♪ annmarie: good morning. this is daybreak era. here's what you need to know. carnage and the bond market. global yields stabilize after an aggressive spike. that led to a selloff in riskier assets as tech was hit hardest. asia stocks under a missed pressure now. will we see a vaccine passporting europe? we speak to the chief economic

advisor ahead of today's european council meeting. good morning to you. some dramatic moves in the treasury market yesterday. stocks over the past few hours as well, getting hit hard. this after treasury yields spiked to one year highs. what we are seeing across the board is in the front end of the curve, the five years. mark malone is talking about the fact that what you are seeing year-to-date in the bond market is almost mispricing. he says investors fear almost 1994 crisis moments. this made worse by the dismal seven-year auction. that's the picture in the bond market. across equities, you can see it on your screen, nowhere to hide. you have the msc x asia-pacific

down more than 3%. that's the worst session for that regional benchmark since march 23. you are seeing a spike in yields , hitting the equity market, hitting those riskier assets. especially highflying tech stocks that investors no longer need when the economy reopens. they are getting hammered. let's break this down further, the mechanics of what went on over the past one for hours. tech shares bearing the brunt of the losses. nasdaq 100 slumping. dani burger has the latest. danny: the moves have been chaotic. that's an understatement. when you look at the wild things that happened between everybody realizing that nobody is coming to save the bond market for now or bond market traders, it means we saw a mini flash crash in the treasury market with 10-year gilts at one point spiking to 1.6%. what that means is that is real contagion territory.

this is an inflection point, which we for -- saw for the first time in a yield -- year. if you are looking for income, a treasury bond is going to give you just as much as it would. it's not just that. these valuations are harder to justify. inflation is rising. the fed raises rates eventually. the cost of capital becomes more expensive. the thing is, what started as concentrated in the tech space has spread elsewhere. asia is getting hit. the stocks futures are getting hit. small-cap futures in the u.s. are getting hit. what this has turned into is the past 10 months, the by everything rally is getting looked at with a new lens. perhaps a lens that this is unsustainable. let's take this opportunity to sell when the market was just near all-time highs. annmarie: certainly. i'm just pulling on gains --

gamestop. it is flying. we have a stockmarket route. what's happening with these retail investors? coram: there is still plenty of -- bukalapak -- dani: gamestop's price action tells us there is plenty of dumb money out there. even though gamestop was soaring, other retail favorites took a big hit yesterday. this means at a time when retail investors are still jumping in and buying, it's coming head-to-head with this big institutional wall of selling. in terms of who will be left holding the bag, it looks like it's retail here. they are still buying at this point. annmarie: thanks so much for that. joining us now for more context is randeep somel. i want to get into what's going on in the bond market. we saw the repricing and the selloff hit hard on the front

end of the curve. that's where the fed says that they are going to maintain the bond buying. why are we seeing that selloff on the front end of the curve? randeep: we need to remember, ever since the pandemic, central banks are coming in globally like we've never seen before and being incredibly supportive. bulls with very low rates and at the same time, huge stimulus. i think people have started to get a little bit worried. everything is reopening again. rates are still very low. there's a lot of cash in the system. inflation could start to come in. at the moment, they are not looking at what the government is saying. it's not just the fed. the ecb is to blame. korea. australia. new zealand. they have all come out and said, we are going to remain supportive. we are not going to raise interest rates because that will dampen any sort of economic growth we are likely to see in

the recovery over the next year. it's just the markets coming to say, are these assets now quite expensive relative to where we are in the economic cycle as things are starting to pick up again? annmarie: i know historically speaking, we are at low levels. what does happen when economies to reopen? is it a case of buy the rumor, sell the fact? randeep: what we need to differentiate now is that we've seen a lot of shares, specifically in technology, that are on incredibly high valuation. seen as disruptive companies. that may be well and good. they are not displaying the revenue and earnings to reflect their valuations. when you start adjusting your discount rate, which is what happened when we anticipate that interest rates are going to rise, the future profits that aren't existing now are even further in the future or discounted back at a higher rate. the valuations need to adjust in order to reflect that. that's what we are beginning to see.

shares have had extreme increases over the past year. a lot of them are in technology. a lot of them don't make any money. it's a little bit of a reality check now. when is that profitability coming in? is it reflected correctly? annmarie: how much of what we are seeing in the bond market, how much of it is complexity hedging? the sellers of the mortgage-backed bond market. how much is that in pricing how swift and quick we are seeing the selloff? randeep: that's likely to be the most likely cause. it's only been a couple days so far. if this continues on for some time, once we get more into the process, we will be able to see how likely that is. like you say, individuals hedging long-term mortgages. the bond market is huge look of to equity markets. small moves like we are seeing,

these are seen as mild. we will see that hedging continue. annmarie: what does it mean for your portfolio? do these kinds of moves have you take a step back and think, i want to change some allocations? randeep: it depends. if we are comfortable with the valuations we are buying at, all the companies i by our earnings positive. they are cash flow positive. i'm comfortable that if the growth is there, we are onto good company. if you are buying shares that don't have any earnings, that don't have any revenue at this stage, i think we need to try to understand exactly what the valuation is and when you expect those companies to start making profits. the discount rates continue to rise like this, they are the stocks that are likely to come under pressure. that's what we see in the nasdaq.

it's the highest event indices coming under the most pressure in the last few days. annmarie: the atlanta fed president said, i'm going to be patient and thinking about what we do next in terms of a policy stance. he said, the economy can run hot without seeing significant spikes in inflation. you mention to we heard from. uneasiness from look are in bank of korea and australia. at one point -- at what point does this start to worry jay powell? randeep: we need to remember that inflation is coming back from an incredibly low level. we've not seen inflation since 27 -- 2007. we've seen a slight uptick from what has been a very low number. especially if you are the fed and you have a dual objective, it's not only to maintain rational pricing but also full employment. the u.s. is nowhere near full implement at this stage. that gives them a lot of room to

maneuver to allow prices to rise while the economy gets back in order. the other thing that is really important here that we need to pick up is the fact that once economies start to reopen, once the furlough programs completely disappear, we need to remember that unemployment is likely to pick up. until we've seen what the true damage of the pandemic is, once the economies open in the government support policies go, we are not going to have a good understanding of where the unemployment is and where the troop inflation rate is. annmarie: it's a good thing. bernard was talking about the fact that they want full inclusive employment. randeep somel. stays with us this friday morning. let's get the first word news with laura wright. laura: eu leaders are closer to establishing a joint vaccine passport to enable company -- countries to reopen travel.

ursula von der leyen is urging them to worry, saying that apple and google may step into the back room. there is support for a vaccine certificate of no sort. no agreement on what type of privileges it would grant. brazil has hit 250,000 coronavirus test as it struggles with the shortage of vaccines. it comes days after the nation became the second in the world to record 10 million cases of the disease. in the u.s., the number of hospital admissions is plummeting. the u.s. intelligence report is expected to say that saudi arabia's crown prince approve the killing of washington post columnist gamal khashoggi. it may be declassified as soon as today. the prince has denied any involvement but says he accepts responsibility as the countries ruler. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg.

♪ annmarie: thank you. let's take a check on asian equities this morning. as well as u.s. equity futures. red across the entire board. there's the benchmark, down 3%. the worst session since march 23. nowhere to hide in asia. nick a two to five down 4%. chinese equities, 1.5%. coming up, the commodity super cycle. are we still on (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body.

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annmarie: good morning. the bond rout that hit equities around the world also sent commodities lower. ace metals pulling back with copper slipping off its nine-year high.

oil fell off a 12 month high as considers type -- as -- what does this mean for the super cycle? our guest is still with us. you have thoughts on this. you say commodities are a little bit of both. a super cycle and a bit of a cyclical recovery. please explain. randeep: we have a process now. as economies reopen, demand is quite high. supply is curtailed. we are starting to see a crisis,. that is the sort of reflationary open part of it. the other part is as we move towards a green economy, as we move towards electrification, electric cars, getting rid of fossil fuels, it requires a lot of metal. it requires copper, nickel, cobalt, lithium. these metals, which are difficult to find in a lot of cases.

an electric car uses four times copper as a combustion vehicle. the demand for these metals, as regulations start to come in and car companies start to move, is going to be pronounced over the coming decades as we get rid of fossil fuels, as all economies around the world move towards the paris climate goals of net neutrality. they specifically have a very strong future in front of them. that's why we have seen copper to extort very well over the last couple months. we are starting to see policies come into play. annmarie: not all commodities are made equal. we could see super cycle like initiatives but for those that are for the green economy. do you think copper could make a run at 10k? randeep: absolutely. it depends on how quickly new supply can start to come on. as with any commodity, you might see the easiest areas first.

you get to a stage where it's harder to mine. you are going deeper. the quality is not as good. you can recycle copper. we need more than we are recycling at this time. the pressure to copper will be to the upside. annmarie: where does this leave oil? we are pulling back a bit. we are still at 66 for brent. randeep: oil is slightly different. it's the inverse of the green trade sector. we saw oil trade negative for the first ever time. similar issue. you see supply completely curtail over that time. now that we have some -- seen demand take up, it has been supportive for pricing. the question will be, how quickly will they get their pipes moving again and get demand -- supply to increase? in the short term, as we reopen, oil will be to the upside.

as we see more electric cars, more alternative fuels like hydrogen, the world will start moving away from oil. in the near to medium term, it will be supportive. annmarie: some people say bitcoin is the new gold. bitcoin is heading to its worst week we saw in a year. we are now at $46,000 on the handle on bitcoin. i was so shocked when you wrote your notes. you wrote no with five o's at the end. is there anything that would change her mind about bitcoin? randeep: it is very difficult to value bitcoin other than what someone else is willing to pay for it. what i mean by that is that there are no underlying earnings. there's no real asset value at this stage. at least with gold, you can only mine so much gold. there's only so much bitcoin in the system but there are uses for gold, industrial uses. there will be a use for it once

it has been mind. bitcoin doesn't have that type of property. bitcoin is very volatile. people like thinking about it as a currency. it should not be moving 20% in a single day. without that intrinsic value, it's a difficult asset to say, what is it worth, at what price would you buy or sell? saying wider adoption is a little difficult. annmarie: but looking where it has come from to where it is now, at the end of last year, 23,000. are you having fomo that you did not get in on this massive upswing? randeep: no. how do you justify using it? we think to ourselves, right. an expectation of a getting to x. you have no idea what that level is. it's difficult to say. you can sleep easy owning something like bitcoin. if you are holding in equity or

commodity, you can understand this a plan to buy -- supply demand dynamics. and have a legitimate way to value the asset. annmarie: you want to talk about the aas and amadeus. both reporting that they are watching them closely. what do they have in common? one is a massive chemical maker and one is a flight booking site. randeep: both are incredibly economically sensitive and have been hit hard by the pandemic. madea's, let's not look at what the final quarter's earnings were. let's see what the ceo says when it comes to people booking flights for june, july, august of this year. let's see if people are starting to get confident again. the vaccine policies will work. the global economies in the holiday markets, which are extremely large for some companies, are setting to reopen again. that's a question of confidence. the industrial chemicals company , if the economies are opening again, if industries are

starting to work again, we are likely to see that they are starting to pick up. the most important thing for their final earnings will be how strong china is as china opened up and started growing again last year. the west will remain on what they started to see in the u.s. and europe in terms of what their economies are doing. i think they are incredibly good lead indicators for the holiday industry and general economic activity. annmarie: thank you so much for joining us. happy friday. coming up, a rough ride this morning for asian stocks. is there a port in the storm? juliette saly standing by. this is next. 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 to help you maintain comfortable, correct form.

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>> this is the bond market essentially telling us that a

boom is coming in real growth in the country and we are not priced properly in the market. >> rates are relative to the world. japan and germany cannot be at zero and the u.s. go to 6%. >> we are selling off because of optimism from growth. i don't think it is concerned with inflation so much as it is concerned that the fed may not thread this needle. >> it's a short last play. a longer-term list is still there underlying the markets and will still allow equity markets to trend higher. >> this is volatility, amplified by retail activities. it's just part of the repricing in this type of market cycle. we think investors should be able to patiently look through this. >> we are very close to the end of this. i think it suggests a real opportunity and some of the segments of the market that have been hit the hardest over the past week or so. annmarie: some of our guests reacting to the spike in yields

and the move across equity markets. asian stocks on track for their worst day since march 23. on route spreading to equities and u.s. and european futures pointing lower. it is right on the screen this morning. joining us now is juliette saly in singapore. juliette: a terrible day. the biggest selling in asia on that bench back and ask any year. it feels like a washout of state securities here as we continue to see this rotation occur to a lot of selling happening in tech stocks. that is weighed heavily into what you have been seeing in the han saying index. let's look at the pain across the region. consumer stocks in china having their worst week on record. the csi 300 down 7.4% this week, its biggest weekly drop since october 2018. you can see us trillion stocks down by 2.4% on the close, sliding the most in six months.

this is about the bond rout two. aussie bonds swinging. the rba intervening in the market, offering to buy april 2024 notes after similar moves earlier in the week. we have a chart reflecting some of these moves that you have been seeing in the bond market. the rba doesn't normally buy bonds on a friday. japan's mark -- yield have ring at the highest level since 2016. trying to test whether boj's tolerance for rising yields is ahead of its march policy review. the bank of korea trying to ease some investor concern as well, saying it will step up bond purchases as we see these yields rally to a two-year high. certainly playing through, minimizing the amount of gains we have seen over the month of february for equities. when it comes to the bond market, you can see yields rising. aussie bonds are a by versus treasuries if you want to dip

your toe in the alligator infested waters. annmarie: alligators. i'm looking at my wb on the terminal. you mentioned australia. 19.6 change on the basis point. astonishing. you mentioned the rba and the bank of korea. we had corroded talking. did he do any sort of intervention? juliette: not yet. what we are looking for is to try to see what the bank of japan is going to do ahead of that march policy review. that has been one thing we have been watching as the central banks try to play catch-up to what has been happening in the bond market as we continue to see these routes occur. the benchmark yield for japan hovering near its highest level since 2016. annmarie: all things right on the screen. thanks for joining us. a quick check on where we traded this morning. as i've been saying, it's a selloff, read on the screen this morning. the benchmark down 3%.

the worst since march 23. we are seeing that contagion into europe futures this morning. dax down. euro stoxx 50, 1.5%. this is bloomberg. ♪ oomberg. ♪

♪ annmarie: good morning from bloomberg's european headquarters. i am and reordering. this is "bloomberg daybreak: europe." carnage in the bond market. global yields stabilize after aggressive spikes following a dismal government auction. that led to selloffs and riskier assets. asian stocks under pressure amid a global slump. will we see a vaccine passport

in europe? we speak to greece's chief economic advisor i had of the european council meeting. dramatic moves in bonds over the past hour, in stocks as well. nowhere to hide when it comes to asia. let's kick it off with what happened yesterday. we saw this repricing of rates on the short end. five year the hot sector. mark malone said the shift year to date is similar to bernanke's mishap in 2013. investors fear what could be a 1994 crisis moment. manus cranny was telling about where he was and the situation in 1994. all of this was made worse by the dismal seven year option. you can see that with nasdaq futures now down. those highflying tech stocks being dumped. in asia, you have the benchmark down 3%, worst session sinc

e march 23. there is nowhere to hide when you look at the asian session. we want to get you an update on what is going on on the vaccine front. israel is passing a major threshold as it leads the world in coronavirus vaccine doses per capita. >> we all have to understand that we still have a long way to go. right now, we are cautiously opening the israeli economy and social life, cultural life after suffering a very serious attack of the coronavirus just during last month. what enables us to open certain areas that we could not even dream about opening is what we call the green pass, which is a certain document, certificate

confirming that the person has either been vaccinated or unfortunately, suffered from the disease and recovered. all of these people, we are talking at this stage about 3 million people in israel, can use all these facilities safely. we are continuing the vaccinations. we are hoping to reach a situation where we will be close to normal life the way we used to know it. annmarie: this comes as astrazeneca's ceo defended a shortfall in vaccine deliveries in europe during a european parliament hearing. he says employees are working around the clock to increase production. >> other sites have been a bit slower. this question [indiscernible] we were looking for the eu. the overwhelming majority of what is manufactured in the eu,

including the netherland facility, is actually going to the use of that. annmarie: meanwhile, eu leaders are inching towards establishing bloc-wide vaccine certificates. angela merkel said in the future, it will certainly be good to have such a certificate but that will not mean that only those who have such a passport will be able to travel. about that, no political decisions have been made yet. greece's one european nation already issuing vaccine certificates and has proposed them to be used for international travel. maria tadeo is my very special guest this morning. maria: one of the big questions in europe is, are we going to get a summer season? we have the good weather around the corner. you see that feed into a lot of stocks when you look at hotels, airlines. we are now joined by alex patelis, the chief economic advisor to the greek prime minister.

i know that you have been pitching hard for this vaccination certificate. what is in it? i am a bit confused. is it a passport, is it a certificate? what are the logistics of it? alex: good morning to everybody and thank you so much for the invite. it is not a passport, it's a certificate. it will provide alternative ways to travel. if you don't have the certificate, obviously you can still come to greece, but it opened the country for tourism last summer. this summer, you can probably come with a negative pcr test, negative antigen test, something like that. if you have a vaccination certificate, let's get going, let's get some standardization so that people can use green lanes. annmarie: ok. would you make that -- and going back to logistics -- would you make that a mandatory condition

before getting on a plane? is this something that even without a certificate, you can still get on the plane? alex: of course, it's entirely voluntary. it's entirely voluntary. let's get the work going now. we know there are a lot of people out there looking for their holidays again. it's been a difficult time for people, lots of months of lockdown, hardship. come spring, summer, governments are going to face pressure from people who want to travel, who will travel. if we do not provide a solution, then somebody else will, whether it's going to be the u.s. tech companies or somebody else. let's prepare. let's get the infrastructure ready and let's have a good summer. annmarie: ok. so based on what you said, you're essentially saying that u.s. big tech will probably jump on this. let's do it ourselves and keep

it more of a sovereign government issue. alex: let's keep the data that will be shared to the absolute minimum. there are a lot of countries like greece who have digital vaccination certificates. we are working at the moment on bilateral deals. there is an agreement in principle between greece and israel. we are also working on a deal with the united kingdom. i lived in the u.k. for 11 years. we do want to welcome u.k. tourists in the summer. we are working on bilateral deals with other countries. it would be even better if this were quarter needed at that european union level and we don't end up with a patchwork of solutions like we did last year. annmarie: just on that point, on the u.k., when do you want to get this bilateral deal done? alex: we are working on the plan. the prime minister will be making an announcement on how things will unfold in the tourist season probably in a couple of weeks. this year, the tourist season

will commence sometime in may. i wil remind you that last year, greece opened its borders to tourists in june. we expect a very good year. annmarie: i know there is a european meeting, summit happening so it's hard to come up with conclusions. based on your understanding, how much consensus is there around this idea of issuing an eu 27 certificate? alex: i think there is growing concern surrounding the work around the certificate. you heard angela merkel's comments overnight. it takes time to do some of the preparation work. there are some concerns by some member states about whether the vaccines will be sufficient. what we are saying is, we will have a lot more information anyway in the future, but let's get this going now. there is a growing realization

that the citizens of the european union will want to travel come spring and summer, and that we as governments should work on providing a reasonable solution for that. annmarie: just as a final question, how much do you worry about mutations? alex: i am not a scientist but so far, there is no evidence whatsoever that there is any significant mutation that is heavily resistant to vaccines. again, this has been an ongoing pandemic and every country needs to adjust its strategy as it unfolds. what we really need to do is get all the options on the table, do the preparatory work and then we can adjust things accordingly. we are optimistic. there are a lot of studies happening in israel. there was a very interesting study that came out that matched people with a vaccine to those without a vaccine. so far, all indications are that

vaccines work. let's use that to make our lives open up again. annmarie: and how confident are you about herd immunity? there has been this view in the market that given the numbers right now, to get to 70% just simply is not going to happen. are you confident we can get to that point after the summer? alex: for sure, we will get it after the summer. we are starting from lockdowns, close borders. and there are ways that we can control this thing. again, this summer, we have a lot more tools at our disposal than we had a summer ago. we have the rapid test, the vaccination strips, a lot more people with antibodies. the situation is much better. let's optimize the situation we have and get people going again. annmarie: thank you so much for joining us. we hope to see you i guess in beautiful greece very soon. thank you for joining us. that was alex patelis, the chief

economic advisor to the greek prime minister. annmarie: thank you so much to maria tadeo, our reporter in brussels, joined by the economic advisor to the greek prime minister. we are just about an hour and 20 minutes away from the start of the european equities session. we have to see what is going on across the equity players across the world. ms yet asia-pacific down more than 3% of the worst session -- msc i asia-pacific down more than 3%. nasdaq futures down 0.9%, yesterday closed down more than 3%. dax futures lower. the russell is also selling often the futures market. cyclicals are now selling of. different from yesterday when it was the tech sector. coming up, the murky world of commodities trading on the people who use their power over the world's resources for

political influence. our chief energy correspondent about his new book, "the world for sale." this is bloomberg. ♪

♪ annmarie: good morning. this is "bloomberg daybreak: europe." the commodities hot streak is putting the asset class on course for its best run in over four decades. our chief energy correspondent has written a new book about the murky world behind commodities trading. his book, "the world for sale," lifts the lid on each trader's play in the global economy. some individuals leverage their position to wield political power on one of the wildest frontiers of capitalism. i only got the book last night but i started reading it before bed. what i loved is you talk about

what happened in iraq, when igor stagen needed to tap to get $10 billion. these are the last swashbuckler's of capitalism willing to do business where other companies do not dare set foot. you have known these people for decades. what was most surprising that you found out during your years of research for this book? >> good morning. i think that the thing that surprised me the most, or confirmed to me my thinking was the political influence of the commodity traders. the commodity traders do not seek political influence. they are therefore the business, making money -- they are there for the business, making money. what they do has political influence. to see what role the traders played during the collapse of the soviet union, of sustaining the regime of fidel castro in cuba, or helping saddam hussein

to buy back u.n. embargoes and sell his oil. that's political influence, to know that the traders were playing a big role in history. that role remained largely unknown. that was certainly very surprising. the traders, although they are there for business, they do play in politics. annmarie: who was the most colorful character? >> i think that the ceo of glencore probably is the most colorful character of the industry, hard-working, rootless, but also can be sharply -- ruthless, but also can be charming at times. i have a relationship with ian taylor, who unfortunately passed away before the book came up. i really enjoyed talking to all

hands of the industry. we interviewed secretaries that were active in the 1960's and 1950's and today are more than 90 years old, very sharp. listening to them and the stories of how the world was changing during the 1950's and 1960's, how the commodities that were traded was also changing. in 1960, communications were more difficult, how news traveled was certainly interesting. annmarie: what are we expecting the kingdom to do? >> i think that next week on thursday, we are going to get opec to release more oil to the market. i think that there is no doubt that opec is feeling the pressure from the market, even if oil prices are down a bit today. as you were saying earlier, there is a wider correction in

equity markets. the conclusion of next week's meetings should be more oil coming this spring. how that is going to happen, who is going to increase what and how, i think that is still open for discussion. they will bring part of the one billion barrels per day of the voluntary cap that has been doing over the last months. i russia will put forward a bigger incremental production. the market telling opec that they needed to increase production. the situation has got complicated by the fact that we lost production for a week in texas. it is beginning to be noticeable in the market and probably increases the pressure on saudi arabia to act. annmarie: are we going to go in with saudi and russia again at loggerheads? >> i think they are going to go

on different paths. the russians would like to go with a faster increase and probably a larger increase. the saudis are acting as the moderation, let's not go too fast, and too large too soon. i think the differences are sometimes overplayed in the market. while yes, there is a disagreement on what to do in terms of the speed and the volumes, i don't think that there is a disagreement in the need to increase the production. probably we see a bit of disagreement, as in every negotiation. but i do not think there is a situation in which both are completely in opposite poles and about to have another breakdown, as we had just a year ago this time. i think the relationship has improved very much since march of 2020. annmarie: no divorce lawyers needed just yet.

our chief energy correspondent. jack writing this book with you. it is truly fantastic. i know some of the stories because i worked with both jack and javier. the co-author of billion-dollar rail says it is a definitive, eye-opening story of some of the most powerful traders. now on sale in the you can united states on march 1. let's take a look at a shift in international relations under the biden administration. u.s. intelligence report expected to be declassified as soon as today implicates saudi arabia's crown prince and the killing of jamal khashoggi. joining us now is bloomberg's middle east correspondent, simone foxman. how is biden changing the u.s. approach to saudi arabia? this was a report that the trump administration was not even thinking about releasing. >> in fact, they had prepared this report.

this is a compendium of cia intelligence that makes this -- that draws this conclusion, according to our sources. biden has for a long time, even on the campaign trail, talked about his desire to recalibrate the united states' relationship with saudi arabia. was a very tight, close relationship, particularly between president donald trump and the saudi crown prince. this report puts that relationship a little bit into the crosshairs, because bin slamans'allegedly role -- bin salman's allegedly role in this killing -- alleged role in this killing. it will put pressure on biden to make good on his promises to be more forceful about human rights, and to take action, even against u.s. allies when they violate human rights. one of the investigators who

looked into the cowling -- killing is already calling for sanctions on bin salman for his role in the murder. we expect some kind of action. annmarie: also overnight, the u.s. carrying out airstrikes in syria on sites connected to iran back to groups. what do -- backed groups. what do we know about this? >> these airstrikes seen so far as reasonably restrained, a response to activity, to bombings in iraq that killed a u.s. contractor and injured several u.s. servicemembers on february 15. this being seen relatively restrained sort of strike that targeted buildings that are used to move personnel between syria and iraq that are by those

iran-backed groups. i think when we look at the broader context, the desire to return to that 2015 nuclear deal that we have heard both the u.s. and iranian sites a, this is -- side say, this is just an indication that there is a lot be on the nuclear issue that they are going to have to try to deal with, maybe perhaps put aside, if they want to get back to that deal. annmarie: simone foxman, thank you so much for joining us, especially on your day off. a quick check on asian equities. we are seeing a selloff in asian markets, as well as european and u.s. equity futures. msci asia extending those losses beyond 3%. this is bloomberg. ♪

♪ annmarie: just over an hour away from the start of the european equity session. it's set to be a messy one.

dramatic moves across bond markets yesterday and that's feeding into the selloff and riskier assets -- in riskier assets, notably in equities. worst session since march 23 for the msci asia. nikkei at 30,000 at one point. we are well below that, often nearly 4%. chinese equities moving lower. i want to show you what is going on in the futures market. europe shaping up to be a messy day. we are about more than one percentage down across everything, euro stoxx 50, ftse 100 and decks. as i mentioned before -- dax. as i mentioned before, what you are seeing in the russell 2000 futures is something to watch. yesterday was all about ditching tech. it's the final day of the month. it is shaping up to be a brutal one. red on the screen. we are just an hour away from the start of european trading.

that does do it for me. thank god it is friday. anna edwards up next with the european open. this is bloomberg. ♪

♪ anna: good morning. welcome to "bloomberg markets: european open." i am anna edwards live in london. the markets say the global bond the selloff eases but the stock slump extends. the nasdaq tumbles the most since october yesterday. the cash trade is less than an hour away. u.s. benchmark yields hit 1.6%, wreaking havoc in markets concerned the fed is behind the

curve's