield -- one of the benchmarks i look at -- rollover, an ever lower negative yield, -.335. it is not paper -- sport. talk aboute will yields and whether the ecb is becoming a eel curve controller. up next, our conversation with jean-claude trichet. i know he will have a thing or two to say about you and euro strength. this is bloomberg. ♪

good morning everyone as we continue to monitor the markets

and the stories and right now i would suggest given the historical perspective, our most important interview of the week. jean-claude trichet is a careful observer of the ecb. wonderful to speak to you this morning. want to speak to you from an engineering perspective. you knew years ago the idea of the oil in the engine and you better get it right. you have the european financial cbtem that is coming up by action. is the debt market in europe lost the viscosity, the ability to be fluid in the great financial system? jean-claude: it is a pleasure to be with you. ecb is say what the tong is to help the market

be as smooth as possible taking into account the dramatic circumstances where we all are. i would say at least the intention of the ecb is to have a market thatt, conveys the transmission of monetary policy to all of the area. i take it this is what they are doing and it seems to me that they are succeeding not to poorly. he was a great leader and thinker for not only france but the continent as well, i believe you would say that the riskier is europe becomes japan. is europe on the edge of like japan?

you-claude: i have to tell when he wasisor president of the republic, so i join you in honoring a great man, man who not only was a , but also aan .relude to the first g7 that there is a real yearsover the last 10 which is the presence in japan ,nd in europe and in the u.s. and that has to be corrected. it is very difficult. in have a lot of anomalies

the functioning of our economies , inoductivity progress comparison to what we had before the crisis, the growth potential is lower, inflation is much too low despite all of the efforts by the banks, and this is creating abnormal behavior of all the economy of nominal normaland of course at extraordinarily accommodating processes, but they are not taking into account that they have to take --to protect the advanced economy at the risk of deflation. they are doing their job, but they cannot do everything, and i trust the other partners have their own responsibility because we cannot go forever in this

situation. mentioning the functioning of the market before the pandemic, and the pandemic added a dramatic layer to all of the difficulties we had before. francine: good morning from london read as the ecb effectively become a controller? if they would be, i think they would've said it like the japanese have said it. i think they are continuing to and thathey are doing, is to help transmitting in the best way possible the policy decisions and then the additional element of accommodation because we have bad news at the end of the overall pmi the

, and also that europe 2020 one to be much less flattering in the projections than it was before. francine: do you worry about inflation suddenly picking up, and if there is inflation, with the ecb be able to do anything about it by raising rates given the level of debt we have? jean-claude: i think the problem jurisdictions all of the advanced economy. we all hope that inflation with pickup, and of course if inflation picks up, it is a different universe where even with the same interest rates you could have nominal interest rates higher, and i would say i expect -- but you could see the

ofjections, the projections the step of the ecb if i'm not inlaid are very visible even 202020 -- 2022, lower than september projections. we see our we are far away at least in the projections of the staff of the ecb but also the imf, so we are far from going back to the no hold inflation level. also with the solid anchoring of inflation expectations, they have something to do on that. my understanding is that when the time comes, when inflation is picking up, in europe in particular, it would be natural of course to have nominal interest rates higher, and i would not dramatize the way

things will go back to a more normal position. i would certainly say that they would go back to precrisis situation. question, if we could come the eloquent economist olivia blinn chard has led the charge and reflate think. "balance of power." --how does jean-claude trichet reflate? jean-claude: i would say reflation is the rule of the game, the reason why the central banks are so active themselves and accommodating. .he goal is there these centrald, banks are not the only game in town.

i would say something that i already told you, we have bargaining power of labor in had employment that is insufficient and that --low augmentation of salaries, in japan, in europe, i --ld say the appointment employment economies. the u.s. is picking up a little bit. this is abnormal and has to change cannot last forever. an important headline out of china as we continue to report on china, and this from the political bureau. the wall street journal with an important article yesterday among others, the china bullet bureau bows more anti-monopoly

efforts in 2000 20 one. this is really front and center now, what will be the approach and the chinese government on capitalism in 2000 20 one? we will continue our coverage. now karina mitchell. karina: the fda could give the go-ahead for a vaccine within days, a panel of experts voted that the benefits of the shot the fdaeigh the risk does not have to follow the recommendation, but it often does agree with its advisors. four battlegrounds states urged the court to declare the 2020 20 election over. the lawsuit once to overturn results of pennsylvania, georgia, michigan and wisconsin. pennsylvania asked the justices to send a clear and unmistakable signal. is unprecedented.

as we have been reporting, authorities in china have detained a bloomberg news assistant on suspicion of endangering national security. haze fan was seen escorted from her apartment monday by officials. officials say the case is under investigation. her family has been notif a spokesman says the company has been speaking to authorities to learn more. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. tom: thank you. on the markets, if you go back to first principles, that is not occurring in the ipo market, look at airbnb and -- door, doordash, whatever it is. free are the guys that own cash flow and -- analysis, david

pearl, stay with this. this is bloomberg. ♪

" bloombergis is surveillance." we have been talking about inflation and some of the shifts in the economies. i want to ask you about something that has been going the rounds. some people were actually calling for the ecb to hold government debt in perpetuity that is illegal but leaders could change the treaty. is this something we should

consider? i think it is something that which has no real meaning and would be a recipe for destroying the credibility of the states and of the treasuries and also the credibility of the central bank and of the currency. confidence to lose of the investors in the world over, you do that. that it isnk at all reasonable. it works under the working assumption that the rest of the thed will eternally trust advanced economy and the credibility and confidence you

have in the central bank and in the currency. it is naive and a recipe for catastrophe. i am very clear on that. we deal: how should with the danger to please markets certain governments talk about austerity too soon? jean-claude: when you have this , itl of additional debt does not seem to be appropriate, when we have to do, when we have are,owed the time where we and i hope that is at the end of the next year, with a vaccine we will be in a different spot. that being said, when we are pandemic, we will have to take action that would permit

the debt outstanding of the advanced economy to dimming nation progressively as a production of gdp. even if it is at high level the rest of the world investors and savers in the advanced economy and the rest of the world, will trust that it is sustainable if the debt outstanding --diminishes year after year, whatever the starting level is. that would be a must. i'm still making the working assumption that we could swallow way whichump in a non-catastrophic without hyperinflation or .efault or catastrophe that is always tough on the most vulnerable of our citizens. tom: the french developed a slide rule in about 1860 and

dragged us into the engineering age and now we find ourselves behind in technology to america. how does europe catch up on technology if it seems to be such a cultural struggle to mark jean-claude: --struggle? we are recognizing platforms we are lagging behind. there is a great determination to catch up and not let only the u.s. and china galloping ahead of us. we will see what happens. europeanerestimate the brains.

vaccine, i see the german firm plays a decisive role in the vaccine today. how would you say? don't forget that the european potential is considerable, and i aware, wehe extent will catch up, i trust. francine: thank you for your valuable time. efforts to strike a brexit deal are faltering, and ursula von der leyen says they will decide on sunday if conditions are right. boris johnson has been saying the same concerns about a possible failure. donahue, thank you for

talking to bloomberg. where are we at? there is still the possibility that an agreement will be reached but i think it is fair to say that it is evenly balanced at the moment. if bob said that the heads are negotiation, and all of the governments from the union are completely behind the commission and our negotiation team and will be supporting their efforts in the coming dates to see if any agreement is possible. i believe it is, but we cannot underestimate the difficult these to reach an agreement for the consequences if one cannot be reached. francine: could talks drag on until next year? the fact that we saw a deadline set for sunday and the

fact that the president of the commission met prime minister johnson earlier in the week is the sign of the need for negotiations to conclude probably and urgently --urgently in order for countries to know where they stand. it is so important for businesses in ireland and europe and the u.k. to know what the relationship will look like early next year. while it is possible, and i would expect there would be some areas that will continue for a futures of what the trading agreement need to look like do need to be concluded soon. tom: good morning. , northern island, there has been central -- centuries of a delicate balance of trust. give us the trust meter right now as these negotiations

continue. what do you observe about the development of a constructive trust that leads to constructive outcomes? in the wisdom of negotiations, particularly negotiations that are so charged issues of trust come under pressure at this point. from my engagement, there is still trust from the european union than an agreement can be reached. saidect the same to be from that united kingdom and the reason the trust as they are and the history of relations between the united kingdom and europe and ireland, that recently have been so

transformed due to her membership of the european union. that is the context for this negotiation. we may be neighbors by geography, but we have become allies because of choices that a by our shared history. in the changing world that you are aware of, the european union , ireland and the united kingdom still have more in common than different at the moment. for those reasons, trust will continue to be there to find an agreement, and the atmosphere will be charged. it will be difficult, but that just reflects the nature of the negotiations that are underway. ,om: based on what you know now what will the border between northern ireland and ireland look like? because of the agreement that was reached

between the european commission and the british government earlier in relation to a northern ireland protocol, it is the case that we will be able to protect the peace process which the governments of ireland and the united kingdom and the european union are committed to. i have confidence that we will be able to manage trade and movement across the border because of the protocol because agreement, in many if not all of the scenarios that we might have to deal with in the future, we will be able to allow andment across the border critically we will be able to obtain the political atmosphere which is a hugely important factor in maintaining peace. francine: does this hard in the

case for a proper financial market, and where are we on banking union? we have something comprehensive soon? paschal: i think that is an important point. the context has changed in our debates on banking union and capital markets union. it has changed because of brexit , because of the consequences of covid. by the appreciated finance ministers of the european area in particular. we know to protect those who we serve, the people of europe, we need to have new sources of funding and investment in a more financial architecture for the european union.

one thing has happened, the changed background fed into the agreement that we reached in the group in regard to stronger goals for the european stability mechanism, and important safeguards for banks in europe. i was asked to report back to them next summer on what areas we believe we can make further progress on and banking union. that is what has happened and what will happen across the first half of 2021. francine: the esm reform is crucial, but now comes the work of sovereigns letting go of their financial institutions. whatuntries understand needs to happen next? i believe they do understand the need for change, but it is fair to say that there

are strong national issues that have formed the backdrop to these discussions that have not gone away. further progress in the banking union is going to be complex and very difficult. my fellow finance ministers know that the context for these negotiations has changed. we have recommissioned ourselves to further progress and that will be particularly important in the first half of next year. tom: we must leave it there. martin schenker, and then adam posen on the american economy. stay with us. this is bloomberg. g.

♪ morning, the u.s.

two-year yield test late-summer lows, and the rio yield at singles, no reflation, oil at 50 dollars a barrel. in america there will be 300,000 deaths by christmas and in germany cases surge and the chinese authorities have detained a bloomberg news assistant for suspicion of engaging in criminal activity that jeopardizes national security. " we willethwait says continue to work as hard as possible to help her and her family." good morning. so much other news out there as we just heard from the finance minister of ireland, it is an extraordinary friday evening and afternoon in europe. francine: there is good nd