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so help me god. congratulations, mr. president. ♪ manus: with these words, the united states inaugurates the 40 fixed president. joe biden pledges to unify and end the uncivil war. covid ravages europe. britain and germany suffered their deadliest days with u.k. hospitals like a war zone. lockdowns grow longer and harsher. how does the economy cope? that's the question before the ecb today. good morning from our middle east headquarters in dubai. i'm manus cranny. it's your daily edition of daybreak europe. so a new era begins in the united states of america. and they roar. the s&p 500 had the best inauguration day since 1937.

everything rallies. netflix up 17%. there was a collapse. in the depths of the report, they warned about a tougher first quarter. joe biden faces this coming down the pike. hsbc buying everything. warning noises from bank of america. to the dollar. unleash the hounds on the downside. both of my guests say that we must differentiate the dollar. we will talk about that in a moment. ubs says depreciation is likely. barclays disagrees. we will put that proposition out there. gold rallies. you can get inflation. dollar down for the fourth day. the 200 day moving average. bank of america morning of a bond tantrum. i've said it twice now. i will squeeze it in in the next

30 minutes again. bank of america warns of a communication slip. eurosterling rocking away. let's to -- get to the top story. joe biden is the next president of the united states of america. he was surrounded by his family, predecessors on both sides of the aisle except for his immediate predecessor. that's president trump. biden pledged to reset the tone in washington. then it was down to business heading to the white house to sign 15 executive orders to unwind trump administration policies from immigration, climate, as well as enacting some of his own ambitious agenda. our senior editor joins us now. derek, take me through the executive order that he signed. it set the biden era tone,

doesn't it? derek: it does. i'm not sure that there's too many surprises here. if you go through the list of day one actions, remember that we were talking about this yesterday. and the day before. what did i say? i said that people always talk about day one. this is actually going to be day one. it's not a metaphor. you are talking about travel bans, pausing construction of the wall, a full review of u.s. immigration policies, some people who were trump appointees at places like the cfpb who are now out. you are talking about re-engagement with the paris climate records. you are talking about re-engagement with the world health organization. saying, i'll tell you, our first

person, dr. anthony fauci. found sheet, as we have gone through this whole pandemic, he has sometimes been the face of the american response. sometimes a little bit of a pariah in the response. based on where he was in the graces of the trump administration. always there, sometimes at the front, sometimes not visible at all. really, 100% seachange from one administration to the next. manus: on the covid scenario, the cdc saying the next 14 weeks could be critical. 500,000 new cases. everything biden hoped to achieve on health could be challenged so to speak. is this the absolute priority? derek: well, i think yes. he put out a couple priorities initially, four of them about

climate, about racial relations, about economy, about covid. covid is key to the economy. you solve one, you help the other. you are right. even as we talk about vaccines going out around the world, we are starting to see that really ramp up in a lot of places including the united states, we are still seeing very stark numbers on covid. we have two data points here. inauguration day was the deadliest covid day we've had so far around the globe. of the first 20 days of this new year, 13 of them have had more than 10,000 deaths according to johns hopkins university tracking. it's very clear that covid is a care -- clear and present danger. not only a health thing continuing, but also a danger to the economy. if it does not heal, the economy will not heal. manus: that's the domestic

stage. let's just pause for a second. many people are asking themselves, the special relationship in the u.k., what will the relationship be with europe? let's take a listen. >> america has been tested and we've come out stronger for it. we will repair our alliances and engage with the world once again. not to meet yesterday's challenges but today's and tomorrow's challenges. manus: i will be speaking to a former u.k. ambassador to the united states of america in just under 20 minutes. very quick from you. where is ground zero for biden on the international stage? derek: i think certainly if you are looking at europe, you are talking about brexit. one of the most pro-irish guys

that has ever occupied 1600 pennsylvania. he is of irish ancestry" irish poets on the regular. i think he will have a big thing when you look at europe particularly about germany and how germany plays into a lot of issues with russia, with china. let's talk about china real fast. that's to say that as the trump administration was going out, china sanctioned a bunch of american officials in the trump administration. was there an effort to split on partisan things? if there was, that's not holding. the biden administration came out and said that they saw that as a partisan move. that they weren't going to play along with that. there's no daylight there. you are seeing a couple things right across the board that are present challenges for this administration going forward. manus: thank you very much.

i will have you scrub up on my poetry. try to keep up with the new president of the united states of america. coming up, i mentioned him. sir peter wes mccarthy joins me, the former u.k. abbasid are to the united states of america. that's at 6:30 a.m.. first word headlines. laura wright has that from london hq. laura: good morning. the u.k. has suffered its worst day of the pandemic so far. yesterday, more than 1800 daily deaths were announced. the chief scientific advisor warning some hospitals now look like a war zone. more than 4.6 million people in the u.k. have had their first doses of the vaccine. italy's prime minister has one the backing for 32 billion euros of extra government spending. the two houses of parliament approved plans to widen the

country's deficit, allowing it to raise more funds to fight the pandemic. he's trying to consolidate support for his now minority government. indonesian investigators are looking into the automatic throttle of the boeing jets that crashed into the sea on january 9. there are concerns that the malfunction could have led to the crew losing control. bloomberg sources say the throttle was produced -- producing more thrusts and one of the two engines before the plane crash. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. manus: thank you very much. coming up, a new era. the biden era. sworn in as president of the united states. how fast can he get a stimulus package approved? we discussed. this is bloomberg. ♪

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there is broad support for a second economic relief package. >> what governors need is not just or -- short-term stimulus but something we can plan over the next couple years. >> the initial proposal is double the size that wall street was expecting. the low end of the $750 billion range if they try to get six -- the high-end, 1.5 trillion. >> let us not pretend we are in a partisan environment and joe biden wants to win on his agenda. he will use every political trick in the book to do it. manus: just a number of our

guests on bloomberg tv discussing the size of the stimulus package from president joe biden. what can he get through? let's look at the dollar. day four of the dollar dropped. that has consequences for cable. is it driving cable higher? i should've changed a few zeros. i really should have. eurosterling at an eight month high. euro at an eight month high. sterling just turning it around. my next guest loves high currency. his name is marvin barth. he's a barclays. good to see you this morning. many people have called the implosion of the dollar. where do you stand on that narrative? you say very clearly that we are moving from safety to growth. the consequence of the dollar. good morning. marvin: good morning. thank you.

great pleasure to be with you again. look, we've had -- this year, the dollar will be relatively stable. the consensus is that we are in the midst of a dollar downtrend. that would require a significant asset allocation away from the u.s.. hard to see that in an environment where the u.s. is delivering above trend relative to other economies. also providing safety in the background. it's more about growth this year and the u.s. is doing that. after a shock like covid, we are still in a world where people demand a relative amount of safety in the portfolio. the u.s. is one of the few countries that can deliver you both. manus: that is very much evident by the longer-term trend. when i caught up with the global head of fx at hsbc, he talked about a divergence path, a

differentiated dollar. am i correct in saying that you see some differentiation in the dollar? that the dollar will appreciate against the yen and the euro. if so, why? marvin: i'm glad to see our colleagues elsewhere are starting to follow our lead and copy the story we've had for a while there. yes. we do see that differentiation. in europe, you are going to get a lesser growth path. that will start to weigh the currency. you are not going to get the unending stream of positive news about growing toward fiscal unity. it doesn't mean you want to eventually get there. we have a wonderful set of news flow in the second half of last year around recovery fund and things like that. you won't get that this time. meanwhile, japan has recovered well. they too offer a significant

amount of safety. you do get a differentiation there. we will likely, commodity currencies within the g10. our top performers is the canadian dollar. that outperforms the dollar. we see a lot of differentiation within em. em gets a big boost from growth here. as we start to see already, there's differentiation taking place. a highly indebted economy is doing less well. growth oriented, equity oriented economies in north asia or israel. we are doing better. manus: with that commodity, let's dig deeper into some of what you just said. let's squared away. germany has appalling numbers in terms of the tragic death toll of over 50,000, a war zone in u.k. hospitals. do you sit and try to sift

through the horror of the headlines and say, the vaccine will rollout, that momentum will build and that will alter the risk paradigm? marvin: yeah. that's largely the way our forecast is based. we have to expect that these actions are likely to work. there is the south african variant that is causing consternation. our equity analyst covering the pharma sector thanks that these vaccines can be tweaked relatively easily. our base case is a broad global rebound. you should bank on that. we are still living in a very uncertain world. yes, some of these near-term headlines will cause hysteria's. whether in stock markets or capital destruction or others. that has potentially uncertain effects. getting to the heart of that point i made earlier, you should

be banking on growth. there will still be a significant demand for safety in this world. there's a huge amount of uncertainty here. manus: where -- does that cap out the moves and some of the higher currencies that you've mentioned in terms of the cad? they are ultimately growth led currencies, aren't they? marvin: yes. if you look at our forecast, you don't have huge moves in any of these things. dollar canada. going down to 127 by the end of the year. even when we talk about relative euro weakness year, we are talking about a move down to 1.14 your dollar. the moves are not that big. it's the case that we are not expecting to see huge moves. this is why our story is one of dollar stability and the

continuing range trade that we have seen for the last five years. manus: i do quite like the reports. you know that. don't you? all 50 pages. marvin: of course. manus: paralysis to goldilocks to gold within a month. a paralysis. i will ask you where the ecb is on that schedule. stay there. do not hang up the phone. coming up on the show, she's in charge. another woman on the show. christine lagarde on the economic growth. the ecb holds its first policy meeting of 2021. will she hold her outlook? we discussed. this is bloomberg. ♪

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of daybreak europe. annmarie hordern will return very soon. policymakers facing an economy gripped by the virus. they are holding their first meeting of 2021. christine lagarde said that the central banks economic growth projections are still very clearly possible. her upbeat tone is increasingly threatened by stricter lockdowns and slow vaccine rollout for the region. marvin barth from barclays is still with us. moments of inspiration. how much are you bothered by the dislocation in politics as something that should be a torchlight of bigger political dislocations in 2021 in europe? marvin: i think this gets to part of the reason why we see the euro underperforming this

year. a lot of it has to do with the growth underperformance. there is a shift in the mood music. in the last six months of 2020, we saw very positive political news coming out of europe, a message of unity, actual clear precedent towards the fiscal union with the recovery fund. what we will see this year is more discord. that doesn't mean -- it will be a lot noisier. that will change the mood music a bit here. what's going on in italy is a clear illustration of that. italy's government is always on the edge of following here. if it does fall, that's a real problem in that it's the populist right that has really gained in the polls. we don't expect the italian government to fall. this is still indicative of the problem you see across europe.

there will be a lot of noise around that with the dutch election in march, with the german election in the fall, french regional election. in the background, weak government in italy and spain that could fall it any point. manus: there is a litany of risks there. your call was around 114 on the euro. can i get a sense from you -- everybody comes on the show and says, reflation. inflation will take off. there will be an inflation arbitrage between u.s. inflation , china inflation, if european disinflation. how does that translate? marvin: you are exactly spot on. take a look at what happened to u.s. interest rates in the first week of the year. they showed clearly assign that

markets believe flexible average inflation targeting is working in the united states. this commitment to a state contingent path of policy rather than a time contingent passive policy. what you had was the prospect of new fiscal policy with the georgia election. that meant that people felt more confident about the output cap closing in the u.s.. this commitment meant that inflation expectations on the front-end popped. that supported real growth expectations further up the curve. you did not see the same thing in europe. there's clear reason why. people will -- are skeptical that they will get growth. you have time dependent, not state policy from ecb. manus: interesting. let's close off with the pound. i was looking at the eurosterling.

keep on knocking on heavens door. the pound is rallying -- don't worry, i won't sing. it is marching higher against the euro. are we in a repricing mode? we have one minute. go. marvin: yes. we do think that sterling is one of the best-performing currencies within the g10 here. the brexit risks are out-of-the-way at this point. you relieve that uncertainty, that's an important point. we saw last year that there was a floor for value in sterling. no matter how bad the news flow came out in the u.s. or u.k., you saw that sterling just couldn't fall. you rarely get those asymmetric profiles in fx. that's what you have here in sterling. dental upside. manus: i will have to tell my boss that i have taken a pay cut.

marvin barth, thank you. good luck in 2021. managing director and head of fx and em macro strategy at barclays. more on the ecb today on bloomberg. ♪

♪ >> i do solemnly swear that i will faithfully execute the office of president of the united states and will to the best of my ability preserve, protect, defend the constitution of the united states.

so help you -- so help me god. >> congratulations, mr. president. [applause] manus: with these words, the united states inaugurates its 46 president. joe biden pledges to unify and and an uncivil war. covid ravages europe, britain, and germany. the deadliest days with u.k. hospitals described as a war zone. lockdowns grow longer and harsher. how does the economy cope? such is the question before the ecb today. good morning to you the day after the night before the inauguration. with biden in power, yelling at the treasury, the hounds are baying after the dollars blood. down she goes for the fourth day in a row. will that continue?

my guest suggested not. you won't see this demolition on the dollar continue it for us. of course, there are always risks. s&p 500 up. the best inauguration. i love effect. back in the day, the best day for an inauguration since 1937. netflix up 17%. there is something that caught my eye. alcoa, the bellwether, the tone setter for earnings. warned that the first quarter is going to be a lower quarterly performance. hsbc can't buy enough of everything. they are long on everything. a rally everything market yesterday. dollar up 1/10 of 1%. sterling at an eight month high against the euro. that will continue according to barclays. the blue -- interview is on bloomberg.com.

let's talk about the new president joe biden, the 46th president of the united states. without the usual pomp and fair fair. a simple message of unity. , harris also took her oath. the first woman of color to hold the office of vice president. [applause] >> the duties of the office which i'm about to enter, so help me god. [applause] ♪ >> preserve, protect, defend the constitution of the united states so help me god. >> congratulations, mr. president. [applause]

we learned again that democracy is precious. democracy is fragile. at this hour my friends, democracy has prevailed. we must and this uncivil war that pits red against blue, rural versus urban, conservative versus liberal. we can do this. thank you, america. [applause] ♪ manus: ceremony there where you had j. lo and lady gaga singing at the inauguration. biden hit the ground running, a slurry of executive orders flew out the door immediately, unwinding trump's policies in areas including immigration, climate, health care. the president vowed to repair the nation's international alliances. my guest has four decades of

experience of international diplomacy. we are joined now by peter westmacott, a former british and basset are to the united states from 2012 to 2016. he has said the willingness of the u.s. president to push the reset button will be essential in restoring america's global image and soft power. great to have you with me this morning. here we are. we had the speech. it was about a healing narrative, the power of democracy. there was a nod in their, we will repair our alliances. good morning, sir. your first thoughts on the new president? peter: i thought it was a very different and very encouraging tone. there was a lot more we then i. there was no talk of american carnage that we have for years ago. the message is democracy has prevailed. we now has the raft of executive orders. we've got the new white house

spokesman saying that we are going back to the days of truth and transparency. the tone is very different. i think it's a very encouraging message to people who are shellshocked by some aspects of the trump presidency. in that speech, there's a message of reassurance to america's allies, that this america will look after america's interests. it will not be in the same unilateralist kind of way, america first and to hell with everybody else. manus: so we are going to see a shift in that. we already have in the executive orders on the world health organization and the pairs climate agreement. i want to draw on your experience as former abbasid or. biden -- ambassador. biden will see brexit for what it really is, his closest partner. this is about the rules based system. an independent u.k. will rely on

its system more than ever. this is the former chancellor and home secretary. there were many fears that britain would be relegated in importance in terms of its position. of course, it's about that rules based system that may draw us closer together, bind us together. your impression of the proposition? peter: i've been very interested in american politics for a very long time. i'm glad to see him out here batting for britain. my own view is that for the incoming president, the united kingdom is going to be instinctively less crucially important than it was when it was in the heart of the european union. europe itself collectively, the main capital of berlin, paris, rome, so on will be important for ports of call for the president. so it's going to be different. biden is clearly on record as

having said that he would not have voted for brexit. he doesn't think it's good for america or britain. but there's an awful lot in the relationship between the two countries which is of real value. the incoming president has a lot of experience on u.k. intelligence cooperation, cyber work, foreign policy court nation. the stuff we vowed to do together militarily in different parts of the world. there are strong relationships. speaking the same language and so on. don't forget that he's fundamentally irish catholic. that irishness is an important part of who joe biden is. i think there's a long experience with the united kingdom. he's right to say that there's lots of potential for working together. whether independent global britain is going to be a powerful partner that we would all like remains to be seen. we've got work to do on our side the united kingdom.

there's lots to play for. biden and people around him are very aware of the fact that our prime minister boris johnson and members of his cabinet were very keen to rush out donald trump. manus: i too am irish and catholic and from northern ireland. i'm drawn to the question, whether boris johnson's actions in regards to the handling of brexit have been injurious. the trust factor between president and prime minister is not a great starting point, is it? peter: i think it could have been very damaging. there were tweets both from the incoming president and from his future secretary of state warning the british government about breaking international law and messing with the good friday agreement. you remember that from a few months back. in the end, because there was a deal and because they did not break international law, i think we dodged that bullet. it was a very clear message that

this administration -- don't forget that joe biden was one of the four key democratic senators who supported bill clinton in the 1990's. he got informed about concerns about everything that goes on in ireland and northern ireland. at the moment, we are fine. it could have been a bad moment. let's hope that all the workings as far as the good friday agreement work well and are not damaged by the new arrangement that the u.s. -- u.k. is putting in place to make brexit work. manus: i was reading one article and i would like your take on it. britain needs to establish itself in a new vanguard outside of europe, outside its brexit position. it could possibly appeal to the biden administration in terms of how it handled china relative to

its european peers. i think it was a political piece. was that a moment where johnson can appeal to biden and really show a unique proposition to him? peter: my view is that all by itself, outside the european union, the united kingdom is going to have to work a lot harder to have an influence on that kind of big, international, global issue like addressing the rise of china. yes, we've got plenty of brilliant diplomats. we've got experience dealing with china. we've had a golden era which hasn't lasted that long. a number of issues relating to hong kong and human rights. is that genocide? the idea that the u.k. on its own can make a big difference in terms of how the biden administration will handle china , i think that's a little ambitious. that said, i'm very clear that the people who the president has

appointed, these are all people who are essentially collegiate. they want to work with allies. they want to work with the like-minded. we've got something that helps them make a difference, helps them rally the international community with china rather than against china. we can move forward in a way that is collegiate without being naive. i think the brits can have something to offer. the fact that we are outside the european union, on our own is not going to make a difference. we will have to put something on the table. that's important, good. the brits have something to offer. let's engage. manus: it will be interesting to see what works, where that rises up. one closing question on your view. you mentioned the u.k. outside of europe. maria is our reporter on the ground in brussels. she chases them around.

the phrase she brought to the table was strategic at tommy. -- baton ami -- autonomy. a lot of work to do in regards to healing the trust rift with europe as well. they have their strategic autono my. why should they cozy up to four years of biden? peter: you are right. there's a lot of healing of the trust rift that needs to be done after the last four years. there's a very important reset going on. i think we will get a very different tone very quickly. the damage has been done. we've had a systematic destruction of the institutions and alliances which have helped keep the peace and keep the world prosperous for the last for years. there are countries out there who have been close allies and friends of america who have been saying to themselves, how do we

trust america. look what trump did to the iran agreement, climate change, previous commitments. there are issues there to be addressed. i don't really know what it means. i think europe is going to want to have its own opinions. the less thing i would say is from the u.k. point of view, we will be totally outside. the e3 relationship in particular is very important. i think that will remain a pretty important of what we try to do together with our close neighbors. manus: thank you for being with me today. that's the former british investor to the united states, france, and turkey. peter westmacott. thank you very much. let's get your first word news now with laura wright. laura: china is tightening -- sanctioning trump administration officials. beijing announced as joe biden was being inaugurated. the white house says the

last-minute sanctions are unproductive, an attempt to play up america's partisan politics. italy's prime minister has won the backing for 32 billion euros of extra government spending. the two houses of parliament approved plans to widen the country's deficit, allowing it to raise more funds to fight the pandemic. he's also trying to consolidate support for his now minority government. the bank of japan is seeing a stronger rebound than expected once the economy starts to recover. it's predicting weaker growth at the end of the current fiscal year, stronger growth rate around. it sees a 2021 expansion at 3.9%. potential bank policy unchanged. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. manus: thank you very much. coming up, the eu didn't meet

today. the raging coronavirus pandemic and rising death toll. stringent lockdowns. we have the story. this is bloomberg. ♪

♪ >> the production, the quality check, the supply distribution capabilities. we need to play our part in meeting that objective. so far, nothing we see discharges us. manus: modernity chairman telling bloomberg -- speaking of vaccines, they are offering a light at the end of the tunnel. in europe, the u.k. suffered its deadliest day with more than 1800 reported deaths as this

morning germany has just lost more than 50,000 people. the eu leaders will meet today to tackle a core dated response amid the vaccine delays and the fears over the new variant. maria tadeo joins me now. how does europe's plan to accelerate its price it response? is all down to the scale of vaccines? maria: it is, a lot of it will be. when you look at the numbers that came out today would you just referenced, very grim picture in europe. the third wave is really taking hold in a number of countries. you mentioned the u.k. in germany. more restrictions are also coming into play in the netherlands, particularly in belgium. the number of cases and deaths go up. this was expected after the christmas break. nonetheless, a serious reminder that the coronavirus is still very much the dominant story here in europe.

in terms of the european leaders meeting in a conference, there will be to focus points. one is the vaccine. how can we roll this out quicker and accelerate that? there will be criticism aimed at pfizer. this is the lead and main vaccine for the europeans. big distribution issues. they are hoping to return back to normal next week. this has to do with the upgrade capabilities. deliveries were down this week. we are expecting a number of countries including austria and the greeks to voice their anger at the european regulator for not acting fast enough to roll out vaccines. at this point, euro has two. we are waiting for a third. this is not enough when you look at the distribution and the number of cases. you don't break even with the number of doses that you are administering on a daily basis and the new infections that you are getting. manus: indeed. we've also, high up on the eu

agenda, relations with the new administration. i'd was just speaking to the former u.k. ambassador there to the u.s.. we were chatting about how europe and the u.s. are fundamentally plagiarizing. maria: yeah. the strategic autonomy is the word. a lot of people don't know what it means. the european like it's. we want to be more independent when it comes to our policy agenda. that's a lot of the impression i got yesterday when i spoke to the head of the european commission. alongside three other reporters in an under view where she said, we see biden as a friend, an opportunity to really rekindle ties with the united states. i thought this phrase was interesting. a return of rules based democracy. when you operate by the rules,

it's easy to get a deal on trade, climate, tech. i asked her whether china would be an issue when it comes to bilateral relationships with the eu and the united states. she said, no. pretty interesting words. let's take a look. >> we as the european union you -- we know what side we are sitting on. the side of democracy next to our american friends. indeed, china is a systemic rival when it comes to the way they look at the individual and human rights. this is a very clear point here. we joined forces with our american friends concerning china. if we look at our competitor, americans have an economic agreement with china.

china has its economic agreements but also with other democracies like us really, canada, switzerland. i think it is self explaining that the european union negotiated a new economic investment agreement. it's a matter for our investors to have a level playing field and access to the chinese market. manus: maria tadeo there speaking to us. thank you very much, well done on that. talking about systemic rivalry between the eu and china. citigroup plans to cut bonuses for its top executives after the bank was reprimanded by regulators last year. we have the details. this is bloomberg. ♪

manus: the biggest wall street banks wrapped up their earnings. morgan stanley reported yesterday. banking stocks have fallen since the lenders began reporting. dani burger has been tracking the numbers. what's the take away? danny: a banner quarter for training. a pattern we see throughout 2020. what's different this year is that we had top executives like goldman sachs and morgan stanley warned that the bonanza might not continue into 2021, that trading opportunities might not be there going forward. we've also seen more banks release those reserves for bad loans. most of it has come from the more per ferreri businesses. bank of america releasing loans in their consumer division, pointing to healthier households. the big banks are getting even bigger. more successful earnings here. manus: certainly coming around

to bonus season. thank you very much. coming up on bloomberg, will christine lagarde stick to her upbeat tone on the economy? anna and matt take ahead look to the ecb rates. ♪

♪ anna: good morning. welcome to bloomberg markets the european open. i'm anna edwards alongside matt miller. matt: good. the markets say, it's party time. stocks hit another record amid optimism around fiscal spending. european futures point to a positive open. the cash trade is just an hour away.

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