♪ without the united states from president's day and without china and hong kong as well overnight, but did not stop the nikkei 225, though, touching levels we have not seen in more than 30 years. in europe we see stocks in fine form, 1.1%, getting a boost in particular from the london market from strengthening oil prices. same applies on the cac 40 as well. lots of talk about in terms of what is going on in the media

space and selling of various asset. wti release if the dollar handle, up to percent -- with a $60 handle, up 2%. the demand side of things. on the supply side, the really cold weather, the cold temperatures, what does that do to the lng, to oil production and even wind generation? it is not just crude that is rallying, platinum is also moving to the upside. on the fx markets, the dollar is showing a little weakness, keeping a bit in perhaps with the risk-on trade we have seen in equities. the pound up 0.4%. the vaccine rollout meets a key milestone here in the u.k. oil is up at a 13-month high. joining me now is bloomberg's will kennedy. really interesting story. we are seeing a lot of reasons

to be concerned around supply, and reasons to be concerned around demand in that particular part of the u.s. as well. let me ask about the supply-side of things. how much of a disruption is this to the export of lng, oil production and wind farms? what is the story? will fish it is unprecedented in some places that have experienced subzero temperatures. it is having an effect right through the energy system. the first place is in the permian basin, the heart of the u.s. shale industry, producing millions of barrels every day. our latest understanding this morning is that so far one million barrels a day have been disrupted because his wells are not for cold weather. they freeze up and they cannot produce oil.

that has big knock on impact into the gas market, a lot of the gas production in texas is from gas wells, or gas that comes out of oil wells. that is feeding through into the local gas markets, where we saw prices rally incredibly, about 4000% last week. that means there is less gas. it is really come to getting on the whole system. anna: absolutely. disrupting oil production. i also read freezing in some of the ports when it comes to lng, and also having an impact on wind farms. let me ask you about those in texas and how they are coping with this. yes, it does get cold weather, but this is surprisingly cold. i think 10 years since we have seen something like this in texas, and it is having an impact on the ability of the infrastructure to cope there? will: basically, they do not

have enough power. majority of texas folks use electricity for eating, which makes a difference in a lot of places that use gas and heating oil. that is putting unprecedented pressure on the grid. supply from wind farms is suffering. even supply from gas power stations. so this morning, the company that runs the texas grade, the main grade, said they cannot supply everyone all the time. they have instituted rolling blackouts. at any one time, an average of 2 million texas homes are not getting a power supply, lasting anywhere from 15 minutes to one hour. huge effects at a time when it is freezing cold. not having any power at all. anna: any fan of this getting better? this arctic air is pushing down as far south of the gulf of mexico. looks a little warmer on tuesday.

will: it will remain cold through mid-week and then slowly get better. i think given the power demand likely to rise through the day, is fairly hard to keep the grid organized through this sort of event. once power plants go off, it can be hard work and them back into the grid again. we can see a situation where things might get a little worse during the day and into tomorrow. we really need to keep an eye on just how many households have to go without power and for how long. anna: ok. we will keep an eye on those prices. wti, $60.67, up 2%. let's bring in another voice, saxo bank chief investment officer and chief economist, steen jakobsen. you have been doing analysis of nearly 250 years of past market

activity, looking for commodity bull market. i am not sure you thought that this particular driver would take a big one. you expect me 21 to mark the beginning of a commodity bull market -- expect 2021 to mark the beginning of a commodity bull market. why? >> the physical world has become too small for the digital and online success, combined with the fiscal spend we will see. all of this puts big pressure into what we have invested into oil and energy sources and the metal industry. we think is a most inevitable that we have, as we are experiencing right now, inflation. that will come through as an inflationary cycle. all of this will be driven up by the underinvestment into commodities overall. anna: it is really interesting,

we are talking increasingly to investors who went best in class commodity investments and say that the credentials of those businesses, or they do not want to go near the sector at all. how do we make sure the sector remains affordable through the transition? the transition phase could end of the pricey, i suppose. dheepthika: very much -- steen: very much so. the renewable energy sector is based on low density, and in a world where we still have a growing global population and a growing need for electricity, the electricity a month goes by 20% a year, capacity on storage sites goes up by slightly smaller than that. we need to get far more effective in the way that we do

that. or we will have a gap between the two. i estimate that the march of customers going into the oil industry is an axis of 15% if not 25%. on top of that, a number of companies would never touch it, although it would have been the biggest lay up in terms of investmentp they will shy away from es. ultimately we need to find a balance between the black economy, so to speak, and the green economy. that is probably one of these things we have to be very careful and calculating into our investment rates in the next two to three years. anna: if this will be inflationary, what should our infliction expectations look like? i read really contrasting narratives over the weekend. others seeing inflation is back,

we have really got to start taking it seriously. steen: first of all, inflation is here. but if you want to measure it in terms of the cpi. we have one construction issue with that, actually, we have two. one being that the rand increment is more than 40% of that. because of the pandemic, rental prices in san francisco, new york and other places are collapsing. that impact is very small. second is that assuming that a bunch of goods reflects the economy is wrong. you just need to look into the accounting, ups and fedex. deliveries up by 10% last month. shipping costs is up between 200% and 800%. absolutely, we already have inflation in place, especially in the production line. the inflation expectation is that we will see close to 3% from a base effect over the summer, and from then we will

shoot up, because inflation expectations with the businesses and ceos i am online with in different seminars is all the same, and that is there is supply constraint, and the price was to go up on the products. anna: with that in mind, how do you view the fed's commitment around keeping rates low for a period? how long into the future do you think we have this stability. steen: the market, through 2024, obviously. we think the first nudging of the rate, at least the first move from extremely dovish tone neutral will come at the end of this year. and in the later part of '22, we will see a move to engineer some rhetoric that takes care of it. but it will be too late. you have to remember, every single time the fed comes up with a plan, less than six months later, they have to change it. 2018 december hike went too far in terms of hiking it. and in terms of hiking interest

rates, the federal reserve turns around every time that market forces them to. what i perceive to be the real risk here is that the market will start to price aggressively the terminal rate on inflation. when that comes up, the market will have to react, and when the market reacts, the fed will be on the back burner trying to mitigate the fallout from that. anna: how will fiscal policy work alongside that? because at this stage in the recovery from the pandemic, we are talking about fiscal support, of course, in europe and in the united states, thinking about how large that should be. i know you have been giving some thought to the way the stimulus changes, what we have learned from 2008, the way that stimulus resulted in austerity. maybe this time looks different. what are your thoughts there. steen: 2008 and 2009 was about creating reserves in the banking system. financial stability.

now we have a focus on social stability, bein reduction of inequality, which means full employmentg mandates from the federal reserve. on top of that, we see the government spending money directly in putting get it into the lower k of the economy. transporting demand directly outside the industry. so, again, looking for inflation through the velocity of money is not going to work. anna: thank you very much for joining us, tenia comes in from saxo bank. let's get to the first word news leigh-ann gerrans. >> texas has begun rolling power blackouts for millions of households of the first time in a decade, as an arctic freeze throws a wrench into the u.s. energy markets. the operator of the state's power grid ordered network operators to reduce strain on the system as people crank up heaters to try and keep warm.

power supplies to residential neighborhoods and small businesses are expected to be cut fred upton 45 minutes at a time throughout the day. donald trump's allies are lashing out at republican representatives who voted to compete -- to impeach him in the impeachment. two state parties, louisiana and north carolina, moved within hours of the conclusion of the trial to censure republican senators who voted to convict trump. british prime minister johnson is backing president biden's call to china to make available raw data related to the outbreak of covid-19. an organization -- w.h.o. investigators concluded it was extremely unlikely that the coronavirus you from a lab in the city of wuhan, but the white house has expressed deep concerns, saying the findings must be free from intervention

by the chinese government. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am leigh-ann gerrans. this is bloomberg, anna. when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store. (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design

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>> this is bloomberg markets. i am anna edwards in london.

let's check out how markets are trading this afternoon london time, dani burger is here with an update? dani: it might be a quiet day with the u.s. off. but on a day when there is not a clear narrative, the narrative is a reflationary one. equities across the board higher, by 1% in europe. it is not just the u.s. inflation, yes, we are seeing bond futures selling off, but in europe we have 50 million vaccines. in the u.k., maybe hopes of reopening. and what is gaining our oil and material stocks, because we are seeing oil rally about 2%, $60 for the first time since january. that is not just inflation, it also has to do with the cold weather in texas, the outages in terms of supply and production. it means rises are rallying. but commodities in general have been interesting as of late.

copper touching its highest since 2012, up about 0.7%. jp morgan says given this reflationary picture we are seeing, it is time for another super cycle in commodities. gold weaker, not getting that inflation bid. interesting to look at what gold is doing, selling out here compared to bitcoin. let's look at bitcoin over the past three days, touching near $50,000, not quite getting there and now it has started to weaken. some of that is coming off. what is interesting is what eddie van der walt said today, our colleague, gold is that inflation hedge bet. bitcoin, you are betting that it is going to become the inflation hedge that. some bitcoin is not even immune to the inflationary story. anna: start the engines. dani burger with a look at the markets for you. let's look at european politics for a moment because that is also moving markets. former head of the the, mario draghi was -- former head of the

ecb, mario draghi, sworn in this weekend in italy. maria tadeo, good to speak to you. mario draghi has unveiled the names of ministers joining his government. let's start with the high expectations. certainly comes with a lot of strong track record and therefore, a lot of people asking what can he really do, just how far can he go in terms of reforming the italian economy? maria: yes. that is still the big question. i always get hold that in italy, there is a gap between being a good central banker and being a european star, which mario draghi clearly is, very respected. then national politics much more difficult. it is a very different context. in terms of what can he do and what types of reforms that could be pursued, when you look at the

names he has included in the government, there is a mix, politicians and also technocrats. everyone that is coming in from the external and private sector. names like daniela franco. the focus will be on executing reforms that could pay off alongside the recovery. this is a government built around the idea that the money coming from europe is the final opportunity to reset a country that has not grown in the last two decades and push and reforms that can make good on that. you look at canada, the idea is that from now until april, mario draghi has time to come up with additions to that recovery fund. then in 2022 and 2023, the big years of reforms and the big years of making good on that money. that takes us to another question, as to whether he can last until 2023, or maybe he

will move from prime minister to perhaps resident of the italian republic. anna: a lot to think about when it comes to reforms that could lie ahead. looking at the influence that rome has in brussels, what is his effect in brussels? at the ecb, he talked a lot about the need for a european budget, the monetary integration we have seen on the monetary side. will he continue to take that message to brussels? maria: that is a fascinating question. there is a sense here in brussels as to what we can expect from mario draghi, now he is a politician and not a central banker. it is not just about monetary policy, it is also about the fiscal policy. the europeans and the french have been pushing for it and hinted that they want a bigger instrument.

interesting that mario is also floating that idea. overall, moving away from just the budget, it will be interesting. we are all curious to see whether he manages to change the balance of power and move it away from france and germany, to perhaps shift the conversation around the table. when you look at the economic knowledge, that monetary knowledge, probably much more than a manuel and -- much more than a minor macron, and angela merkel. it will be interesting to see whether he can change the balance of power which until now has focused on berlin and paris, and also what he does it the so-called frugal 4. i will say that if there is anyone from italy that could do it, it is mario draghi, for sure. everyone before him had been a weaker politician. anna: in terms of the market perspective, the market's reception, we have seen --

closing as a result of the news that mario draghi is becoming prime minister. he brings in with him a team. what do we know about the team? maria: you make a good point, when you look at the market reaction. we have seen the yields and btp's hitting a record low. it is not just about the bu nd, but spanish bonds, the spread has been narrowing. the spanish will feel the pressure to the compared to the italians in their recovery plan, with the italian plan being pushed forward and mario draghi. when it comes to the prime minister, not a lot has been said, that daniela franco is someone who is very well known in the national circles, known for knowing how the machinery works. it shows that he went for that technocratic approach. every minister that is closely attacked to the recovery fund is someone coming from the external sector, someone that is also close with draghi himself which

tells you that perhaps he is intending on keeping this a very in-house, very tight-run operation. anna: maria, thanks very much, maria ten-day with the latest -- maria tadeo with the latest in brussels. it is 12:24 here in london half an hour away from, our european trading session. the picture across various sectors are in europe is positive. the stoxx 600 is up. the ftse 100 is benefiting from the oil price strength, up 1.7%. other sectors doing really well, there are no sectors in negative territory. media is the best performing sector, up by 3.5%. but has a lot to do with the selloff of various assets in the french media space. details on that later on in the program. coming up, we speak with a

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anna: this is bloomberg markets. i am anna edwards. this is president today, special edition of bloomberg markets. we are halfway through our european trading session. you can see the strong performance in london. oil prices are higher. cac 40 is more than 1%. the nikkei two also very strong overnight, something we have not seen -- and nikkei 225 also very strong overnight, something we have not seen in 30 years. jaguar and land rover says it will ditch combustion engines four years from now. joining us is ceo, thierry bolloré. thank you for joining us and bringing us your story and allowing us to ask you about it.

i think the heart of your reimagined man is an electrification. land rover and jaguar. do you feel that you are at the forefront of this wave of electrification or are you having to keep up? thierry: you can see that jaguar was pretty much a head. it is not completely new in our company. at the same time, it is a vision , a vision of modern luxury by design. but with a strong factor of sustainability. that is why we call that responsible luxury by design. this is the vision for the business and also for the brands. and as such, the electrification of the whole jaguar portfolio by 2025 and of the land rover portfolio before the end of the decade, and in fact, in the next five years we are proposing the

ev land rover. we have the technology. we know how to do it. so we know what is the journey. the important factor is that we are at the same time creating a huge simplicity in our platform's architectures. that is going also to help a lot to make sure to be on time. anna: let me ask a little bit about the simplification help. us understand what is happening to some of your production facilities. for our international viewers, the facility in the west midlands in england, are you saying that that the facility will not make vehicles at a certain point, and what kind of use will you find for it? thierry: it is clear that we will continue to produce our vehicles there until the life of these vehicles.

it is clear as well that we want to use all of our facilities better for the new vehicles to come. that is why, we are exploring all the ways to repurpose the site. fortunately, we have a certain number of activities, very valuable activities which are scattered over the midlands in the u.k.. that is the reason why we have a significant opportunity to reorganize, to restructure all of that and transferred this activity in the repurpose thing of that facility. so far we make a very valuable things there in a very efficient manner, which is the goal. anna: what other types of activities you might do their, and what year will vehicle production there cease? thierry: actually, the new jaguar vehicle will come in 2025 with them in a sense of the jaguar brand. but we have also some activities

like vehicle operations, very valuable, where, very much high appetite for our customers flood the this book session for the --bespoke tradition of our cars. anna: let me ask about where other parts of the vehicles will come from. given the brexit agreement that was reached, there is an incentive to localize your sourcing, factories and other arts where are you then going to get your batteries from ? thierry: that is a very good point. in a more global manner, what is very key first is to make sure we are properly positioned on the next value chain of the mobility we are embracing and accelerating. that is the first element. making sure that the make is

well-balanced. so far we know what we're talking about, we are in all of these domains. at the same time, we have to balance with the value in the company. second part is localization. you are right to say that the power in the u.k., it makes a lot of sense to be sourced competitively, very close by our plant. that is why any project of creating battery factories over the is, of course, all great -- over the, is of course, of great opportunity for us. anna: are you in talks with people about sourcing batteries from here in the u.k.? thierry: we are in talks with many people. because it is a question which is not exactly new. at the same time, i think the outcome of brexit, which is

positive for us, is creating a new interest in making these types of projects happen. anna: let me ask you about other partnerships that you have at jaguar land rover. you relied on a company to manufacture the lone all-electric model up until this point. will that production continue or will you bring that in-house? thierry: for the moment, we continue with our partnerships. we enjoy them. we appreciate working with the leading companies who are bringing value to us in multiple types of partnerships, by the way. it is clear as well that we are always looking to any type of opportunities to make sure that we are at the top in terms of technologies, in terms of innovation, in terms of services also that we want to bring to

our customers in this new mobility journey. we have a great partnership with our own shareholders. for example, with tcs on software. such a group is extraordinary. you have got power, distribution, communication, technology, software, all the ingredients of the future mobility journey, all the oem at the moment. we are inside already with greater maturities for partnership -- great opportunities for partnership and we continue to enhance them in the future. anna: you are on the brink of a take change in a business -- brink of a big change in a business that has prioritized luxury and has one version of a powertrain for so long. can luxury continue to be extraordinary in the electric vehicle world? thierry: can you -- sorry? can you repeat your question,

please? anna: can you still have the driving experience extraordinary in an ev world? thierry: the answer is absolutely yes. we have this experience with --, as i told you. i can promise you that the drivetrain, that you can tune with electric power can be absolutely extraordinary in terms of driving experience. that is the beauty of this type of technology, where you can really get the right experience which is associated to your brand through the people in the car, especially the driver and which is truthful to the brand promise. that is why we are embracing the journey with a lot of enthusiasm, as you can see. thank you. anna: embracing the change. thierry bolloré, jaguar land rover ceo, thank you so much for joining us.

shifting to the fx market. the dollar slips against it g10 peers. jeremy stretch, cibc head of fx strategy joins us now. we will pivot away from luxury vehicles to talk to you about the fx market. may be would rather talk to me about the luxury driving experience. let me ask you about the dollar, setting a trend for the week. we see an appetite for risk assets. do we still stand by th logic l for 2021? because 2021 looks a bit confusing for the dollar. do we still sell the dollar? jeremy: you are right, the start of the year has been a bit confusing. we have not seen a definitive trend playing out yet, but i think we will still be in an environment where we are in a recessionary trend. clearly the markets are waking up this week in an optimistic mood.

we have to be careful, there are large parts of the market on holiday. nevertheless, the mist next -- the risk dynamics are powerful. if we see the risk dynamics extended, commodities will continue to perform well relative to the lower yielding currencies. that includes the dollar and to some extent the euro, as well as the swiss franc. overall i think we are going to continue to see that high bid into commodity currencies performing well in this broader reflationary environment. anna: is it because of oil prices? or is this a broader reflation in fx? jeremy: it is definitely much broader than the oil price. we have seen the substantial uptick in oil prices the last few weeks. that has been amplified over the weekend with that intense cold snap in the u.s. which has caused prices to continue to

spike higher. i think if you look at the other commodity dynamics, they are moving relatively --. the leverage fund community has been a community those commodity positions to levels we have not seen in decades on the assumption that global activity will continue to rebound. i think it is very much more beyond just the oil price driving it, as it is a commodity spectrum as a whole. as we have seen the vaccination process rollout, and we continue to see liquidity being injected into the system and the stimulus remain evident. anna: as the certainty that we have with some of the brexit arrangements, there is also the rollout of the vaccine, what do you think is driving this trend?

jeremy: one factor is the market has been able to pare back any fear or uncertainty in terms of negative rates. we have the bank of england briefing a couple of weeks ago which has really taken that parameter off the table. i think we are in a scenario where the vaccination rollout has gone incredibly well thus far, with more than 15 million vaccinated, opening the path to some easing of lockdown restrictions. we are starting to see big-money investors holding sterling long positions again, playing into the broader narrative of the high beaten nature of sterling. it is encouraging this uptrend in sterling not only against the dollar, but against others. we are seeing the sterling reflect the as him shall the growth in q2 and onwards will be robust, because there appears to be an enormous degree of pent-up consumer demand, which hopefully

will be good news to your previous guest, for example, if we are looking at luxury spending, particularly demand in general moving u. anna: the bank of england was talking about that, as well. more people might want to do things with their savings, those who have been fortunate enough to keep their jobs, of course. what about the euro. we are not at 1.23 anymore. jeremy: we are not, but i think we have just the the market which has back a little bit of the optimism. i think what we can say going forward is if you look at the dynamics in italy, we continue to see the btp bund spreads compressing, and structural reform in italy to alleviate the structural imbalances in the eurozone, then i think we can see the u.s. dollar grinding higher. but it will not be an exponential move higher. from a european perspective, they will be much happier seeing

the euro in a 1.21-1.24 paradigm. anna: thank you so much, jeremy. coming up, the latest on the vaccine rollout, and concerns over variance of covid-19. we will speak to a molecular epidemiologist.

leigh-ann gerrans: with the first word news, i am leigh-ann gerrans.

britain has given 15 million vaccinations, a milestone that is said to increase pressure on the prime minister to begin reopening the economy. he praised what is called an extraordinary feat, and said england had a ready met its target of them amazing the top 4 priority groups by february 15. more than 25% of bottled population has received at least the first dose of the vaccine. australian house officials say the country's most vulnerable citizens will begin getting vaccinated next week. new zealand as the unit duration of border workers will begin -- inoculation of border workers will begin on february 20. this comes as the country put its most populous city on a three-day lockdown after detecting covid-19 cases. japan will begin vaccinations on

wednesday. the government agreed to buy the pfizer vaccine for 72 million people this year. prime minister suga says he wants to make sure infections are falling before canceling the state of emergency currently in effect for 10 regions including tokyo and osaka. russian president vladimir putin does not use social media, but the kremlin was to learn more about billionaire in en masse's -- billionaire elon musk's invitation to check on the clubhouse app. the tesla ceo tweeted at the kremlin's official twitter account weekend asking if putin wanted to join him for a conversation on clubhouse. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am leigh-ann gerrans. this is bloomberg.

anna: thanks very much, leigh-ann gerrans with an update on your first word news headlines. european equity markets moving to the upside. we have the stoxx 600 up by 1%. president's day, which is why you are watching this special edition of bloomberg markets. let's get the coronavirus conversation. the u.k. has vaccinated 15 million people, and prime minister johnson is set to face pressure to reopen the economy. meanwhile, the fool continues to show concerns over community spread. emma hodcroft, molecular and begin meteorologist joins us now. very good to have you. i was listening to a scientist in the u.k. say this of african variant doesn't seem to show any transmissibility advantages over the u.k. variant, if we can use that shorthand, and that is helpful in terms of keeping it at bay.

does that persuade you that, yes, we can take the south african variant seriously but we do not need to worry about vaccine efficacy? emma: what i would like to underscore is that a lot of the data here is still pretty early. still, it is incredibly welcome news. that means it will be easier to get ahead. the reason politicians are concerned about this variant from south africa is that it seems like it might be easier to reinsert individuals -- three in fact individuals -- but it may rein fact individuals. as i said, the data is early, we want to do a lot more dirty to

confirm this. but it is good news desk -- lot more studies to confirm this, but it is good news that the south african variant will not spread as easily as the u.k.. anna: i guess it depends which is the more particular variant. let me ask you about boosters. , there has been a lot of talk as we see these variants emerge, we might need boosters in the u.k., coming in the autumn. is the average booster enough to keep pace with the rate at which these variants develop? emma: the answer to that question is still unknown. what we do not about the coronavirus is encouraging. it mutates at a slower rate than the influenza. so there is hope that the coronavirus may not need to be updated so regularly. what is different here is that the coronavirus just moved into

humans a year or so ago. it is still finding better and better ways to be about to get into those human cells, where is the flu has been in humans for longtime but it does not have these larger tricks up its sleeve available. the big question is how many of these larger -- on a verse makes, or are we in a situation where we might need to update our vaccines. anna: when we look at the questions about when we should reopen economies, clearly, we are looking to israel, the uae, took parts of the world where they are further ahead in terms of the percentage of the population that they have vaccinated. what are we learning about the ability of the vaccines to limit transmission? that seems to be an area where we do not have firm data on. or do we? emma: this is something else where data is still emerging.

from israel, it is encouraging that it does look like the vaccine is reduced transmission up to 50%. it does not mean you are completely protected, but you may not transmit the virus at all if you are vaccinated, but cutting that rate at half or more is still welcome. it means other brexit's will be even more successful at getting these numbers down still -- it means these vaccines will be even more successful at getting these numbers down. even if the number of people are vaccinated rise, groups that are not vaccinated could still be at risk, or it could move for the general population, even in people who are not vulnerable. we know that a small percentage of those people can still have that --. while getting vaccine numbers up is encouraging, we want to make sure we understand how much the virus will spread while some of us remain unbethany did. anna: i know you have spent --

while some of us remain un vaccinated. anna: i know you have spent a lot of time studying other vaccines. emma: this last year has shown how much we can do when we take things out like money out of the equation. when of the things people talked about a lot is how quickly these vaccines were developed. i want to underscore is that so much of this work took place before the pandemic, but it was hard fought, trying to get funding. in the last year, we have seen so many of those barriers cleared, and we have been able to show what is possible. certainly, the advent of mrna technology will change the pace of maxis. -- of vaccines. there are many -- that we suffer from all the time that if we

have the incentive in the money, we could help make other vaccines. anna: thank you so much. emma hodcroft of the university of bern. coming up, the latest trends in retail trading. we will be joined by our guest from rbc capital markets. this is bloomberg. ♪ rg. ♪

anna: it is 1:00 p.m. in london, 8:00 a.m. in new york. i am anna edwards live in london and welcome to the special edition of for the president's day bloomberg markets. we have got stocks in europe on the front foot, up more than 1%. strong session in asia as well,

highest levels on the nikkei 225 since the early 1990's, up 1.9% by the close. the ftse 100 lifted the oil price lending support to the oil majors. also the reflation trade in general. cac 40 also benefiting from the talk of spinoff from certain large-cap media organizations. we will get to that story later on. that is where we are on the broad market picture, things looking risk-on. we see the dollar retreating, perhaps another half of that similar story. joining us is amy wu silverman, rbc capital markets equity derivatives strategist. very good to speak to you. i have been looking with interest at the chart going around about the size of the call options in the market, used by retail investors. that has been a talking point all the way through january. how concerned should we be about the size and scale of those call options at this point?

amy: hi, anna. it is a great question, and i think post gamestop, at this point a couple of weeks ago, a common question i received is, is this over? i say, it is over for now but not permanently over because we have seen this retail co-buying exuberance start last year when the pandemic started. it goes in fits and starts, but it continues to be there. state may not be gamestop next, but i think a retail will continue to find other things together around. you will continue to see the option-buying especially as we get another round of fiscal stimulus. anna: you don't have to spend very long on tiktok these days, and i don't, but you don't have

to be there long before you stumble across videos about tell you about all the money you can make not really based on any fundamental orwell explained, the a lot of money you can make between disappearing out on your skateboard or to support the lifestyle that you want how much of this retail phenomenon will. this be a front seat driver of the markets, or will retail investors -- will they start to trade on fundamentals like many people do? amy: you know, it is funny, because sometimes, it is funny as a fiduciary, we are highly regulated in what we can say and what we can advice. obviously, there are certain pockets that are not in yet they are able to -- and yet they are able to give advice. that is always a little bit nerve-racking to watch without giving the risk of what options can entail. i would say, the situations like gamestop will always be fairly short-lived.

once the short squeez is over, it will kind of die quickly, but the overall effect on volatility across the board, whether that is the megacap tack or tesla, fundamentally, retail right now has been about momentum. to some degree, they have not in wrong, because momentum has continue to work for years and years and years. i think when people change the fundamentals is one you will get a crash and the same way you did in the 2000. until the music stops, it continues to trade on that momentum. anna: or until a regulator decides it wants to put it foot down. do you see that happening? i think there will be some regulatory scrutiny later this week of this particular phenomenon. do you think the regulators are concerned about what they are seeing in the retail investing phenomenon?

amy: it is not clear to me yet who the regulators are really going to go after. it is not even clear who the bad guy is probably going to be. my guess is it will most likely end up being large-cap tech, because that was a focus of the democrats even prior to the frenzy with retail trading. and it is really not going to be about going after a specific lenders or what have you, i think it will be about what you do when you get this forum that can attract 8 million people at once where you can essentially act as a decentralized hedge fund. i think that will be the question of how do you monitor big-cap tech in these circumstances? very similarly to what we saw with twitter at the beginning of the year with a capitol riot.

anna: interesting, it all comes down to technology. what about inside volatility? what is that telling us? what our trades about volatility telling us about what to expect? amy: two interesting things about that. people point to the fact that volatility has obviously declined, which it has, since the ridiculous peaks that were touched last year during the height of the pandemic. but if you look at averaging vix levels, we still continue to float around this 20 handle in vix, whereas throughout the pandemic we were at the 13, 14 handle. part of the reason is that systematic volatility sellers were blown out of the water last year. the sort of supply and demand imbalance that will continue. the second implication i see is that not necessarily of a single stock level, but on the index and etf level, you are starting to see a pickup in demand for put options.

that is fairly natural as a reaction to the market getting toppier and toppier. but i think we will continue to see those elevated levels are a while. anna: as you see the markets getting toppier. amy: on the single stock level, you actually have the opposite phenomenon largely determined by what was happening in retail, intensified calls. on the index an etf level, you see that imbalance towards more puts rising, which signals nervousness. structurally, what we like our ways to -- what we like are put spreads. you get relatively high payouts right now to get downside section on a fairly wide range. anna: amy, thanks very much for

bringing us your thoughts today. amy wu silverman of rbc capital. thank you very much for joining us. 1:07 here in london. let's pick up another asset suddenly favored by retail investors, a closer look at bitcoin. the cryptocurrency has been trading lower today after a rally over the weekend saw and -- saw it reach an all-time high, almost $50,000. joining us is eddie van der walt with the markets live. we didn't quite get to 50,000. we are seeing increasing numbers of institutional voices coming out as a we are dipping our toe in and taking this more seriously -- coming out and saying that. what difference can this makes to bitcoin? eddie: it has to the excitement. every time that you see someone like mastercard making it

available, paypal telling investors it can buy, the house like morgan stanley saying they are looking at it, in sales of the excitement around bitcoin. that is what is driving -- it builds the excitement around bitcoin. that is what is driving it. when the price goes up, people talk about it more and a buy it more. but the underlying fundamentals are not supportive of this yet. anna: bitcoin is actually trading higher now, 48,000, up 0.2%. there is a lot of conversation as to whether it can be a currency, a store of value. those detractors say no, because look at the level of volatility. how can it be a store of value with that volatility? i suppose that matters in the downside, but right now we are seeing it on the upside. do people see it as a store of value? eddie: so, when you talk to

bitcoin investors, they have a completely different picture of what a store of value means for them it stores valley because it goes up in value. they believe that over a five-year period, it will go up in value and protect their investment. but for the traditional investor, someone close to retirement, someone talking about something that they are looking to keep their investment safe, growing at more or less the value of inflation, it just does not fit. bitcoin might are up to be that store of wealth. it may grow up to take over the gold market, but at this point, we are just not there yet. anna: we were just talking about the derivative equity market with amy wu silverman from rbc capital markets, talking about regulatory risks there. i am thinking in particular if it's a start -- if people start

putting money into bitcoi with stimulus checks, regulators might say, that is not what it was for. are there any regulatory concerns? eddie: that is exactly right, amy made a really good point. you can sense frustration from regulated entities looking at the advice eating given to retail investors. this idea of, you only live once, which is the #that has been trending on twitter, or money at these risky investments. but that is going to happen right? is no yield in bonds. people are going to go more risky. people have been almost trained to always buy the dip. so that is where we are now. as you correctly asked, whether that rings regulation, that is the question. whether the regulators at some

point -- i think the point at which they start regulating is the point at which they say, this has become systemic. it drags down other assets. at that point i think regulators will get more nervous. anna: until then, yolo, eddie, that seems to be the mantra. now to the first word news with leigh-ann gerrans. leigh-ann: texas has announced rolling blackouts for many households for the first time in decades. the operator of the state's power grids ordered network operators to reduce strain on the system as people crank up peters to stay warm. power supplies to homes and businesses are expected to be cut to up to 45 minutes of time throughout the day. donald trump's allies are lashing out at republican senators who voted to convict him in the impeachment. senator graham proclaimed on

sunday, quote, "the trump movement is alive and well" one day after the acquittal. two parties, in louisiana and north carolina, moved to censure republican senators who voted to convict trump. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am leigh-ann gerrans. this is bloomberg. anna: thank you very much for that. coming up on the program, we will be speaking to the former presidential candidate from belarus. we will get that interview for you shortly. maria tadeo will be bringing us that interview. we will get into the conversation about geopolitics and the global power balance. meanwhile, european equity markets on the front foot. u.s. futures are open and up 0.3%.

european equities market trading to the upside. euro-dollar fairly flat, 1.21. pound is up 0.4% as the vaccine rollout meetsthis is bloomberg. ♪ some key targets. this is bloomberg. (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design

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anna: this is bloomberg markets.

i am anna edwards here in london. european markets moving to the upside this afternoon. the stoxx europe is up about 1%. the ftse 100, gaining as we see or prices higher, up by 1.8%. the cac 40 is up 1.4%. let's talk about global geopolitics and relations between the u.s. and russia. my colleague, maria tadeo, joins us from brussels. she will be speaking to sviatlana tsikhanouskaya this afternoon. thank you very much, maria. maria: that's right, anna. we are joined by sviatlana tsikhanouskaya, the opposition to president lukashenko in belarus. you are joining us. you are there because you left your country, fearing prosecution. your husband is still in prison. four months we have seen the people of belarus take to the

streets to protest lukashenko in very difficult conditions. i guess the obvious question at this point is, given that we have president biden coming in, europeans also becoming certainly in the language, tougher on russia. will it open up a window of opportunity to have an open election in belarus, which is what you are hoping to get? sviatlana: we really appreciate all the support we got from the u.s., and now we -- the position of president biden on the issue in question. we are sure his statement and his messages will be rather strong in the future, and we hope to meet biden in the future , after problems are solved.

maria: when you look at europe at this point, it is obvious for everyone to see that over the past two weeks, the language when it comes to putting has become tougher. we also have navalny coming into play, and also speculations of more sanctions coming russia's way. should serve as a way to go forward in belarus, more sanctions on people in belarus, and companies there too? sviatlana: i am sorry, you're talking too fast, i cannot understand. maria: would you say that in some ways, the fact that we are seeing potentially sanctions going towards russia, or talk about sanctions from the e.u., would that also serve as a way to do the same in belarus? perhaps more sanctions in belarus and against some of the state companies? sviatlana: of course, the threat of sanctions to russia can

influence sanctions to belarus. we are sure that the pressure of sanctions can influence the situation in belarus and make the moment of negotiations closer. maria: do you see a window perhaps to cut a deal with lukashenko? there has been talk about a national assembly. do you see any room to get to an agreement with lukashenko on anything other than elections? sviatlana: the national assembly was not going to solve the political crisis in belarus. it was done to legitimize himself. but he is not legitimate in the eyes of belarus and people that belarussian people.

maria: what would be your message to the people of the levers? it has been months now -- to the people of belarus? it has been months now, protesting in difficult weather. they still protest week after week. what do you tell them? sviatlana: i want to tell them to keep strong. there is no returning to the state of mind we use to live for 50 years. we cannot give up because thousands of innocent people are in jail and we have to struggle not only for them, but for the future of our children. maria: on that note, i wonder, have you had any contact with your husband? i know that he is a very difficult situation too. have you had any contact with him over the past few weeks? sviatlana: in our country, there

is no opportunity to talk to political prisoners and other prisoners even via phone calls. we can communicate only through letters or through lawyers who visit these people. maria: what would you say to some of your supporters argue that perhaps protest does not work, but it is time to perhaps do something that is much more forceful on that front? what would you say to them? sviatlana: i still believe in the chance of peaceful protesting. i understand that there can be radical calls from other people. at the moment, i can't support them because i do not want people to be violated, to be killed even if such -- happen.

i cannot take this responsibility. maria: and just to reiterate the message, when you look at lukashenko, essentially your message is that his time is up and you do not see any room for negotiation with him, other than putting this to a vote again? sviatlana: as a matter of fact, we are calling for negotiations. not with lukashenko, but with the government, the people who are still in the country at the moment. joint negotiations and new elections should be discussed. maria: where do you see room to negotiate? sviatlana: i think it should be neutral territory. may be in europe, or maybe the ukraine or another country. maybe even in belarus, if people abroad can come to these negotiations with safety and

guarantees of other international leaders. maria: have you told them that you want to go back? that you want to be at one point back to do this? do you think they will allow you? sviatlana: they cannot stop me from doing this. of course, they can not allow me into the country, but it will be a scandal. maria: right. thank you so much. we appreciate you for coming on the show and taking the time. of course, we wish you all the best. thank you so much for joining us. anna: maria tadeo with the form of belarus presidential candidate,'s redline at tikhanovskaya. thank you very much for giving us your time. coming up, more on what is moving markets. it is president's day and you are watching a special edition of bloomberg markets. i am anna edwards in london. we will be joined by an

investment management ceo. we will talk about the very risk-on picture in markets today, how long that lasts. this is bloomberg. ♪ (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that and more in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you to maintain comfortable, correct form. that means better results in less time. you can do an uncomfortable, old-fashioned crunch or an aerotrainer super crunch. turn regular planks into turbo planks without getting down on the floor. and there are over 20 exercises to choose from. incredible for improving flexibility and perfect for enhancing yoga and pilates. and safe for all fitness levels.

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anna: welcome back everybody. i am anna edwards in london. it is president's day. we have no u.s. trading, but plenty of stories in europe. let's check on the markets with danny. >> it is remarkable that on this day my on the u.s. front with markets being quiet, we are getting this big story of reflation. it is his story that equity markets are liking. stoxx 600 is up. global equity market cap has surpassed $110 trillion commit to give you an idea of the equity rally. underpinning this is this selloff in bonds. art of it is inflation coming back. u.s. 10 year bond down, but it is not just a u.s. story. across the sovereign bond

market, we are seeing bonds selloff. yields higher on the german 30 year. it was only a few weeks ago that that was negative. it is remarkable we are seeing that turnaround. part of this story takes place in commodities. wti up 2%, this also has to do with the cold in texas hurting supply. jp morgan saying that when you look at copper at a 2012 high, it shows we might get another commodities super cycle spurred by more growth, stimulus and global rebound when it comes to the economic picture. bold, not getting that inflation haven bid. what has been getting that bid is bitcoin. let me show you what it has looked like over three days. it neared $50,000. this is an anticipation that in might become an inflation trade.

or, you can look at more institutional user start to buy it. the first american etf in canada, morgan stanley contemplating making bets. we are seeing bitcoin trade just under $40,000. anna: a comprehensive look on what is moving these markets today. even if some of the markets in asia are closed, and the u.s. is closed also. let's get into a market conversation. lothar mentel, one of the things dani was talking about, these arctic winds blowing down the north american continent. further south, as far south as the gulf of mexico. that is having an impact, believe it or not, in london. the 5100 -- the ftse 100 outperformed. to think the reliance of the ftse 100 seems like energy, is

that going to be a boost or hindrance as we transition towards new energy sources? lothar: that will depend very much on whether those companies will actually make the transformation. at the end of the day, they are energy companies. will the -- will they be able to get away from fossil fuels and into renewable energies? they're making noises around that. it can be a positive in the short-term -- it is definitely expected to be positive as we are looking forward to cyclical recovery. energy, one of those sectors that has a lot of headroom during this year. anna: how positive are you on u.k. assets? we have seen the pound doing well. we have seen some of the reopening ledger sectors, and others in that kind of space doing well in london this morning and afternoon. is it too early?

about the reopening schedule, we have learned from israel that yes, vaccines were, but you still need to take things slowly. lothar: the u.k. is certainly a cyclical play. we are, as you outlined, very exposed in the top end to all of those things that would make a big comeback. the u.k. at the moment, this is the one thing that went well, the vaccination campaign. having that many people already vaccinated gives us an advantage. that is reflected in some of that market movement we are seeing at the moment. anna: we are seeing risk -- stronger risk appetites in the u.k. and across europe, european equities moving to the upside. i wonder how you are thinking about the link between equities and bonds? we've got a 120 handle on

treasuries, what kind of levels to be have to get yields on treasuries, what kind of yields to we have to get before people question the strength in equities rally? -- has been something driving that in part. the thought that maybe there is no alternative. lothar: it is not actually very much we need to have. let's not forget last week in january, we got a more market rise -- marked rise in the year. equity markets took it pretty badly, at least that was our interpretation. therefore, that is really one of the big variables to watch. yields, how high our central banks going twilio -- banks going to allow yields to go? that is why equity markets are currently quite as high as they are. anna: this that what fundamentally separates --

recovery from others, the role central banks will play, the role the fed will play? lothar: you could say that. very much so. but, that is also going to introduce a considerable level of volatility because everybody have their ear to the ground on central banks. are they going to stick with they said? are they going to keep suppressed yields? if they do, that is good for equities. it will be triply good for the recovery. there will come a point when recovery will become so strong that markets will have bubbles from time to time in the concern that yields will have to come up and not stay as depressed. and then we need to see earnings picking up from the equities side to make up for that increase in yields, which is going to bring down the relative valuation. anna: you think we are in the

midst of reflation? some people saying we don't need to worry too much, others saying it is here. maybe cpr does not measure it effectively, but it is here. how do you contextualize, give context to the inflation narrative? lothar: definitely a reflation story, no doubt about it. is inflation going to be a problem, or are we just getting ready -- getting rid of deflation? as long as there is enough supply to satisfy demand, we are not going to get sustained inflation pressures. we might see price shifts, particularly if and when we become happy and want to go to the cinemas three times a week. there will be certain things which all of a sudden have more demand and prices will go up. that is not the same sustained inflation pressure. anna: the pubs, ims. the travel, not so much.

>> the u.k. has given 15 million coronavirus vaccinations. it is a milestone that is set to increase. pressure on prime minister boris johnson to begin reopening the economy. johnson prays what he called an extraordinary feat and said england had already met a target set earlier this year of immunizing the top four priority groups by february 15. 25% of the adult population has now received at least one jab. australia and have received their first batches of pfizer's vaccine. australian house officials say the country's most vulnerable citizens will begin getting vaccinated next week. new zealand says the inoculation of -- workers will begin february 20. the news comes as the country put its most populous city of auckland on level 3 locked after detecting three covid-19 community cases.

vladimir putin -- the kremlin wants to learn more about elon musk's invitation to chat on the clubhouse app. the kremlin calls at an interesting offer, but once more on what musk is actually proposing. the tesla ceo tweeted at the kremlin's official twitter asking if pruden wanted to join him for conversation. bitcoin's record-breaking rally has come with extreme moves. it is not as chaotic as 2017. on a rolling 60 day basis, the swings in bitcoin are generally smaller than when bitcoin was speaking in 2017. -- was peaking in 2017, partially because prices have steadily declined and there is a wider belief that bitcoin will develop into a mainstream asset class. global news, 24 hours a day, on

air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans, this is bloomberg. anna: thank you very much. shares -- rose the most after the company said it could spin off its universal music group by the end of the year. let's discuss this with bloomberg intelligence's matthew bloxham. good to speak to you. this is a substantial move for a company of this size. it's got a market cap of 37 billion euro, 45 billion dollars in market cap. does that just tell us how undervalued this part of the business was? matthew: that's exactly right. the strange thing is, i have

been talking about this for a number of years and indeed the company has been looking for a way to -- for a number of years too. one of the reasons why we put it into the businessweek. if there is one important thing that has changed with this latest update to how they plan to go forward with the public listing of universal music, up until the weekend, the expectation was that they would list a minority stake in the business but then still retain control. you essentially have that conglomerate discount of friction. there were question marks about whether they would pay down debt or invest in other businesses. the fact that they said we are going to essentially distribute universal music to shareholders at 60% will be -- essentially forces the issue.

it takes away the uncertainty for shareholders about where the money is going. it will go straight to their pockets and they will continue to hold universal if they want to, or sell it and monetize the gains. one of universal music's big rivals last summer now trading on a 24 times -- there is still potential for much more to go if core evaluations anna: -- perhaps making a difference to some. one analyst describes this move as shareholder friendly. where does this leave vivendi? lothar: it makes vivendi different. about half of their sales, depending -- it is a much smaller in different business. [indiscernible]

each of those businesses had their issues recently. we have to be more focused on what they are doing on the industrial strategy. vivendi has been a prolific investor in businesses, telecom italia, those investments come with issues. there is quite a lot for them to sort out. management will focus on how they create value both out of those consolidated businesses they control and the investments they have made in the past years. anna: interesting to see the scale of that conglomerate discount hanging over vivendi previously. thank you, matthew bloxham. just to keep check of what is going on of what is going on a vivendi, that share up by more than 20%, 19.5%. still to come on the program, we

continue the interesting conversations, we will bring you our conversation with the billionaire -- that conversation next. he has plenty to say about gamestop. this is bloomberg. ♪

anna: this is "bloomberg markets." no trades in the united states.

oil and bitcoin continue trading globally. this is the picture in europe where we have cash equities trading, and japan where it closed hours ago, but was doing well and giving us levels we have not seen since the 1990's. risk on moves in europe. -- is known for being a disruptive force into looking valley. recently, he has been making headlines as a superhero for the robinhood crowd. in an interview, he shared his views on a traders versus hedge funds. ♪ >> what gamestop showed was the narrative fallacy on wall street. for years, there was these folks that were withered behind the veil. they had a way of conducting

themselves as reported to be superior. in reality, what that short showed was that they were prone to the same poor decision-making and broken systems and technologies that everybody else has to deal with. i found that kind of funny. i think it also spoke to the fact that we have not looked closely enough at the systems that broke as a result of 1998 long-term capital management, 2006 with mayor lehman. we are now with the same problem, slightly different, but mostly the same problem to repeat itself over and over. that is what angered me about gamestop. on the back end, i felt like these two worlds collided in a way where i doubt that in the

end, in the final analysis there was any collusion of any kind. the stench of this whole thing goes to show you back to what we were talking about before, how difficult it is for normal everyday folks to have access to any kind of returns. if you break down the capitalist philosophy, they are fundamentally stuck in this cul-de-sac of always being labor. always being at the ownership of capital. the fact that normal folks can't get access to terns and closing the air-quality gap is going to make all of the things we are dealing with today a lot worse. >> from what i can tell, you appear to have reconsidered a couple of the things you said in the heat of the gamestop moment. where do you stand on hedge funds as a group of actors, and

the role they play in modern finance, and also in the context of the situation, shortselling? chamath: i think hedge funds are an important part of the financial infrastructure. i think they should exist. the ones that are good can thrive. i also believe that disclosure needs to get improved. in every other part of society, as the internet has become more sophisticated and software has become more sophisticated, things have aired time -- aired towards real-time disclosure. it is just not true in finance where people are able to use the rules and bend them to obfuscate the truth. there was a rule that the ipc was considering where you wouldn't have to publish your longs anymore on the same frequency.

to me, that is nuts. we live in a world where your longs and shorts should be published in real-time. what separates you shouldn't doubt -- should not be your and out -- what separates you should be your interpretation of facts, not obfuscation. we should be forced to disclosed the margin, how much leverage you have. hedge funds and banks are no different. they are a critical part of the financial infrastructure and should be treated in the same way. instead, after 2007-2008, a lot of risk effectively went off the balance sheets and went towards these important -- but we do not have that much oversight. i still think hedge funds will do well. there are some folks that are talented and will make a ton of money, but i think disclosure needs to go up. in terms of shortselling, i by

the fact that it is an important part of the market. i am not a huge fan of it. i think certain folks use it to run a neutral strategy. that is great, but i also think that in the world of social media, and we have seen this recently, disinformation can be used to not just because political damage, but this information can cause -- damage. i think the fcc is going to have to deal with that issue and figure that out. how do we manage information or interpretation or sensationalizing of things that all of a sudden can whip the markets up and down. are they allowed to just say whatever they want? is there a higher standard now that there is more distribution with more people? anna: that was social capital

founder chamath palihapitiya in our exclusive bloomberg front row interview. stay with bloomberg television. up next, the greek prime minister. that conversation at 3:30 london time. 10:30 in new york. european equity --

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>> new york, markets are closed president's day holiday. welcome "bloomberg markets." quick data check, reflation trade is on. european stocks, the curve is steepening up in the u.k. euro-dollar back. equity markets relatively quiet. wti back above $60 a barrel. let's dive deeper into the story. let's figure out where the reflation trade is going and where we are now. >> it is remarkable that on a quiet day given the u.s. is off-line, markets are defaulting to more reflationary bends. you get things like global equities in general doing well. the question is, or rates leading equities off a cliff if

they continue to rally off of this story? in europe, stoxx 600 up. 10 year bond futures up a quarter of a percent. the key is yes, a big part of this story is the u.s. is stimulus and growth, but it is global. you pointed out the u.k. curve, in germany, 30 year yields rise, bonds selling off. crude, part of this is reflation, the other is the chill in texas. in general, commodities. jp morgan says we might be due for another commodities super cycle because of this growth in demand and inflation story. copper trading at its height since 2012. if you believe the touch in both markets is gold not reacting, following 4/10 of a percent, and the other side's bitcoin. if you look at what had -- if

you look at what it has done, it touched nearly $50,000. to some degree, there has been an argument forming that perhaps by buying bitcoin, you are betting that in the future this will become an inflation hedge instead of gold. it also might be the fact we've got a bitcoin etf for the first time in north america, you have institutions like morgan stanley looking at betting on bitcoin. that is part of the reason it is rallying, but interesting the inflation argument is starting to hit cryptocurrency. guy: interesting to see what happens when the tide goes out. does it correlate to tech stocks? we will find out. we are watching platinum futures through $1300 an ounce for the first time since 2014. let's bring in jordan rochester. jordan, your thoughts about where we are and where we are going. >> in terms of reflation, it is hard not to see this keep going.

we are only in early stages. the reason why this trade -- this consensus trade is the entire global economy is going from a state of being essentially asleep at the wheel to a full reopening. let's think back to the last time we had reflation trade set up this, it was the trump inflation trade. november-december period. we had this appointment from january 2017 onwards when trump went after obamacare instead of tax cuts. are we going to have deja vu? i think the answer is no because of the reopening and because of our lack of investment last year and this supply of commodities. we had a lot of oil fields not invested in over the months because of covid-19 lockdown. the main questions will be whether lockdown is over or not.

if we have continued years of lockdowns, the variant escape the vaccine, that is the main risk. a little different from the trump inflation retrade is at the same time, all countries are looking to reopen and having demand pickup at the same time. the global supply chain is based didn't -- facing the same problem at the same time. we talk about the u.s. focus, why there should be u.s. reflation trade and that usually gets upended by's -- by something that happens in china. because of the situation with covid-19, i do not think there is going to be differentiation between all of them. we have good growth this year and higher commodity prices. guy: which currencies are going to win? your positive on the dollar, why? jordan: that is a short-term view.

i wouldn't characterize it like that at all. we are bearish on the dollar in medium and long-term. we have had higher u.s. yields recently. i have seen the flow data for your upturn as well. we have had significant equity, significant trade flows to china, that boosted the euro. i became more cautious over the past two weeks, because two factors have slowed. we have seen chinese credits low. we have seen european equity inflows end. we are very optimistic on risk assets. we like the likes of norway, australia, sterling, those countries which are high-performing growth countries compared to europe in the u.s., typically. those are the trays we like. i would not characterize myself as a dollar guy, we are actually bearish medium-term.

in fact, euro-dollar to go up. i am short-term against the dollar in euro space for those reasons. guy: you pulled out the pound, let's -- the commodity trade more broadly, do i buy the cab? with commodities roaring in the way they are, how do i want to position within that basket? jordan: we like the cad, but canadian dollar is correlated to the strength of the u.s. dollar just because of their trade balance. in terms of the nokia, this is where things stand out because we have our usual overlay charts, modeling for where these currency's fair values should be. where is the price of oil going? where's the price of iron or going? lpg in australia.

we have had trade shock, higher oil prices, higher commodity prices. currencies have not actually reacted that much. we had a small move higher in aussie, but nagasaki should be going to 105. trade for australian trade for norway are still cheap, nothing like they were in 2010-2014. even in that period, it wasn't great. i think we are going to go to those levels. that is fair to say because of this global reopening we are having, that sets on a medium to long-term path higher over the next year or so. the only things that will upset that recovery is if you have idiosyncratic domestic factors. i think the market is aware of what is going on, especially when it comes to politics in australia and china. or, norway dealing with u.s.

shale. that risk is there. we have a terms of trade shock, the currency has not reflected that, but it will. guy: do you think central banks will react? rba has been very clear in telegraphing monetary policy is going to remain loose. it is almost divorced from recovery trade. if currency appreciated significantly, will that be something that causes central banks to change tack? jordan: i do not think the rba can get much dovish. they've got the yield curve control programs on the three year, it is hard to get more dovish than that. they can possibly talk negative rates, but i do not think australia will go for that. there is a tug-of-war in foreign-exchange we need to set out between trade flows and financial flows. if you have a trade were both the trade surplus for a country works in favor of a stronger

currency and the financial flows, it is a winner. what is interesting about australia's that financial flows are in question because they used to be the high-yield currency in the g10. it still is, but is no longer the carriage rate. that is a question mark over their future. for the time being, trade flows, terms of trade shock, the big positive we expect to continue, it is good news. rba can argue about this situation they have to mystically on the inflation shock they are dealing with, but i think overall they can't argue against. guy: jordan, stick with us. jordan rochester, nomura affects strategist. mario draghi sworn in as new prime minister. more on that next. this is uber -- this is bloomberg. ♪

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guy: happy presidents' day. live from london, this is "bloomberg markets." ftse continues to see gains. one of the best-performing industries. -- indices. president mario draghi was sworn in as prime minister over the weekend. maria tadeo joins us from brussels. we've got a pretty good idea of what the cabinet looks like. it is a mix of politics and technical skill. what does that tell us about mario draghi? >> when you look at the whole government, what it tells you is that this was a clear balancing act. he did not want to go full

technocrat. he did not want to go full on political because there is a huge recovery fund to manage. when you look at the names, you have a being ministers coming from the external sector from the private sector. the highlight is manila franco who will be finance minister, someone who has worked with him in the past and also an official from the central bank. tells you a lot about the direction he wants to take. what is striking is that everyone who comes from the outside, they are going to jobs and ministries that are closely tied to the recovery fund, which means that draghi wants to keep this a tight operation. a very close operation to his inner circle. secondly, when you look at the jobs that have disappeared from the cabinet, european affairs ministry is not there anymore. there is no position as such, which could tell you that this is something mario draghi is going to deal with directly himself, when it comes to having

that relationship with the institutions, his relationship with brussels and the rest of the european leaders, this is something he is going to lead himself personally. guy: how is draghi's arrival on the political stage being welcomed in brussels? maria: to some extent -- that is a good question, because you know over the past 10 years, italy, you know this is a systemically important country for the european union. it is a founding member of the eu. there is no question that ever sense berlusconi left, the reputational damage to the country and the economic mismanagement, you can say this has been a 10 year stand. this is someone who has great respect, very high caliber politics who is known across the institutions.

i would be interested to see whether or not he does manage to change the balance of power. the eu is very much about emmanuel macron and angela merkel, but angela merkel is about to leave. it will be interesting to see whether or not he is able to change that, but also see the dynamic with some other countries that for months and years have been preaching hard on italy to take on structural reforms. guy: thank you very much, maria tadeo from brussels. let's give back to jordan rochester from nomura fx. why hasn't draghi's arrival been more euro positive? jordan: it has been positive for btp's. this is an italian trade. i ask the same question. when this headline first hit, you saw small bounce higher in the euro, and that was a bit of a wake-up call. i had a long euro position

against the dollar at the time, and we have had that trade on since november. the market itself had also been -- we essentially had a big move higher in currency. it is very crowded. there is no reason for anyone to add to their positions further because they had it on in quite large sizes. for real money measures realreal observable -- guy: -- jordan: this is an italy trade and we have seen btp's tighten, but the euro not react. part of my job as a strategist is to know what the next market drive will be. the markets is how we figure out how ethics work. with a correlation regime change, which has been triggered by the rise in u.s. yields,

higher funding costs make it more expensive to hold trades. that is our consensus that it has not been working well. we have seen position production on the back of those yields. overall, i do not know. there are things we can point at, but i want to focus on medium-term. we have eurozone recovery, hopefully. mario draghi for two years, hopefully he will do some long-term italian reforms. the achilles' heel of italian growth has been the european story. hopefully we start to fix that and not keep talking about rising debt levels and so forth. the other thing that could be a narrative is if draghi starts to make public comments about eu reform. he's got the experience. if we see banking reform, corporation tax reform, all of that stuff could drive the next narrative in the euro story.

equity inflows in europe have dried up. guy: jordan. that is the point though, isn't it? if you talk to u.s. colleagues, they are looking at what is happening in europe with nervousness. draghi may be a calming effect in italy, but he's got a lot to do. there is political risk across europe throughout 2021. also, french elections, something we have to worry about. u.s. investors do not see any reason to put money to work in europe. asia is looking solid, why would you want to put money to work in europe? jordan: in the short-term, that is the case. caps in the u.s. are much more attractive, the chinese story more interesting. when your long euro, it is much lower than what it used to be. the answers your question is

kind of an ugly competition between the dollar and the euro, which is going to underperform the other. we had that story yeah last year in european recovery, now pretty much fully priced in. we need to see action from the europeans when it comes to reform. or, big established numbers. we are also talking about u.s. fiscal stimulus, i do not have the -- to say about europe. you have her low programs, automatic stabilizers for labor markets, debt break in germany being relaxed come of it i do not have her you headline that says we are expecting 3% or 4% fiscal stimulus. it is just not being talked about. until that, we are in limbo. guy: the bonus bank is talking about her imposing the debt break. cable, 139.03. u.k. yield curve steepening massively. 25 basis points.

where are the next obvious barriers for the pound? jordan: we are going to get to 142. that is our target by the end of march. it is when you get to the 145 level, that is what it is going to get interesting. we got nearly there in terms of briefing the area, but when it came to the weak dollar we had last time, i remember writing an article. [please stand by]

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guy: i am guy johnson, this is bloomberg. oil rallying. cold weather in texas disrupting flows for america's shale supply amid big cutbacks from opec and its allies. also, huge power outages. bloomberg's rachel allen's joins

us from houston. let's stay with the latter point, can you bring us up to speed? what is happening in texas? why are these power outages happening? is the situation improving? why wont the -- why weren't the authorities ready? >> it is remarkable to see the entire state of texas in a winter storm warning. while temperatures may not be as frigid as other places in the country and the world, our infrastructure is not ready for this type of weather. texas has a competitive power market, which makes it unique. blocks one does not fully encapsulate what we are seeing. supply and demand, these rolling blackouts we were warned about are starting to look like they are not as quick as we thought. there are those who have not had power since 2:00 a.m. in other cases, 15 to 45 minutes

is turning into several hours. guy: not so rolling. what does this mean for the oil patch? rachel: the infrastructure constraints are not unique to major cities. in the permian basin come the major source of oil and gas for the whole world, pipes or freezing, pressure is dropping. we are reporting one million barrels have been taken off the market, which is crazy. that's why we are seeing wti crude futures pushing $50. guy: does it come back quickly? rachel: everyone is in agreement that this is a unique event. it is not something we are going to see for a long time. supply will likely come back fairly easy, but it is going to depend on us getting through this week. geico -- guy: thank you for spending time

with us. huge power outages and the shell industry there. we will talk more about what is happening in u.k. economic scars emerging with fourth-quarter gdp below its predetermined peak and 10% of the workforce out of a job. we are pushing on with the vaccination programs. daniel soon is going to join us next to talk about all of this. that is coming up. this is bloomberg. ♪

guy: welcome back. u.k. prime minister taking a

victory lap after his government hit the target to vaccinate 50 million by today, the most vulnerable groups. but, when asked when he will lift lockdowns, that is the key question. emma chandra has an in-depth look. >> hitting that vaccination target, meaning the u.k. more than 20% of the population having had their first dose of vaccine come means the u.k. leads and is third globally behind uae and israel. the majority of those who have been vaccinated have just had one dose. they will still need to have their second even as that campaign is opened to younger age groups. nevertheless, the u.k. vaccination campaign considered a success. that is where we are seeing talk turn to when we will see lockdowns lifted. we want to take a look at the impact on the economy.

the u.k., in its third national lockdown, and has been for six weeks. concern about economic damage building. u.k. avoiding a double-dip recession, but seeing its worst slump in 300 years. this chart showing us material impacts to gdp. 260 billion pounds lost to covid last year. what does this mean for the pride minister? there is concern about the economy, but he is coming under political pressure as sizable chunks of his mps are calling for all restrictions lifted. the prime minister do to set out his roadmap to end lockdown next week. what we know? we are starting to hear things. we know caution is going to be the byword, saying he wants any lifting to be cautious. he does not want have to he does not -- he does not want to have to impose a fourth lockdown. schools are priority, they are due to reopen march 8, we do not

know whether all students will be returning the same time. following that, there should be relaxations on restrictions to socializing. at the moment, you cannot socialize even outside. retail hospitality, due to reopen next. holidays, we still do not know. they are illegal in the u.k., but hope to have detail when the prime minister addresses the nation next week. despite this, market seemed to be excited, or seem to be taking part from what could happen for the u.k. in terms of recovery. one indicator, taking a look at sterling, the pound hitting a three year high, rising above 139. strategists telling bloomberg this scant detail is -- guy: emma chandra taking a look at what is happening. let's get more detail from sam -- samuel tombs.

when do you see the positive vaccine data to show up in economic data? samuel: we will have to wait until april until we start to see meaningful recovery. the government is likely to go ahead now with reopening schools , but there will be a two to three week delay before we see what impact i will have. non-essential retailers on the schedule to open at the end of march. guy: the u.k.'s a service driven economy. there is a huge amount of savings that are likely to be spent. how big a bounce back to you think we will see echo -- we will see? samuel: [indiscernible]

they have quite a strong incentive to deleverage at the moment and we have seen mortgage rates pick up sharply. across the economy, spending will rebound. businesses will be very uncertain about what -- in the -- [indiscernible] guy: how big a whole is the u.k. in relative to others? the office of national statistics calculates gdp in a different way. how much of that difference in calculation accounts for the relative underperformance we are seeing? samuel: if you look at the u.k. gdp compared to other countries, the u.k. has seen a weaker

recovery since second quarter. part of that is due to the different way in which we measure government expenditure. it is not the main reason, two thirds of the underperformance is household spending. the flipside is the -- the eventual rebound will be much stronger. guy: holidays are still illegal, apparently, in the u.k. there do seem to be a push from the government to deliver another summary of stake haitians. in terms of the economic impacts, how -- is it? samuel: one thing that supported the economy last year was the fact that few people went on holiday abroad. that accounts for quite a large

-- in households. they just simply did not take as many holidays. you can expect that extra cash to be spent in the u.k. as well. by the summer, -- will be accelerated knowing there will be troubled court orders again. [indiscernible] guy: at the moment, the u.k. economy is in hibernation. that might be muting the effects brexit would normally be having at this point, some of the restrictions we are seeing when it comes to trade. once the economy starts to reopen, would you anticipate they become more clear? samuel: one thing that on unnoticed in the q4 gdp data is how we get -- imports and exports were pronounced. we have seen the new trade deal come into effect about when to a store trade and previous

relations with the eu. already, exports are struggling to adjust to new rules that came into effect in january. we will see a strong rebound in consumption, but exports. be struggling. the transport and travel sector is stashed to the u.k.'s overall -- [indiscernible] guy: some talk a few months back seems to suggest the bank of england was considering using negative rates, not as the economy was down, but on the way up. it was recovering. it would give impetus to the economic recovery. given the recent comments from the governor, do you think that narrative can be discounted? samuel: we've got six months before the -- is allowed to implement negative rates. the minister effectively saying that -- was not ready yet to handle negative rates.

by the time we get to august, we could see maybe -- a stronger position, having rebounded. inflation is heading slightly above the 2% target. i think the need for stimulus at that point will be very much greatly reduced and monetary's -- policy is -- and -- guy: how does the government and authorities more broadly encourage exports, try and figure out that is how -- how that is going to work better? from a policy perspective, reduce friction and encourage companies that have been stressed by this crisis to invest in their own businesses? samuel: fourthly, brexit means

hard real costs to business -- there is not them much can be done. samuel: i would say that because that terror of new deal brexit has been removed, that should make for some recovery. as long as the u.k. makes clear commitments not to undermine the deal by potentially altering subsidies and commits to standing by the deal, then we will see investments slowly recover because we know now there is a trade deal in place. i see stability on that front. guy: let's come full-circle and talk about data. we have data coming up later this week, it is rearview mirror, but high-frequency. what is it going to tell us? samuel: we expect the tmi to recover around 46 in february from 41.2 in january.

businesses should be seeing activity change, that would be a consistent theory. in practice, there is a large number of firms that don't settle in properly and simply give a general impression as to whether things are -- [indiscernible] that could be weighing down there index. it would be hard to extract growth signals from tmi because businesses don't have a mechanical way to save whether it was higher or lower than the previous month. [indiscernible] guy: trust in terms of being able to tease narrative from data, what about forward-looking components? samuel: expectations have been positive given the fact that the economy is still greatly -- at the moment. we will also later this week see

signs that consumer confidence is recovering. that will be interesting. they split to see if there is stronger recovery confidence in those vaccinated. the u.k. could be enjoying sustainable recovery by the summer. i expect that to be continually reflected. guy: thank you very much, samuel tombs, pantheon economics. samuel tombs -- guy: days after departing italy's biggest bank, lucier says he too will set up a snag. this is bloomberg. ♪

♪ guy: you're looking at the principal room. coming up, we speak to the greek prime minister kyriakos mitsotakis. 10:30 am new york, 3:30 p.m., london.

♪ guy: from london, i am guy johnson. now for an exclusive conversation zombie a lucier -- spacs by the likes of billionaires and the french manager. lucier joined francine lacqua earlier. >> [indiscernible] together, we -- concerns. [indiscernible]

>> the world has capital in abundance. why should they invest their money with you four? what would set you apart? >> [indiscernible] we can bring company is -- of the financial sector in terms of capital market, operational management, regulatory reaction and -- that says us our -- that sets us

apart. >> which areas of financial do you consider undervalued? >> [indiscernible] [indiscernible]

guy: former unicredit ceo jean-pierre mustier speaking exclusively to francine earlier. let's took -- talk early --

let's talk more about this spa s boom. jean-pierre mustier not wasting time hitching his wagon to the train. what does that tell us about this boom? what is driving this boom? >> i asked bridge point that weekend, they're managing partner told me that what is driving it is that we are at the top of the market. there is plenty of criticism going around about spacs, but it is really the right place at the right time. there is a lot of money out there searching for investments. if you look at traditional, the lifespan is 10 years, this you get a quicker turnaround for your investment. the spac has to acquire a company within two years. it is a volatile market and this offers you downside protection. you can sell your shares with

the optionality to invest in the company. along with that volatile market means there are companies who want to go public but do not want to go through the expansiveness and time consumption of the ipo process. there are companies that have been pumped full of private equity money and they want to exit, not necessarily through an ipo. guy: is the news and you're going to pick up? dani: part of what happens when we see these offer, that begets even more of these type of instruments being used. same time, part of the reason the u.s. has been popular is the mechanisms for lifting a spac in the u.s. are better trotted territory. we are seeing more spacs listed in amsterdam. one of the things that could change the game is if u.k.

changes their regulation to a now for -- to allow for spacs. you have to suspend the shares when you are about to acquire another company, something that is not appealing. that is one of the reasons we have not seen much in europe. europe trying to court more ipo's with trading moving to amsterdam, so that will be a change in regulation that will spur more spacs in europe. guy: dani burger on the spac story. european equity markets getting traction. ftse 100 up by 2.32. we will talk about vivendi later. certainly an interesting trade. this is bloomberg. ♪

guy: the founder and ceo of

social capital is known for being a disruptive force. in a bloomberg front-row interview, he shared his views on bitcoin. >> i can't take all the credit, a friend of mine and i were talking about random things for the summer. one of my friends was the one that just kind of like set off lightbulbs and i wrote it and published it. it is tongue in cheek. i did another one that said when bitcoin gets to 100,000, i am going to buy goldman sacs and rename it chamath sachs. [laughter] i never thought i would be here.

every minute of this feels like a complete dream. >> i admire you for not taking yourself too seriously. the bitcoin thing is serious. you can't by goldman sachs yet. chamath: can i tell you something about bitcoin? bitcoin is important because it shows the fragility of the traditional finance infrastructure. if you look at the quantity and the size of the -- the real question we should be asking ourselves is ok, if bitcoin becomes a defector reserve currency, it replaces gold. what replaces the u.s. dollar? it is not bitcoin. it is a stable -- what does that mean? in less fancy language, there

are companies around the world that are replacing one fixed u.s. dollar with one digital token of u.s. dollar. by simply making that small abstraction, they are able to completely build financial -- on ramps, off ramps, trading, banking, payment processing, there is a revolution happening. people don't see it because the financial services infrastructure is so robust. when you look at the developing world, or any market where there is any form of currency manipulation or currency stability, that is the future. bitcoin is the canary in the coal mine for a completely virtual, largely anonymous -- and there is debate as to whether that is good --

financial reality. it is an important trend. guy: ceo of social capital. let's figure out what's happening the markets today. volumes are higher than they normally are for the ftse 100. ftse 100 massively outperforming today, up by 2.5%. why? the commodity traders on. oil stocks higher, mining stocks higher, that is the prime driver. we are going to be talking to a eu leader shortly, greek prime minister kyriakos mitsotakis is going to join. looking forward to this conversation. this is bloomberg. ♪

guy: it is presidents' day so cash markets in the united states are closed, from london, i'm guy johnson. this is "bloomberg markets." let's take a look at which markets are open. the ftse is outperforming the commodity story really moving aggressively today. the u.k. turbine is steepening. the euro dollar is catching up a bit. u.s. crude up shortly with the cold weather in texas, causing outages there. dani burger is here. dani: it is really a quiet weekend and we are getting such a strong reflationary trade. european stocks up more than 1.2%. part of the story is that is -- it is a global trade could we

have seen bond future selling off, and really across the board , bonds are selling off on the long end, german 30 year yields at 11 basis points. this is something equities have liked. really the commodities trade driving the different energy sectors in the stoxx 600. if you look at commodities, you get to this picture for jp morgan says we are entering a super cycle when it comes to the commodities. you have some idiosyncratic stories, flattening trading at its highest in nearly six years, same with oil. on the demand side, same story, growth coming back. that is where we get a cycle or the start to rally for years to come. what seems to perhaps have gotten a bit of a bid is bitcoin but a plea look at the weekend,

we saw bitcoin just nearly touched $50,000, and today, of course it is volatile, always, but people might be saying this may become the next inflationary but instead of gold, or maybe it is just people jumping on the bandwagon, trying to buy into the speculative rally. guy: it will be interesting. thank you. let's carry on the conversation. chris watling, longview strategists, joining us now. how much further we got to go do you think? chris: great question. i think the markets have all of the ingredients, lots of liquidity from all sorts of central banks from around the world.

this is backed up by an fiscal stimulus, really huge economic boom, and if biden gets it -- h is, it it's quite extraordinary numbers. there is everything to go for, and the thing to think about is what is going to stop the market from moving forward and what will tighten up the liquidity. maybe the bond market will spoil the party, or at some stage central bankers will try to wake up and take away the punch for. no evidence of that at the moment. there is plenty go -- more to go in terms of distance, who knows? there is a lot of speculation. the weight of money is very heavy, and everyone wants to get involved.

it is very difficult to predict where it will go from here. it is disjointed. it is living on the weight of money and the credit he. guy: back to the fundamentals, the markets been rallying for months, and you wonder, think about all of the positives now. but the market was discounting those weeks ago. chris: the markets have various phases, we had sort of the initial rally, and then we had sort of a tech rally up until september, and then another phase of consolidation. then we had the vaccine and present biden elected, and may be part of that was the stimulus, but now we have another -- we will probably get another infrastructure bill later this year and we keep getting positive noises from the

central bank. markets have hurting mentality, the weight of money behind them. when you put another $1400 per person into the bank accounts, i think half of that will go to the stock market. there is a whole are the weight of money to go in. it is becoming a bit of a craze, and as you know, every man and his dog now thinks they should own tesla. who knows how far it will go. predicting this is difficult. in my beer, this is clearly a bubble in the states. there is no two ways about it. guy: let's talk about the things that could stop it. let's talk about central banks. the curve is steepening. could we get to a point where financial markets ask the fed to bring forward a tightening of policy?

chris: that is possible. central banks tend to follow the yield curve and markets tend to lead. take back to 2018, the market started moving from great tightening, and it wasn't really until you got to the end of december and early january that the dead started shifting. i think the bond market will probably anticipate, i think the guest risk at their, along with this bubble, is really inflation starting to wear its ugly head. if you think about how much fiscal stimulus that may go in this year out of the states alone, that's about 32% of gdp, if you at the whole package in that may or may not happen. maybe it is not 32%, but pretty close. these are enormous nobles -- numbers.

inflation is really potentially around the corner, and i think the bond market will anticipated and that might squeeze the markets. guy: we were really concerned about the disinflationary forces not that long ago, high levels of debt. we talked about that a great deal. you had the them a graphic -- demographic factor, the top -- the technology, have those forces got away or is the weight of money argument, is it so significant it distorts them? chris: i think those are changing. some of them are still there and some of them are changing and now there is this weight of money on top. think about 10 use ago when we -- the idea that a lot of people thought qe would deliver inflation in terms of consumer

price inflation. that was really for finance shall markets, not for the people. this is different, this is money that is being newly created and effectively going straight into accounts to be spent or put in the stock market. the baby boomers were full slow savings 10 years ago. they had not started retiring. now quite a bunch of them are retired, and so that sees inflationary forces going way. china, their workforce is now shrinking, and that is different from 10 years ago, 20 years ago. that workforce entering the global workforce over the last 20 years has been deflationary. that has now started to dissipate. there are a lot of factors. the biggest one is probably the size of the fiscal and the money creation and qe for the people. there is a lot of shifting, a lot of changes.

so it all adds up, and the icing on the cake is really the helicopter money and the size of it. guy: in terms of what comes next near term, do you think there will be a problem with the way that society is structured, thinking about how the government will respond to this, the k shaped recovery, the bottom portion of society is really struggling. the fed indicates that is where the focus lies. if it continues what they are doing, the upper portion will continue to benefit. how do authorities solve that problem? will this be a market effect? chris: i don't think they can solve it. i think they will allow -- the

bottom half of that, they will allow a little what more inflation to take hold, and they will end up chasing their tail harder further down the line. they will allow this inflation genie a little bit more out of the bottle. i don't think you can solve despite monetary policy. you solve it with structural reform, and ensuring that productivity -- reduce the speculative element in the global it connie and can -- economy and don't allow the the clinically -- liquidity pump priming. there are a lot of things you can do, but i don't think the central banks can change the dynamic. they can allow the recovery seat further down to the lower echelon, but then get markets more pumped up or you reverse

the trend. guy: jay powell sounded incredibly political when he was talking a few days ago. stick around. we will hear from general motors president on the impact of the semiconductor sources that his industry is facing right now, broadening it out as well read that is coming up. this is bloomberg. ♪ [ sigh ] not gonna happen. that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. ♪ ♪ the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience.

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guy: welcome back. i am guy johnson in london. clearly, with covid, very much in the headlines, contending to

be in the headlines, this delivery to home option certainly causing a huge uptick in business and clearly they want to take advantage of that. timing is everything. general motors providing a cautious profit growth forecast for 2021 reflecting damage from that chip shortage that is now reverberating throughout the globe. mark reuss telling bluebird it is not a long-term concern, and he discussed the impact on the eb targets. mark: the chip piece, i think the pandemic really did not help a lot of the suppliers who do a great job normally. they run right to our supply, and when the pandemic hit, we brought all of the factories down, and a lot of the supply

was still going -- shifted probably into the consumer electronics piece of that frankly. the thought was the auto industry is maybe not going to recover as fast as some of the others. and it takes a while to do the chili con -- silicon chips, so when the industry came back faster than a lot of people thought they would, we got a hold. we got to work through that. it is not a long-term supply issue that we can see, so i think that is really how you have to think about that. the other piece of it, on the precious metal piece, we use a ton of precious metals in the catalytic converters and other anti-pollution devices inside the engine, powertrains and drive lines of our vehicles, so

we are using those today and they are expensive -- expensive. if you look at what you are really talking about, the mixture in the composition of those items, i can tell you, if you own your own chemistry and you're making those anodes and cathodes your own, you can really do a substantial amount of research and development to eliminate those. those materials that are used today will not be the materials we use tomorrow. guy: it is all about chemical engineering. that was mark reuss. let's talk about this in a wider context. the chip shortage is just one shortage that we are now seeing in global supply chains.

let's bring eddie into the conversation. these kinds of problems are showing up everywhere. eddie: thank you. the problem is, we are seeing this ramp up, particularly when it comes to goods. services are still suffering [indiscernible] but people are buying physical things and want them delivered. the delivery chain has become so much harder, and there was an underestimation across the supply chain of how quickly this would happen. guy: how inflation he -- inflationary do you think this is going to be? eddie: if you're going to make

it more expensive for people to ship because you need greater social distancing, and people have to wash their hands more often, you slow down the supply chain. you make it more expensive for people to get packages. if you're going to do that, it is going to raise cost and it is going to raise it in a way that the central bankers are not as adept at controlling. as they did at gm, at the moment that looks short-term. but does it fade away? we are seeing the precious metals taking up, particularly the industrial precious metals, so we will have to wait and see. this is not the kind of inflation at the central bankers want. guy: it will be interesting to see what the authorities do more broadly. thank you very much.

let's bring back chris watling. governments are starting to take this seriously. there has been talk in europe and in the united states of the need to build chip fabrication plants, and this is normally done in taiwan. there is now concern about the exposure that maybe these regions have to the long supply chain. how big an impact do you think this will have? chris: that is a brilliant example, isn't it? that is what we are getting now and that is kind of a little example of things how -- of how things have changed most pandemic and in this environment where there is competition between the china-centric part

of the euro -- world and the u.s. part of the world. i think a lot of going -- a lot of things are going on, and i think the helicopter money has a lot of paralyze -- parallels. you're really taking efficiency out of the global supply chain when you start introducing these measures and you are just adding cost at that level. it is another factor that comes on top of all of the factors we talked about before the break. guy: in terms of the differences between types of inflation, demand pull is much easier to deal with with central blanks -- banks. central banks will have to step on the brakes even harder.

is that a risk? chris: that is plausible, but i would argue recent you get commodity super cycles, the main recent you get it is because of massive liquidity injections into the financial system and markets. the liquidity pushes up the crises initially and some of that fines a home and creates demand, so where that comes from, who knows, but the problem is when you put the liquidity in, you're doing it to rescue the global economy. just because you got cost push inflation your disinclined to remove that liquidity. so the central banks can and up being a little bit trapped. if they do not get the growth they expect, they need to put in more liquidity, but if they want

to control commodity prices, they need to rally the dollar, if you would like. it gets difficult for central banks because they left with a catch-22, no good outcome really . it depends on what they choose, how much they look through the initial cost push and any other inflation they see. it depends on where they fall on that debate. if they type liquidity up, that causes all sorts of challenges, but they will get commodity isis is down. guy: do you think we are heading for a super cycle? chris: i think we have started one. food prices are already up, seven year highs. look at the bond market, it has momentum. look at lumber prices, so many

examples. i think you mentioned platinum. there are a lot of commodities that are moving, and you can say there has been a lack of capex against all sorts of sectors in the last six or seven years. think about the amount of copper that we are going to use if we really produce all of these electric cars and all of this green energy. there is limited supply of copper in the world, so i think it is very possible. it will not be a straight line, but i think it is quick -- quite likely. guy: chris, we will leave you there. thank you for joining us on this president's day. copper, year-to-date, and it is the 15th of february, already up by 7.85%. crude year-to-date, up by 22%, a huge rally already manifesting itself in the commodity market,

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guy: coming up shortly, john micklethwait, our editor in cheek will be speaking to kyriakos mitsotakis, and this conversation will be really worth paying attention to. that conversation is coming up. this is bloomberg. ♪

>> we do not want to be forced into any kind of retreat or

reverse if you know what i mean. i will ask you just to wait a little bit longer, give us some more time to look at the data about what is happening, the way the numbers are coming down. guy: the u.k. prime minister asking for time before saying when that you will reopen its economy, about the government hitting the target to get people vaccinated today. emma chandra has more. emma: the prime minister was sounding more than usually cautious there, and it means more than 20% of the u.k. population has received at least one dose of the vaccine and that the u.k. is leading among some of the larger nations it we are also seeing the program opening up to younger age groups, my

parents got their first shot last friday and they are very happy. and opening up means that will happen alongside others eating their second doses, so there are challenges ahead for the program. nevertheless, hitting the targets, meaning a lot of people are seeing it as a success and that is why we are seeing the pressure on the prime minister to say when he's going to reopen the economy, and of course the british economy really damaged by the lockdowns, the u.k. still in its third successive lockdown. we are getting this detail, about when they will get us out of lockdown, and that comes from a nation that is fed up with being in lockdown, and also from the political pressure. a number of conservatives saying

they want all restrictions to be lifted right may. we will not get that detail today, the prime minster says he will get that roadmap by the 22nd of february. we are starting to get details. it's take a look at the graphic and we can say that caution is the byword, and he says he wants any relaxation to be cautious and he does not want to go into a fourth lockdown. by priorities are schools, but we do not know whether all students will return at the same time. then some relaxation of socializing rules and also retail and hospitality following, and the big talking point here, of course holiday is currently illegal, and also sink new quarantine rules coming into force today. some reports that the government is considering allowing self catering staycations. what does this all mean in terms

of the markets, they are taking this detail to be very good impressions of what might be happening in terms of the u.k. recovery. just one metric, sterling hitting a three-year height earlier in the session and hitting a 139 handle. guy: thank you very much indeed. it is also, -- italian ski resorts have been -- the outlook for the summer, remains incredibly cloudy, what impact will that likely have of the peripheral countries such as portugal, spain, italy, greece, we will be talking to kyriakos mitsotakis shortly. for now, there are a number of

economies around europe that rely on the tourist trade, the greek economy is one, but certainly if the britain's do not go on holidays, the germans do not go on holiday, what impact will that have on those economies? >> of chris impact for this year would be significant if grace has the normal tourist season, then the greek economy could rebound by 5% or more this year from the roughly 9% drop in gdp last year. if the summer falls virtually flat, it may be a bit more than 2% growth that they can manage. we can be very confident -- competent at tourism will be much closer to normal in many structural terms, in terms of the longer run road potential

because of the reforms partly from the kyriakos mitsotakis government. they are on the right track, so this year there is a question, but for the longer term, greece does not look bad. guy: in terms of what could be done to compensate the economy or the lack of tourists arriving, what capacity does greece or spain or portugal have? helger: there is not that much you can do short term. you can continue the kind of survivor support that we have had for the furloughed, the support for businesses, to be ready for the next tourism season. we do have a lot of european money coming to fund investments across europe including the southern periphery, but this cannot be easily accelerated. you have to have the projects to start them. this is a process that takes time.

it will be there. near-term the outlook is more if there is less of a summer then we should have, then we will need more support for businesses and workers. guy: in terms of the effectiveness of that money, do these countries, and i was talking about italy the other day and looking at the draghi government, do these governments have the infrastructure necessary to spend this money? that has been a huge impediment, italy has been very bad as spending money that it has received from brussels. helger: that is a significant issue, for italy more than most. that probably is one of the tasks for draghi, and that would help implement the fiscal

programs, which would also make italy a better place for private investments in the future that is the huge challenge. guy: do think he can deliver for italy whatever it takes, what he delivered for that eurozone? helger: if you are a top central banker, a magic word can impress markets, but if the only problem , as it was in 2012, then we could solve it and did solve it as the president of the ecb. but now is prime minister, he has to tackle a lot of structural -- he has to reform the country. he has to get things through parliament, and that is a much more difficult task. i would expect him to make progress, but it will be a hard slog. guy: we all remover that.

i think bumblebees were mentioned. thank you very much indeed. we greatly appreciate your time today. coming up, we will keep the spotlight on greece. in a moment, john micklethwait speaks to kyriakos mitsotakis really looking forward to that conversation. this is bloomberg. ♪

guy: live from london, i'm guy johnson. this is "bloomberg markets." the pandemic continues to take a right -- bite out of the tourism industry in greece.

we are speaking to kyriakos mitsotakis. john: prime minister, very nice to see you. i wonder if i can begin with the summer. many people perhaps including me want to come to greece. what will be the system for those who have been vaccinated, will there be more deals like you seem to be close to doing one with israel, for people with vaccines will be able to come through almost automatically? p.m. mitsotakis: thank you for having me. i was the first european later to raise the issue of a common vaccine served -- certificate which will simple fight travel when a significant percentage of people have been vaccinated. a vaccine certificate will allow you to enter greece without being forced to provide a negative test and without quarantine restrictions. we do intend to go them -- go

down that path. we have agreed in principle with israel about this. i hope that at some point at the european level we will also agree on a common vaccine template for all european countries. people will want to travel, especially during the summer, and it does not make sense to me not to facilitate travel to the extent we feel comfortable to welcome people who have been vaccinated. for those who have not, we would request some sort of negative test, but we want to make it as easy as possible to be able to travel to greece. i see a lot of member states having an interest to explore this idea further, and i think the reason is there citizens want to travel they want us to make travel as easy as possible especially during the summer. john: the specific things you will do for the places people want to go, the islands, are you

looking to vaccinate those people first, giving any kind of priority towards the economy and where you put your vaccine? p.m. mitsotakis: first of all, greece has done better than most european countries in dealing with the pandemic, which was sort of unexpected given we entered this adventure with an underfunded health system, but our statistics are much better than most countries. we have also rolled out vaccinations faster than many other european countries. it is completely digital, which came as a surprise to many. so far we've been able to vaccinate people at a relatively fast pace. we are dependent on the number of vaccines we received from europe. i expect the number to ramp up significantly. right now our priority is to

vaccinate older people, and when we address these categories, we will look at prioritizing vaccines. hopefully we will have more vaccine by then and we will be able to advent -- administer them given the demand in greece. we hope in summer a significant percentage will be vaccinated. i will remind you we opened up for tourism last year and we did it safely. last summer we did not have the tools that we have now, no vaccination, and there was limited testing available. now we will have the vaccine protection and we have additional testing capacity, which is very helpful. john: how frustrated are you with the european union? greece was outstanding when it came to coping with the first wave and now i think around 6% of your population you have vaccinated, but because of the slow introduction, you are

vaccinating people as quickly as you can, but there is this problem about supply. that seems to go back to brussels. how much do you think the commission was at fault for that? p.m. mitsotakis: i have been a supporter of the concept that europe needed to purchase vaccines at the european level and then distribute them to all men were states on a per capita basis, making no distinction between rich countries, poor countries, medium countries small countries. there is no doubt that there were issues in the execution of the project. i think the president of the commission accepted responsibility and now we need to move forward to make sure that as new vaccines are approved, disapproval will happen quickly, and we will not run behind other countries in terms of how quickly we receive them. i am sure even in brussels at

the administrative level, the lessons have been -- we have accepted what happened, and we have learned lessons. we need to move forward and make sure that, march and april, as new vaccines are approved, there is no further delay. we have the capacity to administer many more vaccines, and we have the infrastructure. it is something a question of getting our hands on the vaccines, and this is a european decision at the end of the day. john: can you give us some idea of the economic cost of this? i understand the first quarter looks tough, and that is because presumably the lack of vaccines becoming a major part of that. p.m. mitsotakis: every time he

closed economy, you pay a heavy price. greece has been no exception. we will suffer a big recession in 2020, and q1 on that look as good as what we thought it would couple of months ago. we are not the exception. if anything, we are in sort of our third lockdown and hopefully in a couple of weeks we will bring cases down significantly and we can contemplate reopening. very dependent on retail. every time he closed on retail, that is a big hit. we have also supported incomes, jobs, seen no increase in unemployment so far. our intention was to keep the productive base of the economy intact, so as to return to normality as quickly as possible could we managed to keep retail open for three weeks in january,

which was very encouraging. i hope february -- other countries are in a much stricter lockdown now, so q1 will be difficult, but i hope for a good healthy recovery in q2 2021. john: do you think this will be the last lockdown for greece? p.m. mitsotakis: i sincerely hope so. first of all, we are building a vaccine wall, and we are not just vaccinating anyone, vaccinating the most vulnerable, the ones who are increasingly likely to occupy -- occupy an intensive care unit bed and lose their lives. we tried not to put too much pressure on the health care system so we are vaccinating a

disproportionate percentage of those people who would put pressure on the health care system. we have the added benefit of the weather rate it will get better before it will in london, so in april, there is a seasonal aspect to this virus. we knew this from last year so i think in april things will improve significantly in terms of virus transmission. john: i wonder if you could confirm whether you're going to prepay early the imf loan, i think you are talking about prepaying. is that still on track? p.m. mitsotakis: it is on track. we will repay 3.3 billion early out of the 5.1 that we had

borrowed. i think it is important to be consistent with the markets. they have rewarded us with record low interest rates. this is a function of liquidity, but it is also a vote of confidence in the ability of this government to deliver reforms in the middle of the pandemic. a lot of investors are looking at greece right now and we want to be consistent in the signals we sent to the markets. repaying the imf loan early, we made that commitment, and we will make sure we stick to the word. john: how much do you think the reputation of greece is changing? for many people, they looked down on greece and said they could not run things, and that you had this good record of dealing with covid. do you have a name in mind in terms of that?

how important is the arrival of draghi in italy from the point of view of changing the reputation of southern europe? p.m. mitsotakis: i think it is important in 18 months we have been in power for 18 months now, we have dealt with several crises at the same time. we had a migration crisis, a crisis with turkey to deal with. i think we have been relatively successful. i think we have sent a signal that this greek state, which was always considered to be inefficient, when properly managed, can deliver results. we have moved the digitization part very aggressively. greeks appreciate that, and there is a sense that the state is standing by people and really helping them out and supporting them.

i think this helps us with the greek brand both in greece and also abroad. for your second question, i think the appointment is actually good news for the european union as a whole. i happen to know draghi personally because i met him during the greek crisis. he brings tremendous credibility to the council. i think there is a common agenda that i am sure he will deliver for italy. there are common threads with greece, the use of renewable energy, so, yes, i think he will do a lot to change this, these stereotypes of north versus south, which i think was the legacy of the previous decade. i think we need to look at things from a completely different perspective, and i intend to make this a very

successful decade for greece. we have submitted our plan under the recovery and resilience fund and it has been received positively i the institutions -- by the institutions. so now we have the firepower to support our ambitions for the greek economy. john: if we could ask you at some point about turkey, you have had difficulties in the eastern mediterranean, a very interesting speech where you talk about the new center of the eastern mediterranean, but you have this problem of sanctions against turkey for the rest of the european union does not seem keen on that. do you think turkey can ever become a proper partner of the european union? p.m. mitsotakis: we had a

difficult 2020 with turkey, with a lot of tension rate i hope that 2021 will be better. i think we have made it clear that what happens between greece and turkey is going to affect the relationship between turkey and the european union. sanctions are never an end to themselves. if it is a credible threat, i think sanctions can force countries to change behavior. i hope this happens with turkey. we discussed with turkey in exploratory talks to resolve are one main difference, the limitations of the maritime zones, and we have seen some months of lower tensions. i welcome that, and i do hope that we will continue down that path paired we are destined by geography to be neighbors, and we have had times a very good

relations in spite of the fact that some tensions have remained unresolved. i hope that 2021 will be better. at the same time, we intend to strengthen our alliances to form alliances with a group of like minded countries that respect international law. we have proven some issues of the zones can be solved in accordance with international law. we signed two agreements to limit the zones, so this can be done. there is no dispute that cannot be resolved if we have respect for our neighboring nations. i hope that at some point we will be able to see i die with turkey -- eye to eye with turkey. john: thank you for speaking with bloomberg.

very good to see you. guy: thank you very much indeed. the greek prime minister kyriakos mitsotakis speaking to john micklethwait. and you heard him talk about the program that has been rolled out very effectively in greece as a result of covid-19. it will be interesting to see the effect it has on that revenue raising capacity of the government, which has been such an issue. european markets are set to close in around half an hour. the reflation trade certainly a huge driver today, particulate for the ftse 100, which is up nearly 2.5%. this is bloomberg. ♪

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>> monday the 15th of february, 4:00 p.m. in london, 11:00 in london where it is president's day. u.s. markets are closed. i am guy johnson. we are counting you down to the european close. in terms of what we are seeing, with london outperforming european equities so broadly, up by 1.5%. guy: it is the big mining stops, and the oil stocks -- mining stocks and oil stocks driving the market. we are seeing curves steepening around europe. the german 10-year up by 4.6 basis points. elsewhere around the world, we are continuing to watch what is happening with wti. >> that is sending