>> good morning. from bloomberg's european headquarters, i am annmarie hordern. this is "daybreak europe," and here is what you need to know. >> disorderly conditions in markets threatens the achievement of our goals. i would not be concerned if those things were to happen. annmarie:c jay powell unleashes a bond selloff with a miner nod to the recent spike in yields.

a cautious tone. china sets its 2021 growth target well below consensus. we are from beijing. the powder dry. saudi arabia and opec-plus keep a lid on the oil supplies. let's begin with jay powell unleashing a bond selloff last night that is moving markets this friday morning. good friday morning. let's see the impact of the discussion on prices, stopping short terrain in those bonds. a miner nod. recent moves were notable and caught my attention, he said. traders sending a clear signal they intend to keep selling. the tenure this morning, 1.5 6%. this is that comfort level that standard chartered was saying it would start to get uncomfortable for the fed. you have nasdaq futures flat but yesterday, we did close in the red.

9.7% from the recent all-time high. what that could potentially mean is a correction and we are breaking below 120 on euro-dollar. we have not seen that since june so we are seeing the strengths come back into the dollar and brent crude north of $67 a barrel. oil is higher. this comes as the opec-plus is rolling over those original cuts. a little bit of exemptions coming in from russia and kazakhstan. the main fit is coming from riyadh. we get more on that later. oil higher. that's adding to inflation concerns and that could end up being a headache for central bankers but no real hint of intervention just yet from the fed chair yesterday when he spoke at wall street journal's webinar. take a listen. >> we want to see labor market conditions consistent with our assessment of maximum employment. we want to see inflation at 2%. these are highly desirable outcomes that would represent an

economy that's very far along the road to recovery as it relates to the bond market. we want to see and would be concerned if we did not see disorderly conditions -- orderly conditions in markets and we don't want to see a consistent tightening. that's really the test. we think we are likely to see inflation move up during the course of this year. businesses will be potentially hit by a lot of demand as the economy recovers, which is a good and but you can see bottlenecks and prices moving up. we are inclined to see those as transient. as far as the guidance, it's pretty specific and as i said, it will take some time to get there. annmarie: jay powell speaking yesterday. 1.57 right now on the 10 year yield. even before powell spoke, some were predicting it was on course to reach 2%. ing and bmp seeing 10 year yields rising more than 50 basis points. scott minerd has a view on that.

take a listen. scott: even if 10-year note skip to 2%, which seems to be the new number everybody is talking about, it is not going to be sustainable. this tree shows that these sort of spike up in yields that occur at -- after the end of recessions typically are reversed because inflationary expectation gets ahead of what the real experience is. annmarie: that is a look at the fed. the next catalyst for markets is today's february jobs report. excitations for our a rise of 198000 and this comes after initial jobless claims totaled 745,000 last week. that was up from 9000 from the prior week. to jay powell's point, speaking at that seminar, the central bank is still far from achieving its employment goals. joining us now to break down all this news this friday morning is the global chief investment strategist at black rock investment into two.

what a fantastic moment to have you on. 1.57%, bmp, ing, talking about a 50% rise. scott minerd said this is not sustainable. where do you see the outlook on the 10 year yield? >> yields have been grinding higher since late last year and for a long time, driven by rising inflation expectations and more recently, also the real components are moving higher as well. our expectation is for yields to gradually grind higher but markets should be able to -- risk assets should be able to do some of that, especially given that yields are going higher because of the expectation for growth to come through rates so let's think about why we are having this situation. with regards to the speech last

night, i would say that perhaps markets were hoping for more from jay powell, but the reality is he was consistent with recent speeches and continues to be dovish though perhaps not as much as markets were hoping for but if you think about, any sign of market distress, risk to market volatility, the fed comes out to bend over backwards to reassure markets, then they become more captive to market dynamics, which would make later on the exit conversation a lot harder. i can see the dilemma they are in. the recent yield grinding higher does not change our progress stance. some of the indigestion has been called by the speed of -- give it a little bit more time, supported by robust fundamentals

. we continue to be progress. annmarie: did jay powell make a mistake by only giving us a miner nod? >> -- minor not? >> there was some disappointment. as i was saying, if they really go out of their way to reassure markets, more so than they have done in recent days, then markets may well get a muted boost but we will become even more hoped. central support makes the conversation of taper, of exiting, and all of that, so much more difficult so i think striking a balance is very important. annmarie: he also alluded to the tools the fed could use but would not get specific. what do you think would be the first protocol? something like operation twist? >> it is becoming more and more

talked about, like the front end on the backend adjustment. i would not say it the main expectation just yet, and i think he is right to keep that flexible in terms of what they could do. the reality is, they could have a few things that they could consider for the growth and playing out. they did not want to keep their options open. and specifically, i want to stress that in terms of how the fed what kind of look forward, inflation dynamics is key. they are able to look through the inflation overshoot because of these moves towards average inflation regime inflation targeting. and they say that they expect inflation on a trend to come through because of this unleash of the pent-up demand and the

reopening and all of that, but if this pressure, this inflation coming through, if it is transitory, it's key to monitor so we have expectations that inflation, in the medium-term, is still somewhat underappreciated so we do see inflation kind of coming on a sustained basis but that is really key to monitor because if it comes through on sustained at a very high level, then the fed is able to look in through that, coming under scrutiny. annmarie: i want to move on to that payroll. if you look at the consensus, i mean, the range we had, -135 to 500,000. they are really all over the place. what is your expectation for today? wei: the wide range of payroll estimates has been a hallmark of economic data releases as we

navigated through this pandemic and i would note that our expectation for u.s. economic data actually has been positive and that we think the labor market. i would note that especially given the recent focus on central-bank reaction mechanisms, we could see a situation where somewhat disappointing data might actually erase market hopes or greater fed support. if we have a slamdunk, it could add to some of the disappointment that markets have around the fed not immediately coming to rescue so some of that good data, not necessarily very good for markets, and that data

potentially giving more hope for markets. i think the dynamics could play out today. annmarie: i want to get your take on the selloffs we had yesterday, the tech heavyweights. the nasdaq is away from a correction. do you think that we are well underway and the global rotation or do you want to maintain a hold on some of those growth stock? wei: technology is an interesting sector. in the near term, because of this, what we are observing in markets, the leadership rotation, technology has been coming under pressure and also with yields backing up at the long end of the curve and the rate adjusting, to some extent as well, some of the cash flow, future cash flow business models get -- gets greater pressure. on a strategic basis, a lot of the tailwinds, trends like

digitalization across different sectors, that is just getting started and we continue to want to hold onto technology despite the fact that in the near term, there is this kind of leadership shift that we are witnessing right now. i think it's very important -- conviction towards quality companies and technology names able to grow their cash and free cash flow and profitability even at very challenging times. we would bring our conviction there with our tilt, to lean into the broader central banks and economies opening and everything we are witnessing right now. we want to express that with our tilt towards small caps, for example. we recently were under waiting value and we want to also -- we recently upgraded european equities from underweight to

recognizing that it's kind of a cyclical asset well-positioned for economies reopening. annmarie: home of the cyclicals. leaning into the cyclicals on the trade, wei li, stays with us. let's get a recap of your first word news. opec shocked the oil market, sending prices soaring. the producer agreed to hold that steady in april. it represents a victory for riyadh. the u.s. and u.k. are weighing additional sanctions against russia over the use of chemical weapons. bloomberg sources say the options range from sanctions against oligarchs to the extreme step of targeting the nation's sovereign debt. the potential penalties at the latest sign of deepening tensions between moscow and the west. france is planning to tighten its regional covid-19 restrictions, shying away from another national lockdown. the region will be put under a

weekend lockdown from saturday. the government is strengthening mass wearing rules in the most affected areas, enclosing some large shopping centers. 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. coming up on the program, aiming for 6%, china sets a growth target well below consensus. national people's congress focuses on the economy. the very latest, next from beijing. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't.

so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

annmarie: -- >> they are mounting on the international landscape. the global economy continues to face grave challenges. domestically, there are weak links in our work to control

covid-19. the foundation for achieving our recovery needs to be further consolidated. impediments to consumer spending remain an investment growth lacks sustainability. annmarie: li keqiang speaking at the annual session of chila's parliament. the national people's congress. china opened the meeting with a relatively conservative target for economic growth this year of above 6%. the move signals more restrained monetary and fiscal policies in contrast to what we are seeing in other nations and focuses on potential changes in hong kong. the parliament set to review a proposal to overhaul the electoral system. joining us now is tom mackenzie. he has been all over this all morning. a conscious target for economic growth but it's actually surprising they even set a target, isn't it? what is this telling us about the chinese leadership and what they are thinking going into 2021? tom: that was the stand out from

this work report, this speech delivered by li keqiang. they did in fact set a gdp target for 2021 because a lot of economists thought they would drop it again as they did last year but they set it at above 6% but as you rightly point out, that's well below the consensus. most economists we speak to see growth between -- just above 8% for the year so what it suggests is they want to have in place those guide rails for officials from beijing all the way across the country to ensure that they have these target to meet but they don't want to add to the debt leverage that is already out there and add to the financial risks that we know they are deeply concerned about and that's why they have the deficit target reduced from three point 6% last year to 3.2% this year. there is a big focus on ensuring there is enough job growth. they want to add 11 million urban jobs. this is ensuring the future growth for china is more balanced, more focused on the consumer, focused on a tech

driven recovery and talking of technology, they outlined plans to spend 7% in terms of r&d spending on technology for the next few years up until 2025. there is a big focus on semiconductors. and 5g as well. just to underscore that the future in terms of the growth prospects, they want to see modernization, innovation driven by technology, and the consumer. annmarie: two other things that stood out to me, tom. maybe you can give some insight. there's moves to tighten grip on hong kong and the potential to widen trading partners. they need to undercut the united states. is that how you read it? tom: that is certainly an interesting line. premier li keqiang said he wants to develop stronger trading ties with japan and south korea and potentially sign-up for the newly put together tpp, now formulated under this is a pact that involves, by the way, canada and australia. both of those nations, china is currently in something of a

trade war with. china punishing both of those countries with trade action so what it means in terms of china's positioning as the biden administration tries to tie up those links with international partners is interesting. in terms of what is happening with hong kong, this could be the final nail in the coffin for hong kong's opposition leaders. they said -- chinese officials said they will change the rules around elections. for the executive committee that governs hong kong and for the chief executive. there may be a vetting process to ensure that candidates can prove their loyalty to beijing and we discussed this yesterday. we should watch for a response from washington on the back of these changes if, as is widely expected, they get greenlighted. carrie lam says she will check the law once it is passed in beijing. annmarie: 36 page report. those stood out for me as well. tom mackenzie, thank you so much for joining us. wei li at black rock investment

institute is still with us. i want to get your reaction on that above 6%. it is well below consensus. is china's growth being held back by the fact that the rest of the world is still grappling with covid-19? wei: i would observe that, yes, maybe this 6% target is below consensus. it is somewhat in line with local markets expectations and i would also say that, yes, we have a target for this year. we did not have a target last year, but in the five-year blueprint, there's no road targets either so there is a bit of a flexibility there. the immediate growth is very achievable. the goal of the government at this juncture is not to maximize the short-term growth. it is more to really have a better mix of sustainable growth which is a very, in my view, a reasonable balance to strike and

6% is achievable to the extent that it does not require significant monetary or fiscal using to achieve that, which is why we have the deficit targets at 3.2 percent as opposed to kind of 3.6% last year, but usually, below 3%. we are also talking about a not too restrictive environment either. and everything that you talked about in terms of the technology focus, the environmental focus, they are all in line with expectations so nothing too surprising out of the announcement of that and we like china from an asset allocation perspective. annmarie: you are tilting in terms of wanting to get some exposure. wei li at blackrock investment institute, thank you so much for joining us this morning. coming up, e.u. attempts to walk the tightrope between containing

virus cases and mitigating economic damage. this is bloomberg. ♪ 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. get gym results at home in just 10 minutes a day.

no expensive machines, no expensive memberships. get off the floor with aerotrainer. go to aerotrainer.com to get yours now.

>> we will do extra activities. yes, this is true. and we are able to do so. as you know, we were the first to fight against the pandemic with fiscal means in europe. annmarie: all actuals speaking to -- olaf scholz speaking to matt miller. wei li is still with us. what we are seeing across european continence is differences in who is lifting restrictions. it has been well out in front, getting those inoculations into people's arms. the one thing we have not seen

out of europe is more fiscal spending. you think that will hold the european recovery down? wei: you are absolutely right in terms of the magnitude of the fiscal package coming down the pipeline. europe is quite a bit less in comparison with the u.s., and so far, year-to-date, this slower than expected vaccine progress has been holding back investors from allocating to european assets, equities, significantly. we are entering a period of cyclical kind of ups and rebounds and that should benefit assets, especially european equities to an u.k. is as well, for that matter. we recently upgraded our european equities which were underweight to neutral because we don't want to be left out in this cyclical moment.

it is playing out in markets and we are overweight u.k. assets for the reasons you talked about in terms of the u.k. being further ahead in the pandemic curve. i would also observe that if there is some kind of slower progress that has been dampening sentiment, if you look at earnings that wrapped up for q4, they just finish reporting. european equities delivered one of the best earnings beats we have seen for a very long time and it's not as though an earnings story is a margins story. we are seeing pent-up demand really affording companies this strong pricing power that we have not seen in a very long time so the fundamental story for european companies in this cyclical environment is robust and we want to lean in on that. annmarie: wei li, thank you so much for that.

global chief investment strategist at blackrock investment institute, thank you so much and enjoy the weekend. coming up, i don't care about prices. that is what the saudi energy minister had to say after the opec-plus meeting where he made the unexpected decision to maintain that one million barrels a day supply. this is bloomberg. ♪

>> good morning. from bloomberg european headquarters, i am annmarie hordern. this is "daybreak europe," and here is what you need to know. >> i would be concerned by disorderly conditions in markets or a persistent tightening and financial conditions that threatens the achievement of our goals. i would be concerned of those things were to happen. annmarie: jay powell unleashes a bond selloff with only a miner not to the recent spike in yields.

global equities and treasuries extend declines. china sets its 2021 growth target well below consensus. saudi arabia and opec-plus keep a lid on supplies. sit: 30 a.m. in the city of london. jay powell unleashing a bond selloff that is moving markets this friday morning. let's see the impact on the prices. he stopped short of trying to reign in bonds. he said recent moves were notable and caught my attention but that's all. at some point, the fed will have to come in and act. 1.56% and then you have softer, .1 percent down, nasdaq futures. the compass yesterday closing

9.7% from its recent high. 10% would be a correction and that is something we need to watch this friday morning. strengthen the dollar index. third week in a row, the bloomberg dollar index on the rise and brent on a high above $67 a barrel, closing in on 68. goldman sachs, ubs, the like. $75 for the second quarter, $80 in the third quarter. that could end up being a headache for central bankers around the world that skips -- world, especially for the chair. take a listen. >> we want to see conditions consistent with our assessment. these are highly desirable outcomes that would represent an economy that's very far along the road to recovery. as it relates to the bond

market, we want to see orderly conditions in markets and we don't want to see a persistent tightening. we think we are likely to see inflation move up during the course of this year. businesses will be hit by a lot of demand as the rig -- the economy recovers. you could see prices moving up. we are inclined to see those as transient. as far as the rate guidance, it is pretty specific and it will take some time to get there. annmarie: even before powell spoke, some predicting it would be about 3%. we also heard from guggenheim cio scott minerd. he had a view on the 2% target. take a listen. scott: even if tenant -- 10-year note get to 2%, it is not going to be sustainable.

history shows that these sort of spikes up and-year-old -- spikes up in yield not occur at the end of her sessions typically are reversed because inflation expectation gets ahead of what the real inflation experience is. annmarie: in seven hours, the next catalyst for the market will be the february job report. this comes after initial jobless claims totaled 745 last week, up from 9000 from the prior week so powell has a point with the central banks saying it's far from achieving its goals. if you look at the forecast across the board, they range from -35,000 on the print to 500,000 so in this new environment we have post pandemic, the payroll numbers are a roller coaster in terms of what the market is looking for. we want to take a look at what happened at the opec meeting

last night. i was up last night at that press conference. saudi arabia and its allies shocking the oil market with their decision to send prices surging. the saudi energy minister spoke about the decision. >> i don't care about prices. i care about discipline. i care about bringing inventories -- once this curve -- once the levels are within the contours up the 2015-2019, that is comforting. annmarie: joining us now is the chief oil analyst at energy aspects. great to have you on the program. what a meeting it was. this morning, brent crude, $67, 59 cents. what is the risk of over

tightening now on the market? >> hello. look, i think there is some risk around over tightening. i definitely think that even if not for april, opec and particularly saudi arabia need to start talking about how they will bring back the barrels into three. the market right now is not superstrong. part of his because of seasonal maintenance. i think the minister is aware of that and i think people have been telling him, these are my conversations which have pointed towards them thinking if we add 1.4 million barrels per day in april, prices could correct lower. i don't think saudi arabia can really afford to see that. they would like to keep prices above 60. that was definitely a driver but i think if they continue with this, that is the critical thing. april is one thing but may and

june, that's when demand really starts to pick up. iq said, at the press conference, he clearly said i want to see it first. i want to see the demand pickup for us rather than believing people's expectations. that's a very clear message that he's going to be reactive rather than proactive and that is where the over tightening comes in. annmarie: when i asked him a few things we are on the cusp of a super cycle, he says i need to see it first. he wants to see results before he does any sort of movement. in one sense, if they went for the saudi's -- it is a win for the saudi's. on the other hand, russia gets an exemption. why are they doing all the heavy lifting themselves? i thought they wanted everyone to share the burden. >> so did everybody else. this has been an interesting ve, like last time, when they gave russia and kazakhstan a little bit of exemption with domestic demand.

understandable. the cold weather has been strong. however, the april number, again, russia disagrees with the saudi thinking right now. they ultimately want to get to the same place. they both want a rebalancing but russia prefers to err on the side of caution. they don't want an over tightening. i'm sure you have seen headlines out of india today. they are complaining again. and they are worried. russia is also worried about shale, which saudi isn't. they have a different tactic. what saudi arabia has realized is that because oil prices are so much higher now, 25 dollars prior to the last meeting, but rather than holding up the entire group for it and repeating what happened in april last year, that's the big no-no. we will give you an exemption but all of us reap the rewards

of higher prices. it is win-win for russia. i don't know how long it can continue. that is the biggest question. annmarie: you brought up a very good point and that is what russia is nervous about, and that is shale. that is why russia wants to keep prices at a happy place but not too much to galvanize shale. you were on that risk conference last night. -- in that press conference last night. subtle warning shot to the permian? >> i think he is -- is that a warning shot to the permian? >> prices will not go up. i remember speaking to them about exactly this. they have kind of gone through all the capex numbers with us, just saying what are each of the producers saying? this is opec as a whole. they really focused on this.

i agree that this year, u.s. producers are raising production given the focus on shareholder returns but i do think this is a risky take because next year, once you have had two years of solid prices, there is nothing really stopping them, especially the small and mid-cap producers. they will be disciplined but there are lots of small producers who have never been disciplined and i think that is where we should be cautious. even saudi arabia should be cautious about what potentially happens in the medium term because next year, you could argue we will need those barrels because demand will go up and we don't have much spare capacity besides opec. i think we should be a little bit cautious about that. annmarie: i want to get your sense on where does the group -- when does the group start thinking about iranian oil barrels coming back on the table? we know there is a potential for the jcpoa to be reunited between

the united states and iran. at what point does he start thinking we have more barrels coming from iran? >> that's already on their minds. obviously, nobody will talk about it when you ask but they are clear and saying we know it is coming back at some point this year. we will have to make space like we have done with libya and venezuela. in a way, again, it will not be talked about, but the reason i think saudi arabia is accelerating is because they are expecting iran to come back. that will be unwound as well so the quicker we clear the other overhang, the easier it will be for the markets to absorb iran without tracking lower. that's definitely at the back of their minds right now. the later iran comes back, it will be easy for the market to

support and demand will be higher. jcpoa -- the u.s. will reenter and there will be negotiations but it is proving to be pretty slow. annmarie: they also don't want to talk about prices. they say they don't care about prices. we do. overnight, a slew of banks -- jp morgan raising two dollars to three dollars. where do you see the outlook on prices midyear and the end of the year? wei: -- >> in the short-term, prices can go to $70. it could even be by next week because there is momentum and a lot of passive money coming in. the one thing he did allude to his backwardation. saudi's understand the importance of maintaining backwardation that attracts more passive money and gives you a higher rates. he understands that very well.

we have always had an $80 plus outlook for next year but i have said that because of the amount of liquidity, we could see it by the end of this year. we have too much spare capacity that can be brought back. next year, absolutely present. annmarie: $70 potentially next week. thank you so much for your insight this morning. kkr outpaced all of its private equity rivals last year, spending more on deals than anyone else during the pandemic. kkr's head says repeating that in 2021 will be difficult. take a listen. >> we invested almost $40 billion last year and if i look back right now, and hindsight is always a great thing to have, but pricing -- since we made

these acquisitions and the market has become a lot more competitive versus when we were active during the sort of q2 and q3 last year. and i don't think we would be able to make those transactions today in the environment we have so i feel pretty good about what we have invested in and the valuations we were able to invest in at that point in time. >> does that mean you are not able to put as much money to work this year as you did last year during the height of the beginning of the pandemic? >> it will be a little bit more challenging just given the prices and the environment. dani: how worried are you about those valuations? >> i have always been worried about valuations. there has never been a time when we felt that everything was cheap. even when i looked back last year in march and april, i felt we paid very rich prices. it turned out that was not the

case but it's very hard, whenever you make these investments, you feel that you are paying top dollar. so i think we need to be smart about where and how we invest and deploy some capital but it is more competitive at this point. annmarie: johannes huth speaking exclusively to dani burger at the sidelines of the super return conference. coming up, eliminating anti-china forces. beijing vowing to curb the role of opposition activists in hong kong's election. we are going to hong kong, next. this is bloomberg. ♪

>> semi conductors or chips are

essential components in things we use every day. they are made from the material that gave silicon valley its name and they handle everything from processing to simple functions. think of them as the brain of a device. when the pandemic shut down car factories in march, automakers expected less orders for passenger vehicles so in turn, they cut their orders for chips. at the same time, working from home and 5g drove demand for laptops, smartphones, cloud services, and data centers so those industries increase their orders for semiconductors. that caused chipmakers to switch production to those areas rather than pile up tips they could not sell, but what kari and computer companies did not expect was a quick rebound in demand for their products. here lies the problem. there is now not enough supply to meet demand and building chip factories takes years and costs

billion's of dollars. >> the answer in the near term is nothing can be done in a grand way. supply expansion takes time, new factories, new capacity. >> how bad could it get? chip shortages are expected to wipe out $61 billion of sales for automakers alone. and big chipmakers like -- games council makers say things will get worse before they get better , potentially impacting holiday sales. president biden signed an executive order -- like taiwan's tsmc and south korea's samsung. trex company such as qualcomm, nvidia, all of these companies don't have factories of their own and rely on third the manufacturers. over the last decade or so, they have become extremely reliant on tsmc.

>> how long before supply meets up with demand? it is a guessing game but some analysts say will not see signs of a turnaround until the second half of the year. at the low, bloomberg news, san francisco. annmarie: ed ludlow on the semiconductors shortage. china has called on its tech giants to share key data, dealing a further blow to companies reeling from extra antitrust group me. they government report outlining the priorities encourages companies to open up data related to areas from which to e-commerce and social media. we want to stay with china and get the latest on what is going on in hong kong. the national people's congress is that to review a draft resolution on changes to the territory system in the coming days according to a draft published by china's official news agency. let's bring in stephen engle. thank you so much for joining us. talk us through what this means for democracy in hong kong. a lot of this was expected but it is going to have a big

repercussion, isn't it? stephen: if your question is what is the future of democracy versus what is the future of hong kong, i can be clear on that. the future of democracy in hong kong is on life support at best. already, the main pan democrat lawmakers resigned en masse. we have 47 pro-democracy activists and former lawmakers who were part of that resignation. they are now about to stand trial under charges from the national security law. this is a clampdown on the promises for a gradual slope towards democracy under the basic law. the constitution here in hong kong. it is because beijing saw what has happened over the last several -- seven years or so, from the umbrella movement in 2014, and the rejection by the pan democrat's of electoral reform, they wanted the whole enchilada, universal's average.

they did not get it. now, they are getting a worse scenario. no formal opposition in the legislative council right now and these new draft laws, which will likely be stamped into approval, and then confirmed by the national people's congress standing committee after it closes in 1.5 weeks. it will severely limit pan democrats because it will create a body that will handpick those who can be candidates for the legislative council and will also have a say in choosing those legislative council members. forget about a free vote for the people. it's going to be handpicked beijing supporters picking handpicked beijing supporters. annmarie: very briefly, where does this leave the opposition party? are they all but tired now? stephen: yes, again, is going to be a very long road ahead for

those who wanted to have democracy. again, the pandemic grants -- pan democrats camp wanted the whole enchilada and now, they are getting nothing. looks like any opposition will be in the form of more municipal kind of legislation. if there is anything on politics or questioning sovereignty, anything like that, that is not going to be taken up i any opposition parties in the legislative council. annmarie: we look forward to more of your coverage on this. stephen engle, thank you so much for joining us from hong kong. coming up on the program, the only game in town. u.s. jobs report. we will look at that, next. this is bloomberg. ♪

>> there was the problem in

ordering enough vaccines last year, but now, anyone is working very hard to work that we will have enough vaccines to bring it to the people. annmarie: the finance minister speaking to bloomberg's matt miller and jonathan ferro yesterday. now, we are just over one hour away from the start of your equity trading. we are looking ahead in terms of the futures market this morning. we are red across the board as we had the selloff yesterday on wall street. spike in yields. all of this comes from mr. jay powell unleashing a bond selloff last night and that is moving the markets this morning. dax futures, point 5%, and ftse 100 futures down .6%. all of this, the next catalyst to be looking out for. it is payrolls friday. 198,000 jobs is the consensus survey but look at that chart. you have some predicting as low as -35,000 on the print to some as high as 500,000. so this is going to be the

latest reading on the jobs market and that will be coming out at 1:30 a.m. london time. that does it for me area happy friday it anna edwards, up next. this is bloomberg. ♪

anna: good morning. welcome to "bloomberg markets: european open." today, the markets essay the end of the everything rally. jay powell sends yields soaring. european futures point lower. the cash trade is just less than one hour away. here are your top headlines. no pushback from powell. the fed chair does little to soothe the bond market, giving only a miner