francine: glass half full. fed chair jay powell sees the u.s. economy performing strongly in the second half of next year but promises to keep supporting the economy. decision day on threadneedle street. the bank of england prepares for its final rate announcement of the year. policymakers are set to keep stimulus unchanged with a brexit deal yet to materialize. and bitcoin's rally. the cryptocurrency tops $20,000. scott minerd says it could be worth $400,000. good morning, everyone, and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene in new york. in the last 20 minutes, we had huge news out of france. the story of the day, emmanuel macron testing positive for covid-19. yesterday he had a working lunch with the prime minister of portugal. we understand he also had various meetings with his cabinet but at all times the president -- or almost at all times -- he is wearing a mask.

that is by people surrounding him. he has mild symptoms and will self-isolate for seven days and continue working from self-isolation. 32 years younger than president trump, and age does make a difference with the virus. there is an article about the harm to younger and younger people with a virus. it is always serious, but certainly it really underscores the news -- we are not talking enough about, because we have all this other news flow going on. but i'll tell you, you look at the acclaimed virus update on the bloomberg terminal, and this worse.ets worse and i was modeling out, when do we get to 4000 deaths a day in the united states? it is grim. francine: it is very grim. i was reading news overnight about how -- you are right, if you are over 65, you are at risk, but the category of 30 to macron,h is president

the cases and hospitals are quite high. we wish him a speedy recovery. but again, we should take the virus seriously no matter your age. let's get to first word news with karina mitchell. karina: congressional leaders are close to an agreement on an almost $900 billion coronavirus aid package. the plan is for $600 payments to individuals and $300 per week in supplemental unemployment insurance payments and aid to small business. what is not included, eight to state and local governments and lawsuit liability protection. jay powell sees light at the end of the tunnel. after the final policymaking meeting of the year, he is the most optimistic he has been since the coronavirus began. he says the central bank will keep writing economy with plenty of support in the future. emmanuel macron has tested

positive for covid-19. the resident palace says he took -- the presidential palace says he took a test as soon as symptoms appeared but they did not specify what the symptoms were. he will self-isolate for a week and will continue to work. the u.k. and the e.u. are heading to a final battle over fishing rights, the major issue standing in the way of a post-brexit trade deal. officials cautiously predict an agreement within days. differencetled the over another major issue, a level playing field for business. 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 member. tom? tom: thanks so much. i'm going to do a quick data check here. we deserve to do a longer one because chairman powell continues to move markets. equities continue to lift. we will talk about record highs today. small-cap coming but cap doing well.

solid 60site up a points. spx up 20 points. the vix came in on chairman powell's press conference. no question about that, breaking 23 to 22. the yield space ever greater, negative yields on inflation adjusted real yield that we look at, a -1.03% is really stunning. in the foreign-exchange market, we are going to get to this with jane foley in a moment. it is extraordinary, what we are seeing in the movement of different currency pairs. francine: yes, i would look, of course, at the currency manipulators, and are interesting facts on what the swiss franc did and whether longer term it has an impact on a country like switzerland. i know we speaking -- i know we're speak with thomas jordan shortly. then watch out for pound climbing again.

officials cautiously predicted a exit deal today, but -- a brexit deal today. but we don't have much more an update than yesterday. and then bitcoin -- what an interview with scott minerd that you had yesterday. i did watch. it really touched 23,000. that francinezing lacqua would give up liverpool and tottenham to watch scarlet fu and me get it done with scott minerd. francine: with the kids, tom. big guys, ity the is the local cub playing. that's the local club playing. tom: all the credit to scarlet fu come who jumpstarted that discussion on bitcoin. i'm not going to opine on bitcoin because i think a lot of people know how i feel. i am more in the nouriel roubini

camp, who is really wound up about bitcoin. but this is the moment for the strident bowls of bitcoin. francine: in the final meeting fedhe year with the great special, the fed strengthening its commitment to the u.s. economy, cautiously optimistic. the chair, jay powell, warned the next several months will be challenging. ofthe substantial reopening the economy led to a rapid rebound of activity command annual gdp rose an annual rate of 33% in the third quarter. in recent months, the pace of improvement has moderated. a full economic recovery is unlikely until people are confident that it is safe to engage, reengage in a broad range of activities. if progress to our goals were to slow, guidance would cy our attention to increase policy accommodation through a lower expected path of the federal funds rate, a higher expected path of the balance sheet. our guidance for interest rates and asset purchases will keep

monetary policy accommodated until our maximum employment and price stability goals are achieved, and that is a powerful message. as i have emphasized before, these are lending powers, not spending powers. the current economic downturn is the most severe of our lifetimes and it will take a while to get back to the levels of economic activity and employment that prevailed at the beginning of this year. and it may take continued support from both monetary and fiscal policy to achieve that. joining us now is jane foley, rabobank head of it affect strategy -- of fx strategy. 21 --st low until interest rates low until 2023, painting a much more optimistic richard for 2021? i thinkat's right, but at the end of the day the message the markets heard is that the fed has got back. the impression that the fed will use its balance sheet to keep interest rates low, to make sure there is plenty of deep money,

and there is risk appetite that is quite high. there are plenty of warnings from the fed, that we have not seen the end of this pandemic yet. respect to with hospitalizations continue to suggest that. as the market continues to look through what is likely to be a very difficult couple of quarters, with a light at the end of the tunnel, the risk appetite has been promoted by that belief that interest rates will remain low for quite a long period of time. tom probably wants to talk about dot plots, but how much does -- how much lower does the dollar go? is a good question. the currency that is traded the most -- what we have seen in the euro and other currencies -- new zealand is coming to mind -- is strength in their own rights,

really, over the last six to seven months. the new zealand dollar overnight really surging. they have pretty good economies. the australian employment data again surging for about the fifth of the sixth consecutive month. we have seen strong growth in new zealand because they have economies that manage this pandemic well. they close their borders. sectors have been hurt because of that, but they are performing quite well compared to some other countries in europe and the u.s. to introduce a chart in the next block on dollar canada. it is really confusing come indexes, --5 lended blended indexes, like a pro like jane foley uses every day. i could really teach a course on its elegance, and it is called gamma convex. it is a long chart.

should we be concerned about the gamma out there in the blended big currency index? jane: we should perhaps be concerned, but we should also be aware that the dxy index is heavily biased toward euro-dollar, the weighting of euro-dollar absolutely enormous. from that point of view, you would be better off looking at a different index, a more effective index. whether it is the bloomberg one or for the bank of international settlements. but dxy is tradable, and perhaps it is why people look at it so closely. be honest, whichever dollar index you're looking at, you will see dollar weakness. the fed has been successful at manipulating that. tom: we have had a four standard deviation move in the dollar index. how abrupt are these moves for other nations dealing with the new weak dollar america? jane: i do think that this is a

real significant event, perhaps even a disruptive event for many different central banks. they are not going to all rollover and take this. in a weak currency environment where you have inflation environment where you have us elevated levels of unemployment, low levels of wage inflation's. nobody wants a stronger currency. the fed has the biggest balance sheet, perhaps the most power to push over the dollar. but other central banks will also be pushing back with konta data b's and policies particularly, and may be more negative -- with quantitative easing policies particularly, and they will push against the weaker dollar, but the fed perhaps has the biggest balance sheet. francine: jane foley of rabobank stays with us, and we will talk about currency manipulation and what that means for a country labeled with such a name. coming up in the next hour, david rosenberg, of rosenberg research.

that is coming up, and this is bloomberg. ♪

."m: "bloomberg surveillance good morning from london and new york. single best chart, particularly important with jane foley from rabobank. here are currency moves -- they look at it in standard deviations, and there is no question about it, it is a standard deviation move from the left. it is a 6.3 standard deviation move. i have rarely seen that. it is what is called a fitted

chart, a little misleading, but the bottom line is we are getting big figure moves in some of these currencies. jane foley, what is the concern america,djacent to with such a strong, strong canadian dollar? jane: well, again, this isn't something that any country really wants now, and of course i would not anticipate that the bank of candidate will push against this with any interest rate cuts right now. but interestingly, unlike the u.s., the bank of canada has said that it would reduce negative interest rates if need be, but the bar is set really high for them to do that. candida is also influenced by the oil price, and -- canada is also influenced by the oil price, and that will also support the canadian dollar. at the moment, it will not be of significant concern, but further down the line, they don't want to see that stronger canada dollar. tom: where is further down the

line? itis an unfair question, but is always so castaic, it is always political, it is always a shouting match. need tothink we would see the pace picking up for a sustained period for them to do anything with policy. what we would see first of all is if that is a little bit of jawboning, perhaps warnings that they are prepared to do with policy what is needed, but the weaker dollar, the pace of the weaker dollar is something that which is going to make an awful lot of central banks uncomfortable right now, and looking at the central bank like switzerland, it must be a real poke in the eye yesterday to have to suffer the weakness of the dollar and then have the u.s. calling them the manipulator. tom: fran, i can't say enough how unusual 6.3 standard to's is. -- standard deviations is. francine: it is.

the swiss got named a currency mean a bit later by the u.s., with a massive intervention, keeping the frank from appreciating. what else could switzerland have done, and how problematic is that label for them? sympathy for the authorities. they have overvalued for a long time. and switzerland will sort of understand that it is an expensive country. they already have a negative interest rate, and what is really important here is that when we have the g7 communiques, that the market should be setting foreign-exchange rates and central banks, not treasuries, that was really in the days before qe now we have so many central banks using quantitative easing. the real question here, is qe, is qe a currency manipulator? the central bank of switzerland cannot qe -- cannot use qe.

they would not be able to use quantitative easing. using fxthey are intervention instead. given the huge amount of quantitative easing by the federal reserve, is it a case of, you know, the pot calling the kettle black? the millionguess dollar question is we also have the administration taking over in the u.s. does the treasury under joe biden take a hard line like this administration, toward switzerland and other countries? jane: that is going to be interesting to see. i don't expect there will be a very swift change. the new administration is going to watch and see what develops over the next few months. generally speaking, the market is expecting to follow bellicose response with this administration. the new administration is expected to build bridges, and

some of those bridges that trump has knocked down. i think generally speaking, the treasury perhaps we'll take a step back. i again, the term currency manipulator is not drawn just from the convention but from three terms. herewhat is so important is the all-important trip to davos, the annual trip to the mcdonald's in zurich, to save money. i just ran it through the jane foley rabobank meter, and that use to top tick $14 a meal, and that is up to $17.34. francine: unbelievable. that fancye down at cafe knocking down $80 lunches, and i'm down there with $17.84, saving money. if youe: ok, tom, believe that, you will believe anything. tom: we are not going to be there in 2020. francine: a big mac at

mcdonald's in zurich is probably just as expensive as a meal at roles. jane foley stays with us. coming up, welcoming back the global head of commodities research, a great chart looking at copper and what copper has been doing over the last two months. it is an interesting story. in new york,10:30 3:30 p.m. in london. and this is bloomberg. ♪

francine: "bloomberg surveillance this is "bloomberg surveillance -- this is "bloomberg surveillance." the residence of the french president, the elysees palace, says emmanuel macron has tested positive for covid-19. let's go to paris with onion news pound -- with onion news ania nussbaum. does the president have symptoms? president does have symptoms but they are mild, and he is self-isolating. the national assembly is going to isolate as well, and we will know more soon about who else is a contact case and needs to isolate because they were in touch with macron. tom: what is the viruslike in paris? mr. macron will be tied up in

this, but what do you see on the streets of paris? ania: i see people wearing masks. ahead in a few days going , to christmas, which is in france a time when people traditionally go see their families and see their parents, their grandparents, and when the government will lift restrictions on the curfew exceptionally for christmas time. we are also getting close to new year's eve where people are going to party, and the government's minister told me that france will deploy enormous amounts to make sure that the curfew is implemented. it is a time with friends under curfew. after two strict lockdowns that ended earlier this week. francine: thank you so much, on your nussbaum from our paris -- ania nussbaum from our paris

office. we had president trump, boris johnson come and out the french president. the portugueseth prime minister yesterday. we need to talk about brexit. there barnier saying that is good progress, but the less someone blocks remain. i think the mood is that there is a narrow path to get a deal. we will see exactly what that is and if we have an agreement, it still needs to be ratified by the u.k. parliament. they could be recalled from their recess next week. coming up, we speak with george georgeconstantino -- popper konstantin new . this is bloomberg. ♪

francine: this is bloomberg surveillance.

in london,ne lacqua tom keene in new york. -- urging policymakers to take action against a looming global solvency problem -- looming global solvency crisis. massed only by massive liquidity injections from governments around the world. joining us to talk about this and other european matters is george papaconstantinou, former greek finance minister. thank you for joining us, mr. papaconstantinou. we keep hearing about the break -- about the crisis, being at the brink. the crisis, because we are talking about it? a more benign in fireman of low interest rates.

the public sector. i don't think we can dismiss it as an issue that is not here. this is exactly what the report is saying. at the same, -- at the same time, i don't think it is imminent danger. spending whatever we need to spend. after that, there will be a day of reckoning. it is not too early to start planning ahead. there are some good ideas in that report, regarding the corporate sector. governments will also need to see what they do with the balance sheets. francine: what are the main things that we learned in 2008 and subsequent crisis that we can put in place now? george: we learned that central banks can go a long way in not likepreads low,

countries which we are up their ugly heads in the markets. this cannot be done forever. to keepnot continue those assets on the balance sheet. there will need to be some way from governments those debt -- keep levels in check. important is the ability to service it. it shifts the headline from understanding that i -- understanding the debt. -- began the first steps of moving a nation from what became down to the present

1% yield. in greek politics, everyone can argue over who gets credit for that. it is a remarkable accomplishment. describe the courage it took to do that, and apply that collective courage over the challenges now, particularly with a pandemic across europe. there was collective courage in the sense that we had to take a step back from the brink and do what we needed to do to bring the deficit down. and slowly regain market confidence. at the same time, european partners had to rewrite the rules. but we are seeing today is a reflection of that. , within europe, the reaction to the pandemic with the reaction to the euro

zone sovereign crisis, it is day and night. back then, i took the ecb a -- did whatever it takes, led by mario draghi. neededme, the commission to suspend fiscal rules. me of battle once -- you told me in the midst of battle once, the goal was to get greeks to bring their capital back to greece. did you succeed? george: once you are in a situation where you have restored growth and restored your fiscal fundamentals, and your borrowing conditions are because i normal, -- are attract --l, you can

because the investment gap is huge. it cannot just be filled by domestic forces alone. this is a different circumstance. through theoing slot --terity and self-flagellation we had to go through in the crisis. hopefully this is behind us and around be able to resume 2018, 2019, rather than going back to 2019 -- rather than going back to 2010. francine: mr. papaconstantinou, when the leader of a g-7 country tests positive for covid-19, does it change the trajectory of that government policy? president emmanuel macron tested positive. george: best wishes for a quick recovery.

to people thatl no one is immune, and it facilitates some restraint over the holidays, which is going to be a problem all over the world. issue, ineate an terms of governance with big decisions coming up. athink the two big things, , to putat europe had, a together the new financial package that is done. brexit which seems to be in the capable hanetiators. micron has shown leadership in europe over the last few years and being able to move forward. francine: thank you for joining us, george papaconstantinou, the former greek financial minister -- finance minister.

president of russia is holding the annual press conference for an hour, and i think counting. the president is virtually speaking to a lot of socially distanced reporters. we are expecting covid-19 to come up amongst the questions, policy.as foreign here is karina mitchell. na: -- americans would get a one-time $600 payment and they would be $300 per week in supplemental unemployment benefits, as well as aid for small businesses. democrats will not have to give up their demand for aid -- bloomberg has learned that the white house is holding urging -- urgent meetings to discuss that hacking leak from russia.

a number of u.s. agencies were attacked by hackers, believed to be tied to the russian government. in germany, a record increasing more thannfections, 45,000 new cases today, over twice the number from the day before. earlier this week, fatalities also set a daily record. merkelchancellor angela hinted that a shut down may happen before january. the first major winter storm of the season is battering the northeast united states. it is now moving on to new england. at least three people were killed in car crashes. the storm put more stress on hospitals struggling with the coronavirus. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. tom: thanks so much.

the vic's comes in sprightly at 22.01. watching action in the foreign exchange market as well. it has been brutal. us,y ogle will join lieutenant governor of the te.ire state - this is bloomberg. ♪ ♪

tom: good morning everyone. bloomberg surveillance. we are focused on mr. mccrone and his -- mr. macron and

his illness. yesterday on our fed special, the show stopped. scott -- bitcoin up to $400,000. >> i remember only first did qe. my comment to people at the fed at the time is i don't know how you ever unwind this without having some financial accidents. i think we got that. we saw that in the taper tantrum, and we saw it back in 2018. wind think that any under -- unwind of these programs or stopping them leaves the fed and the economy vulnerable. is thecally of concern corporate bond purchase program.

or the -- theebt, municipal debt or the fob look -- or the public financing program. ofhave a long list municipalities in this country that are going to have severe issues within the next six months, regardless of a vaccine or anything else. >> another asset i am looking at, bitcoin which is six -- which is up 6.3%. guggenheim has reserved the right to invest in bitcoin. have you guys started buying yet, and how much is this decision tied to the fed's extraordinary policy? bitcoin and our interest in bitcoin is tied to fed policy, and the rampant money printing that is going on. weterms of our mutual fund,

are not yet -- with the ftc. we are still waiting. of course we made the decision to start allocating toward atcoin, when bitcoin was $10,000. it is a little more challenging with the current price closer to 20,000. -- closer to $20,000. that, ourd fundamental work shows that bitcoin should be worth about $400,000. even if we had the ability to do so today, we are going to monitor the market and see how trading goes. ultimately we will look to buy it. tom: how do we get from where we are now to $400,000? is it just based on scarcity? scott: right, it is based on scarcity and relative valuation

of things like gold as a percentage of gdp. bitcoin has a lot of the attributes of gold, and at the same time has an unusual value in terms of transaction. some fedt minerd with chat and a bombshell on bitcoin as well. one of our experts on bitcoin joins us now. edward, why has bitcoin doubled? edward: it doubles and doubles again, right? bitcoin has surprised a lot of people. a lot of people have been writing it off and said at some point it is going to zero. i know, because at 1.i was one of them. we keep eating our words and bitcoin keeps surprising. there is ato accept pool of people out there willing to buy this stuff.

ago about thecond supply-side, but what has been proven over the last year is that the demand side is equally stable. there are people out there that will buy this stuff. you keep -- tom: just because of time, you just explained the cross perfectly. who controls the scarcity here? responsibility to control the supply-side of this commodity? edward: the supply-side is stable and written into the algorithm. unless the miners get together and say they are going to change this, they will only ever be 21 million bitcoins. whatever the demand side that is out there is going to have to match up with the other side of the equation. francine: eddie, you haven't

been called edward since age four. it righttually buying now? is it institutional investors? is this just going to grow for the simple fact of who is buying it? i think institutions are waking up. institutions are buying this. they are saying clearly this asset classes going to be with it is the long term, but where it sits in their portfolios that i think is interesting. i don't think they are saying this is exactly like gold, they're going to sell all of our gold because it is going to do the job that gold did. i think where it sits is somewhere like venture capital. eddie, i get eddie on gold, obviously i don't agree. we are at the conjunction of jupiter and saturn december 21,

for the first time since 1226. in 1226, royalty were flipping coins because of the scarcity problem, and because of their mode of inflation at the time. who is going to start clipping the coins in the system of bitcoin, that will widen out the scarcity, diminish the scarcity, and threaten this huge hyperbolic pricelist? eddie: that is on the assumption it turns into a unit of exchange, because of it turns into a unit of exchange, which is a million miles from where we are, then yes, the deflation problem becomes real. outsidethink anybody, of the hard-core bitcoin community, is talking about that right now. people are talking about the store of wealth relationship, and i think that is a possibility for bitcoin in the long term. right now, it is a speculative

at that perhaps it becomes store value down the line. francine: thank you so much, eddie van der walt. tom, what you said was nonsense. that jupiter and saturn crossing gives us a brexit deal, not bitcoin. the christmas star, december 21. this is really cool. this is absolutely stunning. this is back to louis the ninth, the guy who built -- francine: if only he could also remember his password for bitcoin. coming up in the next half-hour, -- [indiscernible] interest rates and inflation. tom: i will ask him about bitcoin. francine: i know you are. we will ask about passwords and knowing them. this is bloomberg. ♪

tom: bloomberg surveillance. futures up 21. down futures up 132. that level 30,000.

now on the stimulus, emily wilkins in bloomberg government. biden transition expert. she is watching all of this. speaker pelosi says when we are ready, we are ready. how close is ready? emily: that is the question everyone on capitol hill is asking. the deadline is the very end of friday. there is optimism they can make that deadline. if not, we are going to see them working the weekend. both sides have pledged they will not leave capitol hill until an agreement is reached. tom: that is great. i'm glad they are falling on the sword, and i get the idea there are negotiations as well. where is the point of compromise? where is the distinction locked away, in those smoke-filled rooms? emily: there is some disagreement over whether funding from fema can be used for coronavirus.

there are a couple other sticking points left, but the two major sticking points, the question about funding state and local governments and liability protection for governments, those have already been resolved in a way. they will not be in the bill, so we may see more debate on those, down the line. for now, those items have been moved off of the table. francine what are the chances of getting it before friday at midnight? emily: we see a lot of progress in the last couple of days. i've covered congress for a number of years, and nothing motivates these guys like a dead light for go -- like a deadline for going home for a vacation. there is definitely a chance we see this before the deadline. if not, it seems like lawmakers think they can potentially wrap this up before christmas day. francine: emily, funding flooding into the georgia senate race, but mainly from out-of-state donors. what does this tell us? emily: this is something we have seen throughout senate races.

basically with democrats and republicans, there is a ton of funding in this very virtual very online year. democrats the two have outraised their republican counterparts, but a lot of democratic senate candidates outraised their republican competitors in the general election and republicans still won a number of those races. tom: what is the so what of a one-time $600 payment? there is a lot of research shows the rich people just pocketed -- what is cards and the so what of a $600? is something00 that has really been pushed, particularly by progressive democrats but also by some republican members. it is something president donald trump has been pushing. their argument is people have lost their jobs, they are being

forced to stay in, businesses are forced to be closed. the government needs to in some way reach out to the american people and say we understand you are struggling, here is a check for some money to help you out. tom: thank you so much. an ongoing battle, maybe we will see some agreement today. futures up. david rosenberg will join us in the next hour. we will talk to david rosenberg about the whispers of inflation, and the reality of disinflation and how yield speaks. this is bloomberg. ♪

can kind morning, we

of see the light at the end of the tunnel, the dollar kind of slums, and the inflation-adjusted yield goes kind of evermore big negative -- vic negative. germany is considering a hard shut down. mr. macron very ill. pelosi says we will be ready when we are ready. ready better be by friday. good morning everyone. this is bloomberg surveillance, from new york and london. quite frankly, we are looking at tariffs. mws those -- news of mr. acron, even at 42. francine: we know he has mild symptoms. we know he will continue