♪ >> global assets show a mixed picture as investors weigh the risk of the new variant of the coronavirus. a new u.s. relief bill. a challenging christmas. boris johnson offers a last ditch proposal on fishing to secure an 11th hour brexit deal as he races to france. biontechch explores -- explores options to expand vaccine production. we will speak to their cco.

i am yousef gamal el-din in dubai. we have quite a recovery in stocks after the biggest drop in two months. that is a bit of a different picture from what we are seeing in other assets. cyclicals driving the recovery in the european stock story quite substantially so. 10's, you cans. sense the caution. s and italian bonds edging higher. it is a stronger green backstory that is in the eye of the storm in the fx space. we are down 0.2%. haven flows continuing to prevail, especially outside of the stock space. brent crude under pressure. we are barely above $50 per barrel. we will keep a close eye on those moves.

let's get to the bloomberg first word news. the u.s. house and senate have passed a giant year-end spending package. it combines $900 billion in pandemic relief with $1.4 trillion in regular government spending. the votes cap nine months of gridlock over a new rescue plan. the bill now goes to president trump to sign. suspected russian hackers targeted senior treasury officials and the recent cyberattack, according to the top democrat on the senate finance committee. the effort -- information taken is not yet known. the hacker reach the offices of the highest ranking official but it does not seem to have hit the irs or taxpayer data. european union has approved vaccine from pfizer and beyond tech, paving the way for -- biontech, paving the way for inoculations to start before the end of the year. officials at europe's health regulator also says there is no evidence the vaccine will not work against the new variant of

covid-19. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. ♪ those are some of the highlights. let's talk about the new variant of the coronavirus that is still weighing on markets. it is causing global concern, more contagious. it raises the risks of new lockdowns and has already triggered a fresh wave of travel restrictions. ago, reduced hours flights from the k. it was discovered -- from the u.k. it was discovered in the united kingdom, but denmark, the netherlands, belgium. mornings to be done to limit the spread. >> it is likely that this will grow in numbers of the variant across the country. i think it is likely, therefore, that measures need to be increased in some places in due course, not reduced. it is a case that will -- this will spread more.

yousef: furthermore, sam fazeli r more, sam fazeli joins us. is it likely to expand given the current list we are familiar with? sam: yes, good morning. it is possible that it will expand. one interesting element that has been added in the u.k. is the hypothesis, and i have to stress that all of these are hypothesis until saudi data backs them, that the -- solid data backs them, that the rapid increase three we are seeing in the u.k. may be driven by youngsters, adolescents catching the virus and even younger people. because the virus has found a way to be more efficacious in getting into your cells, and those age bands are less susceptible normally, it seems

to be that that might be what opposede rapid rise, as to people like me being more susceptible to the virus. if that is the case, it obviously impacts massively how we think about schools and opening of schools everywhere, especially the u.k. ousef: the indications are that this vaccine, or vaccines in general, are meant to be continue to be effective with this variant. there is no hard evidence to actually confirm that so it could actually be not as effective? sam: yes, that's perfectly possible. we just had a conference call by biontech where they described that they think that the repertoire of immune response that they vaccine generates has on theas, many areas virus that are not affected by this mutation. is that mutations

often change slightly the shape of proteins. what that could mean is that even though the specific area that there vaccine targets are not affected by the mutations. may be less susceptible to be attacked by the vaccine. these are hypotheses. i appreciate your insights. that is sam fazeli. out this discussion, because european shares have advanced to this morning after filing the most in almost two months. christian nolting, deutsche bank international private bank cio and head of investment solutions, joins us now. in your research, you make the argument that one should not believe that there is going to

be a quick return to life as it was pre-covid. as you look at the market reaction to this new variant of the coronavirus and the potential implications thereof, what is the battle plan at deutsche bank wealth? management this morning christian: what is the battle plan -- this morning? christian: what is the battle plan? to be a bit more cautious on the reopening of the economies. i do not think it will be an easy first quarter, to be honest. nevertheless, we see light at the end of the tunnel. we still think that vaccines will do a good job and then probably from the end of q2 onwards, you see a real effect. as long as we have not heard that the vaccine does not work against mutation, and that perspective, i think we have all reason to believe that. it is not immediately life before covid. we think there are massive changes, we call it even

tectonic warships. shifts.ectonic why? technology has been accelerated, the trends. that's something we need to take into account. another is home office. there are changes which will stay. a faster virus contagion, so let's assume that this spreads and transmits more easily -- if that is the case, is that also mean that you could be looking at a financial contagion? even if it is a mild one, at the tip of year-end? we are beginning to see a little more demand for greenbacks. christian: well, i think people a more realize that with contagious virus, lockdowns could be staying for longer, as i mentioned. that's why growth rates for 2021, which sometimes were skyrocketing, have probably been brought down a little more.

nevertheless, i still think th at q2 is a better way where we can open the economies. there could be contagion to markets if there is a realization that it all takes longer. it could also be that the u.s. is a bit more affected, because i think there is all reason to believe that the new mutant virus will go there. there could be spikes of volatility in the markets, which i would not rule out for the first quarter. yousef: what kind of sector calls are you making off the backs of the bigger themes that you expressed? 4-dstian: we like that teams and it's probably easy to remember and important for investment decisions. , themy start with debt already mentioned high debt levels. that could have implications, if

you look at the u.s., they talked about taxes already. to bring down inequality from that perspective, but it is also that there is more spending on health care. that's why we like the health care sector for investment. digitalization, is certainly interesting from our point of view. demographics -- yousef: we are going to pick this up right away so i want you to hold onto that thought. christian nolting stays with us. whate going to look at is happening in france, because they have shut down freight traffic from the u.k. countries from around the world are banning travelers over virus fears. brexit talks are still ongoing. we will bring you the latest on the challenges facing the u.k. that is next. this is bloomberg. ♪

♪ yousef: economics, finance, politics. this is "bloomberg surveillance." boris johnson says he is trying to reopen trade routes via dover, the u.k.'s busiest port, as fast as possible. a day of discussions did not and the chaos after freight arrivals were shut down after fears of faster variant of covid spreading. all that while the days count down until the end of the brexit transition. joining us to discuss is maria tadeo in brussels. bring us up to speed on the latest travel restrictions and where we are at with the freight holdups. maria: it continues.

you have seen those pictures playing all morning of trucks waiting in line just to enter friends and -- france and try to get a hold of normal operations. the french have restricted travel from people, but also goods. the prime minister says he has spoken to emmanuel macron to try to open up to get operations back up and running. the french and principal said they agreed, but there needs to be a health protocol put in place before and people will have to be tested before they can enter in a truck. disruptions very much continue. the numbers do not appear as big as yesterday, but nevertheless, the disruptions are very obvious and apparent. the list of countries now banning travelers from the u.k. into continental europe biplane, many of them trying to get home for christmas, has increased. spain and portugal have said

initially they did not want to do this, now saying that there will have to -- they will have to close their airspace to u.k. flights. that is all happening in the midst of the brexit talks and internal debate in the eu as to what measures should be taken, as to what kind of approach will be needed. yousef: we are also waiting to hear from abu dhabi airports to of a field as to what the direction is as it applies to flights from the u.k. where are we with the brexit discussions, though? it looks like we had a little bit of a breakthrough. maria: look, the clock is ticking. we know there is two weeks before the u.k. could crash out, in wto terms, from the european union. there is speculation, a rumor doing the rounds in brussels that there could be a breakthrough on the fish, that the united kingdom could be about to give ground on the quotas. they have said they wanted to

see a reduction from the u.k. quota fish in u.k. waters from the eu. . 60%. that seems to be moving to 35%, closer to the 25% offer that big european union put on the table. they could potentially increase the transition period into the new quota, giving them a five-year term to adapt to the new situation. the u.k. had argued for three years. this is not official. it is during the round stay in brussels. if this serves to unlock that socks -- block -- unblock the talks over fish, that a deal could be closed. yousef: thank you for that. maria tadeo. want to get back to christian nolting of deutsche bank international private bank. the u.k. is evermore finding itself in a real mess. also is also -- they are losing quite a bit of leverage, if they had any to

begin with. would that make it easier? christian: you cannot just be pushed to a deal because you created this mess from the mutant virus. it probably shows again what could happen if the deal does not happen. lor ee all the cues of ries in front of the dover port. i think we see some developments today as you just heard and maybe we could get to a solution. yousef: when it comes to the near-term trajectory of cable, under pressure, as you would expect this minute, but is there a case to be made to allocate some capital into this trade? christian: i think if we get a deal really or kind of solution, that could be certainly seen positive, because you just have more confidence that there is an outgrowth of the u.k. economy. of course, the virus is still there for quite some time, as i mentioned earlier. but i think you can plan a bit

better, so there is more, let's say, certainty. that would also trigger money to flow back into the u.k. from that perspective, yes, if you have a deal, that is certainly seen positive. yousef: is a double-dip recession now unavoidable for the u.k., as far as you're concerned? christian: i think probably yes. nevertheless, we already know that there is probably light at the end of the tunnel. if we see vaccinations working, which is what we should assume, then we do see some growth for the u.k. the round of 4.5% for 2021, which is then out of a double-dip recession. yousef: we still have more to discuss. christian nolting stays with us. coming up, we will get you a bit of a snapshot. relief at last. the second biggest economic rescue package in the united states history passed congress,

but have markets already priced it in? is it ancient history already? we will get that answer next. this is bloomberg. ♪

♪ yousef: you are watching "bloomberg surveillance." the second economic rescue package, the second-biggest in united states history, has cleared congress. after months of disagreement

between democrats and republicans, the senate followed the house and passing the bill. the package will fund the federal government for the rest of the fiscal year and will also provide aid for businesses and consumers, including $600 stimulus checks to most americans. christian nolting of deutsche bank international private bank is still with us. the markets live team has looked at the reaction arrived after -- right after the senate decision came through. they are wondering what assets are going to benefit most from the u.s. aid plan. markets had a lot of time to price in the consequences of this, right? christian: yes, there was a long time where this was negotiated. it was even to be discussed to be there ahead of the elections in november. now, we are close to the end of the year and finally this is through. i think the rising infections have pushed politicians. markets have looked into that and price to this. one reason the u.s. did not do

so bad as others yesterday was that we have this agreement in both and this is through of the houses of congress. i think especially equities are profiting from the, because -- that's whatecause we have seen throughout 2020 actually. out kinds it your go of stocks, like airlines and restaurants, that should become my primary focus again? christian: that's the discussion really of growth versus value. we have seen this massive outperformance of growth because of technology being there, clearly one of the winners of this crisis. over the recent weeks, we have seen cyclical stocks coming back. i would really differentiate between only value, because we see a very low interest rate environment, which is not the best environment for financials and that will stay for quite some time. ,yclicals should do quite well

and especially going into 2020 one, where we see a recovery in growth. yousef: what about the return of buybacks for banks in the united states? how critical a signal is this for the wider market? that is certainly positive news. you have seen in europe, that the ecb under certain circumstances is allowing that to happen again. also for dividends, i think that is good news, because it is helping the market from a demand-supply perspective. i think that is good news. yousef: all right. we will leave it there. fromis christian nolting deutsche bank. coming up on this program, a desperate attempt to reopen trade routes at a christmas. france is closing its border to the u.k. over the mutant virus. it has caused an enormous amount

of disruption. we will be speaking to the ceo of alcaline. that's next. this is bloomberg. ♪

♪ economics, finance, politics. this is "bloomberg surveillance." i am yousef gamal el-din in

dubai. targetedussian hackers senior treasury officials in the recent cyberattack, according to the top democrat on the senate finance committee. the information taken is not yet known. the hack reached the offices of the highest ranking official, but it does not seem to have hit the irs or taxpayer data. the u.k. is battling to reopen down overrance, shut fears of a faster spreading variant of covid-19. boris johnson says he is working as quickly as possible to end the chaos in dover, the u.k.'s busiest port. dozens of countries are now restricting flights from britain. in order to secure a brexit deal, the u.k. may be looking to compromise. sources tell us that prime minister boris johnson may give some ground on fisheries if the eu followed suit in other areas. britain could accept the bloc cutting the value of the fish it catches in the u.k. waters by 1/3. previously, it was asking for a 60% cut.

global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. we have some breaking lines coming through from several entities. this is from the german institute, the vital health care authority that comments and gives perspective on germany's plan to mitigate the impact of the coronavirus. they are saying in this press conference that the u.k. virus mutation has not been detected in germany. this is at a briefing they are making these comments. at the same time, the he officials -- the officials saying it is very likely that the u.k. virus mutation is actually already in germany. we will wait and see to see if we get more details. we are waiting for additional numbers are coronavirus infections from the u.k.. that is expected imminently. in fact, we are getting those

numbers now. the england and wales covid-19 fatalities have fallen in the week through december 11. covid-19 accounted for 22.4% of the fatalities during the week. a bit of an improvement in the fatality rate. it has dropped in the week to december 11. the total england and wales figure was 14.3% above the five-year average. some new numbers to digest and on the covid situation in the united kingdom. let's get to our next guest. the u.k. government is desperately working to reopen trade routes to france after the country closed its border over the mutant virus. it caused chaos in dover and southeast england, with lorie

ries backed up for miles. joining us is lorenzo zaccheo from alcaline, which specializes in luxury car parts. can you quantify the impact the disruption is having on the profitability of your business? lorenzo: it is obviously absolutely massive. basically, we are talking about -- we areetween 50 talking about thousands of pounds per day. it has been a very value. -- a very bad year. march,, april, and may very bad. the other motive industry came to a complete -- automotive industry came to a complete standstill. we cannot of disaster just to

hit another one -- came out of disaster just to hit another. that's a massive amount of money that we are losing. 1.2 million pound was lost in those three months. now, we are having more losses here. everybody is concerned, obviously. ,u customers are concernedr because nothing is moving. that's the issue. yousef: are there any contingency plans that you have been able to roll out? what are your options? how are you working around this? lorenzo: we try to do the best we can. unaccompanied now, we are doing about 500. logistically, it's a nightmare. we have to get other vehicles on

the others the channel to pick up these trailers to be delivered. it's a massive cost. we have also got double men teams basically. there is no light at the end of this tunnel, because obviously now we are talking about testing the drivers, you know. that basically if they were not showing symptoms, it would take two or three days to get results. we do not know what is going to happen. the problem is -- yousef: how would you describe -- if i could just follow up, how would you describe the communication with the government? do you sense that they have been accessible throughout this crisis? is there perhaps room that they can improve on? lorenzo: if i could just use one word, i would say absolutely rubbish. truckstalking about 170

the other day that waiting -- that weighed in. they miscounted. miles -- got 23 or 25 they come up with 900 vehicles. the numbers are completely wrong. you do not get anything reassuring from the government. so basically, we do not really know what to do. we have to keep the drivers until the very last minute. we cannot allow them to go anywhere. that's the problem. we have to keep them here. yousef: we will get the government to respond as well. run-up toerim, in the this crisis, how did demand hold up, as far as customers and clients across europe are concerned?

was there light at the end of the tunnel? did you see green shoots of an imminent recovery? lorenzo: the last two weeks leading up to christmas, we have been absolutely flat out. the biggest issue is the pricing. subcontractors tried to charge us twice as much, because obviously lack of vehicles and a willingness to come to the u.k. they knew it was going to be a nightmare. someone predicted it was going to be very difficult, the air conditions this week. most of them have doubled their prices. it's been difficult, because obviously there was a stockpile. we did not have enough vehicles to do it anyway. that's the biggest issue. you cannot predict, you cannot plan. it's just impossible. you know, we are working on 24 hour lead time here. that's the issue.

thank you foro, sharing some of those insights. it has been super valuable in terms of getting a bit of a feel about what companies like yours are going to her on the front lines. lorenzo zaccheo, the alcaline managing director, thanks again. we are going to stay with the broader coronavirus theme and speak to sean marett of biontech . the vaccine was approved for use in europe. there is a lot to get to. we will try to get to all of it. that's next. this is bloomberg. ♪

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watchingou are "bloomberg surveillance." i am yousef gamal el-din in dubai. let's get you the bloomberg business flash stories. tesla was the biggest drag on the s&p 500 on its first day of trading on the benchmark. the electric car maker now represents 1.6% of the index, ending the day as its sixth heaviest weighted stock. the fall follows a surge on friday, when index fund managers purchased tens of millions of shares ahead of inclusion. platonic -- peloton is purchasing a rival. sales have a short sword this year -- sales have soared this year but the company has struggled to keep up with demand. vodafone is offering to buy out the remaining shareholders in german telecom firm kdg. it comes seven years after it

originally agreed to buy the company. back then, it acquired about 77% but was blocked from buying the the rest, including elliott management, who wanted more. eu countries should receive the current test coronavirus vaccine in the next five days, according to biontech. speaking at a press conference this morning, the group's chief business and commercial officer says it does not anticipate shipping issues due to brexit. it has anticipated -- said that the united states will get 5 million doses by the end of the year. sean marett joins us now. let's get your reaction on this new variant of the coronavirus. you are looking to test your vaccine with that. how long is that going to take? sean: just as we did at the beginning of the year, we can develop constructs against variants within six weeks.

the question will be, once we do that, what regulatory discussions we should have, if necessary, in order to get such a vaccine against a variant approved. of course, that is something that we need to do later on. six weeks, we can have a new vaccine ready for discussions with the regulators. moment, thehe indications that we have gotten is that there is no evidence that a vaccine of the current lines would not work against of this new strain of the coronavirus that appears to be emerging out of the u.k. and other countries. but there is neither any evidence to say it's going to be as effective, right? sean: yes, that's something that we've got to test. andariants have emerged this virus, like all viruses, is unstable, that's by nature. you see new variants.

withve tested 19 variants the original variant encoded in our vaccine. our vaccine continues to be effective against those 19 variants. this is a new one, so we are currently testing in the laboratory to see if this ur vaccine works against this variant. is looking toch expand production, we understand, at year end discussions with the german government. what help are you seeking? sean: the help we are seeking locally is really about approval of our existing facility in mahlberg. foret it approved

production by the regulators here locally in germany and of course then at the european ema level as soon as possible. it is really important for us to manufacture as many doses as we can as early as we can. that will be the aim of working with the government and ema in order to help to assure that. yousef: you're looking at, what? 1.3 billion doses in 20 21, maybe more than that? if you can get up and running with your kind of investment plans, what is possible? what kind of number is achievable beyond that? sean: i mean, this depends on a lot of factors. morean go up significantly from 1.3 billion. billion.plan is 1.3

we think that is achievable and realistic. int, of course, is combination with our colleagues at pfizer. between us, we share a network of factories. mahlberg, the factory we bought from novartis would become part of that network. yousef: do you expect to have any stumbling blocks with border closures in the u.k. and some of the wider disruptions that we are seeing at the moment, in terms of virus vaccines getting into the u.k.? sean: no, we do not anticipate shipping challenges. ane, boat, and lorrie. if the channel tunnel to the u.k. is shut, there are other routes into the united kingdom. yousef: what about operating

conditions, or let's say transport conditions? needs to be stored at -70 degrees celsius, is that making tricky?e a little bit you have to develop the rollout logistics to be able to leverage. sean: don't forget that together with pfizer, we have designed shipping boxes to act as -70 freezers. we simply put the vaccine doses and the vials into these boxes, whichever dry ice in them -- which have dry ice in them. we pack them and ship them. no, we do not see any issues there at all. yousef: what are some of the other factors that would have an influence on your decision to either keep capacity targets where they are or increase them? think there is 7

billion people worldwide that we would want to vaccinate with our -- so anyny ability ability to increase the capacity would help to achieve that en d. for those who want access to our vaccine, we will give them access purchase agreements. that still remains the aim. very focusedwe are on that and if we can increase capacity to do that quicker, that's what we will do. yousef: a question on these different variants of the coronavirus. is it correct to say that your design of the vaccine has an ability to be calibrated to different strains? sean: that's exactly right. that's one of the enormous

attractions of using mrna, the vaccineto make a new extraordinarily quickly is one of the significant advantages we -- this is one of the things we started with pfizer with flu 18 months ago. of course, now we can apply that too.covid virus, and it is the speed with which you can change your vaccine that makes mrna particularly useful in a pandemic situation where you are seeing changes to the virus. as i say, the virus so far, the verys we have seen -- the variants we have seen so far, have not affected the efficacy of the vaccine. yousef: really appreciate your time. i know this is a very busy day for you. cco,marett, the biontech with additional insights.

coming up, finding out a way from the slump. could 2021 be the year of european banking m&a? we will discuss that next. this is bloomberg. ♪

♪ yousef: economics, finance, politics. this is "bloomberg surveillance." i am yousef gamal el-din in dubai. europe's biggest banks are coming to a stark realization, they need a plan to get out of current slump. m&a is seen as a way to create a thriving joint. let's have -- giant. let's have a look at some of the pros and cons. joining us for that is our financials m&a reporter. why are we seeing this m&a activity get a little bit off the ground here in comparison to what we saw earlier on in the year? >> good morning. thanks very much. i think i am probably a little more bearish on banking m&a. ishave seen, historically started maybe 15 years ago in ,urope when unicredit board

which was probably the biggest cross-border deal in the past 15 years, and then this banking consolidation in europe started. there are many, many hurdles towards banking mna. there has been a step change now. why have we seen banking m&a this year? three veryn two to significant deals. it is because banks see a need to cut costs. that's a reason for why banking m and eight is happening. is happening, the need to cut costs. usually, the synergies are higher. this is a quick way to reduce costs. you look at the caixabank, banking deal, that was an easy way to reduce cost base and yield, as they say, synergies. why now? step change in

regulation this year. the european central bank said, if you want to do a deal, come to us early and there is no automatic requirement of capital increase. yousef: regulations are absolutely critical in this thinking here. where does that leave us? why don't you share with us some of the names that you think could be likely targets or likely in discussion. , everyrally speaking bank that is trading significantly below book is a target. the market assigns a lower value than the bank's assets. to a specific bank one of the names that is naturally coming up is germany's commerce bank. it is this -- commerzbank. in the euroggest zone. this bank is very undervalued. this is why it is also a target. one of the hurdles is that for

now, the government is still a key shareholder. the question is what the government wants to do and whether somebody wants to make a move. there are many hurdles. if banks get bigger, they may have to post higher capital requirements. not have af you do deposit insurance scheme for europe, which means you cannot benefit from the economies of scale. that's another -- yousef: thank you for that. we are going to have to leave it there. continuessurveillance into the next hour. european stocks bounceback. we are getting mixed signals from other asset classes, including commodities. the coverage continues. this is bloomberg. ♪

♪ tom: this morning, call it bio

-hysteria. the dow near 1900 points. the six plus percent swing, while it sets the nasdaq 100 near a record i. dover, they look for a pragmatic solution. we will talk dover. johnson telephone macron. macron looks for testing of truck drivers, lori drivers. the french could have helped, if not for brexit. light reading. over 5000 pages of other incentives, including kentucky racehorse owner relief. improvent $6 billion to red sox pitching. good morning, everyone. "bloomberg surveillance." lisa abramowicz and tom keene. did you recover from yesterday?