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. front and center is this

unfolding story within the united kingdom, and quite frankly, across europe. lisa: this is a story that just encapsulates 2020. a mutated virus destroys christmas. that seems to be the mood and the united kingdom as people look toward a more virulent strain that we are seeing. tom: the strain is a big shift. for those of you just catching up, we showed brandenburg at berlin. it could be any other airport in europe as people are trying to figure out what to do. euro star really chaotic this weekend. this is a movable story. david and maria will join us in a moment. i want to focus on a new variance of the virus. we are thrilled that paul hunter will join us later in this hour, truly expert on religion. let me look at -- virology. it.res not doing

they have worsened dramatically. the vix says it all, up five. that is not a typo. wake up, matthew. get off the ski slopes. 27 point 09, that is a huge big figure move in volatility that wrapped around the virus, wrapped around what we see in the pandemic and maybe some stimulus news in there as well. i do want to note, the two year yield gave me a 0.10 momentarily. show me the vix charts again. you are killing me. this is too much on a monday morning. there is the spike up in the vix moving over the last 20 days up to a lofty 27.18. it is too early in the morning for you to do a data check. what do you have? lisa: i'm going to defy you and give you one anyway. a real deterioration ahead of

the open here. you can see s&p futures down over the last half-hour, now dropping or have been dropping quite a bit more. i guess it has retraced a little bit. 2%, the 100 down concern about the virus and what that means in terms of both the businesses within london, some of the other urban centers as well as mobility. crude down the most since early november. around the terrier ration here. 5.4 -- deterioration here. the dollar seeing one of its best days in months, at one point, since september given the consensus it will weekend. itla, this is the first day is included officially in the s&p and it is down 4.6%. considering the 700 gazillion percent increase we have seen in tesla, not exactly taking that much she knocked the stocks. tom: it is an eventful day.

we will have stimulus talk out of the u.s. and the successful agreement overnight. right now, we consider this serious mess in the united kingdom. maria tadeo will join us from brussels in a minute. we are thrilled to bring you david merritt, bloomberg news senior executive editor, truly experienced on the logistics and how it links into the government as well. they will be a so-called cobra meeting today with the prime minister. what does the prime minister hope to accomplish? we are waiting to see what comes out of that meeting. the cobra committee only convenes at moments of crisis. the level of this real sense of chaos is engulfing the country this morning after a very dramatic weekend with the admission this new strain was ripping through london and the southeast of england at an alarming rate. an emergency lockdown in the

shopsl city, with closed and people told to stay at home. over the weekend, european nations lining up to shut the door on travelers. -- in the united states is hostile -- the real constraint in the united states is hospitalizations. is the real constraint for the government there hospitalizations? have: so far, hospitals held out. that is a big factor in this emergency lockdown. we are seeing hospitalizations taking up. we still have these overflow hospitals they could call on. -- we are coming into january and february, worst months always for the health service. if the beds were filling up already, people are starting to panic about what things may look like in just a few weeks time. also, step back a bit and

consider the bigger concept around brexit. that is still not resolved. we are less than two weeks away from britain crashing out of the european single market without a deal. we had people panic buying supplies. now, we have them worrying about the virus, adding to the brexit concerns. people really worrying there is going to be problems with food and medicine. remember, the vaccine, which has been rolled out is coming from brussels, coming from belgium and made in germany as well. if there is any interruption to those supplies, that is only going to add to the government's and norma's over this monday. lisa: maria tadeo is over in brussels. what is the sense of respect to trade? david was painting the health picture. how much has traded in the supply chains, how much have they been disrupted? very early totill say, but in terms of what this

means, it is nothing short of a diplomatic earthquake when you get countries like germany, france, italy, the netherlands, all of them telling you we are not accepting your flights, we are going to shut down the euro tunnel. the fact you cannot get on the euro star from london to go to paris, belgium, the netherlands, this is big and also the idea that we are potentially going to see big, huge especially in the ports and france because also merchandising stocks and lorries entering the country from the u.k. for 48 hours, i would also say going back to a david just said when it comes to brexit, this morning, when you look at the european press, when you pick up any newspaper is they say this is a country isolated now from the rest of europe. it is a country in chaos and this is happening two weeks before we had into a big hard deadline as to whether or not there is a trade deal. the picture the prime minister was helping to give to the world , we are going to thrive, that

is not the impression from a european perspective when you are waking up today and you see a country isolated from everyone else. lisa: talk about from the british side, the idea of how affects latest chaos any discussion of brexit. how much does this interfere with that deadline or do you see this being preeminent as far as the priorities here and with people looking to avoid hard brexit? minister hasime been really concrete that we are not going to extend the transition period,. this is a sense of emergency. nicola is calling saying this is madness. the government is holding firm, but you can expect that to be discussed at the cobra meeting today. how are they going to juggle these to emergencies developing at the same time?

if people start to see shortages of food or even medicines in the shops the same time as hospitals are filling up, you can bet the government is going to take a huge political hit from that. does that mean they actually get a deal? that is the other thing. it has got to happen soon otherwise there is no time. tom: lisa abramowicz and tom keene, bloomberg surveillance, a special edition with massive shutdown in the united kingdom. exceptional market reaction. the trucks lined up at over here across the dunkirk. they are not happening today as european truckers desperately try to get home. the vix has deteriorated out to a 28 level moment. futures at -57. maria tadeo, it is real simple. with this new strain of this virus, is there a risk that u.k. shut down forces europe into a

recession? is that part of the calculus? maria: it is part of the calculus and for the europeans, stressing they have always said we negotiate from a position of strength, we are much more coordinated than the u.k. would be and that is not been reflected in the situation to the extent that you have one country, the united kingdom, shut down from everyone else. i just want to release stress because this is very symbolic, the idea the french have shut down the euro tunnel. i know that may not seem like a big deal, but it really is. it is that symbol of connecting london and paris. what i would say very quickly, some of the virologists have been saying the united kingdom does much more testing and sequencing and this may not be that this is unique to the u.k., but we could see this in europe in a few short days if that sequence has proven right, the virus may already be here. tom: maybe the most important

point of the last seven minutes. the inaccuracies and mistakes made in cases and testing as well. thank you so much for joining us this morning. seven, the bidup falling away in the markets. -57.utures we are watching yields come in as well. with our first word news, here is ritika gupta. itika: lawmakers won't have much time to review the economic stimulus plan congressional leaders have agreed on. both the house and senate are scheduled to vote on it today. most americans would get a one time $600 payment. the paycheck protection program billion. $284

that includes forgivable loans for small businesses. president trump's a campaign is turning to the supreme court again to challenge the election results in pennsylvania. it is another longshot appeal aimed at overturning three separate decisions from pennsylvania's highest court. the supreme court has already rejected two efforts to overturn joe biden's victory in pivotal states. brexit negotiators are still hung up overfishing. talks between the u.k. and the european union over a trade deal have missed the deadline. there are few signs either side is ready to compromise. ac/dc advisory panel says the elderly and frontline essential workers should be next in line vaccines.virus those front-line workers include firefighters, teachers and grocery store workers. the first round of the vaccinations is going mostly to health care workers and residents of long-term health care facilities.

global news, 24 hours a day, on-air and at quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this iska gupta, bloomberg. lisa: coming up, we are going to be talking about what could be the beginning of a trade. we are looking at a dollar spot index. seeing a row the terrier ration of the tape across the board with equities. up next, hsbc senior fx strategist. this is bloomberg. ♪

lisa: this is "bloomberg surveillance." i want to bring you these

breaking headlines. the nasdaq is investigating connectivity issues to the exchange for some clients. we don't have more information, but it is an emerging story. just want to give you a sense. nasdaq futures down about .9%, not necessarily down as much as s&p futures. tom: we will bring you the data checks here. lisa and i watching futures negative -- deteriorate. more than anything, we're looking at the vix. 21.80. balloons out, six big figures. that is a huge move in the vix. we will have to see how that settles out toward the u.s. open. i also want to show sterling right now. stay on that board, 132.10. what the pros do is they look at sterling out four digits, which is called pips. like gladys knight anna pip --

and the pips. a big 2% move. move to get to dominic. what do you do when you have such an emerging crisis away from fx? what is the strategy, to be opportunistic or do you wait? dominic: you mentioned gladys knight and the pips. i think this looks like it is on the midnight train to zero rather than the midnight train to georgia. now is not the time to panic. when we look at it, we try to take a slightly medium-term view. we have been warning clients and people we speak to for some time that the rally that we have seen in sterling up to this point, or up to the last few days, was driven not by optimism around the u.k., but by global optimism. got is a potentially very weak

ally. sterling has been completely dominated by external forces. you get a domestic story and that shows you how vulnerable sterling is. that is something we have been trying to warn people for quite some time. sterling has not been reflecting its own domestic vulnerabilities when you start to see these stories. it shows you that even in the medium-term, sterling is likely to underperform in those places. tom: in a time like this, you know this so well, there is a certain amount of media hysteria. when you sit down in front of the bloomberg today, how will you link in fx dynamics to what you see, and in case of the u.k., the gilt market? dominic: if you look at the relationship between guilt and sterling, for the last year or year and a half, they have barely been related at all. they have had almost zero link. that is what i'm am talking about. it is about sterling being driven by external drivers.

the u.k. has been massively highly linked. it has not been driven by u.k. rates. u.k. rates are basically at zero. maybe they go down a little bit. maybe the bank of england is forced into something more dramatic, but that story is pretty much done. i think sterling is a much better barometer of what the market thinks about the u.k. down the rates market. i think right now, the fx market is telling you sterling looks vulnerable. lisa: certainly, sterling has a lot of challenges with respect to the mastech economy. throughout the year, -- domestic economy. when the dollar is having a bad day, everything else is having a good day. today, the dollar is having its best day since june. people going to quality or perhaps just a classic haven. how much is that underpinning all of the moves we are seeing, whether it is the euro or sterling and beyond? dominic: i think the dollar is

going to be the safe haven currency of the world, alongside the swiss and the yen for as long as i am in this job. pretty much as long as any of us are going to be around. the liquidity and access to treasuries, those things don't disappear overnight. hurtnk the dollar has been by that in the last six months. lots of optimism. i do think that status, the dollar being that safe haven, it is not going anywhere anytime soon. if you believe we gather the short-term panic we are seeing and you do start to see that brighter future in 2021, which is what we do expect, i do think the dollar will come under more pressure again. the way markets work when you have this significant decline in risk appetite, the dollar is always going to do well on days like that. tom: we are going to come back to dominic at the half-hour mark as well.

huge news flow in a true deterioration now continuing in the market. s&p futures giveaway as well. down to -66. this is a 1.8% move on spx. let me stand corrected, 1.8% move on the s&p 500, 1.5% on the dow. in the next hour, in these tumultuous times, michael at and km partners. stay with us. tom keene and lisa abramowicz. this is bloomberg. good morning. ♪

tom: "bloomberg surveillance." good morning, everyone. markets on the move and falling. it 29.11. seven, make futures at -73. we can stay on the equity market, but i really focus on bonds now giving away. this is price of the demand into bronze. i am watching the two-year more than anything. we did have the two-year go to a print. massive curve flattening in the real yield. i'm going to beat to death foreign-exchange for you other

than to say even swiss franc shows strong swiss even against the euro as well. what do you see? lisa: the sterling is really important to note. ireland saying brexit talks are not in a good place. fishing still is a hurdle to the brexit deal. the eu has gone well beyond opening offer on fish. in addition to what we are seeing with respect to the covid virus, we are also seeing issues with respect to brexit. we will discuss that coming up. we are also going to be talking with the head of u.s. bank equity strategist. this is bloomberg. ♪

♪ tom: bloomberg surveillance, good morning. terrific news. lisa abramowicz and tom keene in

new york. the markets are deteriorating. i am watching the vix and the s&p 500 volatility, down 10,000 on the vix. level atch the 30 29.63. 2.2% moves at -80 but down, futures -580. nasdaq 100 having a challenge day. well, prices in as up yield. i'm watching the two-year u.s. yield more than anything, it now officially collapses. lisa, we are simply going to have to follow this as we get near a 30 print on the vix. lisa: the news has changed, there has been a change of tone with the new strain of the virus. there is a question of positioning. we are looking at ongoing deterioration. when you look at currencies. look at the dollar. the bloomberg spot index having

its worst day since march. since march, absolutely surging. i wonder how much of it is a result of crowded trains, there was the biggest short position ever heading into this on the dollar, expecting it to weaken. how much are those shorts being forced out of their whole? us, seniorstill with hsbc fx strategist. how much of what we are seeing in volatility is due to crowded positioning? dominic: i think it is one of for liquiditys going into a normally quiet time of year. moresitioning alongside widely used spots on the inn. they are showing dollar shorts are very popular. into 2021 -- that has been the consensus pretty much every year for the last five years. positioning will be a short-term maneuver, not something to think

about for six months. tom: we will follow this through the morning. indexng news, the s&p 500 now through a 30 level. that is always a big deal. lisa: dominic, to follow what you are talking about and what tom is highlighting, if this is a short-term issue does that mean you want to go against it and dive in? either short the dollar, sell the dollar, by sterling, go against a consensus trade? dominic: i'm not sure i would want to go against sterling. sterling remains one of those currencies where there is so much to mystically challenging i would not want to go against it there. in places like australia, new zealand, these are economies that are robust. they have a strong likelihood of having a good rebound in 2021, and these currencies can have a good three months, six months, year ahead.

if i was going to fight this move i would play long on the long kiwi rather than play long sterling. i think there is too much uncertainty volatility around u.k., the brexit, and other things. tom: where is the opportunity. if the loonie is that 127 and weakens to 129 -- do you jump in with pacific rim, em, what is the choice when you finally get the courage to move? are right, you're catching the falling piano. if you are open to where there is a bit of pain, a lot of those pacific rim currencies, australia and new zealand we like. in emerging markets, more asia generally. places that have seen better growth outcomes and will see better outcomes through the course of 2021. russia, turkey has had a bit of a policy re-think. to get you inant

trouble with janet henry, it's christmas, are we talking negative rates in the united kingdom? dominic: we don't think so. i don't think they want to. i don't think right now it would necessarily do much good. the problem the central bank faces and any central bank faces , when you only have a hammer every problem looks like a nail. that's where the bank of england finds themselves. , and if theyd qe need to do more listening in three months time, they kind of get pushed into the corner. i don't think it is their preferred option. i don't particularly think that negative rates are a great solution. england feels it has to do something and there is not much else -- lisa: dominic, thank you for

being with us. to bring you up to speed here, we are looking across the world as we look at the virus getting worse as we look at the possibility of a hard brexit as people struggle with the reality of a christmas destroyed by a virus that has destroyed all of 2020. s&p futures 2.2% decline, the best day for the dollar so far. the bloomberg dollar spot index since march raising a question of what has changed. we are getting some sort of stimulus effort in washington, d.c. moving. tom: well -- i would suggest, and i'm editorializing, stimulus pushed aside by the enormity of the shutdown of the united kingdom. lisa, you have your favorite benchmarks on the terminal. mine is the german two-year. i learned that from john, what is his name? he told me about the germany

two-year. i'm watching the germany 10 year this morning reverse and go to an ever greater negative. it is not where it was the first week of november. we are watching negative continental rates. in the u.s. i'm watching the u.s. two-year, it is not my prediction but one of my great calls that is of interest this year, a two-year yield that will not just be like a rock. .10 89 on the two-year yield. lisa, what else do you see? lisa: the 10 year yield, if you're talking about yields collapsing, the idea when you look across the board is the consensus trade of reflation of a better 21 is squeezed out today. there is a question of how far the squeeze can go given that we are looking at one of the most crowded markets ever in recent history. i think you can't let that go. 30 year yields also coming in at

1.6%, some curve flattening to find the consensus. here.0 9.6 we finally got a bit of stability in the market. it's been an ugly hour. i want to point to the negative real yield, negative one .0962. are going to continue to follow us, stay with us on market through the morning. with our first word news here is riddick a group death. ritika: congressional leaders have reached an agreement on a $900 million spending package to the economy. most americans will get $600 in stimulus payments and enhanced benefits for unemployment through march and the ppp program will get money. lawmakers won't have much time to review the mentor, the house -- measure, the house is set to vote followed by the senate. u.s. officials acknowledge they

will need to determine the extent of a russian hack on federal agencies and private companies. mitt romney says russia acted with impunity and he says donald trump has a blind spot about it. donald trump has contradicted u.s. intelligence officials and suggests that china may be a hind the attack. get ready for what one astronomer calls a spectacular event in the sky. saturn and jupiter will be the closest they have been in hundreds of years. the result is a christmas star effect, similar to the one that led the three wise men to the nativity scene. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta, this is bloomberg. tom: thank you. distance is unimaginable, i measure by the distance to mars which is more than the distance to the moon. mars almost the same distance as

to the sun. away ands six mars's away, is almost 11 mars's the distances are unimaginable. 12/26.es back to medieval history with ritika gupta. , the timeack in 1226 of louis the ninth, the great king of france. it is absolutely once-in-a-lifetime and this will be tonight if you are ever so fortunate to have clear skies. lisa, was that enough astronomy? lisa: i feel like we have to reset and make sure people know they are listening to and watching bloomberg surveillance and not astronomy today. tom: did i do ok? bbc with a great animation of that. i will try to get it out on social media. watching the markets of stability and the shock of the

united kingdom shutdown. futures -72. , on a united kingdom changing era. this will be an important update. stay with us, lisa abramowicz and tom keene from new york. this is bloomberg, good morning.

>> this is bloomberg surveillance live from new york. i'm lisa abramowicz aside tom keene. as the u.k. enters the firing zone from all sides of brexit deadlines coming up, not coming up with an agreement and having talks fracture. an emergency locked down due to

the spread of perhaps a more contagious strain of the virus. is u.k. and changing europe research center. jill, can you give us a sense of what kind of emergency it would take for the u.k. government to shut down the economy at a pivotal time for talks of brexit as well as a holiday? can you give us a sense of what the mood must have been like to make this decision? like they are saying they got a new assessment on friday that there is some controversy about when they knew. there has been increasing unease for the past couple of weeks that the christmas relaxation that the government had agreed was looking increasingly unwise as covid rates rose again in the u.k. and the talks were getting to points where they were at risk of being overwhelmed. there was a sense in any case

that the government was dragging its feet, it has been resisting saying theyeople have to abandon the christmas relaxation. there was some sense that was already there and when they finally got the evidence they a moreay that there was transmissible variant and they felt they had to act. way tonted to do it in a prevent mass panic on saturday evening in the u.k.. we had all those scenes of people clogging up train stations trying to get out of london to not have their plans wrecked. tom: thrilled to have you on, i -- afraid they were going to i was afraid the queen was going us not to have you on. what happens in a cobra meeting and what can politicians do about what is clearly a medical and natural disaster? jill: cobra is basically just

the name for the briefing room. it's like a situation room, we just like calling it that. , a basic tended to do deciding on a whole rash of measures. interesting thing about cobra when you are at the heat of a , there is what they call a battle rhythm of meetings. you can get some operational people, they can involve the whole government and other lawyers of government, they decide to make rapid decisions and transmit them into people who have to do things on the ground. tom: what do they do to transfer to the trucks, the lorries, at dover trying to get back to europe? take one application of what do we do on a monday morning or in your case on a monday at 12:00 noon. how will they move those trucks back to europe?

the: they can redirect trucks, they want to redirect them to other ports that have some conductivity. the problem, what they are doing at the moment is implementing their contingency arrangement that they have used in previous -- where they convert one of the motorways and highways into a parking lot to try to maintain flow. they turned that into a car parked. that it is not the u.k. government that is stopping the trucks leaving the u.k., it is the french government that has imposed this rule and what they will be trying to negotiate, people talking this morning about the ways they can dubs -- deploy some sort of rapid testing to

enable the poor to reopen. tom: with breaking news we have to move along. thank you for joining us. making veryayor clear he looks for an extension of the brexit discussion and brexit transition. we have heard that from others as well. futures at -78 and dow futures -5.5. now at 2.1% move on s&p futures. the yields where you would expect, price up and deal down. ,old earlier reversing huge huge round-trip in gold. he has been quoted across the united kingdom media this morning. one of the experts on the transfer of a virus and the transfer of some blend of their mutations. we are thrilled to bring you from the university of east

anglia, paul hunter. this is bloomberg, stay with us. ♪

tom: bloomberg surveillance,

good morning, lisa abramowicz and tom keene. interest at -81 dow futures -585 in the vix 29.52. worst 20 minutes ago, but i don't want to oversell that. dxy 20.89. paul hunter joins us now, the norwich medical school, quoted widely within the british press for his expertise on virology in this moment with this horrific virus. professor hunter, there are glycoprotein spikes, those horrific spikes that we see out of this virus as well, how are the mutant spikes different from the spikes you have been studying since february echo prof. hunter: -- since february? prof. hunter: there are differences with this virus compared to what we were seeing in november. the thingprotein,

that sticks out, that's important because it is what enables the virus to get into the new cell. fair, we don't yet understand why this particular variant is more infectious. andnow certainly that it is that it poses a substantial increased risk, but we don't at the moment fully know at the molecular level what is driving that increased risk. tom: if the molecular level takes us back to our heroes like francis crick, is this crisis for experts like you a crisis of mrna and the dna structures, or a crisis of the vaccine and its potential efficacy, or a risk that efficacy? main crisis ishe that we now have infections spreading more rapidly than the

traditional variance. really got to me in the prime minister's presentation was when he said it was increasing the r-value compared to the older variant. in the national lockdown we were at best able to get to .7. immediately what this is saying the national lockdown itself was not enough to slow the spread of this virus. certain,know yet for but it looks like these changes won't damage the impact of the vaccine. that very working on intensely at the moment. lisa: the lockdown, the shutdown or the restrictive measures the staving off in not

the spread of this virus. you are quoted saying this is so depressing and it will probably extend the pandemic and what we are experiencing for months. prof. hunter: absolutely. lisa: can you walk us through that? how much you are going to see this prolong what we are experiencing? prof. hunter: that's a very difficult question to answer. it depends on how -- on so many things. that we don't get another even more infectious virus, that the vaccines do as we expect and hope that they do. two weeks ago i would say i was quite confident in saying either time we got to the end of it january into february we would start to see relaxations in the restrictions across the u.k.. in a sort of piecemeal basis. now i think that is very likely

and we are likely to see problems well into spring and into the summer. paul -- tom: paul hunter, thank you. professor hunter with the norwich medical school at the university of east anglia, truly an expert on this horrific pandemic. lisa, as professor hunter was speaking we saw deterioration in futures, -100 and the vix down to 31. markets on the move. lisa: the stimulus that washington seems to be coming to an agreement on priced in, not priced in a dramatic worsening of the pandemic and this new strain. what we are seeing across the board is a reversal of consensus trades. 2.4% and oilown having its worst day in months, idea ofost 6%, this mobility absolutely crushed by this virus. a plug for myt

book of the year, "a new world map" on oil and are changing landscape. space, it is exceptional as you would imagine. it is price up and yields down. we are at four digits, .8 82 on the 10 year yield. i'm watching carefully, the .wo-year yield is below .11% please stay with us through the morning we will be doing much more data checks here with futures at -94. michael and our next hour. this is bloomberg. this is bloomberg.

♪

tom: this morning, chaos in dover, chaos in london as hancock says this is deadly serious. trade ar goes from one day to none. i government -- after three temporary fundings, mcconnell and pelosi have a deal, biden considers 900 billion a down payment. increasedpoverty rate to 26% in november. the real yield in the markets -- the real yield and the markets in absolute turmoil, futures at -100. bloomberg surveillance, tom keene in new york with lisa abramowicz as well. extraordinary markets. we will do more market checks, we have a perfect guest, michael darda, we will look at the aviation question in the united kingdom and kevin cirilli in washington. lisa, what is your observation m