anthere are over 20 exercises to choose from. get gym results at home. no expensive machines, no expensive memberships. go to aerotrainer.com to get yours now. >> good morning from bloomberg's european headquarters, it is 6:00 a.m. in london. this is daybreak europe. here is what you need to know. caplain weighs in on the inflation debate. and president trump's second impeachment trial, the senate says it is constitutional.

plus corporate results come thick and fast. we hear from the -- socgen. good morning to you. 6:00 a.m. here in the city of london. we have a busy 60 minutes ahead. my co-anchor manus cranny is on assignment in abu dhabi in a very important conversation. he will be sitting down with the c.e.o. of etienne. and the vaccine rollout and the afe united nation industry that has been completely battered by the pandemic. that conversation is exclusive. you don't want to miss it. it is in about 10 minutes time. we'll be talking earnings with the cfo of societe generale. that's what we're looking for the next 60 minutes on the show. let's take a look at trades this morning.

we had a pullback on the record highs on wall street. we didn't go under a seventh straight day of gains. this morning futures are looking perky. 14 points on the s&p 500 futures. 10-year yields, right now we trade 1.16 on the 10-year. today we get c.p.i. data and we had jay powell speaking. very important inflation debate. $61 and then we see the dollar weakness. we see this playing into the euro-dollar. breaking through that level on the euro dollar. a lot of this has to do with what is going on in the politics in washington, d.c. president joe biden of course pushing for that $1.9 trillion stimulus plan. it is a big drive to have price action, that fiscal stimulus bill being debated in d.c.

$restaurants will get additional support. $7.5 billion for paycheck protection program and finally president biden has backed a proposal for a quicker phase out of planned stimulus checks. we asked some of our guests their taken to inflation. >> how much of a pop in prices did we get now that the economy is open and consumers have in their pocket. how sustainable is it? >> if we're able to get people promptly vaccinated and made big improvements on unemployment, it would not be surprise to go see cyclical almosts build. there could be some momentum building behind yields. we're going the get the

reflation of air fares and hotel rates. most of the investors believe that the inflation and rising rates are a bit out there and there is probably more of a downside risk to rates than a huge upset. annmarie: joining us now is christian. he suggests worrying about missing out on the bull run, he is not worried at the moment about this inflation debate. i have to ask you. you're quite bullish. are you worried about the market and the potential bubbles? >> this is always the big discussion over monetary stimulus. it is fair to consider evaluations. of course usually when you have such a strong recovery, this is not when evaluations matter.

this is a recovery year. usually valuations do matter. for now, i would shrug it off. this is a very, very supportive environment for risky assets. annmarie: when do you start to worry about higher borrowing costs and what that means for equities? >> you know, i think we're talking about the normalization. this is just the cheapest borrowing cost ever. at some stage, it is normalize. it should normalize for the right reasons. business is better. prospects are better. there is no way it will kill the recovery. there is an easing going on. things are brightening and they ought to be ready to take rescues and take money at the higher rates. annmarie: you're quite bullish

and you don't want anyone to miss out on this bull run, craste christian. i want to understand what you're thinking for 221 could be the biggest risk. we heard from pimco, they said the risk is probably the market prematurely pricing in the end of the pandemic. does the vaccine rollout, is it still one of the massive risks in how you time it? >> it is the number one risk. you believe the recent surveys. it is the single biggest risk. usually the real risks in the market are the ones that come out completely unexpected. therefore i would take with a grain of salt. we don't have much evidence that business is failing. it looks quite successful. but yes, indeed. that is the deflation.

annmarie: where do you suggest people start putting money then? >> well, we always told our investors to stay the course. if you're going to hold enough or what you think is the neutral -- you have to find ways of getting back in. very tricky. a psychological trap. we do this readily. not taking one receive the step to do the whole kind of closing of the gunman gap. -- closing of the gap. annmarie: an inflation debate is what we have seen in the commodity prices. what have you seen medium to

long-term? >> we just operated our short to medium term target to about $70 a barrel. we think it is cyclical. we doubt that there is really a super commodity cycle. we think most of these markets are well supplied. we expect this will be in the mid 60's or $60 kind of as a reference price medium to long-term. annmarie: stan said he is very, very short the u.s. dollar. this helped commodities. where does the dollar play into your thinking for 2021. do you want to take on more risk in terms of fx commodities outside the united states? >> this has been the biggest u turn in the federal reserve's history, what they pulled through last year and a wall of money that hits not only u.s.

financial market tansd economy and the whole world. therefore we think there is a dollar weakness to be expect, especially as things start to pick up post pandemic. therefore we think it is a change from what we had tchfs dollar strengthening regime to the dollar weakening regime. that benefits a lot of global assets outside the united states bflt we think there are more opportunities coming up, in korean stock, japanese stock. german stocks. i think there is plenty to choose from. annmarie: thank you so much for joining us. head of research. coming up, my co-anchor manus cranny is speaking with a c.e.o. what the company's business

outlook is. that's come up next. this is bloomberg. ♪ rg. ♪

annmarie: good morning. this is "daybreak europe." one area that has been hammer bid the pandemic is the aviation industry. it has sparked fierce debate an how to get passengers back in the skies safely. dubai is trying a travel pass for those who have been -- have had the vaccine or tested negative. manus, take it away. annmarie: good morning to you. we're at h.q. with c.e.o. toney douglas. we're in the simulator zone.

tell me how the business is doing. what are you in capacity? is the worst behind us? >> good morning. again, a very warm welcome to our headquarters in abu dhabi. everybody knows that this pandemic has been the biggest challenge that aviation has frankly ever seen and i don't think any of those expect that the worst is over yet. however, i for one am a natural born optimist and we like to think that many to have decisions that we have made during this pandemic, the actions that we have taken are leading a path to the way in which aviation will adapt to this kind of problem and perhaps adopt a different series of protocols going forward. not withstanding that, it has been really difficult for everybody within the commercial airline field.

manus: when do we get back to 2019? to people with get into these beautiful machines? >> it is the golden question. when this pandemic first came a mainstream reality, probably this time last year, the forecast then were a recovery to 2009 passenger volumes by 2022 and the more possess midwestic once went into early 2023. here we are -- the more pessimistic ones went into 2023. it is probably 2023. will we ever get back to 2019 numbers? the important thing here to do now is to adapt to the new reality of all of this. manus: let's talk about how we adapt and how we change. you are triling that. when be that digital passport be a global standard in your

view? >> so when the pandemic hit in march last year, i'll never forget this date. march 23, 2020 is when we packed our entire fleet. we have retrained all of our cabin crew. we have wellness ambassadors onboard every flight. we eliminated all unnecessary touch points. more importantly, we came from august of last year, all the way until now the world's only airline 100% p.c.r. tested at point of origin and point of arrival. we can be sure everybody onboard is tested and therefore from a wellness point of view it gives a peace of mind.

manus: where are we on vaccinations? i've had my vaccination. >> the big story today, i'm absolutely delighted to share it with you and your viewers first. it is as follows. we have today the world's first commercial airline to operate with 100% vaccinated crew and cabin crew. so cabin crew and flight crew, 100%. back to that wellness proposition. if you choose the travel with us, we have a testing regime at origin and arrival. everybody who is onboard is a member of our cabin crew and flight crew. 100% vaccinated. we're the first airline to do that. manus: is that a choice of vaccine or one vaccine? >> we have adopted one vaccine. the whole of our organization, i elected very early this year to get vaccinated.

i want to go on record to thank the amazing participation from the whole of the family because we are doing this because it is the right thing to do for the right reasons for ourselves, our loved ones. importantly in our line of business, for the traveling public, our guests. manus: how critical is it to getting all of the traveling public back on these planes? >> i've been calling this one out pretty much since march of last year that some form of wellness certification will be part of the way forward. in the same way visas used to be issued as a rite of passage. what we have been doing since august of last year with the p.c.r. tests is linking it to your ticket reference number. if you have come to heathrow and you haven't been vaccinated it would have been linked to your ticket and therefore we

would be running a passport system already. another project we're involved in. it is my leaf that public, the traveling public, our guests will want to have that level of assurance. manus: do you think they will want to adopt it? do you think adoption is going to be easy by the traveling public? >> i believe it will be. the methodology has been in place for sometime. manus: do you think all vaccines will be treated equally? will they all have equal status? >> it is a great question. let's face it. it is early days. many parts of the world are at different stages in the vaccination program and abu dhabi has got the second highest adoption level. the unite arab emirate has the second highest adoption level in whole of the world. my sense is that we'll fine

there will be some degree of adoption and normalization, probably six or seven. going forward in the way in which our wellness problem sigs seeks today, testing before you board, point of origin and arrival. going forward, i anticipate that if you have got one of the recognized vaccines, that will give you right of passage. manus: o'leary, he is juggling the planes like you. what is going to be the core -- as you come of the pandemic? >> i mentioned before when the pandemic forced us to ground our fleet, the way in which we developed a wellness proposition and the key components to that. but also we did project cabin. we have gone in detail in the way we maintained our aircraft. the key to that was 7873 liner.

we have one of the biggest fleets in world. it is widely acknowledged as the most efficient aircraft of its kind in the world. we currently operate 40783 dream liners and going forward that will be the backbone. it is a high performer. back to wellness with the hepa filtration process that is onboard. given what we have known the cabins, for us, this is a winner. manus: -- i think at the moment we haven't got a fixed date. the deliverries. given that we -- so many aircraft types in our fleet, for example, i'm not sure we'll ever operate them again. we'll concentrate dream liner.

manus: do you need abu dhabi to roar back to consider bringing the a-380 back. >> i'm not sure we will ever bring them back. the economics of a big four-engine aircraft, particularly with the performance of 787. the answer to your question is probably yes. the only way i could see them come back into play is the routes, the likes of london, new york, paris. manus: the a-350. where are we on the a-350. >> our fleet plan going forward, we're looking to operate up to 12 a-350's. so that is locked in our plan. let's face it. given what has happened with this pandemic it is all about now avoiding trying create uncertainty because i'm not sure that exists anymore.

and i've been more entrepreneurial and am ige aisle in the way we react. -- agile in the way we react. it is going to give people confidence to get back to the normality in every day air travel. manus: let's take one last go with a question. are we going to see a major flight carrier around the world go under in 2021? >> it is an impossible question to give an answer to but we have seen neanl have gone into administration. sadly i think that list will get longer as this particular problem continues. manus: always great to be invited. good morning. do you miss me? annmarie: good morning, manus. i certainly do. it is nice to see you. i saw your video on twitter as

a co-pilot. i think i'll take you as a co-anchor. not a co-pilot. fantastic interview. he said prepandemic volumes should return in 2023. still a far way out. coming up, an update on d.c. details next. this is bloomberg. ♪ (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs

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annmarie: good morning. 6:25 in the city of london. the senate as affirmed the constitutional basis of former president trump's second impeachment trial clearing the way for arguments to begin on whether he incited an insurrection by inflaming the mob that stormed the u.s. capitol. bruce, run us through

these proceedings and what is going on with the senate. >> ok. well i think the big surprise was that the vote on whether this was constitutional or not. it was different than the vote last month. there was a vote in january in which five republicans joined with all 50 democrats. this time they had a similar vote and they picked up another republican, bill cassidy, republican from louisiana joined with five other republicans and all the other democrats. the former president's lawyers did not have a good day. cassidy just said that you know, their arguments were bad. even senators who voted with those lawyers said that they didn't do a good job. republican john cornyn of texas said one of president trump's lawyers that he just rambled on and on an on and didn't really

address the constitutional argument. not a great day for the former president's lawyers. that said, the trial is going forward and it seems that there is little suspense here that most likely there are enough republicans based on this initial vote who are going to support president trump, that it is unlikely that he will be convicted. annmarie: that's what it does look like from yesterday's proceedings. thank you so much for that update. we're just over an hour and a half from the start of european eck tay trade. let's take a look at where we start. we have s&p 500 and the across the european equity futures. something i want to to you what is going on o in china. the c.s.i. extending gains of

2%, prepandemic levels when it comes to china. there is an yood about chinese exceptionalism. we hear from the fed, robert caplain weighing in on the inflation debate. this is bloomberg. ♪ g. ♪

♪ annmarie: good morning. 6:30 a.m. in the city of london. this is bloomberg zpay break europe. stocks are pushing higher as the fed's robert cab lan weighs in on inflation debate. plus stimulus expectations rise before any package comes, president trump's second impeachment trial, the senate says it is constitutional.

and corporate results coming in thick and fast this morning. we're going to be hearing from the likes of socgen. good morning to you. i want to get a check on what we're seeing in the price action this morning. yesterday wall street did close lower. we didn't have a seventh straight day of gains. not every day can be record highs. we are advancing, 13 points on the s&p 500 alongside european equities. china extending gains north of 2%. 10-year yields trading at 1.5%. what a turnaround it has been from a year ago. our last guest talking about uplifting the brent prices. $70 or north of that. the dollar is breaking down a bit. you see the euro breaking out there, breaking through 1.2124

is where we trade. one of the main drives is this fiscal stimulus bill in washington, d.c. the latest draft says restaurants will get $25 billion in support. $7.45 billion for the paycheck protection program and state and local government also receive $350 billion in aid and one thing important to notice, president biden has backed a proposal for a quicker fadeout of those stimulus checks which has been at the heart of the debate between republicans and temperatures. here is laura right with the first word news. >> the european union's foreign policy is vowing to draw up more sanctions against russia. he described russia's handling of the navalny case as

merciless. one dose of the shot gives 2/3 protection against the coronavirus with two doses that rises to around 80%. the u.k. has now given more than 13 million of either the pfizer or oxford shot and vaccinated more than 90% of the over 80's. tokyo's olympics is facing another challenge. sexist remarks from an official. the 838-year-old former prime minister last week disparaged women for talking too much and there are calls for him to step aside. global news 24 hours aday on air and at bloomberg quick take powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. annmarie? annmarie: thank you for the

recap. societe generale has fallen further behind wall street rivals. capping the first losing year for the french learned in more than three decades. joining us now is the c.f.o. of societe generale. william, good morning to you. thank you so much for joining us. a number of european lenders have hinted that the worst is over and they can see light at the end of the tunnel coming out of the pandemic. do you agree? do you think worst is over too with this last quarter? >> good morning. thank you for having me. we definitely think that we have seen a much better pattern than the first half of the year. it was very difficult for everyone. particularly for us, especially in the market activities and yet we do think the future we

think things have normalized and potentially could rebound. annmarie: we have dating back to our terminal this shows that this is one of the worst performing quarters we have had since 1988. that is only the dates we have in the terminal. can you confirm this is worst we have seen in three decades? >> if you're talking about the quarter, which i understand is your question, definitely not. we have actually -- annmarie: sorry, for the annual -- >> we have a loss of minus 258 million. you know, we are a known company. i would not say for how long that was. you have to look at the real economic profit. we have a decline in the economic profit here. the economy profit is positive

at $1.4 billion. what creates is loss is accounes. you have seen others. different types of assets. the underlying profit is 1.4. this is down 60% year-on-year. this is not satisfactory of course. annmarie: what are you seeing in the first few weeks of 2021. are you seeing an improvement? what units, specifically? >> as you know, we don't like -- we don't like the talk about current trading but things are different. i would say across the board, we still see the impact of the

confinement. it is holding well. certainly better than what we had seen in the first half of the year. we have seen an improvement in the second half. annmarie: i want to get into some of the challenges you have. societe generale's price to book ratio is the lowest of any major european bank. what is management's plan to boost this, william? >> the first thing that we do, these improving the profitability of the company. as you know, we have started -- the second year in a row we have decreased -- we will continue because we think lowering the cost to income ratio is important. second, we have worked to a

very solid balance sheet. potentially we are the strongest capitalized of all french banks. this is important because it means we have flex to believe the invest and we have flexibility to support our clients and to return cash to shareholders. and then the strategic initiatives. you have seen what we are doing in retail. mergeing with our retail network. we have shuffled the market activities. equity structures in 2020. we invested degrees, r -- mobility with a.l.d. in addition to online bank status in france. we are number one by far. we have a number of things.

annmarie: you're speaking of a year of action. we know the bank is going to be selling -- when will get the announcement of that sale? >> you probably know something that i don't know myself. you know we don't comment on any m&a. this is rumor. this is not about any news. let me be very specific about that. you may have seen that the revenues are continuing to increase. and be a very interesting company. annmarie: i'm sure you have seen all the market reaction recently william with tesla saying they are buying $1.5 billion worth of bitcoin. are clients asking you about bitcoin?

>> we have a lot of questions about crypto currency. we have initiatives on block chain as well. that is an area which is definitely of interest. not specifically about bitcoin. the reputation of bitcoin in and of itself is not that great. annmarie: can i ask you william, what your view is on it as an investment? >> for vote general? i think we have a -- we made a clear commitment on that. it is potential as early as september, we want to start buying back our shares. i think it is clear that we have the view that the there is value in the shares and that is one of the best investments we could do with the cash we have on the balance sheet.

we have some flex to believe the do that. annmarie: i wanted to get your take. it is the nice guy story of the week. let's end on what is going to be happening in 2021. the bank is going unveil a strategic plan for this half of the year. do we have a date yet? >> we did say that we would unveil some strategy plan. it is not a stranl plan for the whole of societe generale. we'll wait until there is more clarity and the macro complex. it would not make sense to rush to a conclusion there. yes, on may 10, we will come back to the market. we have a new head of c. bimbings. -- c.i.b.

we are planning a deep dive of sustainable finance. we are a leader in this space, particularly in an energy position and we hope to show to people it is not just a question of -- it is mostly a question of business opportunities. annmarie: all right, william. we're going to wrap it up there. you're more than welcome to join my climate change show. coming up on the program, going to be speaking to the c.e.o. of a region energy company. we'll talk about fourth quarter earnings, future of oil and renewable energy. this is bloomberg. ♪ .. ♪

annmarie: good morning. that is day break europe. earnings season is under full swing. ecuador has posted an unexpected loss for the quarter hit by low oil and gas prices. it is selling its shake the a u.s. onshore field. joining us is anders opedal. the quarter was a little bit rough for you. but at the same time in 2020 your shares are pitch back to prepandemic levels. do you think your weathered the storm better than your pierce? >> well, obviously we were affected by the low prices in 2020. we set a tough target to improve our cash flow and project of improving our cash flow by $3 billion u.s. dollars. we achieved $3.7 billion. we improved to $h.1 billion in

the fourth quarter. that has enabled us to have a very good outlook for the cash flow for 2021. with $6 billion free cash flow before dividend. we are well positioned for 2021. annmarie: so far you are doing very well in terms of the brent price. trading at $61 a barrel. different story than 2020. >> we have a long-term view on the oil price and this is around 2025 and maybe around $64. so obviously we are seeing a good price in the market now. there are also volatility. we learned from 2020 there can be big volatility in oil prices and we are expecting volatility

also going forward. when i say we expect $6 billion free cash flow before the dividend in 2020, we're basically seeing $50 for 2021. annmarie: this report of you selling onshore assets for $900 million in north dakota and montana. why now, anders? >> well, we are working on improving our oil and gas portfolio and improving the profitability and also increasing the robustness in our portfolio. we see this asset is not as profitable and robust and there has been quite a lot of interest in buying this so we have -- we found the price very attractive and we are able to take this consideration and reinvest it into more profitable projects. we have an outlook for several

projects in 2021 and 2022. the break even for those projects is around $30 with a value creation of $3.9 billion. we are actually reallocating the capital for some of our assets that are struggling with lower prices into more profitable projects. annmarie: the other big takeaway of course is you lifted the dividend. last summer lawmakers in norway had their generous oil tax package. there was this expectation that dividends would remain in line and this dividend hike, do you think that is in line with what lawmakers were expecting from you? >> we had the package in 2020 that is postponing some of the tax that we are paying for 2020. we have grown the dividend

slightly. we took down dividend by 67% due to the unprecedented tensions in the market during 2020 and now increased -- took it down from 27 to 9 and now we have increased it from 9 to 11 and then from 11 to 12 this fourth quarter. annmarie: next quarter will we see 12-13? >> well, we will evaluate quarter by quarter based on the capex level. the cash and the necessary financial flexibility we need with the market outlook. we are still 56% down from the fourth quarter 2019 level. annmarie: of course you are going to monitor it quarter by quarter. do you expect to continue to lift the dividend? >> we will continue monitoring

the necessary flexibility we need and we will do this quarter by quarter. annmarie: the other thing of course as you're lifting your production, 2% i believe 2% from 2021. do you think by the end of 2021, we will get back to prepandemic levels? >> this is an uncertainty. we have seen the demand has been reduced due covid-19. there is big hopes based on progress. where we will be in terms of demand at the end of 2021, i'm not 100% sure. but we are focusing on improving our oil and gas portfolio and we have a good -- for some of our projects. particularly on the norwegian continental shelf and that will allow us to increase production by 2% in 2021. we have production growth, up

nearly 3% from 2021 to 2026. we are well positioned to capture a future increase in demand. a little bit further down the line, maybe reduce supply due lack of investment at the moment. annmarie: the government recently agreed to fund your northern light operation. does this have to do with carbon capture and sequestration when can can we see these projects, see the light of day? >> this is the first project where we actually are -- having a flexible situation where we will storr the co 2 safely. we will have boats that will be able to go around to europe. we can safely ingest it into the norwegian -- this is the first of its kind, this kind of

project. of course at the moment, we need governmental support. we're happy to have support from the government and our partners total and shell. we expect that over the next years we can bring the costs down. when the carbon price is -- this can be a good business. but at the moment, our governmental support is required to make it profitable. annmarie: anders opedal. c.e.o. ofequinor. coming up, we're going to get an earnings recap. this is bloomberg futures higher. ♪

annmarie: good morning. this is day break europe. just over an hour away from the start of the european open. halfway through earnings in europe. overnight, i'm looking at twitter. how does it stack up against the bigger earnings picture we have seen so far? >> it is easy to get lost in the earnings news. it has been actually a remarkable quarter so far. it is not just twitter. it is not just u.s. tech. it is not just the u.s. globally we're seeing earnings growth look very strong. every developed region has turned positive when it comes to earnings growth. this is the third skiver quarter that we're seeing the majority of companies beat. deutsche bank said had it not been for the big rebound wow saw in is second and third quarter, this would have been a record we have seen from companies. europe is a laggard.

it still has to see earnings grothse. it is the banks weighing it down. you know, you spoke with socgen. still going forward, because of how strong an expectation beatings it has been, deutsche bank says that especially for the more cyclical sensitive sectors, europe, the yen, we can see the big turnarounds. i talked to one hedge fund manager who said europe, u.k. is so cheap now. you have to go in and buy. annmarie: christian gallagher caught up with us earlier in the program. pe said why is everyone worried about inflation? time to worry about missing out on this bull run. that is it for daybreak europe. coming up next in european market open. earnings season continues ramping up. meant for you including interswruse the cocaine of

mersk and heineken. we're seeing risk on this thursday morning. this is bloomberg. ♪ this is bloomberg. ♪

anna: welcome to "bloomberg markets european open." matt: good morning. the markets say bet on the gain train. stocks set to rebound from tuesday's losses. tencent fuels a rise in hong kong. platinum hits a six-month high -- a six-year high.