>> european equities slump on virus concerns. travel and leisure stocks leading declines. london close -- goes into full lockdown. france, germany, and italy suspending travel from the u.k. bertens biggest port stops traffic of the continent. in the u.s., congress has reached a 900 alien dollars spending package to take place later today. -- nine hundred billion dollars spending package to take place later today. welcome to "bloomberg: surveillance

." the selloff has been the lockdown in london and the ripple through the tourism industries around the growth -- growth. on the stoxx europe 600, treasuries grinding higher. personal income spending data on wednesday. the big moves are in the fx space, the biggest move since june 2020 for the bloomberg dollar index, up .6%. under pressure, down 3.5%. it is shaping up to be the monday pain trade. important movers to look forward to, gold up 24% this year. we are building that on the back of haven flows. table 1.3264. cable, 1.3264. needs little explanation. thedislocations around

broader emerging markets fx space so let's break this down in more detail because the emergency lockdown in london and south east england -- england is causing christmas chaos with 16 million people being told to stay home following the detection of a new strain of covid-19. police blocked travelers from boarding pack trains before the measures came into force and holidays abroad have been canceled with european nations banning u.k. arrivals. ofthe new variant is out control and we need to bring it under control and this news about the new variant has been an incredibly difficult and frankly an awful year. yousef: let's flush out the market impact with dani burger. what exactly has popped up on your radar? dani: stocks that have been hit hard today, you have to look at the travel sector, like iag, ryanair, some of the worst performers today.

they haven't given up gains over the past few months with the hopes of the reopening trade with the vaccine trade. we are not to the point yet where we were at the beginning of the pandemic were these sold off severely. what needs to happen now is investors need to look at the market and say perhaps we are going to get more fourth quarter lockdowns and we need to price in some of that. that is the action we are starting to see. value will suffer, be it travel sectors or banks. to the upside, more momentum growth names. currencies, the other one to keep an eye on today because the thed is having a move to downside, two standard variation, its worst day on track since march 18 during the beginning of the pandemic. the first acid i'm the board -- on the board is cable overnight volatility. options markets are pricing in more pain. we see typically what

with bridget deadline concern, but it is the virus, as well. -- brexit deadline concern, but it is the virus, as well. yousef: let's get more on the situation and get to bloomberg's senior executive editor. david, the prime minister has canceled christmas for many people. where does that leave the political situation? it is pretty carious and there is a sense this morning in london of panic around the government, with problems piling on to other problems. we have this very worrying surge in infections around london, the economy, which is the engine of the whole u.k.'s economy being shut down over the weekend days before christmas and then nning travelions ba between their countries and the u.k., that has led to the shuttering of about 20% of the goods that are consumed in the u.k. coming to that port so huge concerns about supply chains, both of food and of medicine in

the coming days, just a few days before christmas, and if that were not enough, we are less than two weeks away from the end of the transition period for brexit. as yet, we still do not have a trade agreement with european union. dress rehearsal for what we could see toward the end of next week if the negotiating teams can't reach their differences. ,ousef: that is david merritt senior editor. let's get more from the mainland, maria tadeo is in brussels. how disruptive can this get at this stage? maria: well, it can get very disruptive. we have some of the biggest countries in europe including italy -- germany, france, deciding to restrict access to u.k. travelers to continental

europe, citing the new variant of the virus. this is the time that is very busy for ports, airports. there are a lot of people trying to make it home for christmas, and that list could get bigger, longer. we notice a meeting happening in brussels in an hour's time. politically, the action from the european government is they are reacting to the press conference on saturday where the prime minister says we have identified a new mutation. the virus is spreading quicker, and that has led to the quick reaction in 24 hours. the only big exception is spain. they have a lot of traffic with people., especially of and they argue unilateral measures are not going to help the situation, it will lead to big disruptions in air traffic and it is better to see a european coordinated response. david talked the implications for the prime minister when it comes to the domestic situation, but also in europe, when i look

at the european media, the headline i see repeatedly is "chaos in the u.k.." that global britain boris johnson was hoping for looks isolated from european perspective. yousef: maria tadeo in brussels. we will continue the conversation shortly, also looking at the market impact, but a line crossing from tesla. scherzer falling in premarket to the tune of 5.1% in the first day of the s&p 500 inclusion. recall we've had the astounding rally year-to-date, the stock up eightfold, but now on the first day of the s&p 500 inclusion, the indications from the futures are that we might get quite a bit of a selloff as the stock joins the broader s&p 500 index. we will keep an eye on that. coming up, the perfect storm for boris johnson with a full lockdown for london. brexit negotiations sit on a knife edge. we discuss u.k. assets next. this is bloomberg.

♪ every year, we set out to do one thing: help the world believe in holiday magic. and this year was harder than ever. and yet, somehow, you all found a way to pull it off. it's not about the toys or the ornaments but about coming together. santa, santa, you're on mute! just wanted to say thanks. thanks for believing.

yousef: economics, finance, and politics. this is "bloomberg: surveillance ." sticking with london and the south east of england, are in a restrictions as a new strain emerges. the pound has slumped. joining us is the rathbone cio. we are seeing more countries either introduce new restrictions or consider a cascade of additional measures. is it too early to speak of a newly developed resilience in some of these risk assets? >> yeah, i think it is.

unfortunately as your headline highlights, the concerns around whether or not we get a brexit deal combined with the uptick in the new virus cases in london and the southeast region have seen u.k. assets come under pressure this morning, particularly around hospitality, retailers and the like, domestic companies and the concern around the virus spreads to european markets so there will be a lot intooppy markets as we run christmas and quite a bit of uncertainty and i suspect europe is not going to be in noon from this new mutant virus development. european new virus cases will be climbing, as well. yousef: we will leave the medical analysis to the medical experts for the moment. i want to zero in on how to respond to this unfolding

situation. there are going to be investors who got railroaded the first time around when the coronavirus his early in 2020. what should we be telling clients in terms of building up defensive positioning more aggressively to avoid that kind of replay? we obviouslynk through the early part of -- the selloff in march last year told clients they should take the longer-term view and not sell assets and obviously, i reiterate the same again and i think the situation is considerably different from this time around. we put to one side the brexit only for for a moment, a moment, and say around the virus, have vaccinations coming. we have a very active support from governments around the

world in terms of fiscal stimulus and central banks operating a qe policy. financial markets should be viewing this as an unfortunate hole in the road to recovery, and i think there is a vaccination program is rolled 21, people will become more relaxed but we will say more -- see more days like this, as well. yousef: that is the concern, isn't it, that the vaccination program doesn't stay effective with the mutations of the coronavirus. has indicated in principle, it should work, but we need to see what the datasets. that is a scenario that would bring with it a repricing and markets? along isur view all markets were ahead of themselves in terms of the vaccination

program and we were likely to find the winter months very difficult and we would have some volatile days in markets and only, today is one of them the back of what was announced by the u.k. government over the weekend, and i think we could well see we have other days like this and i would say to you we are looking at opportunities. we've seen strong rallies across value in cyclical names. i expect some of those would come back and the defensive names will play out better through this time, but there may be opportunities within that to revisit stocks. i was looking through your research and a key portion that caught my attention was the way you describe a potential brexit trade deal. "it seems to be a terrible favor of fudge -- labor or fudge -- of fudge or an agreement."

>> i expect in perfect agreement, myself. it is knows a price we've seen another deadline slip at all, and so consequently, our view thealways been there was possibility this could go to the wire on december 31, but beyond that. night fromion last various eu commentators, it could be a possibility of negotiating into 2021 around the trade deal. i think there is a lot of uncertainty to come, but the only point i would make is there appears to be over the level playing field some definite new initiatives made and over fisheries, there was a slight chink from michel barnier yesterday saying there had been move -- some move over sovereignty over british waters.

i wouldn't bank on it. hold that thought. we have a lot to get through with julian chillingworth of gohbone as we watch cable lower by 2%, the biggest move since march 2020. let's get the first word news we're watching. congress has reached a deal on a roughly $900 billion pandemic relief plan. leaders announced the deal yesterday. it is being still written, but the house is expected to vote today, followed by the senate. the two most contentious issues, state aid, shield.ability u.s. officials say an effort lies ahead to identify the extent of a suspected russian hack on federal agencies and private companies. senator mitt romney says russia acted with impunity in launching the cyberattack, calling for a response. president trump is playing it down, suggesting china may be to blame.

>> japan has approved a $1 it adds to the, developed world's heaviest debt burden as the country struggles to fight coronavirus and supported economy. this month, the government announced the rescue plan with some of the funding by next year's budget. global news 24 hours a day, on-air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. that's the roundup. seen tesla fall on% in the premarket trade the first day of its s&p 500 inclusion. the stock is up eight fold, so a remarkable year for tesla in terms of upside momentum, but on the first day of the s&p 500 index inclusion, we are seeing that come under pressure. stands.it here is a preview of the

pipeline. u.s. stimulus breakthrough, congress reaches a deal on a $900 billion relief package. we will get the details next. 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.

>> more help is on the way. ago in consultation with

our committees, the four leaders of the senate and house finalized an agreement. it you will be another rescue package for the american people as citizens continue battling the coronavirus this holiday season, they will not be fighting alone. yousef: that was the senate majority leader mitch mcconnell announcing the u.s. has reached a deal on a roughly $900 billion relief package. bolster thet will u.s. economy as the pandemic continues to rage across the country. lawmakers are expected to vote today. julian chillingworth, rathbone cio is with us. is the magnitude of the deal going to be able to deliver sustainable chair for risk assets? what is your initial read? julian: i think there will be a degree of relief they finally got a package through, around $1 ticks a numbert

of boxes. not ass the unemployed, much as last time but still help forthere is smaller businesses, particularly hospitality. i think that is good and individual u.s. citizens will get $600, some of whom i'm sure will say that and probably spend the movie -- money through 2021, but it is all helpful and good in the states, but comes on a difficult day in the european markets. yousef: we are seeing a bounceback in the greenback, so we are up .7%, the biggest one-day move since june of this year. is that going to correlate with an incoming administration that might cling on views of predecessors, including hank paulson and larry summers, who adopted a strong dollar policy

in a global economy to favor u.s. interests? julian: we will have to see, , on a depressing day on the back of the virus be a there was bound to bit of safe haven buying of the dollar, in my opinion, but i think what the markets will be whether or nots -- is whether or not the democrats get control of the which by winning georgia, looks not likely, but if they were, that would give the incoming president biden the opportunity to push forward with bigger infrastructure programs, more stimulus, but tax rises. it is a mixed picture for markets on the back of that, so i think -- i don't think we are necessarily going to see under a biden regime in very strong dollar policy, but i may be

proven wrong, but i think it will be key to see the u.s. economy grow. yousef: in the event we do see a deteriorating economic picture because of new challenges with the pandemic, what else can the fed come up with? they'd indicated they are not fans of that, but could they bring that up? julian: i would be very surprised under chairman powell. i'm not sure janet yellen either would be keen on that, so i jerome powell has been clear all along he thinks more can be done on qe and has been stating that the last few weeks. he's been pushing for fiscal packages and he will view the package announced as a step forward. i think there are more letters

you could see them pull -- levers you could see them pulling before going down with rates, and the u.s. banking industry, they would be very happy, as well. yousef: we will have to leave it there. that is julian chillingworth, rathbone cio. i want to get to a portion of the global markets map. emerging markets foreign-exchange, getting hammered. losses led by the south african rand and losses in time stocks -- tai stocks. this is the global picture, sentiment negative. coverage continues. this is bloomberg. ♪

welcome.

let's check in on the markets because we have a situation where the selloff in risk assets is accelerating off the developments off lockdown in london. what does this mean for travel and tourism around the world? we did get a little bit of a relief bill from the united states, but at the end of the day, the pandemic is in focus and weighing heavily on treasuries are grinding higher on the data from personal income and spending data. big moves in the fx space. the dollar headlining that, the biggest move since june of this year. brent getting hammered, down 4.1%. a lot of uncertainty because of this new challenge with what appears to be a new strain of the coronavirus. let's hit the board to contextualize. gold. -- gold up.

cable down. across the foreign-exchange space, quite a bit of selling. let's get to the bloomberg first world news to give you some of the other key developments. brexit talks are continuing today after missing another deadline. sources say significant differences still remain and there are two key disagreements, access to fishing waters and limits on state aid. the eu chief negotiator says talks are in a crucial moment. the u.k. leaves the eu single market in less than two weeks. sydney is tightening restrictions. social activities are being curved until the 23rd of december. household gatherings are now limited to 10 people. at least three states are imposing travel restrictions. the sixth biggest u.s. banks are set to buy back as much as $11 billion of their own shares in

the first quarter after the federal reserve lifted buybacks. central banks saying lenders have a capital to whether an extended downturn. global news, 24 hours a day, on-air and at quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. story.et back to our top an emergency lockdown in london and south east england is causing christmas chaos. more than 16 million people being told to stay home. the move follows the detection of a new more contagious strain of covid-19. police blocked travelers from boarding packed trains just before the measures came into force. holidays abroad have been canceled. european nations moving quickly to ban u.k. arrivals. >> the new variance is out of control and we need to bring it under control. this news about the new variance has been an incredibly difficult

and to an awful year. backf: for more, let's get to our senior executive editor. what is the chronology likely to shape up to be in the coming hours as the government tries to fight on these two fronts? david: we are going to have a crucial meeting of the government's crisis committee happening later this morning. it is pretty rare for them to have unscheduled meetings. i think that shows the scale of the sense of chaos now in the united kingdom with this southern emergency lockdown slapped onto london just days before christmas. all of these plans, restrictions being relaxed, ripped up over the weekend. people scrambling to know what they should be doing in the next few days. added to that, we have had countries across europe banning travel from the u.k..

increasingly this morning, lots of concern about supply. closed. of dover 20% of food and goods come through that port. just a few days from christmas and that has been shut. we are going to have to wait and see what the prime minister has to say later today. what plans they will put in place. politically, very difficult for the prime minister as well. again, just a week and a half before we exit the eu single market and still no trade deal insight. yousef: thank you for the moment. that is bloomberg's senior executive editor. europe has been quick to react with a number of countries banning inbound flights from the u.k. germany is in the middle of a delicate brexit negotiation. they are among those to halt rivals -- arrivals from britain.

france has suspended flights for 48 hours. a cascade of other countries have followed. maria is in brussels. you couldn't make this more complicated if you tried. it looks like we have a bit of an issue. we will try to reestablish communications. maria tadeo there. coming up, we hear from our with the chief scientist at the world health organization. that is as the u.k. struggles to contain ahima tatian of the virus that is more contagious. that is next. this is bloomberg. ♪

watchingou are "bloomberg surveillance." in anast england are emergency lockdown. at the worldentist health organization says that u.k. scientists are working with the organization on the new strain that is spreading. she told bloomberg there is currently no indication that the vaccine treatments won't work on this mutation. important is really that we study the impact of these mutations, particularly when it starts becoming a dominant strain. we have seen this happen before with other strains where they arrive and slowly take over and become the dominant strain. advantage.e the bottom line is that the intervention to prevent the spread, regardless of which variant it is, are the same. i think that is key and that is where we should be focusing.

scientists are doing the lab experiments to find out what are the mutations of this new variance. is it really has transmissible as has been suggested? does it prevent antibodies from finding coronavirus? are questions that scientists are hopefully going to answer in the coming days and weeks. until long will it take we know this variance response to the vaccine? soumya: i would say it is going to take a couple of days, if not a week or more because there are several experiments that need to be run. this is such an important question. it needs to be addressed properly and we have to let the science and data drive us. what needs to be done is experiments in the laboratory where this virus is cultured and

exposed to antibodies from people who have either had natural infection or received the vaccine in the clinical trial and perhaps have antibodies that were vaccine induced. when we do those experiments, then we will know whether we can neutralize the strain of this virus just like any other strain. we need to wait for these experiments to be done. >> is this new variant unique to the united kingdom? numbers of largest genome sequences of the variant have been described from the united kingdom. there have been some reports from other countries like denmark, the netherlands, i believe australia has one case. you need to keep in mind the u.k. is probably experiencing much more than other countries. africa, thereth are huge disparities.

there is more genome sequencing and they are describing a variant as well that we believe will become much more prominent. the lesson is more countries need to do more sequencing. scientists can actually compare, look across countries and also look at the timelines of how these strains have been developing. at the moment, most of these things have been described from the u.k., but i think we have to remember the caveat i just mentioned and if we look, we might find in other countries as well. it is really important for us to keep track of the virus as it evolves because it is so important for treatment and antibodies and so on. a virus tonormal for behave like this. it is just that there is so much

focus and interest on the virus. the influenza virus mutates much more rapidly than the size covid -- sars covid 2 virus. these are all possibilities in the future that we need to consider for this virus as well. at the moment, i think there is no indication the vaccine and treatments won't work. andtart using drugs vaccines, viruses evolve to try to avoid those. that is the natural evolution. at this point in time, i don't think we have any evidence to suggest the vaccines that are in development will not work for the majority of people. the chief scientist at the world health organization. europe has been quick to react

to the lockdown in london with a number of countries banning inbound flights from the u.k. to try to halt the spread of the new strain of the virus. germany, in the middle of a delicate brexit negotiation, halts all arrivals from britain. ireland has jumped on the bandwagon. let's get back to maria tadeo. she joins us from brussels. talk me through what forces are at play this morning on the ground over there. we have seen very swift action in 24 hours. a growing number of european countries, including all the major big ones, spain remaining the only exception. they are going to restrict the access of u.k. travelers into their countries. spain says if anything, the reaction needs to be coordinated at a european level. if every country decides to take

european action and ignore that unilateral action, you are going to see big disruptions on air traffic. this is the time of year that is always very busy. there are people trying to make it back home. europeans are saying they are taking action because they were concerned about the press conference the prime minister gave on saturday, which he said, we have identified a new version of the virus that spreads much quicker. that triggered many alarms in europe. they said they did not get the data they needed. they are saying if you're putting our country and lockdown we need to do everything we can to protect our citizens. you are also looking at the euro tunnel that connects london to countries like france, belgium and the netherlands. when you look at lori's that were supposed to enter continental europe, the french have decided to block that. you could see real tensions at the border in the u.k. if that continues. yousef: another country getting

on the list of those that are restricting, suspending or completely halting flights from is suspendinga flights originating from the u.k. until december 31. another important player in global aviation deciding to put this one on the back burner. one more follow on the impact all of this is likely to have on the brexit discussions. is we havereality two weeks until the u.k. could possibly crush out of the european union without a trade deal. we have already seen the heightened uncertainty because of the paperwork that could involve. because of the legal uncertainty a lot of businesses are having to operate with on both sides of the channel. there are the politics coming into play here. the prime minister is coming turningessure for you

g on theurn -- u-turnin christmas lockdowns. the u.k. is in big trouble, big chaos whether that strengthens the european position where they decide to look at this as two separate items, what is clear is there is pressure building on the prime minister. the economic pain of that could be much more severe. yousef: thank you for that bloomberg -- thank you for that. maria tadeo in brussels. the chairman of the dubai-based property developer says as difficult as the year has been, 2021 won't be better as the market still faces a significant supply. things are in europe and other parts of the world, it is very scary. this is something no human being has control over. this may come back much stronger

or may disappear. foundod news, we have now a vaccine for that and hopefully it will work. those are medical things, we hope it works and i really hope it does and we see a better 2021. the challenge is going to be in 2021 that we don't see a little improvement and then we start dumping more supplies. that is the risk. i hope they don't start dumping supply just because they can sell. ,e are very careful at damac and i can assure you we are not going to bring new products in , maybe a few hundred or less 100 here and there just to keep the momentum going.

we strongly believe next year is going to be a challenging year and we will not bring new products and we have no intention of expanding because valuation does not look rosy. yousef: that is the chairman of damac. the selloff is accelerating once again. it appears the decision by indian authorities to stop and halt the flights from the u.k. is part of the reason behind that as more and more countries thede to add restrictions, market and ventures get more and more nervous. u.s. equity futures were lower across the board. the u.s. dollar currently just about 1% higher, 1134 points. that is a very big move that we have not seen for the most part

of 2020, that kind of one-day pop to the upside. brent crude getting another knock lower. we are at 49.83. let's flip the board. some of the other assets in play and on the move. this is what is defining the broader picture. it includes gold, cable. it does not appear to stop over the last hour. we are now 2.3% lower. we have spoken about the perfect storm, about the double whammy. to break all of this down in plenty more detail. this is bloomberg. ♪

economics, finance and politics. tesla is in focus again as it was early in the hour. it is losing ground falling by about 4.2% on what is the first day of its s&p 500 inclusion.

730% this year in anticipation of this historic inclusion. --is the biggest country company ever to be added to the benchmark. at the moment, the premarket suggesting a little bit of pressure and what is broadly a negative market because it is all about the pandemic and about new restrictions being implemented country by country. appears to be following suit in terms of restricting flights from the u.k.. we understand the israeli prime borders is seeking both to keep out the covid mutations. that just coming through as well. let's stick with that main story. everything from cable to stock the oil all weaker this morning. joining us to dig deeper through the market reaction is bloomberg's dani burger. are the markets telling us the new covid variant is a shorter-term concern or is this

going to be something that more profoundly characterizes 2021? dani: i think if we break it up at the different assets, stocks have not retraced a lot of that return to work, return to normal life trade. we are seeing a big impact to travel stocks, iag's one of the worst performers. we have not totally given that some of the gains when value came back with hopes we would get more openings with the vaccine. the issue now at stake is the vaccine is a story for later in 2021. in the meantime, we might be getting more lockdowns, more travel restrictions globally then had initially been anticipated by markets in the first quarter. sterling hard-hit, falling by as much as 2%. thanas only fallen by more 2% to other times this year. this is a two sigma move. it definitely is not something we normally see from sterling. the concern here, especially at

the time of year we are at, do you really want to be holding on to cable. who knows when we will get this trade deal finally done. in the meantime, the u.k. economy is going to be hard-hit by these new restrictions. yousef: spot on. in the meantime, the u.s. is in the process of formalizing this agreement on the stimulus. is that going to be sufficient to really offer support, maybe even lift sentiment once more details come out? been it so far has not enough to overshadow what is happening in the u.k., but i really fear what single markets would have looked like if we did not had this stimulus progress. at the same time, it is really not enough to stave off some of the hit this reflation trade will take. if you look at what is happening with u.s. futures, they are less hard-hit than what we are seeing in europe, but what is lifting them is the mega cap tech. nasdaq futures are more about flat today. providingat is

growth in the market. that is a classic trade we see when we get those virus concerns, when we get concerns about the economic damage to further restrictions. yousef: thanks for that. that is our market supporter, dani burger. "bloomberg surveillance" continues in the next hour as we flush out the conversation around the perfect storm, the clouds that are gathering around the u.k. and the coronavirus. this is bloomberg. ♪

tom: this morning, chaos in london as hancock says this is deadly serious. bandsd bands slots -- flights from england. a government official says something like march. after three temporary findings, mcconnell and pelosi have a deal billion aiders $900 down payment. america's poverty rate increased 26% in november. the real yield moves real low, nearing all-time negative rates. sterling challenged today as well. good morning. "bloomberg surveillance. tom keene in new york with lisa abramowicz in new york as well. it will be an eventful four days as we stagger to the holidays.