yousef: president trump signals he may not sign the covid-19 relief bill passed by congress. he calls it "a disgrace." its borders,s allowing arrivals from u.k.'s busiest ports. they are required to show a negative test result. and a brexit deal hangs in the ballots again.

michel barnier says both sides are ready to make a final push. ."lcome to "surveillance i am yousef gamal el-din in dubai. surprise pushback from u.s. president donald trump on the stimulus package come on the virus relief bill come asking for changes. we see a bit of a relaxed view in some of these risk assets. let me give you the rundown. stocks in europe risk-on. it almost seems like the market is waiting for more clarity on the political front, trying to get an idea of what the next legislative session will be thus far. german bund trade, activity broadly thinner. some adjustments before christmas. the other highlight in the trade as the weaker dollar, down went 3%. it does -- .3%. it does set us up for a volatile session for risk assets more broadly. we did bounceback overnight, and

van brent crude falling for a third straight day. a new report, and increased to u.s. stockpiles. that not help at all, if you are trying to be long oil. let's get to some of the bloomberg first world news to get you that picture. france's opening trade, ending a suspension that crippled britain's busiest port at dover. he used citizens who are able to show a negative covid test will now be able to travel from the u.k. almost 3000 trucks had been stuck, threatening a shortage of fresh food. lufthansa is airlifting some prose into the u.k. ae bank of england needs laser focus on keeping inflation expectations in check after the pandemic. that is after the chief economist spoke he warned if the central bank left its bite, it will push a bond yields, and that will add to the u.k.'s massive debt burden. he spoke to bloomberg's

stephanie saunders on her podcast. as the vaccine rolled out, it is going to remain a bumpy ride, not as bumpy as earlier this year but bumpy nonetheless, because we see virus cases on the rise, we see restrictions on the rise, and that goes likely this year, i think will persist very near term. yousef: israel is heading for its fourth election in two years. governing coalition collapsed after seven months, and that came after a failed to pass a budget. a new ballot assented set to take place march 23, and polls indicate a new challenger may be able to win enough support to dethrone benjamin netanyahu, prime minister for over a decade. and that is your bloomberg first word news. let's get our top story. president trump has posted a surprise video, slamming the relief package that has been approved by congress. he is describing the 2.3

trillion -- 2.3 trillion dollar bill as "a disgrace," and is demanding a larger stimulus payment for citizens. pres. trump: i am demanding congress increase the ridiculously low $600 to $2000 or $4000 for a couple. i am also asking congress to immediately get rid of the wasteful and unnecessary items. yousef gamal el-din -- ,ousef: joining us is vincent and this was not in the script. how much more time will investors allowed to pass before repricing some new scenarios for 2021 because of the held up stimulus bill? morning.good well, the welcome news is president trump once a bigger stimulus, not a smaller one.

au know, congress agreed on $900 billion bill, and he wants to increase the checks sent to the people, and that would increase the package by about $340 billion, so that is even. more positive for the economy. . wecourse, the risk is that get nothing, because remember that the republicans are not too keen about that. initially, they wanted a $500 billion plan, substantially smaller, but now president trump wants something bigger. eventually, i think the republicans here are exposed. we have january 5, runoff election, two, actually, and georgia, and if the republicans cannot get their act together, they might be paying the price. the polls are extremely tight in georgia right now. so, vincent, how

do i calibrate my strategy here, based on everything that is laid out? now that the president is pushing back, what changes, as far as clients are concerned? vincent: i think the way the market is reacting now is that there is still a decent chance that we will get a deal, and if that deal is made, it will be a bigger deal, so it is a bigger stimulus for the economy. so that is why i think the market is not reacting too badly to this news. in any case, the sooner the better, but in any case, you know, after this runoff election in georgia, let's see what the situation is. but even if a deal is not made before the turn of the year, i think it is likely that we will get something once we get a new president. so i do not think the market

will be too worried about this. i do not think it is a game changer actually into the turn of the year. yousef: so does that mean you will stick with some of the calls for companies that will benefit from rising expectation inflation? the virus gets frontloaded. that means the scenarios for the first half of 2021 will be much more accelerated, right? vincent: i think so. i mean, the view that we have remains positive for risk assets. my biggest concern is percent men and positioning, which is getting crowded. there is alieve strong rationale for that. 2021 is seeing a more sustained recovery, and the cyclical stocks, the value stocks that have latched should benefit, and again, let me say that the georgia elections will be very

important. if we get a blue wave, which i would think is a possibility right now, you would get more fiscal stimulus and probably a lower chance of extension duration from the fed, for example. i think this probably would mean higher bond yields and a stronger rotation toward cyclical, so that will be important. yousef: these are some interesting ways of looking at these latest developments. thank you for sharing those insights. we will resume our conversation shortly. oft is vincent chaigneau generali insurance asset management. he stays with us. france's reopening is border on the u.k.. christmas is just two days away for how long will it take to clear the backlog? we are live to tell the story. this is bloomberg. ♪

yousef: economics, finance, politics. this is "bloomberg surveillance." i am yousef gamal el-din in dubai. says apple ceo tim cook refused to take a meeting that came in the darkest days of the program when tesla was burning through cash. apple declined to comment on the remarks. citi's fixed income traders are likely to see a 10% bump in. their bonus this year. . they are set to post their this performance in more than a decade with revenue of over one-

third this year, but citi has to balance that with $17 billion it is the setting aside for loans. and that is your bloomberg business flash. critical trade between the u.k. and continental europe has reopened. these are live pictures from dover, britain's busiest port come after france shut its border on monday, and that came after covid concerns. those who test negative for the fires are now allowed to travel from the u.k., but the backlog is expected to take days to clear. there appears to be a lot of discussions on going there on the ground. let's get more with lizzie borden, bloomberg's u.k. economy reporter. us from dover. give us a bit of a sense of the situation on the ground over there. zzy: good morning.

than 2000 are allowed to park here, according to the council, and this is daily gridlock. you can really sense the frustration on the drivers' face s. the queue has started already this morning. services have restarted. the french government agreed to agreed to test negative in the past 72 hours. the thing with the testing here, using the faster but less accurate test, which sources tell us french officials were initially opposed to using but eventually agreed to accepting. they refuse the more accurate but slower pcr test, but those will also be valid. walking,e drivers out, floating together, not wearing

-- most not wearing masks. i know we have been keen to find , difference in lori drivers and they work in isolation with limited contact with others and therefore have lower infection rates. because of fears also met today, if the testing cannot meet up with demand, it is still unclear what the testing will be, but the drivers want to get their goods, many of which are fresh, across the border before they perish. to keep the cost moving, operation blocks are in place, that is a system in kent. a no deal brexit. it feels like it is a rehearsal for the brexit chaos this country has been bracing for at the end of the month. if you remember, the government's worst case scenario would be 7000 lorries queued

up, so this is a taste of that. yousef: right. burden, bloomberg's u.k. economy reporter. vincent chaigneau is with us. it will take days, not weeks, to clear the trucks waiting on the port of dover and elsewhere. are you seeing perhaps an inflection point for the u.k. as we get into 2021? vincent: well, listen, i do believe that we are getting closer and closer to a deal. i cannot believe that after months and years of discussions, we are going to fail just on this fishing issue. you know, they started quite far apart, where the eu wanted a the eu of just 18% in catch in british waters. the u.k. wanted 60%. now we are going to end somewhere around 25%, 30%, and

there will be a discussion in terms of how long that transition toward those new quotas is, but i think, eventually, we are going to get there. but is running very short, i think we will get a deal, and clearly this is something much-needed for the economy on both sides of the channel. we have to face already the covid crisis, a hard brexit, with too much pain right now. ausef: vincent, there isn't currency that traders are worried about more than the british pound. it peeked over the last two weeks. this is by the indication of the pound-dollar, one week of volatility, so the relative cost to hedge against early decline. cost to hedge against declined. nothing short of a jaw-dropping perspective.

if you were to bet on a particular direction here in cable, which side would you bet on? no, i think sterling will appreciate, as you say. the market is quite nervous. not thea no deal is now scenario but in fact would be very large. notmarket is nervous but is primed for a no deal, so clearly, in the unlikely event of a no deal, i would expect quite a short decline in sterling. that is not what we expect. we expect a deal. and i think, eventually, sterling will win. u.k. stocks also, which will quite -- are quite cheap, will win from that. the as i said, it is short, market is nervous, and it is wait and see. vincent, hold that

thought. we still have a couple of things to get to. that is vincent chaigneau from generali insurance asset management. he stays with us. up next, repair and despair. after a tough year for world economies, the conversation turns to generali insurance asset management for 2021. this is bloomberg. ♪

yousef: you are watching "bloomberg surveillance." i am yousef gamal el-din in

dubai. let's discuss the outlook in more detail we all hope that 2021 will be a year of repair, but my guest this morning also says it could be a year of despair. he warns dental growth could be lower coming out of the crisis. employment will recover more extend and covid will inequality peers that what this is vincent chaigneau of generali insurance asset management. it has really involved around this idea of real yield hovering around -1%. you are proposing that the multiples expansion is not even as larry for -- not even necessary for single digit returns in 2021. run me through your thinking. vincent: yeah, that is correct. we are looking for a short increase, a short rebound in earnings next year, i mean, the original 40%, 4-0, in europe, for example. as the earnings recover, and

before earnings increase, the stock market can go up even without a further expansion of the multiples. i mean, let me be clear -- multiples have increased sharply, and that is quite high, and this is a matter of concern. but i believe this is not something outrageous in an environment of super easy monetary policy. let's keep in mind that the centralsheet of the g-4 bank this year increased by about 20 points of gdp. this is something absolutely unprecedented and is actually quite a closed lane between that balance sheet expansion and equity multiple. ,o equity multiples are high but they will most likely stay high, and the earnings recovery will do the job. yousef: you are also quite vocal

about the change in landscape around diversification in therelios, and, arguably, are reduced benefits from diversification, because we are seeing more correlation, and as a result, some of the hedging strategies become more interesting. what are some examples here that you are sharing with clients? vincent: yeah, that is correct. i believe that with this new monetary policy set up, we are in a new paradigm. i mean, i hate to say today is different, because that is a dangerous sentence, when you invest money, but, as i said, that balance sheet expansion, those negative lower yields are indeed a very strong anchor of cross asset valuation. i believe in this new paradigm, central rate volatility is lower, because central banks want bond yields to stay low.

but you get stretch valuation across asset classes, and that means more frequent correction. and that is where the hedging strategy becomes very important. and even more so that, as you said, the diversification benefits diminish, because, in the past, through recession or even, rates-off market, fixed income markets tend to do very well, and these upset la losses in equities. that is why the hedging becomes very important, and i believe that, as equity markets continue q1,ecover, to rise, in volatility probably will pull back, and this will be important to set some hedges as sentiment becomes very consensual and positioning very crowded. yousef: very briefly, vincent, if we can get the core cause at the moment --core calls at the moment at generali insurance asset management. you are overweight equities.

what about credit, what about other assets? vincent: we continue to like credit. much less so than we did a few months ago, because spreads already have compressed a lot. bbb credit, corporate bonds in europe, the bbb index is about 0.4%. that is not going to generate a very large return, so -- but we still like credit, as compared, and we like to go down the rating scale all the way to bb, where historically they are quite low. yousef: right. vincent, this has been a terrific discussion. i have to jump in here, because that is all the time we have. vincent chaigneau, he is the head of research at generali insurance asset management. this is bloomberg. ♪ this is bloomberg. ♪

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