global stocks surge tosh records. the nikkei hits 30,000 for the first time since 1990, while bitcoin stops just shy of $50,000. u.s. markets closed for presidents' day. the u.k. hits its 15 million vaccination target. europe continues to lag behind. paolo gentiloni says we can rebuild the economy better. and the spac revolution continues. former unicredit chief executive jean-pierre mustier is the latest to be linked to a blank check vehicle. he abruptly exits italy's second-largest lender. good morning, everyone, and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene is off today. it is quite a big market day. the insufferable surge of bitcoin taking a pause this morning, prices just shy of $50,000. we look at the performance over

the last 12 months, and i'm also looking at what is going on with not only oil but natural gas because of the arctic freeze in the midwest u.s. us get to first word news with leigh-ann gerrans. leigh-ann: england has hit a milestone of immunizing the top four fire -- priority groups. with 15 million vaccinations, the u.k. has given at least one jab to over 25% of the adult population, and has pressured prime minister boris johnson to begin reopening the economy. in the u.s., donald trump has been acquitted on the impeachment charge of inciting insurrection. there was -- they fell short of the geordie needed to convict. senator mitch mcconnell described the president as practically and morally responsible for the attack on

the capitol. due to three new cases of covid-19, after an emergency cabinet meeting, prime minister of new zealand put auckland on lockdown. there is social distancing for the rest of the country. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i'm leigh-ann gerrans. this is bloomberg. francine? francine: thank you so much. this is what the market is looking at. bitcoin, it is also a story about oil, and overall reflation trade is actually continuing. our front row conversation with the chief executive of social capital also says the cryptocurrency bitcoin has been hitting the heady heights of 200,000 in the near future. we know that the reflation trade, it is unclear what could make it take a pause, the rest

of european stocks climbing. south korean and japanese shares , we saw the data showing that -- nikkei, the 225 touching the 30,000 level for the first time since 1990. joining us to talk about the markets and everything in between, reflation, also more, is max kettner. great to have you on the program today. when we look at the reflation trade, when will it pause? max: that is a very good question. what could break it for the moment is probably sentiment in positioning. we look at the aaii last week. that has been surging quite dramatically. the positioning was coming down at the middle of -- toward the end of january. so i would say if anything could sort of give it a little bit of a pause, that is probably

sentiment positioning, getting a little bit ahead of itself, but in general, i would say positioning at the moment is not overly stretched. even if we do see a little bit of a break, that reflation trade has further to go, particularly over the next three months until the middle of the second quarter . there is really a little bit more room for all of those reflation trades to rally further. francine: you have the coronavirus vaccination rollout, according to a specialist, going to plan. so that is reflationary. where you -- the new variance? i know you are not a virologist, but could that affect plans? max: that is probably a bit of a -- i would not call it longer-term, but probably beyond future. where do we had, for example come in the next quarter, next

winter? are we going to head into new lockdown? the possibility of that, that could be a bit of a downside surprise, but that is very far away, right? what we are really going to see now for the next two to three month is much less of a focus in terms of new variance, how that holds any kind of recovery. i would much rather lean toward what you have been saying. you have this triple whammy of more fiscal stimulus, this base effect driven inflation coming through from energy and food prices in particular, and on top of that you have signs of reopening perhaps around q2, signs of pent-up demand in the service sector, so you have to sort of triple -- that is going to be pretty really inflation or a -- pretty reflationary on the second quarter. thereafter it is going to be much more challenging, much more tricky because the new variance,

-- the new variants, it is due to the base effect. fundamentally we can see there is more sign of disinflation at the moment rather than reflation. at the moment doesn't matter. at the moment you have this triple whammy and you have to write that momentum -- to write bank that momentum in the next several months. there is no real sign of fundamental reflation. that is going to be much more of a wobbly one. francine: what do you do with oil right now? this is part of the rebalancing of oil, and now you have this arctic freeze in the central u.s. where does this end? max: very simply, buy it. very simple. we are still overweight on oil in our allocation. it bios -- it boils down to the inflationary theme right now. there is almost a positive feedback loop between the reflationary theme and oil prices at the moment.

in the sense that there are these positive base effects coming through. and a lot of people are getting really excited about this reflation idea, each means there is more hope for a more rapid recovery and demand, and that actually we do see among some signs of a drawdown of inventory, particularly in the u.s. that means there is a bit more of a hope of a more rapid demand recovery with italy, and have to draw gene inventory. that means in conjunction with a positive feedback spiral from these reflationary -- just don't buy oil. francine: one of my favorite stories from last friday, a simple but very powerful story on the bloomberg terminal that basically said, look, volumes are really high, almost nearing records that we had in march of 2020. but actually, if you look at volatility, and is kind of know where to be seen. what does that tell you about valuation? max: well, i guess that is one

of the main questions that we get from investors right now, one of it being the reflation theme, the other one, how frothy is the market, out of -- how out of whack is it with fundamentals? how out of sync is it with the reality economically that we are seeing? short-term, there is frost now coming over the last two or three weeks. sentiment has gone a little bit more positive, so there might be a bit of a break in the near term, but it has sort of a three to six month view. from a three-month perspective, it is pretty good. with regard to volatility, i would say -- it means a lot of systematic investors are still not in the market yet. if you look at equity with cta, they are nowhere near where we were january 2018. they are only -- we are only halfway where we were in 2020 or in the summer of 2019.

things like risk parity, volatility marks, they have very little equity exposure so far because equity volatility, particularly compared to things like rate volatility has been so much higher. there is a positive thing to be made of it. but subsiding volatility particularly in equity markets, that could push prices a little bit higher through systematic investors increasing their exposure. francine: thank you so much, next kettner of hsbc stays with us. we will also have plenty more on the markets with sebastien galy. that is coming at 6:00 a.m. in new york, 11:00 a.m. in london, and this is bloomberg. ♪ want to save hundreds on your wireless bill? with xfinity mobile you can. how about saving hundreds on the new

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francine: this is "bloomberg surveillance." i'm francine lacqua and london, tom keene off today. we were talking about the reflation trade, some of the valuation in the markets. max kettner, where do you see opportunities? max: i think at the moment things like floor caps -- i think that is still worth a trade. for example, if you look in the u.s., things like financials still make sense because they are in a better position relative to the euro zone. in the euro zone, you see the banks index have actually rallied way too much compared to some of the fundamentals. compared to bund yields, the bund yield curve, peripheral spreads. valuations are a little bit out of whack with what fundamentals are suggesting, so rather stick

to the cyclicals within the u.s. emerging-market equities still make sense. that makes sense from a cross asset perspective. it is actually not rallying too far relative to performance drivers like the dollar and cyclical commodity prices or activity prices for example. i guess broadly, you know, we are still going to see a little bit of dollar downside throughout some of the riskier credit. high-yield makes sense. i guess we are going to go straight back to sort of new all-time heights there. we are really not a long way off it. that is the situation across fx and across equity right now. francine: looking at emerging markets, does it have to be

linked to china? and we look at china, the economy is powering ahead. there seems to be an uneven recovery. how does the play out -- how does that play out? max: that is a good question, and i think the overall market, number one, i think buying china bonds actually makes great sense. got a relatively stable currency. effect strategists expect a bit more two-way volatility there. that is a roughly stable dollar, renminbi. it is priced into a very good recovery, but we do think credit growth has started to peak. that is a pretty good hedge perhaps against the slowing of the global growth recovery in general, particularly in the second half of the year. that makes sense. in terms of china, the spillover for the global economy and other regions, yes, it really is a precursor for inflation

globally, but i would say particularly for emerging markets, it is not only china at the moment. it is particularly the tech cycle. thing about taiwan, think about exports in south korea on the semiconductor space. that is really where the music for the party is playing right now. that is probably a little more important to the domestic recovery right now. that puts asia on a chair right now. francine: max kettner, thank you so much. max kettner, with hsbc. coming up in the next hour, hugo rogers from deltek bank and trust, chief investment officer. we will ask him about covid-19. that is at 6:30 a.m. in new york, 11:30 a.m. in london, and this is bloomberg. ♪

leigh-ann: this is bloomberg surveillance. i'm leigh-ann gerrans with the bloomberg business flat. australia says google and facebook are nearing deals to pay domestic media companies for news. the government says it held talks with the two tech giants over the weekend, adding that great progress was made. both firms oppose legislation

forcing them to pay media companies for news. after his fourth -- after his fall from race, new whitford plans to start a new firm. he will be chief of a new outfit that plans to focus on the biotech sector. that any comeback is subject to an ongoing investigation. that could ban him from investing. his reputation was tarnished in 2019 he was forced to -- and can barton has resigned after a scathing report from regulators. it found the australian can seem no operator had facilitated money laundering and was not fit to hold a license in sydney. the acquiree recommended -- that is your bloomberg business flash. francine? francine: thank you so much. in a historic second impeachment trial, former president donald

trump was acquitted by the senate on charges of inciting riots at the capitol. the vote was 57-43, which fell short of two thirds geordie needed for conviction. the increased friction among the republican party. >> the trump movement is alive and well. people believe that he brought change to washington policy wise that was long overdue. all i can say is that the most potent force in the republican party is president trump. we need trump plus. sen. mcconnell: there is no question that president trump is practically and morally responsible for provoking the events of that day. >> our constitution is more important than any one person. i voted to convict president trump because he is guilty. francine: joining us is kathleen

hunter. it is unclear at this moment -- first of all, there seems to be a lot of anxiousness in the republican party as far as what they are. but is the republican party the party of donald trump, or is it something else? kathleen: i think the one thing that we do know is that trump is not gone from the republican party as a huge influencer. the votes that we saw on saturday made that abundantly clear. what we will see now is sort of a fight for which direction the republican party goes, and i think that we are seeing -- there has been talk for a while of the possibility of a civil war around the idea of whether trump should live on or be put away, and i think we are going to see the civil war play out very publicly, potentially, over the next two to three years. francine: what happens in the next two to three years? does it depend on what trump does and what he wants to do next, or are we going to see

someone emerging from the republican party, a be more moderate, to try to take over? kathleen: well, i think that one of the things that is going to happen in the midterm elections, coming up in a year and a half in 2022, it will provide a clear signal where we are seeing a number of the house members, people like liz cheney from wyoming, who have drawn pro-trump primary challenges. we are going to be seeing that play out over the next couple of years. there was also an ongoing question about whether or not himself -- trump himself will run for reelection in 2024, so we would likely know the answer to that sometime after the midterms if not sooner. in the meantime, i think there is going to be people who are jockeyineplace trump potentially as a leader of that wing of the party, and also create a contrast, to say that this is not the direction the party should be going, and in the opposite direction create a more moderate republican party,

and we even saw some mumblings last week about republicans talking about breaking out and forming some kind of a third center-right party that would sort of be in opposition to the trump wing. there is a lot of churn in the gop, and a lot of disagreement about the direction of the party, and i think watching that as we go through this election cycle, will be very, very interesting. francine: kathleen, how does joe biden actually move away from this to focus on his policies instead of the media trying to always second-guess what donald trump is going to do next? kathleen: i think that having the impeachment trial, that was a huge focus over the last week and a half. i think having that over and done with will clear the decks and create space for joe biden to kind of get the spotlight back. certainly we would like to do that, talking about his stimulus plan. trump has the ability to still command media attention, but

obviously he has been banned from social media, so he is not able to tweet and use the bullhorn that way. he has set up his own website, the office of the former president. but he doesn't have the ability to hold the kind of megaphone that he has in the past, and i think that the country in a lot of ways he's going to be focused going forward on what joe biden 's administration will be doing, at least short-term, as we get closer to the midterm. the balance of attention shifts back to what it was during the inauguration and shortly thereafter. i think the impeachment trial thrusts trump back in the spotlight for a brief period of time. francine: what role does mitch mcconnell play in the republican party going forward? kathleen: mcconnell's power in a lot of ways is already diminished. he's already the minority

leader instead of the majority leader. he gave a very -- practically, trump essentially was responsible for the riots, and mcconnell claims that he did not believe it was constitutionally right to convict a former president, someone who is no longer in office. so that was a loophole that he used. but i think that mcconnell was really trying to say -- he was trying to not alienate the trump wing of the party but also made clear that he is trying to move the party slowly in a different direction. francine: thank you so much. kathleen hunter there. this is bloomberg. ♪

>> we have no reason to think that they are ineffective

against any variation of -- any new variant of the virus, in protecting people, margaret, against a serious illness and death. that is a very important consideration for us. one of the big features of the astrazeneca that has been confirmed is that it reduces transmission between people. it is a 67% reduction in transmission, as a result of the use of these vaccinations. francine: that was boris johnson, speaking to cbs over the weekend. the prime minister facing mounting pressure to reopen the u.k. by the end of april, after reaching a milestone in vaccinations. more than 25% of the adult population has received at least one shot in the u.k. joining us now is paul hunter, professor of medicine. i remind myself that you were the first one that actually saw this virus coming over in march

and told me exactly the time it would take to come to europe. what do you see is the thing people mi -- as the thing people miss out in the conversation? do we need to wait, or is it find to open from lockdown? -- is it fine to open from lockdown? prof. hunter: it is not going to be the thing we monitor. we should be looking at the same things we looked at in december, the case numbers, debts, hospitalization -- deaths, hospitalizations. the vaccine will make that decision a lot easier because even though it doesn't necessarily stop infection

altogether, it does reduce the spread of infection. also because it seems to be very effective at stopping people getting -- possibly more effective than getting the mild illness, it will make all of the metrics so much easier, to make decisions. we do come out of lockdown, and i think we are on target for a april or march opening of schools and i hope over the course of the next two to three months, we will gradually see more restrictions lifted, but i don't think we should rush that because if we end up relaxing too soon and then having another surge, we may well be back where we were earlier. by the summer, i could see things be much more relaxed. francine: professor, what are we trying to achieve with vaccines? are we trying to make sure that nobody gets sick, even if it is a mild infection, or are we just

trying to make sure the people don't die and end up in hospitals? prof. hunter: the primary aim of the u.k. vaccination campaign is to reduce the instances of severe disease. vaccination by itself will not eradicate the virus. the virus is with us for a very long time, decades and centuries probably. we will ultimately come to live with it, as we have with previous coronaviruses that have made the jump into human society. the issue is to make sure that until we get to the point where we can have an infection without it causing as much harm, and that is what the vaccine is doing, reducing that harm when we gave -- and we do get the infection. but the virus is still there. we have to worry about people

who have not gotten the vaccine. ultimately, all of these things working together. we are moving into summer, where these sorts of viruses spread much slower. things are going to get a lot easier, in the not too distant future. francine: do you think we have a moral obligation to make sure that people who are not vaccinated are protected? prof. hunter: we need to do what we can, but clearly this is a political decision about what proportion of the population remains unvaccinated or what proportion of the vulnerable population remains unvaccinated. that is a difficult question. it is not just a public health question, and i think it is a political decision that we made

at the appropriate time -- that will be made at the appropriate time. the evidence is that we are still getting very good at obtaining vaccines. we have to make sure we do what we can for people who haven't yet had the vaccine for whatever reason, and care for them if they do get sick. but ultimately, i think we will see a substantial reduction in the restrictions we are living under, within months rather than years. francine: professor, there are a number of things in the spotlight. today, travelers from red zone countries have to quarantine in a hotel, but there are reports saying they are still allowed to mingle with people on planes or with other people at the airports. does that need to change? what is your take on these

passport vaccines? are they the right way forward? prof. hunter: the first thing is to say that most infectious diseases, border restrictions are very tight, whether they are quarantined or total closures. they have value come over they don't -- they have value, but they don't guarantee a stop to the disease. the south african variant in the bristol variant -- and the bristol variant are already here. ultimately what we are doing with restrictions is to delay things a little bit, until we have more of our population immunized. i can't see that this won't have benefits for a long time, but i would hope and expect that the

need for these border restrictions in the next few months will be lifted. but you are quite right, as people are coming into the country, they may be mixing with other people, where they have been, before hand, not necessarily a good indicator. these viruses are already spreading in countries not on the red list. ultimately, it is probably going to be a few weeks, but it won't be the thing that makes the difference. francine: thank you so much, paul hunter, university of east angela. let's get to the "first word news." >> japan will begin covid-19 vaccinations on wednesday. the government has agreed to by the pfizer vaccine for 72 million people this year. the prime minister says japan needs to make sure infections are falling, before it cancels

the state of emergency that is currently in place in 10 regions, including tokyo and osaka. the u.k. is stepping up its efforts to encourage investment in renewable energy and sustainable agriculture. the government is launching -- that will start work in april. the mission is to provide data and analytics to financial institutions, to support their investment decisions. bitcoin is paring gains after the weekend took it to a record high. it comes as the world of financial services seems to be embracing the cryptocurrency, with a unit of morgan stanley considering making a bet on the digital coin. canada has also approved the first non-american bitcoin etf. global news, 24 hours a day, on air and on bloomberg quicktake, powered by over 2700 journalists and analysts in more than 120 countries. i'm leigh-ann gerrans.

this is bloomberg. francine: coming up, we continue to track covid-19 with the -- that conversation at 6:30 a.m. in new york and 11:30 am in london. this is bloomberg. ♪

francine: this is "bloomberg surveillance." you are looking at the principal room. coming up litter today, the greek prime minister. that will be on bloomberg, a little later on. this is bloomberg. ♪ now to exclusive conversation with the former chief executive of unicredit. he planned to raise funds for a special acquisitions company that will invest in private services. i started by asking him what he

wanted to start a spac after unicredit. >> if you look at the cooperation between the u.s. and --[indiscernible] we lack capital in europe. [indiscernible] -- we chose the financial sector to do that. francine: the world has capital in abundance. many people are starting spac's. why should they -- why should anybody invest money with you four? >> [indiscernible]

what we can bring to a company is our wealth of experience in the financial sector, capital access, digital transformation, and so on. [indiscernible] francine: which areas of financial services, do you now consider undervalued? >>[indiscernible]

francine: our interview with jean-pierre mustier, on his new spac. coming up, jaguar lands a new ceo. this is bloomberg. ♪

leigh-ann: this is bloomberg surveillance. i am leigh-ann gerrans with the bloomberg business flash. -- has named robert kerensky as the sole head of its investment banking unit.

copresident -- is leaving to head the euronet stock exchange. both men were put in charge as copresident, following the departure of --. since taking over in 2018, they have shaken up the unit, splitting it into two segments, global banking and quibble markets. dubai international airport saw a 17% slump in traffic last year as the pandemic slammed the travel industry. the airport ceo says they can maintain their crowd as -- their crown as the busiest international travel hub. >> it depends on the rate of an -- rate of vaccination globally. we have seen great progress in the uae, second only to israel. the capital is in place. once the rest of the world gets toward a meaningful figure,

travel will recover on the back of that news. leigh-ann: and that is your bloomberg business flash. francine: thank you so much. bitcoin is back on the retreat after touching $50,000 over the weekend. an investment unit at morgan stanley is considering whether to bet on bitcoin. canada approved the first non-american bitcoin exchange. thank you so much for joining us. the focus is on bitcoin, close to $50,000, but how much will this be adopted by mainstream? mainstream wall street, mainstream exchanges, and is that pushing the price higher? >> i think it is what is pushing the price higher. to your point about becoming a bitcoin expert, we almost don't have a choice. everybody at the moment feels like you have to learn, because there is so much about it.

it has become more accessible. you got futures contract, you got paypal on the other side. everybody can get access if they want it. francine: but does it become a systemic risk at any point? you have come on the program to talk about regulation before, but the more we adopt it as is, the more it attracts regulators. eddie: that is exactly right. as long as this is a fringe assets, only a few people are invested in it, it doesn't matter if it is hugely volatile, but if we see in the next crash that bitcoin drags down the wider risk appetite, the regulators become a little more nervous and they say, does this become systemic? if this becomes systemic, they

have to regulate and if they start to regulate, this becomes a whole other ballgame. francine: how do we know what that ballgame becomes? you have a number of people saying $100,000 or $200,000. how are you watching this? is there another angle? eddie: the big question is exactly how big does it become? if it becomes big enough to take on the gold market and it is important that it will be regulated at that point because a lot of people are invested in. if however, it becomes successful in its ultimate goal of becoming a global reserve currency, that is a whole other ballgame and i don't think the regulators will allow that. they will scale it back at that point. at some point, bitcoin will become capped. you have to ask yourself, are we

approaching the top? francine: how do we know when we are approaching the time? what type of main street or wall street companies are looking into this? can banks afford not to at least have an opinion on bitcoin at this point? eddie: absolutely. i've never had so many calls from money managers in the real world, talking to their customers and they constantly come in and say is this a commodity? grappling at the moment with how do they analyze it, how do they value it. as for the question -- i think everybody wants a piece of the pie at the moment, but we've got to have an underlying use case. just new money flowing in can't sustain it going up forever. that is just called a mania and at some point, mania bursts.

it is really hard to call a top at something like this. it has gone up 10 fold since march of last year. march of last year, it was sitting at $5,000 and now it is sitting at $50,000. i don't know that i would be happy, so i don't know where the top is, but at this point, it has become so volatile and so unpredictable that i don't know if investors haven't missed the boat already. there may be others to follow. you must wonder whether there is a fallback. francine: eddie, there is definitely less volatility than we saw in 2017. is volatility a good indication of what it means for adoption by mainstream? eddie: there is less volatility,

i think because bitcoin is so much of a higher price right now. it is a bigger market, a slightly more mature market. don't forget, even when paired with something like crude oil, this is something that is abnormally volatile. it is less volatile compared to bitcoin in 2017, but much more compared with anything else. francine: people are trying to compare it with gold. the difference is quite striking. how do you explain this? eddie: the comparison with gold is interesting. people are talking about the outside and don't get me wrong, a lot of the people investing in this are investing for a lot of the same reasons they would have bought gold. they are worried about m and t,

they are worried about negative rates, systems flooded with liquidity. but gold is a proven inflation hitch. bitcoin is a bet on an asset that may someday grow up to be in inflation hitch. that gives you this explosive upside. if it doesn't achieve that, the market b so much larger, the valuations will be so much higher. that to me is the big difference. gold is on the floor and bitcoin is the pretender -- is on the throne and bitcoin is the pretender. francine: eddie van der walt, thank you very much. coming up, we speak with -- this is bloomberg. ♪

francine: a new week and global stocks surged to records. bitcoin starting just shy of $50,000. u.s. markets are closed for presidents' day. europe continues to lag behind in vaccinations. -- says the rollout will be critical for the growth forecast. the spac revolution continues as the former unicredit ceo is heading the mix. good morning and welcome to "bloomberg surveillance." i'm francine lacqua, tom keene with the day off. in the last couple of seconds, we had breaking news out of the u.s. this has to do with the price of oil and the price of natural gas and that arctic snap in the u.s.. just moments ago, we heard that the cold weather put