♪ >> like touro college confirms joe biden's victory. curbing the virus. new restrictions threaten major economies. new york could see another full lockdown. credit suisse will restart share buybacks in january and sees fourth-quarter investment bank revenues ahead of the year. good morning and welcome to bloomberg surveillance. i am francine lacqua. brexit and focus on

looking in any pound movement and in the u.s., we will look at the stimulus bill if we get it. we will also talk about bill barr. you look at european stocks, they are getting 0.3%. u.s. futures rebounded after a slump, partly some of the mixed trading we saw in the u.s. and asia. also, lingering worries about tougher lockdown. you look at the contracts futures, they seem to be giving a hint that investors optimism is back after losing on monday. you look at the number of cases against the economy, it makes for interesting reading. oil dropping from a nine-month high with concerns that virus restrictions will mean what less travel. here's leigh-ann gerrans. leigh-ann: london has been hit by the uk's toughest restrictions starting tomorrow and authorities are warning a new variance of coronavirus may

be driving a rapid rise in cases. the switch to tier three means pubs and restaurants will close except for serving takeaway. says newcretary measures are essential for the jobs in the longer term. new york is also heading towards a second full shutdown, according to governor andrew cuomo. he says the new rules will come into place if cases and hospitalizations continue at their current pace. mayor bill de blasio also warning of new restrictions and urging employees to work remotely where possible. government agencies and major corporations outside the u.s. are reviewing their computer systems for signs of security breaches. that is after a hacking campaign inserted malware in software updates from computer company solarwinds. it is more than 300,000 customers worldwide, including the u.k.'s national health service and nato. china's recovery gathered pace

in november, supported by strong demand from home and abroad. it was the nation even further ahead of its peers as the only major economy likely to expand this year. exports have rocketed in recent months. the return of virus restrictions in many parts of the world have fueled demand for medical equipment and electronic devices. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i'm leigh-ann gerrans. this is bloomberg. francine: thank you. joe biden biden is now officially the electoral college confirmed his victory. it puts them over 270 votes needed to win and will be inaugurated as the 46th president on january 20. biden noted his 306 electoral votes is exactly the same number president trump turned in 2016. >> at the time, president trump

called the electoral college tally a landslide. by his own standards, these numbers represented a clear victory then and i respectfully suggest they do so now. francine: meanwhile, u.s. attorney general william barr is stepping down after publicly disagreeing with president trump's claims of widespread voter fraud. trump confirms the move on twitter, saying far has that an outstanding job and will be succeeded by deputy attorney general jeff rosen. joining us for more is derek wallbank. great to have you on such an important day. the electoral college has finally voted. is it finally over? derek: well, the president does not think so because he spent much of the overnight, tweeting late into the night, re-tweeting people who were trying to urge a continuing on of the fight. there has been no signs from the

president that he is going to stop here, some of his high staffers were talking about this not being over. for the rest of the world, it mostly is. you're starting to see some republican lawmakers, some senior ones, not all, but some senior one saying this is over. some others say there's not really a path. in any other election, i would say especially, 2000, bush v. gore, this is where it ended. right now, trump is going to continue on it and it looks like you will. francine: but when will he leave the white house and how will he leave the white house? derek: he is not going to be president anymore on january 20. the last thing that really people should be watching for is congress routine, accepts the results of the electoral college. that will happen the first week

of january. there is a procedure where maybe someone can try and challenge votes. we have not necessarily seen any senators on the republican side are going to go along with what some house republicans are looking to do. even if they do, it does not appear likely at all that trump has a chance in the world of overturning this result. it is not stopping him fighting. even though biden is trying to move on with everything, he still kind of not getting a clear slate to do that even as all of the votes are counted. they are what they are. joe biden won. francine: how significant is william barr stepping down right now? derek: i think it is quite significant actually. you mentioned in the introduction that he and trump had fallen out a bit over not being willing to go as far as trump wanted on the voter fraud stuff. barr said flat out there was not a nationwide systemic fraud of

the kind that it would overturn these election results. that's not what trump wanted to hear. he doesn't necessarily think barr has done enough in terms of investigations into joe biden's family, his son hunter in particular. there is going to be a month where we are not sure what barr was walking that there is a month where someone else's attorney general, the acting attorney general. barr mentioned in his resignation letter that there was some morek things he wanted to take care of in the next week or so. it will be interesting to see what those things are going forward. certainly, a split with this much time left to run in a presidency, that is not what we would call routine. francine: i know the focus is now firmly on georgia on the political front, but what can we have on the covid relief? are we going to have a bipartisan agreement? derek: i am feeling better about

this that i have been before. you know i have been a skeptic of all a lot of the wall street folks who said this is imminent and shouting the word imminent for months, which is not the definition of imminent. what you are seeing is a possible path forward. lawmakers are looking at splitting off the contentious issues and proceeding with something around about, a little bit lower than what they have been talking about but still a lot of money. and proceeding forward with that, trying to find an agreement. additionally, i think you should take it as green shoots the idea that lawmakers are talking about staying in town until something gets done. this week is critical. i would venture to say today is critical, but it does look better now than it has looked at any point in the last month or two. francine: thank you so much, senior editor derek wallbank. not thinking that relief was imminent himself, saying the same about brexit ongoing for

now. coming up, we talked the prospects of a stimulus in the u.s. and what a biden administration would mean for trade and the economy. we will focus on the markets. this is bloomberg. ♪ ♪ - [announcer] imagine having fuller, thicker, more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. they're personalized to match your own natural hair color and texture, so they'll blend right in for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music)

♪ francine: economics, finance, politics. this is bloomberg surveillance. a bipartisan group of the lawmakers is proposing putting out the most contentious part of the stimulus package, removing state aid and liability protections. if endorsed, this could be the first rescue plan to get the support of both houses of congress. joining us this morning to talk about all this, great to have you on the program is always. when you look at the stimulus

bill in the u.s., finally we have a president-elect confirmed with joe biden, what is the changes we get something? much skinnier relief bill then some would have thought but how urgent is it that we get something? >> quite urgent because we know there is an urgency supporting unemployed people expiring. the next two weeks. that is the big difference in the u.s. and europe. in the u.s., you have to repeatedly come up with. you have roughly 30 million people another's emergency schemes. that needs to be done. we have to have some measure of income protection for these people. after that, you have other issues, one i think that will be problematic is municipal and state financing. u.s., they cannot

actually get benefits. there are tax receipts. the only options for benefits. there were some calculations by the brookings institute, ending up with a net fiscal of 5.5% of gdp in the u.s. next year if there is no support. it is getting kind of urgent. vaccines,given the what is the trajectory for the world economy and the u.s. economy? does the trajectory go for inflation and gdp depend on the relief bill at the margins or is it something you can actually put to one side? gilles: i think we need to get some measure of additional support, especially in the u.s. because the structure just to avoid, we have another contraction in the first quarter of 2021.

that is important. news of thehe big last one or two months is the vaccine, we can count on exiting the stop and go situation which we have seen since february. depending on the logistical issues that we face, it is something we should be able to see from the middle of 2021 onward. my view for the trajectory of growth is quite simple. two speed story. forl complicated, mediocre the top of 2021, especially if we don't get any fiscal push. obviously, it is much stronger rebound in the second half of 2021. on inflation, some of the current drop in inflation is purely mechanical. it is due to the drop in oil prices.

in germany, for instance. mechanically inflation rise in 2021. the inflation will remain quite subdued. in no shape to produce a proper inflationary push in 2021. i'm quite relaxed on that front. francine: what happens if you get surprised to the upside? i know you are relaxed about inflation. is there any chance, can something happen, for example, the recovery are the vaccine? we reach herd immunity quicker than we think, is that change? gilles: obviously, anything is possible. --ould be really surprised the market is quite soft everywhere. you don't have the right ingredients for wage growth. let's assume something happens, ok? in the case of the fed in the

case of the u.s.,, what we know is they would allow inflation. they told us so. inflationary mode. support would not be changed. the issue might be the difference for the ecb because they are unofficially in this targeting mode. however, they just told us what they were going to do at least until 2022. we have a measure from the quantum policy support we are given. and where inflation is. francine: yesterday, we had a very important call from mario draghi that we need to do everything we can to avert the global solvency crisis.

how dangerous do you think this could be? gilles: that is going to be on everyone's mind from 2022 on. support if wency have it in those countries. support,e monetary solvency issues can be put on the back burner. theave the focus of opposite of solvency issue. this is goings, to be a big issue. i think there are some things we could do. one, precisely because we have the solvency issue, i don't think monetary policy can afford to normalize quickly anywhere in the world. the necessity to maintain some level of debt stability conditions will be one of the reasons -- maybe where inflation is, monetary policy would be very accommodative.

weould not be surprised if started to take a creative approach on dealing with legacy debt. one possibility, for instance, would be loans issued during the crisis. private debt. central banks could be involved in this. on the public-policy side, my guess is that one of the solutions we will find, maybe thaticated, is to consider the quality of public debt that banks have been forced to buy is not going to cancel but it is going to be kept on the central banks' balance sheets for a long period. francine: thank you so much, gilles. he stays with us. we will come back to this idea of staying on the balance sheet. coming up, credit suisse sees

his investment bank raking in more money this quarter than the last months of 2019. we will dig into the details and the strategy update, coming up shortly. this is bloomberg. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $400 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

♪ this is bloomberg surveillance. i am francine lacqua. credit suisse says is investment bank continues to perform well

with revenues for the fourth quarter ahead of a year earlier. the bank confirmed a target for return on tangible equity of 10% to 12%. in the medium-term, planning to start share buybacks. joining us is bloomberg finance reporter marion. what are the key takeaways from the update? marion: hi. yeah, what we are looking at is three main takeaways. as you mentioned, the return on pensionable equity targets, 10% to 12%. share buybacks at 1.5 billion swiss francs starting in january 2021. they have increased the profit target for the wealth management division. key to think about when looking at the return on tangible equity target, this may be difficult to achieve next year as we just don't know what credit loss provisions will look like as the pandemic continues into next year. francine: so, what have they

actually said about the fourth quarter performance guidance? marion: the fourth quarter, it looks like it will be much like the third quarter, so a lot on transactional revenues, both from the wealth clients doing a lot of trading, particularly in asia, but also the investment bank. they have guided the investment bank is doing better than the fourth quarter of 2019. then again, we need to look at how that will pan out because in the third quarter, they sort of trailed peers on the trading side, so it remains to be seen. deutsche bank has been guiding they were doing really well. we will have to see how they duke it out. there is thing about the fourth quarter is they have a couple of hits that will factor into the revenues there. there is a write-down on a hedge fund stake they have an a provision for litigation in the u.s. francine: when you look at some of the risk and compliance at the bank, how is it going? marion: yeah, they have been

doing an ongoing restructuring of the compliance units. has been a difficult year for them. a lot of things have been exposed from the pandemic. different funds that were not working. and they haveia been involved in difficult situations with softbank. it is not been a easy year. a lot what the ceo is trying to do is figure out what's going on, clean those individual businesses up and set them up for a better path next year. francine: thank you so much, marion. being moved into the u.k.'s toughest tier of virus measures, increasing restrictions. we will discuss with that means for europe's economic recovery. we are delighted to be joined by gilles next. we will also talk about brexit

and what exactly that means for the economy overall. let's bring them up to show you exactly what investment feels like. the focus is on current restrictions. the focus is on the virus. a deal that could be done. we will see what that means. treasuries little changed. oil dropping from a nine-month high. we will have plenty more market checks throughout the hour. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london.

let's get to the bloomberg first word news with leigh-ann gerrans. leigh-ann: joe biden is now officially the president-elect after the electoral college confirmed his victory. that puts him over the 270 votes needed to win, and he will be inaugurated as the 46 president on january 20. speaking after the vote, biden noted his 306 electoral votes is exactly the same number president trump earned in 2016. u.s. attorney general william barr is stepping down after publicly disagree with president trump's claims of widespread voter fraud at the 2020 election. trump confirmed the move on twitter, saying barr has done an outstanding job. he will be succeeded by jeff rosen. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm 120 countries,

leigh-ann gerrans. this is bloomberg. francine? francine: london and parts of southeast england are heading into tier three restrictions from wednesday. that is as u.k. authorities warn of a new variant of the disease that could be driving a rapid rise in cases. new york is heading to a second full shutdown. cases and hospitalizations continue at the current pace, according to governor cuomo. still with us is gilles moec from axa. anduding the recovery fund brexit, and everything between, let's start with the european central bank. not- i know you're expecting it worldwide, but if there is something in europe, could ecb even afford to increase interest rates given where we are at debt levels? es: no, i don't think this is within the realm of possibility at the moment.

, profitability is the ecb's only fall, and given the emergency of the situation, it is quite clear that this priority is making fiscal policy possible by making sure that financial conditions remain favorable. in 2021solute belief is , again, if there was a chance of an inflationary bound, the ecb would look through it and probably consider given the typical gyrations in the economy, it is hard to know if any inflation hump is temporary fluke.t is just a so for 2021, i really don't it will beuld be --

more complicated once the -- it isare over, once not going to happen before march of 2022. obviously if there is an inflation surprise, the ecb would have to do with -- i would if weat by definition, end up with stronger than expected inflation in europe, it will mean probably that our economy is doing better than we thought. it would mean that firms pricing stronger than we thought. our economiesat monetarye better with policy. but that is for 2022. francine: what are the prospects for euro right now? we have the recovery fund, we are not sure where brexit is headed, but it is more positive than it felt like last friday. does europe outperform the rest

of the economy, or is it still in dire trouble? the problem euro has to deal -- the problem europe has to do with in the short-term is the second pandemic wave is less -- how do you say -- the peak is lower than in the first wave, but it seems to be quite stubborn, the second wave is quite resilient, which is forcing restrictive measures probably longer than we initially thought. we see germany preparing to announce the toughening up of the restrictive measures, probably into next year. france has also prolonged some of the restrictive measures into january. it is a shallower type of mobility restriction, but it could be quite long. gdp is probably contracting, but

the policy, i think we have in managed to cutly a deal with hungary and poland to make the resilient recovery possible. i think there is a strong message about the solidity of , and policy support is quite robust, i would think. francine: what do you make of brexit? so there is a skinny deal on the table. even if we don't get that, is it a domestic u.k. problem, or can it spill over to europe? given where we are with the pandemic, i would say that the ramifications for drownedill be kind of in the pandemic noise. the kindircumstances,

,f figures that we have in mind could be somewhere in the area .4% or .5% in 2021. given the kind of gyrations we have been living in since last year, it feels like a drop in the ocean. for the u.k., it would be higher. so i think that is one of the reasons, actually, why europe is in a pous-tio brexit at the moment. it would not wish it, but there are other issues that they have to deal with right now. but does it mean that european companies have all the necessary paperwork? is there anything that could happen that could be a big hit for german exporters or italian exporters? way aroundre is no

it. i would say even if we had to do with an extra day, it would still be -- it is actually very likely that we will have issues crossing the border between the e.u. and the u.k., even if we have a deal. onwe don't have a deal, then top of everything else we will have tariffs. it will be problematic for german-french-italian producers, so that is why you could end up ,ith an impact on euro area gdp which under normal circumstances would be high. inis likely to be drowned the shock of the -- everyone wants a deal. it is in everyone's interest. pain betweenat the the two parties, to me it is quite different. if the u.k. does not get a deal on january 1, they will levy

tariffs on products coming from the e.u. and that will trigger an inflationary shock in the u.k., and that would come on top of all the logistical issues. there is no doubt in my mind that the impact on the u.k. would be quite significant, much more significant than on the e.u. as a whole. francine: going back to the ecb quickly, does it matter if they are controlling the yield curve, if they are a yield curve controller, or not? or are they an e.u. controller or not? gilles: they are. the purpose of your action at the moment is to preserve financial solutions and making sure financial conditions are inr enough to allow -- reality, you are in yield control. it is not explicit and there is no threshold. they are not saying we are trying to keep interest rate

more or less at this level. video, keeping interest rates unchanged, basically telling you that they were trying to keep broadly where they are right now, and i guess where they are means the german yield but also for virtual yields. implicit yield control, it is probably -- the normal channels of monetary policy probably don't work at this juncture. you can cut interest rates as much as you want. the impact you have on the point sector is small. but you can still do is making sure that fiscal support can be powerful, and it can do this by dealing with any concerns the market would have on that dependency at least this year. that is the most efficient user

there. francine: thank you so much, gilles moec, from axa with some insight. london's property market fair in 2021? we will discuss that next, and this is bloomberg. ♪

francine: this is "bloomberg surveillance." the u.k. is living through the biggest housing -- in almost -- biggest housing rally in almost a decade. there is also a segment of the market that is lagging behind, and that is luxury properties. house prices clipped 0.1% between june and november while the national growth has been

fueled i tax breaks. isdon's prime real estate also suffering from a lack of international buyers. let's talk about this with niccolo barattieri. he has given us some wise insight into that part of the retail market. the real estate market. thank you so much for joining us. when you look at the state of the market right now, when are you expecting international buyers to be back? niccolo: it is interesting, because we are seeing that volumes are back to pre-pandemic levels. so if in january you would have told me that we would have had a will pandemic and you would have told me that people would not be able to travel and would be staying home since march, i would have predicted a cataclysmic housing outcome, but that's not the case. people are buying properties also remotely come and there has been a greater focus on homes then there was before.

it is quite interesting. flat,l london has stayed while london as a whole is above 4%. but that can be said for many cities around the world, from l.a. to tokyo to many other places. it is interesting that homes have fared very well in this environment. francine: overall when you look at the prospect of a possible capital gains tax in the u.k. next year, what impact would that have on the luxury property market? niccolo: look, i think that everything that possibly could have been thrown to the property market has been thrown since 2014. the change to rules, the different hikes in -- one coming in for foreigners in just a few months. brexit. this would be one more thing that obviously would keep the market subdued, and that is why we have been in a flat to bear eight for seven to months. people talk about the one in the

early 1990's, late 1980's, early 1990's, that was 36 months. it was quite protracted. that is why in the market we see pent-up demand. seven to eight months is quite a long period of time. francine: are bureau chief is writing income and he is watching what you're saying, and he reminded me that someone new home sales are on track to be the lowest ever. is there a trend of people moving to the countryside because of covid? do people want to be elsewhere than in the capital, and certainly elsewhere than zone one? niccolo: there is a lot of talk that people could be migrating it is countryside, and the end of urbanization. -- same thing was said when in when the telephone was invented in 1876.

i think they were going to be talking about it in the next two or three years and see that it was not the end of a trend. that it was not decades and decades long and urbanization is here to stay. and people are more important than trees in our livelihoods, and so i don't see that happening long-term. francine: how challenging would you say london has been as a market for overseas developers in the last couple of years? developersthink for in general, it has been a very challenging market. when you have a market that doesn't rise for a period of six years, it is challenging, and obviously there is additional stock on the market that would have been absorbed. that transactions are at their low point this year. however, one has to see that in central london when you get high-end transactions, the difference between a bear market and able market is about -- and it is very quick

to turn around. ofsee that during periods distress like we had in 2009, but also as you see here, london has been incredibly resilient, and a place where people want to come. they take the opportunity that you have a weak sterling, and this has fueled some of the other stability in the market, greater than thought. francine: we talked about covid and a number of things, but we have not talked about brexit. another question about the next three or four months, we have seen a huge uptick in hong kongers asking for british passports. does that translate into home sales? francine: yes -- niccolo: yes, this will translate into home sales. they are looking in different cities in the u.k., nonce isis harrell he -- not necessarily in

just london. is that pent-up demand that is coming from that region of the world, and not just hong kong but in asia in general. francine: so we have brexit, we have covid, we have possible capital gains tax next year. how do you see the luxury property market developing in the next six months, 12 months, and 18 months? niccolo: i think that in the wert term, the difficulties are experiencing now will be prevailing. travel restrictions are obviously a big negative for this market. we need people to come and see the properties in order to buy them, in order to increase the number that we talked about before, and a general the weak economy as well, probably prevailing in the next three to six months. having said that, we are going to be in a backdrop of zero interest rates, and i believe the zero interest which are here to stay for some time. governments cannot afford to increase them to the debt levels

they have incurred. i think the international buyers for london is still very strong, and the weak sterling will help the market. so what you see in this last year, which has been incredibly difficult, is that actually volumes have not dropped off a cliff. and we just started having a little uptick in volume and that is a precursor for prices to go up. difficulty in the short-term, but on my 18 month view, i think this is your buying opportunity. last year and the first six modes of this year coming. francine: if you look at next a couple of things including the haven from overseas, are you expecting more government stimulus to counter that? kind of in the spring of next year? and what shape would you tell the government that that stimulus needs to take? niccolo: i think you have got to

continuing that you have got to continue channeling the u.k. as a brand, right? general, residential assets like many in the world are forward pricing mechanisms, so i think that the bad news that it is coming has come, that is in the markets, right? since june of 2014, if you put that in lower terms, we are talking closer to 40. it has been a substantial move, which i think prices and a lot of this bad news. tra,ine: niccolo barrett chief executive of northacre there on luxury property. coming up, a chaotic year ahead according to the airbus chief executive. will have more from our interview with him next.

this is bloomberg. ♪

>> i think it is going to be very complex to move from today

to a normalized situation by the end of 2021, 20 22, and 2021 will be counted most probably. francine: that was the airbus chief executive talking about the year ahead. let's get straight to the bloomberg business with leigh-ann gerrans. leigh-ann: credit suisse says its investment bank is continuing to perform well, with revenue higher than in the fourth quarter of last year. the swiss bank is restarting its share bad bank program -- share buyback program in january, with a significant return of asset management in 2021. airbus is warning that no post-brexit trade deal puts its investment in the u.k. at risk. fauryexecutive guillaume says the decision will be based on how easy it is to contact business after the split. in the meantime, the company has no plans to close down sales of its british operation. and tech giants could face up to

10% decline in revenue if they failed to comport with e.u. rules. the company will be banned will -- banned from using any data from business users to compete with them. a company that systematically breaks the rules could be ordered to divest businesses. andgovernment agencies major corporations outside the u.s. are reviewing their computer systems for signs of security breaches. that is after a hacking campaign inserted malware in software updates from company solar wind. it is more than 300,000 customers worldwide including the u.k.'s national health service and nato. london has been hit by the u.k.'s toughest restrictions. warning that a variant of coronavirus may be driving a rapid rise in cases. the switch to tier three means pubs and restaurants will close, except for serving takeaway. the how secretary says new

measures are essential to protect lives and jobs in the longer-term. and that is your bloomberg business flash. francine? francine: thank you so much. the markets firmly focused on exactly how many number of new infected there are, and also on these restrictions of lockdowns. we had an interesting take from gilles moec talking about the vaccine, then moving to recovery, and we will be in the start and stop kind of scenario. overall, the picture is u.s. futures signaling a rebound, looking at trading pretty much making european equities holding, but not to massive gains. there are lingering worries about tougher lockdowns. treasury changing, oil dropping. this is bloomberg. bloomberg surveillance continues. ♪

francine: it's official. the electoral college confirms joe biden's victory. he asks americans to look ahead to the urgent work of getting the pandemic under control. curbing the virus. new restrictions threaten major economies. london is set to enter tier 3 rules. new york could see another full lockdown. and credit suisse will restart share buybacks in january. it also sees fourth quarter investment bank revenues ahead of the previous year. good morning, everyone, and welcome to "bloomberg surveillance." tom keene, welcome back. in london andtom, new york. a lot of the focus is on tom's bowtie. a lot of the focus actually on brexit. good that you had a couple days off so you didn't have to look at volatility and pound. joe biden is finally president-elect, confirmed. tom: i would say the virus overwhelms everything, francine, even brexit, the story in london, and certainly different stories in the u.s., a fed meeting coming uas