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? lisa: no, i am still reading the

5593 pages. tom: red soxto the relief yet. page 3000 or so. we will talk to kevin cirilli about this here in a bit. usually, we always spend forward. we always have to look back to yesterday. you almost knew the market was going to recover of of rumor and speculation. lisa: what triggered it to begin with? the same kind of drumbeat of pandemic worsening we have been getting for a wide. was it enough? not really to get a real selloff going. tom: buy the dip. cash fundp on the yesterday. let's get the first word news in new york city. bill that spending has something for everyone. last night, the senate gave final approval to a measure that combines coronavirus relief with

regular government funding and tax breaks for businesses. president trump was signed into law. it includes 900 billion dollars in economic relief, the second largest measure in u.s. history. most americans were gay one time payment of $600, plus enhanced jobless benefits will be extended. haveer attack is said to targeted senior treasury officials, according to ron wyden. the extent of the attack is not known. irs data and taxpayer data do not show any signs of attack. 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. i am ritika gupta. this is bloomberg. tom: thank you so much. breaking news and down goes sterling over fish. kingdom'se united exit offer on fish. no surprise. rejected by european union

officials and you see a sharp reaction in sterling. futures are negative. nasdaq 100 green on the screen and really buttressed right up near record highs on nasdaq futures. i will do currencies, lisa, and . leave. the bond space to you dxy index down from the hysteria of yesterday. yen, as i mentioned. euro back over 1.22. 76.rling, 1.33 euro pound, this is a bit confusing, particularly for early-morning americans. so much of the united kingdom and europe sets in sterling, that goes the other way. one goes up and wonders down -- one goes down. >> that was great. high-level cfa. i am looking at what we are

seeing in s&p futures and what they are doing right now, which is not very much. i really wonder how much this has to do with tesla. in the bond space, you can see a persistent bid. . for bonds. me, interesting to see the dollar strength continuing today at the expense of the euro and the pound, which is having a bit of trouble this morning. right now, let's get a sense of what we are going to see going forward. joining us now is the senior strategist for emea markets. he has been phenomenal on everything currencies, but also the pressure of negative real yield. let's start with the pound. can you even play in this sandbox or is it basically an emerging market currency right now? currency,nd as an em that has really been in play for the last three or four years,

according to some areas. at this point, i think the deal is still a base case. the fear of a no deal, the lori --f two thousand rries, that is happening already. i wonder if the visual impact will be as strong in the case of a noted. bearing that aside committee deal or no deal, the bigger story is the state of the u.k. economy. may be a stronger lockdown is coming. we just saw the borrowing numbers. in the u.s., a new spending package is about to be pushed through. the net-net not looking too ros y further u.k. right now. barelyan industry worth a billion pounds, is that something that would derail such a strong relationship?

come year end, a deal should still be the base case. >> the economy, which is the main story here, not doing so hot. how do you trade around these dueling narratives and the longer-term story, which is really fundamental and economic? evaluations from basis over the medium to long-term, is quite -- rather than looking at cable outright, cable does go lower, but looking at the reflation view in some parts of asia, for example, where the economy is strengthening. an.k at sterling-korean yu second, u.k. equities linked to global economies. i think those are opportunities worth exploring. tom: you have always been respectful of flows. right now, i want you to follow the flows. what is money actually doing here at the end of the year? , weooking at our monitor

are looking across asset classes, money is looking at ys, at the areas where there is a real yield to be had, not just in currency terms, but if you can find those bond markets, equity markets that gives you a real return, those areas will benefit up ahead. of 2006it the energy where people are squeezing out every basis point in search of yield? is there a panic to relieve parse and split hairs? >> i do not think there is that much of a panic yet. there is always the fear of missing out aspect. ultimately, that is a fundamental case at this point. if you look at the chinese 10 through yield, it went 250 basis points over a 10 year treasury. china is actively allowing that. the market is sensing opportunity. a lot will depend on whether

asia can maintain its current trend and reflate. if that's the case, that will be the directional flow. >> the title of your research paper, congratulations on coming up with a classic year-end title. as you work a classic year-end piece, spinning forward to next year, how difficult was it for you given the very strong consensus, given the fact that you wonder come up with a nuance that is individuated, but also is right? >> it is not just about profitability, it is about flows. you want to go to areas where perhaps flow is being a bit stretched. if the position is profitable come these flows are going to continue. i think the markets are in a cautious mode. we want to look at things from a multidimensional point of view, be it a bit more granular. you want everything to align.

carrien come through the point, currency point. we think there are plenty of opportunities in the market. >> we will touch on them a little bit. i want to get your sense on the consensus call of the euro strengthening and the dollar weakening. do you think that could continue, especially in light of the recent lockdown of the k and some of the concerns over the new -- the u.k. and some of the concern of the new virus strength? >> yes. if you told the ecb that we could get to 1.30 toward the end of next year, even mid next year, i think the ecb will be happy with the. if we get there in six or eight weeks, then we will have a problem, the ecb will absolutely talk it down. pace much more important than levels. tom: where is the overplay now? where is the over bet where you have got all your radar up?

at this angle, asia is still at one point where evaluations will have to come into play. i am looking at the cnh very clearly right now. the key phrase from the pboc, fairly valued. these two words. valued. renminbis stump strengthening dutch stopped strengthening -- renminbi stopped strengthening. tom: this is really important. the one-way bet has been stronger pacific rim, led by china. you are saying, as we saw back to plaza accord, there is a point where countries will say no, we are not going to do it. >> the point at which that happens is when the pboc believes they are going to be at fairly valued, not overvalued. last time, they allowed to go

overvalued. when you unwind an overvalued currency, it becomes very volatile. i am watching that. tom: this is really important. we are going to rip up the script. lisa abramowicz has allowed it. her agreement to do the show without jon ferro. her agreement was that we had to rip up the script at least once an hour. >> at least twice in our, tankan tom keene. hour, tom: we are going to come back yuh jeffrey you -- geoffrey on the great call on the pacific rim. just too easy of a guesstimate a. number of ways to go. look at the headline on fish. eu says no to the united kingdom. this is bloomberg. good morning. stay with us. ♪

♪ tom: "bloomberg surveillance." good morning, everyone. lisa abramowicz and tom keene. through the morning. what we are going to do here, we yu going to talk to geoffrey about the stimulus bill, but has comments about pacific rim are so important, we are going to continue this discussion. this is really important. ,his goes back to plaza accord massive strong dollar weakening so abruptly.

you've got the rubin dollar up, here's the move back up we've had through the trump administration. what's important about this chart is it is pointy. there are solutions with countries just saying no. how close are we to china, germany and other single? -- saying no? >> let's just look at china. at what point does china realize the currency is overvalued? if i look at the index, we are barely 3% from that right now. not far off. 50% --lar may be 40%, tourism, chinese are not spending $100 -- $100,000 per year in u.s. colleges. there might not be as much room

as the market thinks. tom: how does the fiscal change affect all this? the increased debt, increased deficit buttressed up against the currency movement? at thes the fiscal umph moment change things? >> china will hope that the fiscal change in the rest of the world can boost some of their own assets and allow some of that natural rotation out of asia. anondly, china wants to set ideological difference. china has been talking about fiscal restraint. they did not want to go on a spending binge, pointing out to europe, america, they are spending beyond their means. this is a divergence. they are actively trying to restrain things right now. on the other hand, they need to realize this makes chinese government bonds a lot more attractive. it is a delicate balancing act. one key comment, too much cheap

money going into china. estate.ry about real this is where they want to contain things. >> if we are going to be talking about the importance of pointy charts, let's talk about the ability to create them with policy. does the pboc have the ability to dampen the u.n.'s rise? is this something more difficult for them now than it used to be? >> it is difficult in the sense yen'show do you send the rise while trying to encourage long-term investment through china? these are conflicting. you want to encourage longer-term flows. in the short-term, you want to avoid this too strong strengthening as well. for the time being, it is tweaks and policy. the most recent one, telling goinese corporates to

pay back some dollar loans. these tiny things that over the medium to longer term, i still think that money will be about to go into china. they will use window guidance to limit the flow. ofy want to avoid a repeat 2014, 2015, allow the yuan to go overvalued because that will be really messy. >> how does joe biden's presidency change the scenario a little bit in terms of trade policy with the u.s.? >> from beijing's point of view, that is not expected to change anytime in the near future. beijing would be happily surprised if it was to the positive side. the dialogue might increase somewhat. there is acknowledgment that there is a bipartisan consensus on trade. globally, if you look at u.k.-eu movement to actually ship production back towards home countries. shine is not counting test china is not counting on trade --

china is not counting on trade. years, it is10-15 about stimulating domestic demand. the pace needs to be under control. tom: one final question. the equation and the residual, is the nominal yield less the inflation expectation equals the real yield. it is a cottage industry to focus on the real yield. should we focus on the real yield, the residual or should we focus on the dynamics on inflation? >> next year, i think the dynamics of inflation are going to be more forward talking. it is all about where will inflation expectations rise above what markets are expecting? here's going back to my view on europe. anduse for the third time so long, there is fiscal on the table, they have gotten through some of the rule of law issues.

europe is where inflation can surprise to the upside. if that happens, the euro will be allowed to strengthen to offset that in a matter consistent with the ecb's inflation priorities. next year it will be about inflation expectations. tom: amazing to see the different slopes of the major financial nations here on inflation expectations. the u.s. with a real burst of inflation expectations. usually valuable as always. wonderful on how countries will react to a weaker dollar. one thing we are all reacting to is the great mis-call. small-cap, mid-cap, finally they move. david saar buried rumored to take over the detroit tigers. on the tigers and on small-cap, mid-cap excellence.

futures up. this is bloomberg. good morning. ♪

♪ lisa: -- 500esla's debut on the s&p was not a cheap one for investors. the electric carmaker was the biggest drag on the benchmark and its first day of trading. shares fell as much as 7%.

four accounts for about points of the decline. apple reportedly wants to build a self-driving car for consumers by 2024. according to reuters, the company is developing its own battery technology. apple has been working on driverless car technology since 2014, but pared back its 2017, instead focusing on the underlying autonomous systems. the spending bill congress passed includes dozens of tax breaks. helping handot a from lawmakers, so did the makers of beer, wine, and liquor. that is the bloomberg business flash. tom? tom: thanks so much. the data check is simple, back to normality after the festivities of yesterday. huge move yesterday, 6% total swing in the doubt, really extraordinary. 0.3%.sdaq 100 up

boredom in a bond market. >> with the stock move yesterday and a lack of moves today, tesla the third-most volatile stock in the last couple of months. that's one thing i am watching. the dollar gaining yet again after yesterday's strength, despite the fact that we have more of a risk on tone. gold has become, to quote mark carney, and unreliable boyfriend . is it going to go up, down? coming up, we have mark lazard at 8:30 a.m. in new york. this is bloomberg. ♪

♪ bloomberg surveillance, good morning, lisa

abramowicz and tom keene. , thern in the markets dynamics of foreign exchange, the litmus paper is extraordinary. sometimes you get lucky and we got lucky at bloomberg when one of our founders, tom segundo, turned to paul sweeney and told him to hire smart people on the screen. we did that and we do that and we've done it again. at jp has been wonderful morgan over the years providing foreign exchange strategy and i'm thrilled to say she has joined bloomberg intelligence in charge of the world of the dollar. now she can get it from bloomberg directly. thank you for joining bloomberg intelligence, did you frame up your research for b.i., what is your call on dollar? aubrey: good morning, thanks for

the intro. i'm afraid -- i kind of embrace a majority of people. a bearish outlook into 2021. as we saw yesterday there is such a thing -- there isn't such a thing as one-way trade. a big move on the dollar, lower this year and the outcome circumstances where this dollar bearish view could be challenged. for what does it mean commodity currencies? the bank of good at this. you see the loonie most strongly -- the bank of montreal where you used to be is good at this. you see the loonie most strongly. what does dollar weakness mean for commodity nations? audrey: dollar would benefit on currencyed risk market environment next year.

you have very much to see that as much of a u.s. dollar weakness story as an isolated canadian dollar strength story. the commodity currencies do have some catching up to do from the fall we have seen in 2020 and that would open the way for the canadian dollar to do well and 120 five andowards potentially lower on dollars cad. lisa: so much of the weakening has been driven by the idea of a reflationary environment worldwide. how much does the physical support package passed in congress add to that conversation? does that help the risk off move or give a sense of strength to the dollar because this could strengthen the u.s. economy? i think yesterday it was very much a bit of a mixed day for the currency market and the

market in general. we started the day in a risk off mood globally, and that was driven by the bad news from the u.k. on the virus front over the weekend plus the returning concern about the no deal brexit outcome. very much a specific european theen underperformance and dollar was doing well on the back of that. in the afternoon session we got better use on the u.s. fiscal front and we feel it in this state of mind where we have for a leave from the u.s. fiscal situation, and that has helped the u.s. story. we are at a stage where a recovering u.s. economy -- that is negative for the dollar. u.s.tory where a strong economy will become more of a dollar breach will be coming

later round, something will have to think about -- we will have to think about in the second half of 2021 or 2022. at some point the stronger u.s. recovery story starts to question below for long yield story from the u.s. and that is an important element in being dollar negative. that's when you start to think about how much longer you can run this dollar bearish view four. i don't think we are there. lisa: a lot to unpack there. bid ofked about how the dollar strength has been driven by european weakness because of brexit and the virus strain has accelerated the pandemic. how much more does that have to go, does the euro have to go lower? does the pound have to go lower based on recent developments? price is think the still quite resilient for european recovery -- european

currencies. lower in we saw a move the morning session, but we came back pretty quickly. look at cable today, back at nearly 134. we just had a headline suggesting that the latest offer on fishing has been rejected by the eu. for now we have eight days to go and we still don't have an option for brexit solution. the market is trading under the working assumption that some kind of last-minute deal will be found. even though i would not break that view i am feeling more uncomfortable by the day in holding that view because we are running out of time. hoursope in the past 24 on the european side of things we saw a taste of what may be to

come on a no deal brexit obstruction at the border. tom: something you said that is important as that we watch as we come off of some sort of catharsis, we had catharsis yesterday, and with a vengeance the asset classes came back. away from affects, what does that signal for debt or equities what does that signal for debt or equities? audrey: depending on whether you returning --it is this returning risk appetite, let's get over the virus issue, the vaccination deployment will be effective, economies will go back to some kind of normality in the course of 2021. if you buy into all of those arguments and those working intoptions, you still buy

the dollar bearish view. yesterday morning we had a bit of a pullback. it's normal. we had such a strong run and there was so much uncertainty. the one other thing -- getting into year end, so there is low value. tom: this has been wonderful. thrilled you have joined bloomberg intelligence, chief g10 fx intelligence strategist. in new york city with our first word news here is ritika gupta donald it is up to trump. white house aides say the president wilson nine spending bill that combines coronavirus relief with regular government funding and tax breaks for businesses. it includes $900 billion in economic relief, the second largest measure in u.s. history. most americans will get a one time payment of $600, plus

enhanced unemployment benefits will be extended. in texas, coronavirus hospitalization surpassed 10,000 for the first time in 10 months. the second largest state in the u.s. is struggling with the latest wave of infections. texas healthf services have 15% -- 50% of capacity occupied by coronavirus patients. the number two republican in the senate is downplaying any chain -- he says any attempt by house conservatives to challenge you abide in's -- challenge joe biden's elections will go down. trying to reopen trade routes to france after a day of chaos. the french shutdown trade traffic from dover because of fears of a faster spreading variant of the coronavirus.

the british government imposed a strict lockdown on london and surrounding areas. 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. we say? lisa: -- topic of potential food disruption, the ports that were shut down in response to the new strain of the virus. doug banister joining us of the dover board. this is bloomberg. ♪

♪ an excellent conversation with the french president, this will be sorted out in the next few hours if we can and our teams will be working on it.

if we can get a result then that would be great. we will do this as fast as we can. it only applies to a small percentage of food entering the u.k., and british supermarkets have said their supply chains are strong and robust. everyone can continue to shop normally. the moment forf the prime minister of the united kingdom, an extraordinary day yesterday and the images that we ent and the of k port of dover of trucks backed up for miles. authority, douglas banister, the chief executive officer of the port of note are -- port of dover after tours of duty in jersey, he is a pro on port logistics. we are thrilled he could join us this morning. basics,tart with the not back to 1066 and the norman

conquest and the importance of dover, but what is on all those trucks lined up down the highway? dover, we haveof been around for a long time. our success is driven by how close we are to our largest trading partner in the u.k. which is the european union. just inprovide is a time trade conveyor belt type doinge, with each one five round voyages in the day, it's a tremendous amount of capacity and resilience for the entire u.k. supply chain. tom: it's a system that works, a france, theyh with make it clear if there was not brexit this would get fixed very what is your estimation of when we see a pragmatic solution? doug: i don't know. what i'm encouraged about is the governments on the both sides of the channel are engaged deeply in trying to come up with a

solution that would allow freight to carry-on crossing back into france. as folks will know, inbound traffic into the u.k. has been continuing to flow, although it is on more reduced volumes than we typically see this time of year. lisa: is the solution medical or political? doug: i don't know how you can separate the two. there's a bit of both that has to go on. these are sovereign nations trying to protect their citizens and the best way they can. one thing i will say is that the lori drivers themselves are a pretty safe bunch -- lorry drivers themselves are a safe bunch, their livelihood is dependent on them keeping safe so they can drive freight. toa: how long will it take unwind the backlog of trucks? doug: the best example i have is in september of this year we had a nationwide security operation through the united kingdom which

meant everyone and everybody leaving by a port or airport was subject to increased search. 4.5 thousandwe had lorries stuck in the security system. within 12 hours once the security system stood down we had clear that backlog and were back to normal. fromi want to move away this, this will get solved, there is a lot that is rotting for restaurants in london. from your distance of dover in the south of england of canterbury, what is your view of will work with ireland and the republic of ireland if we get brexit? in your view will there be easy trade to ireland and northern ireland? bridgehe so-called land that connects ireland to the european union, coming over by ferry and driving down through

the united kingdom and over to the continent on our fe rries, 30% of irish exports use that route. it's something like 12 to 14 hours until the park -- from departure until they are in market. other routes are much longer. this is a popular route for the market because of the fast transits and high frequencies and high capacities. tom: what is your wisdom for the prime minister if you were to get a phone call from the prime minister? if he asked what would you need what would you tell him? doug: it's what he is working on now. what we need to do is understand what the protocols are going to be to allow the freight drivers to get back to work. during the first lockdown that we experienced in march and april, the truck drivers had been exempt.

information comes out and the situation changes. prosperity ofued the nation and the society in britain to make certain that traffic continues to flow for consumers in britain and british exporters to get this moving again. question in your incredibly busy day. that is the history, the baggage is soer to dunkirk immense. now we have macron and johnson going back and forth great tell us your take, particularly as an on the heritage of the link between the united kingdom and france across the channel. doug: it's not many times someone gets to run a company that is 400 years old, but that's what we are at the port of dover. over centuries of operation we have had challenges and disruption. the one thing that is certain is

that the geographic proximity to the largest market and we are adjacent to the busiest shipping lane in the world. is a hugely successful and highly productive operation that has been tuned and honed over a great many years. position where we continue to provide this awesome service to the nation of great britain. tom: doug banister, thank you for joining us. the chief executive officer of the port of dover to the southeast of england. scene. green on the flat on the s&p 500. nasdaq giving us the tech lift this morning. i would look at gold, 1878 announced. we shall look from the lower left to the upper right on gold and that can only mean dennis, i got a couple of emails, yes i will start with gold with gartman.

he's had an extraordinary year yuen and euro. this is bloomberg.

♪ bloomberg surveillance,

good morning. lisa abramowicz and tom keene. an importantme for article, matthew winkler our editor in chief emeritus who has gone back to the bond market of long ago and far away when yields or 14% and he was writing for the wall street journal. now he writes it on a double-digit return for 2020. we know you can't make money in bonds, and in tax faries i am making 19% per year in the pandemic. how do you do that? matt: fear and greed, those wonderful opposites are the answer. coming into the year a lot of greed in the bond market, things where people said -- price to perfection is always dangerous. then the pandemic hit in early march and the municipal market

froze and seized up and a lot of people thought we would not see it again like it had been. and a couple of months past we were back to the same trend. theid in the column that low on interest rates was around august. if you look at the chart we are at it right now. hell of a ride and it has been a ride a progressively lower interest rates. that is made the municipal market attractive. when you have treasury benchmarks below 1%, people need to yield and want yields. the best place to get them this year has been in the municipal market. that's been the story and fortunately it's a good story because state and local governments need the money the most right now and they have been able to borrow and refinance particularly all

through the pandemic which is resurgent. this is a story about the federal reserve and what they have done to support the market with their municipal facility. how much does this jeopardize fed independence from your point of view because of what it has done to allow state and local governments to borrow at low cost? that is not i suppose an opinion i have spent a lot of time on except to say that the fed has been there and should be there to make the markets work day in and day out. that is what the facility did. backstop for immediate borrowing. if you look at what the fed did in 2008 in the financial crisis and look at what they did here, this was out of that playbook and it worked. it's hard to argue with something that essentially enable buyers and sellers to

come together and do their business. that's what the facility did. no doubt the fed had everything to do with this scenario because they pushed interest rates barely above zero and they did have this facility. it did make a difference because it gave issuers and investors confidence at the same time. an: too short a visit, important article, i will put it on social media. matthew winkler writing about the total return of muni bonds, it is applelike, and extraordinary year of capital gains. matthew winkler, thank you so much. lisa, quieter than yesterday but nevertheless informative. an interesting discussion with mr. banister from dover. the: talking about how resilience of the ports will remain. in the market the churn is interesting given that we are getting news. we got a stimulus package everyone was waiting for. we have more of a sense of

vaccines and people are quiet today. nasdaq 100d look at up at highs, 3/10 of a percent move. with that recovery yesterday that we saw in the markets -- lisa: how much of your cash did you rotate into tesla? tom: i did not do tesla. spx is a roulette wheel. 7:00 a.m. yesterday i got the phone out and moved it to the corbo leveraged all cash flow. is safe. speaking of safe, finally small-cap and mid-cap, move on. , an important discussion on what you missed in 2020. this is bloomberg.

♪ tom: this morning, call it bio

hysteria as the dow is peak to trough to peak swing. .ear 1900 points the nasdaq 100 right now near record high. the dollar weakens. dover, while we spoke to their ceo in the last hour, they look for a pragmatic solution. the prime minister telephones france. n looking for testing of truck drivers, dover optimistic that can be done. how about light reading? 5005 hundred 39 pages of other incentives including kentucky racehorse owner relief, and --on tibet, bloomberg surveillance, i'm tom keene in new york and lisa abramowicz in new york as well. jonathan ferro not to be seen, i