inflationistas. economic contraction. there is disinflation, yield lower, two-year to record low. best in class vaccination insights, a run on pound sterling.the lung on the ftse. when did i last said that? the house and senate, clear and present video shows an incitement to riot. good morning, this is "bloomberg surveillance." i am tom keene with francine lacqua. we got through the five hour without impeachment talk. as many news stories that, rest of america moving on and they are removed from it in their support. francine: what i'm surprised -- i have been following it quite closely. it has captured the imagination of europe that for such a long

time has been looking at the u.s. as the beacon of democracy most of almost is looking into a looking glass to how the u.s. operates. i'm surprised -- not surprised, but we have moved on and there is so much of these video usage. it is quite vivid imagery that they're putting out an us the media can look at and the general public. i was intrigued by the two-year treasury yield at a record low and geoffrey yu sang anything could happen next. tom: we will get to jens nordvig in a moment. wall of money out there that changes all the fancy academics that everybody has in their head. nothing like billions and trillions of dollars of liquidity to change the surveillance calculus. first word news, here is ritika. ritika: house democrats building a case against donald trump using his own words and chilling video of the storming of the

u.s. capitol. i laid out their case any opening arguments of the impeachment trial and the senate. one of the arguments at the former president tried to sew doubt about the election results months beforehand. joe biden raising a number of concerns in his first phone call as president with china's leader xi jinping. according to white house account, the president spoke with xi about what was called china's unfair economic practices. he also brought up human rights abuses and restrictions on political freedom in hong kong. the european union has rebuffed the case call to reset their post-brexit relationship. the bloc says the british first needs to honor their promises they made as part of the divorce deal. the u.k. has asked you to delay the implementation of border checks on some goods entering the province. in japan, the former right present -- prime minister

reportedly will resign as the head of the tokyo olympic committee following remarks that demeaned women. growing criticism over his comments that adding women to the board of the committee would lead to more talking. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thank you. let me get to the data check. futures up 11. continued equity was bitcoin -- continued equity. bitcoin. i'm struggling. francine: sterling continues with the vaccination story come the fact that are ahead for the moment than everyone else in europe but i think part of the conversation will turn on brexit , new relationship including equivalency.

looking at some of the technology stocks in europe, but they are leading gains. when the implications of soft s. inflation data. tom: let's begin with jens nordvig. his work is absolutely inspirational. when the facts change, the market changes. there's a wall of cash out there. we saw the stunning move. jens nordvig, his book on the euro was -- requires a reread. good morning. i want to talk about the two year yield, the wall of cash. jp morgan has a vector to lower and lower yields. what are the inflationistas have wrong? jens: we have liquidity at the short end of the curve. it is ironic what is going on.

all the talk about use economy in the long and moving up, but the last several months, downward drift in the short end. this cycle is different from any other cycle. we did go into negative rates and in the u.s. release of liquidity coming from essentially technicalities about how the u.s. government managed -- now being released. it is a very interesting situation where we have concerns in the long end and opposite dynamic on the short end. it is certainly impacting markets, and the currency market is one of those. tom: how do you like dollar dynamics into what i presume will be a significant and rapid curve steepening? jens: i think when you look at essentially the relationship between what is going on in rates and what is going on in

fx, we look essentially at a parallel shift in the curve, the whole curve moves higher, that is something that is powerful for fx dynamics. but at the moment, you have something very different from that. you have the curve steepening dramatically. it does not support the dollar much if at all. you can also see what is going on now. you talk about that u.k., its own sort of bullish dynamic going on around the vaccine rollout. in the u.k., the short end is starting to move higher. being priced out. give a lot of talk about the u.s. being exceptional. -- you have a lot of talk about the u.s. being exceptional. the rates on the shorted are going down at the moment. that generates a bearish argument against sterling, for

example. francine: i want to talk about sterling in a second. if we go back to dollar dynamics, what happens if we have negative print on the u.s. two year yield, for example? jens: i think the most important segment for the dollar on the curve is the short in. there are a lot of players that will be paid attention to what -- hedge. typically hedge for three months, six months. all of those short instruments are going to be correlated with each other like, what is going on in the markets. what had just had. it is relevant to the currency market. therefore it is something we should pay attention to. obviously, we're not talking about hundreds of base points moving. maybe 10 points. it is still relevant and especially because a lot of people have gotten so focused on

moving the other direction long and. -- long end. it is dramatically weakening the move on the long end should support the dollar because we just have this very unusual situation where we are literally going on the opposite direction. francine: jens, going back to the u.k. and the pigment in sterling, of course it is partly because of what covid vaccinations are looking at, which is in the u.k., milli fire had anyone else in europe, but how much is there a belief that now that brexit has happened that u.k. will/taxes to become a kind of singapore? jens: to be honest, i think the vaccine rollout is very important. if you think about what is 2121 about? it is about investors hoping and expecting reopening. it matters greatly whether you can reopen in march or whether you can reopen much later.

the u.k. is on track where we think the hospitalizations should start to see in impact from this vaccine rollout within weeks. and what i mean is the proportion of people who get infected who have to going to hospital, i think that is the key policy metric that people will look at. if that starts to come down, that means we have turned the corner, vaccines are working. once that is ahead for how sterling trades. in addition to that, we have had essentially the negative rate debate in u.k. within the bank of england put on hold. we will not have negative rates within six months. that was at the last bank of england meeting. i think those two things are artan. -- are important. we did have discussions about

brexit. we've seen many stories on the paperwork and so forth. i think that will be resolved. we are in a sweet spot where most of the factors, sterling, the next couple of months, that will be the driving force. francine: tom, the only pushback, the u.k. -- let's remember, what are the only countries in europe where schools are still 100% closed. the idea it could open very quickly is we are in so deep lockdown compared to france and italy and germany. i would caution and put how quickly the u.k. can get back. tom: we're going to come back with jens nordvig on his ownership of pandemic analysis. he has been wonderful on the data. futures of 12. coming up on the policy of washington when they get back to it after impeachment. ms. cantrell of pimco.

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tom: "bloomberg surveillance." good morning, everyone. time for jens nordvig to come back on the pandemic. right now on washington in a different washington, libby cantrill joins us with pimco. i know it is easy to go to fiscal worries and inflation worries, but what does the actual deployment of more than $1 trillion look like?

what is short estimate of how it will actually be diffused into the system? libby: good morning. that is a great question. i think that is what all policy analysts and economists are trying to figure out. it will be bigger than 120 and dollars. it will likely be much closer to the $1.9 trillion that bind had laid out. -- that biden had laid out. about $350 billion of it is state and local funding. that will likely take a while to get into the system. some of it will be more frontloaded. stimulus checks. how people spend those checks immediately or do they save them ? i think the number here matches, is extraordinary. the impact to the economy may not be front and loaded as you might think. -- front end loaded as you might

think. tom: libby, a look at where we are waiting for impeachment to be done. the simple question is, when we get a check in the mail? forget about that. when we get the impulse of fiscal stimulus? my guess is it is a lot farther down the road than anyone once -- libby: we are flooding the economy with monetary and fiscal stimulus. in some ways, we view this fiscal package just as much a protector of downside risk as an increasing potential upside risk, inflation risk. for all the reasons you all just talked about in terms of the mutation of the virus, lackluster vaccine rollout, and

for all of these reasons, we think this could be as much a protective of a downside -- fragility and at the job number. the fragility of the u.s. economy. big, bold approach that biden is using, i think there is good reason for it. francine: libby, good morning from london as well. what will happen with productivity? libby: these are all great questions. i am not sure we have a great answer for everything. philosophically, much of it in the u.s. will be dependent on the rollout of the vaccine and some indications that is getting

better and improving. arguably more federal support for the last few weeks. the big question mark here. the question for us in a someone's is after you -- some ways is after you get to this covid relief period, fiscal policy perspective, what comes next? maybe is a risk of some upside inflation pressures. but even then, we think the fiscal authorities really have -- infrastructure package in mind, where we think that kind of seamless good arguably help productivity and therefore mute those inflation risks will stop

obviously, lots of the question marks. -- inflation risks. obviously, a lot of question marks. this is unlikely to get much republican support in the senate. francine: is there 100 the economy they need to focus on to target? -- is that one part of the economy they need to focus on to target? stimulus or relief package, you feel better about the path forward for the u.s.? libby: we talked to our media desk, they will call out the fact state and local -- revenue coming in a higher than many people were expecting. quite a lot of fragility of the state and local level, but having to spend a lot of money on things that the vaccine rollout. i think we will welcome the fact

this package very likely going to include a very big portion of money for those state and localities because, again, there's been a lot of pressure on them and they've only received $150 billion that congress has appropriated. [indiscernible] tom: explained efficacy of the distribution the states and localities. do we know where the money it is going? is it a constructive use? we know stingless checks -- stimulus checks, i get it. what about state and local? libby: from the cares package we saw in the spring, and one reason why more money has not been going to states and localities is some of the states did not necessarily either need it or need it immediately.

it looks like this $350 billion more or less, looks like it will be going to states and localities -- there will be a portion of that that will be divided across all of the states. but then there will be a top offer those states -- that makes sense, trying to target those states that are suffering the most. there will be a baseline figure. washington, she no, every senator needs to get some money for their state so there will be [indiscernible] tom: take you so much, libby cantrill. greatly appreciate it this morning. coming up, there are a set of mayoral candidates for this great city step andrew yang will join us in the 8:00 hour. stay with us. this is "bloomberg." ♪

ritika: this is "bloomberg surveillance." the dating a bubble has raised more than 2.1 billion dollars in the ipo, expanding the size of the listing and share price above marketing range. value of about $8.2 million. unusual amongst the dating apps in that only women can make the first move. royal dutch shell says oil production has begun a long-term decline.

the company estimates the production will fall 1% to 2% a year and its output will be $.55 lower by 2030. that laid out the plan for transitioning to cleaner energy. assess the target for electric car charging and electricity generation. disney faces a high bar when it reports quarterly earnings after the market closed today. the company riding a wave of enthusiasm. disney shares are up 23%., take more than a subscriber be to impress wall street. that is the latest bloomberg business flash. francine: thank you. let's quickly focus on the markets. if you look at the reflection trait and the equity so far, clear this sharp run-up in equities the start of february is taking a little bit of a breather. there up in your but trader

seemed to be taking a more subdued stance on technology. those stocks are leading gains in europe as investors also try to think the implication of soft u.s. patient data. tom: a turn of the markets. you call it a boring day. i would point out dollar training, not dollar weakness. -- turning, not dollar weakness. sterling 1.3826. jens nordvig on the pandemic coming up, bill dudley in the 8:00 hour. this is "bloomberg." ♪

♪ >> given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the

endemic economy, achieving and sustaining maximum employment will require more than support monetary policy. it will require a societywide commitment with contributions from across government and the public sector. my expectation would be that this would be neither large nor sustained. we are looking at actual inflation. we want to see actual inflation. francine: that was fed chair jay powell tech -- speaking at the economic hub of new york. we do sometimes forget because the market participants -- this all depends on how we keep a handle on the pandemic. there are number of things you have been studying, trial data, to see how you could stop people from getting so sick that they could end up dying. what kind of pattern do you see in terms of lockdowns and health questions? >> we are already seeing a

dramatic ramp up in the vaccinations. we won't get the vaccine in one day and be over with it. it takes longer than that. compared to where we were in the early january -- in the u.s. we were way above one million per day. in europe it has been very slow. we have a little more than half a million per day. we just delivered the oxford-astrazeneca product in the last week. we have this huge question around biotech and producing more in germany. it is supposed open up february 15. we think it will be a big ramp up in essentially how many people get it in europe. hope for policymakers will be totally different in the

reopening will start to be discussed. we had some comments yesterday from merkel that suggested she wants to reopen in early march. that was a change in tone. they are very worried about the different strains. international travel will definitely be very restricted for a long period of time. it doesn't mean the services will stay closed forever. to get the hospital pressure under control, see the vaccine rollout speed up and have those service sectors shut down for a couple of months. francine: if you are jay powell, is the underlying message that they will be behind the economy until they could have a cup of coffee? we will see the tail risk of the pandemic died down. jens: in a way they have a copy

already. this guide they put in place, the average inflation target is really quite dramatic. it has realized inflation could matter. in past cycles, when are we going to recover? perceptively you want to do something about policy. in this policy framework it is almost like you have decided to sit back and say we are going to wait until the realized numbers hit a certain time. it is then we will consider doing something. it does not really matter what each member is doing. all powell has to do is reinforce that so we don't have the market getting confused. they will not be very preventative. that is important to what we are talking about earlier.

not just because of the liquidity injection coming in now from the release of government departures. also because you have a situation where the fed guidance is a lot stronger than it was anytime earlier. i get questions all the time about tapering. the short end is just anchored in a way where we can't have a tantrum like we had in 2013. it is a very different cycle. francine: i know this is longer-term but maybe something we need to start thinking about sooner, everything the fed is doing on the premise in the special fate of the dollar. does china stop it from being a currency quicker than you think or does not change the dynamic of fiscal and monetary policy in the u.s.? jens: china is doing a lot of structural things. they have done a lot of things in the bond market. it has finally attracted a lot

of money into their government bonds. this is the first year we have seen that. they are also doing stuff in the technology space. really the creation of a digital yuan, there's a lot of steps in place that are strategic steps they are taking to really create the competition towards the dollar. when we have a volatility in the market, it is typically the case that the dollar strengthens against other currencies. that is very little against the chinese currencies. we are on a very interesting path. over time that could create some competition for u.s. assets. that will not happen next week

or next month but over a multi-year period there is no shortage of capital around the world but as we get into a normal cycle. francine: thank you for the conversation. jens nordvig. ritika: donald trump's impeachment team is counting on a couple of words from the former president speech on january 6. they will lean heavily on trumps use of the words peacefully and patriotically when they make their case in the senate. that is part of the defense against the charge incited. house impeachment managers focus on trump urging his emmett -- supporters to fight like hell. president biden says the u.s. will sanction military leaders in myanmar. they will not be able to access

about $1 billion in government funds held in the u.s. umana terry and support to the country will remain in place. bitcoin is largely holding onto gains from its run to a record $48,000 this week. the largest digital currency was trading about $44,000 earlier today. bitcoin jumped as much as 18% this week following word that tesla had invested $1.5 billion in it. global news 24 hours a day and on bloombergquint take powered by 2700 journalists and analysts in 120 countries. this is bloomberg. francine: coming up next we have the principal at pgr group. this is bloomberg. ♪

ritika: this is "bloomberg surveillance." coming up later today uber's ceo. this is bloomberg. tom: bloomberg surveillance, good morning everyone. futures up 12, dow futures up 77. a lift up yesterday with tesla and bitcoin. that was 46,000 on the bloomberg terminal. the two year yield a record low for a record low for cup of coffee. right now on the impeachment, particularly after the trial, lester munson joins us. what you need to know, he knows from those videos we saw yesterday. he knows the stairwells. he knows every nook and cranny having worked on the capitol. he is in the republican camp

with distance from the former president. i'm dying to know where the gop is after the trial. let's assume we move on. former president trump -- what does the party look like the next day? lester: it will still be messy. the house had its own kind of reckoning with the votes of liz cheney and marjorie taylor greene a few days ago. there has already been if you want to call that some progress. i think in the senate you have a much smaller number of republicans who voted to overturn the election. on the other hand you will have this larger group to very likely vote -- to vote to acquit the president. it will have to look their colleagues in the eye and explain why they did that.

the republicans have some work to do. tom: there seems to be a state level, almost local committee level to support the president and go after any and all in the party who stray away from the trump ideology, the trump belief. how do those people respond to those realities, those new items we are seeing. ? lester: the local republican organizations are the most committed republicans. they are motivated to spend several hours a day, several days a week working on party issues. that is not your suburban voter. that is not the folks the republican party needs to go out and get and be a real majority party again. they are very concerned about the impeachment but they need to make the case for the folks who

are not the central committee for the republican party. francine: how do they do that? what does mitch mcconnell do in this situation? lester: mitch mcconnell is the most interesting center to follow pretty much in any situation. he has already indicated to senators this is a conscience vote and i will not whip you one way or another. he seems to have open the door a little bit to the possibility. he might vote to convict. i don't know that is going to happen since he voted the process was unconstitutional. republicans will have to do a lot of work to explain if the president is acquitted on their vote. they will have to explain that to voters and why this capital riot insurrection -- capitol riot insurrection doesn't result in some punishment for someone. francine: we find out after this trial who is in charge of the republican party. if it is donald trump then how

does the republican party actually come together? do we see the emergence of another party that goes through this moderate conservatives? lester: those are great questions. once this trial is over, republicans are pretty much going to come back and turn their attention to the biden administration. they will do the things they are opposed to. it will galvanize their opposition to the current government. that is the opportunity for republicans to perhaps redefine themselves. politically it is a very useful foil to have a common opponent. i don't want to say anymore. you can kind of rally your troops against. that is the biden administration . they have spent $2 trillion on the recovery, which

republicans are against. thinking it is too much money. we will go from the impeachment trial to considering this gigantic stimulus program. republicans have an opportunity to redefine themselves. tom: when you are teaching at johns hopkins how do you explain the marriage of republicans, all persuasions with the domestic militia movement of this nation? it has always been there. lincoln knew it was there in the springfield speech of i think 1838. how do you explain militia history and link it to the republican party? lester: it is not easy. there are two big components. one is the wing where these militias come from. i don't get is fair to impugn the entire jacksonian wing of the republican party populace. it is a little unfair. that is where they came from.

the republican party also has this hamiltonian approach. business people, full to are interested in open international trade. the coalition. traditionally the hamiltonian's have had the upper hand. now the jacksonians have the upper hand in the last four years with trump. they will have to flip that back to being the elite business guys being in charge i'm afraid. tom: lester channeling the three volumes. lester munson, pgr group principal. that was a real clinic on 19th-century republicans. francine: i have the book, i have not read it. tom: coming up, jason farley. futures of 12, this is bloomberg. ♪

francine: this is -- ritika: this is "bloomberg surveillance"

they say domestic production will stop the country from losing its edge in innovation. the ceos of intel, qualcomm were amongst those signing a letter to the president. they say u.s. chip manufacturing has dropped from 37% in 1992 12% right now -- in 1990 to 12% right now. there will be a cloud-based platform built with microsoft that allows faster integration into its vehicle suite. here in manhattan, landlords are offering record cuts to fill empty apartments. they are averaging 2.3 months of fremont -- rent, that is the most in decades. once you subtract the concessions, rent is down 19%. that is your bloomberg business flash. francine: thank you so much.

as we continue to track the virus bloomberg has developed a partnership, johns hopkins has been at the forefront of international response offering insight from experts and public health in infectious disease and emergency preparedness. running us today is jason farley. thank you so much for speaking to us. we spent so much on the vaccine and rollout. we forget how much leaps and strides we are doing with the medication to combat covid-19 when someone catches it. jason: good morning from a snowy baltimore. there is good news all around. they recently had a reportable -- in a will of an antibody -- an approval of an anti-body. it is designed to prevent a

hospitalization with those with mild symptoms. all good news. francine: is a good news because they could be more effective in combating mutations or variations with this covid-19? jason: so far it looks like the bodily neutralizing antibody works against the u.k. variant. i have not seen data this -- thus far about the south africa variant. i trust that there would be good support there as well in reducing hospitalization and death. tom: when we get through the vaccination, people are going to say what took so long? what is the constraint to beginning to have 50-year-old get vaccinated? jason: supply is the ultimate answer to that. we have a pent-up demand. i was on a call with a senator here in baltimore.

we have the conversation with constituents it was repeated by every caller. i want to list at multiple different locations. i'm over 50 years old. i can't get access. it's about supply. many people want the vaccine. they just can't get the shot. tom: here's the moral question. i don't expect a religious answer. do you try to control over 60-year-old who really don't want the vaccine or do you basically say excuse the french screw you and give it to the people dying to have the vaccine in the 40's and 50's? jason: you raise a very important point. when we think about society and the equity of that aspect, we are overcoming a lot of vaccine hesitancy among the populations most at risk. the populations of the

african-american community have greater medical mistrust and other barriers to access care. there has been lots of historical nature of mistreatment to those populations of those in the united states. we are planning on doing the activities to encourage vaccinations among those in the population. it does take a lot more work to convince individuals and community because of that mistrust that the vaccine is right for them. francine: why or more countries not doing genome sequencing like the u.k.? if you have a pcr test it could tell you exactly what the mutations and variations are. until more countries do that are we -- could these vaccines combat future mutations? jason: molecular surveillance is

quintessential to actually understanding the overall spread of these viruses. california shows that less than one cent in the beginning of january were viral variants. a recent study shows there were upwards of 4% by the end of january. we are driving a little blind here without more molecular surveillance. what that would obviously do is tell us how many people have each variant, where those variants are most likely to spread, help us further mitigate the spread by increasing measures necessary to prevent transmission. tom: i think this is so valuable, there so much to talk about. we will continue this conversation with jason farley. francine, what do you see on the bloomberg terminal right now? francine: i'm looking at stocks,

they are higher, oil retreating a little bit. we did have a report earlier on. i will point to what you are saying in the u.s., two year yields at that record low captured my imagination. got me thinking about what could happen and what kind of timeframe. traders seem to be taking a subdued stance overall trying to figure out inflation data means for monetary policy. tom: brent crude, 61 per barrel. the turkish lira stronger. the turkish lira with a six handle? i don't think so. this is bloomberg, stay with us.

>> the fed wants to give inflation a chance to pick up. >> there's a risk that we are going to get inflation policy. >> inflation has been too low. in some way we should rejoice. >> when we open up a will be bottlenecked. >> it should be somewhat temporary. >> it is an overwhelming amount of monetary stimulus. >> until it is clear we are out of the woods we have to be aggressive. >> this is "bloomberg surveillance." jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance." alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities pushing higher, we are up one third of 1%. chairman powell has a message for president biden, could i have another term please? that's what it sounded like