annmarie: good morning. from bloomberg's european headquarters, i'm annmarie hordern. this is daybreak: europe. stocks trade near record levels as dovish comments from jay powell boosts sentiment. u.s. vaccination drives pickup pace.

20 million doses of astrazeneca. and hedge funds family offices amid the archegos blow. happy friday. the s&p 500 pushing above the 4000 level. that is our mliv conversation of the day. how far can this stock rally go? look across some of the asia-pacific indices. chinese equities down. there were two inflation beats out of china having a negative impact on trade. we are going to have a weekly drop when you look at the oil market. the saudi oil minister saying we could be nimble with supply. and we do have the u.s. 10-year gilts at 1.6%. we have a resumption of issuance starting next week. the biggest drive for where

rates will go is the fed which yesterday maintained its commitment to a dovish policy stance. dovish tone continued from jay powell. he played down the risk of inflation and pledged to get the u.s. back to a great economy. he also invoked a homeless encampment in downtown washington saying the recovery remains incomplete. he said the push to vaccinate people worldwide was important. >> what we have said about our asset purse is they will continue at the current pace until we see substantial progress towards our goals and that means actual progress. we are not looking at forecasts but actual progress. we will be able to measure that with inflation and it is matched with the indicator of maximum employment. i would look at global

vaccination as a risk. annmarie: in san francisco, the fed says they are bullish on the recovery but noted we are still a long way to go. >> we have to see further progress. not expect it but see it. annmarie: stay tuned for more from mary daly. later today, we will speak with fed chair -- fed vice chair. that conversation is coming up at 1:00 p.m. london time. joining us this morning to break down the latest is saxo bank officer, steen jakobsen. we have monetary and fiscal policy putting the pedal to the metal. jay powell talking yesterday about getting back to a "great economy pure co- but he said if we see inflation

risk come up to high, that we have the tools to calm it. >> it is the change of policy which deviates massively from what has been in place since greenspan allowing an institutional allowance that inflation can go higher. and what he is saying is clear. he wants to see actual data, not predicted data. the fed has been the main driver of how they are operating. this is a 180 degrees change. that change is fiscal dominance which means we will have this ray very long time which ultimately will and in much higher inflation. think we are starting to see ed in food prices. energy prices.

export prices. out of china today. annmarie: we did see it out of china but [indiscernible] now [indiscernible] steen: if you look through all of that, for me, the main concern is that the business-to-business is through the roof. if you look at metals, base metals, if you look at how we are starting to set up the recovery through doing support of the lower, transfer of income releasing purchases and consequently you are going to infrastructure and green transformation. this is creating auto next in resources. for the consumer, there are only

two ways that you can see inflation, food and energy. both will have massive base effect. u.s. food prices are up 24.4% year-over-year in the last reading this week. annmarie: i am getting the sense that you don't think this is just a transitory blip. you -- do you think this inflation has room to go longer? steen: i think it will run longer and because we as a framework have allowed it to run higher as well. in 2022, there will be the amount of inflation through the mechanism of higher custom capital and that will kill the growth rate. i think that is very likely to be the case. it concerns me somewhat that the central banks right now and policymakers seem to think it is a narrative that they can create.

all of this demand. you know as an economist that the only way the u.s. gets to what powell talked about, a stronger economy, is through increasing productivity. i do not see an increase in productivity. i see a lot of transfer income and spending through the fiscal lever that they use. annmarie: ok, but when you talk about the fiscal levers in america. we had the relief packages because of covid-19. those are one-shot and done. and then we have the infrastructure plan they are working on. but that is over eight years. do you think the market is overestimating the impact of this fiscal response? steen: there are two ways to answer that question. is this enough to cater to the deficit on the infrastructure in the u.s. over the next eight years? absolutely not. the number is insignificant to the number that should be spent.

several consultancies have made a report. $5 trillion a year. and you are talking about much less over five years. the lesson we have is 2008, 2009 where the federal government made available a huge infrastructure to spend but no one picked it up. i remain very reluctant to think we have the massive impact from this infrastructure into the u.s. economy. it is going to run to the tune of $5 billion a year which is insignificant to the monday coming out through the support of the lowercase and the economy. annmarie: you also talk about the 1970's inflation and how it

ended with voelker hiking rates to the moon. what do you mean by the market will force them? steen: we are already seeing in some of the issuance going on that the bid to ratio is falling. we see the geopolitical risk increasing as china is not showing up as much as they used to do in biden u.s. strategy. there are policy changes in the middle east. for me, what is really going on is i think the federal reserve also realizes you are going fall metal -- full metal which means the cost of capital will have to go up. the fed is reading that the cost of capital will remain.

but i remain skeptical that there is a fine balance in which you can operate. the u.s. saving rate at 25% is in sync -- is insignificantly small relative to the foreign buying you need to appeal to. this means that foreigners need to show up to buy and that can only be translated into making the dollar appealing. the federal reserve seems to think it can gradually increase the cost of capital. i don't think they can afford the increased to the cost of capital. annmarie: 200 basis points in 10 year u.s. i want to end our conversation on this. mark malone says by this summer, we will see 3% on the 10 year yesterday steve majors said we will end 2021 with 1% on the 10

year. where do you see year to date on the tenure real yield -- 10 year real yield? steen: i also think from a policy response stance, the federal reserve will not do anything before we get to 2.5% or 2.6% in terms of changing its policy. i think the fed has been historically wrong and i think the interest rate will exceed to the upside. annmarie: saxo bank cio steen jacobson stay with us. laura: brazil has recorded more than 4000 covid related deaths in a 24 hour period, the highest single day told. the institute producing the vaccine for brazil is suspending

output. restrictions are to be reimposed in tokyo and elsewhere. more uncertainty. the u.k. travel industry -- the department for transport says covid testing will be compulsory according to whether a foreign destination is rated green or red. the government says it is too early to say which nations will fall into which category or whether they will review this again in may. the u.k. has granted asylum to nathan law, a move likely to create tensions with china. beijing introduced a sweeping policy for the hong kong government. 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.

this is bloomberg. annmarie: just ahead on the program, vaccine inequality as the u.s. stockpile remains unused. we look at the huge disparity in the vaccination drive globally. this is bloomberg. ♪

>> i penciled in morris millis than the -- i penciled in more stimulus than the board of governors staff. it has not materialized in the way i expected and i have not changed my outlook overall. the truth of the matter is the fiscal stimulus along with the extraordinary measures along with getting covid behind us a

little bit and moving into a light at the end of the tunnel scenario, we are seeing a lift to the economy that looks positive and is most welcome. >> and the jobs report, just about a million net new jobs added and many economists are saying maybe another million in the next month and more after that. does the economy look not just better then what you had hoped for but other than you had forecasted? >> i have been pretty bullish about how the economy initially starts to rebound. think back to last summer when we had warmer weather and got covid to subside a little bit, people were eager to come out and consumers were ready to spend. that caused a burst of activity in terms of output and employment. i expect that sharp rebound to take place. it will take several months of

millions of jobs on the jobs report to get us back to a point where we can say that we are fully beyond the economic impact of covid. i am bullish on the rebound but we have a long way to go. >> is there anything happening now that if it continues you will say, i was not going to change my dots in march but it is looking good enough if people can say that we can move this up a bit -- is there something you have seen lately that if it continues so that by the next meeting you could alter that a bit? >> i see the economy as shaping up in a positive way. relative to december, 2020, i am much more bullish now than i was then. after a slow start, we have had a very successful vaccine rollout. people wanting vaccines can get

that now and that is permeating across the country across all age groups. the covid numbers have been getting better. those have all boosted my outlook. that was reflected in my positivity at the march meeting and going forward. for there to be more than that, i don't foresee that. we already have some indications that there are risks on the horizon in terms of hotspots of covid. they are reminders that the virus is not behind us yet. i am optimistic and bullish but i have a note of caution. as goes covid, so goes the economy. as we get closer to having this behind us, we have the last stage to get to. annmarie: san francisco fed president mary daly talking to bloomberg about her outlook for the u.s. economic recovery saying stockpiles of the

astrazeneca vaccine have -- has now grown to 20 million doses. joining us now to break it all down is rachel chang. 20 million doses. what do they do with all of these vaccines? rachel: they are pretty much just sitting there. there is a deal for 90 million at some point to be delivered to the u.s. the truth is that the u.s. does not need them. it may be that they don't even need johnson & johnson. the question becomes, there are so many developing countries like mexico that are really struggling that need these vaccines -- should they be donated to places that need them much more? annmarie: that will be an important question. our thanks to rachel chang.

let's get back to steen jakobsen. rachel is talking about how the countries with the highest income have better access to the vaccines. how does the recovery even for the developed world like europe and the united states, how does that continue when you have an uneven vaccination campaign around the world? steen: right now, there is a flurry in cases in india and brazil, traditionally high birth countries. it is a big concern down the road. it is some of the malfunctioning that we see in the vaccine diplomacy and the rollout. execution in europe has been horrible. some countries like brazil continue to refuse to accept that covid-19 is a risk. very uneven and difficult to

navigate in terms of the emerging market i think some countries like india which is -- which has been central to global growth is coming from a poor base in terms of the vaccinations. annmarie: the european vaccination campaign has also been slow but is picking up speed and they do have access to the vaccinations. when do you see their recovery accelerating? steen: as it looks right now, in europe, there is a huge difference in the rollout. i think fully by the end of q3, we should have a majority of people vaccinated which means q3, q4 will be the lift off in terms of their growth.

and from circumstantial evidence that i have, people will be spending a lot of money and traveling and basically compensating for what has not happened over the last 12 months so growth rate will come through the ceiling both in europe and in the u.s. annmarie: saxo bank cio, steen jakobsen, thank you so much for your time. find out what dugan thinks about management at his old bank. this is bloomberg. ♪

>> through the financial crisis in 2008, credit suisse was one of the banks that had no government. they have managed as one of the best through that crisis. there is a lot of good dna

around risk management. annmarie: brady dougan speaking about the current state of risk in banking. and credit suisse is rolling out tighter limit. a potential sign of things to come as they deal with the continued blowup of archegos capital. lets talk with danny r about credit suisse. dani: they got to the low-end of estimates. they did not have the collateral to meet the margin calls. they say their clients will still not -- will not have -- give us a fixed amount of money and we will give you this size of positioning. they are going to allow the ability of dynamic margin calls.

ultimately, for hedge and family offices, this means they may have to post more collateral and potentially see less profit on some of those trades. annmarie: what other areas could we see democrat forms? -- could we see them make reforms? dani: other banks could follow suit. we did hear from the former credit suisse ceo saying there was not that much risk-taking in the dna but credit suisse has other areas that could come under pressure. last year, for example, they were one of the biggest underwriters of --. these are areas which regulators have looked into before so perhaps some of the more risky areas could also see some potential changes come to them when credit suisse does its wide review that thomas said would

happen when the new chair calms. annmarie: only a matter of time. changes still to come to credit suisse. just ahead, retail rebound. levi strauss seeing strong rebound growth in the first half of the year and on last nights conference call, they are talking about a denim resurgence. we will teach to the -- we will talk to the denna makers cfo next. we did have another all-time high on the s&p 500. equities on a tear and that is our mliv question of the day. how far can the stock market rally go? we are seeing some weakness across asia. there was a rebound -- there was a beat on inflation. as we had to break, a very good morning from here in london. this is a london live shot.

this is bloomberg. ♪

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if for any reason you don't want to keep it, we'll give you a super easy refund. we'll even cover the return shipping. this is a limited time offer, so go to aerotrainer.com to get the body you want with aerotrainer. annmarie: good morning from bloomberg's european headquarters. it is 6:30 a.m. in london. here is what you need to know. stocks trade near let -- record levels as the dovish comments from jay powell boosts sentiment. the u.s. vaccination drive picks up pace while the astrazeneca stockpile is said to have grown to 20 million doses.

and credit suisse tightens financial terms for hedge funds and family offices amid the caicos capital -- archegos capital blowup. we are seeing some euphoria across the futures market in europe and the u.s. we are seeing equities in asia take a leg lower. there was news of an inflation beat out of china. negative impact. nymex crude struggling to get a hold of $60 per barrel. saudi oil ministry saying that opec could be nimble with supplies. they are headed for a second week of yields -- all of this has to do with what is going on at the fed and how the dovish tone continues. jay powell spoke playing down

the risk of inflation. he invoked a homeless encampment in downtown washington to make the point that the recovery remains incomplete and fragile. he says diverging efforts to vaccinate people globally is a risk to progress for the economic rebound. he urged people to get a shot and continue social distancing. >> what we have said about our as that person is that they will continue at the current p cento we see substantial further progress towards our goals. and that means actual progress. we are not looking at forecasts. we will be able to measure that, it is inflation and it is the indicator of maximum employment. i would look at global vaccination as a risk. annmarie: san francisco fed mary daly says she is "bullish on the rebound of the u.s. economy" but

there is still a long way to go. >> we have to see substantial progress. we are looking to see it in the data. annmarie: data dependent fed. stay tuned for more from mary daly today and later today we will speak with the fed vice chair at 8:00 a.m. new york time. you don't want to miss that. economic rebound meaning consumers are back to shop and they are buying. levi expects strong demand. addendum maker -- the denim maker has revamped its forecast. joining us to discuss recovery is the cfo, harmit singh. thank you for joining us. good evening. i know you're staying up late. i want to start out with this

strong pent-up demand. where are you seeing it? harmit: starting with the u.s. first, good morning and thank you for having me. we just reported a very strong quarter where we beat estimations. guidance on the top and bottom lines. the guidance is largely driven by the recovery. we are seeing people that are staying home turning to denim. we are also seeing a new trend occur. as consumers see new products, they are wanting to buy. during the pandemic, we also accelerated the digitization of

our consumer experience. we were able to launch our app. largely because it was important for us to connect with a younger consumer. we have 5 million loyal consumers in the u.s. and in europe. all of that is driving brand heat. we have also done 10 collaborations in the last quarter. we have the michael jordan trucker jacket. as long as there are brands that consumers can trust, that is a factor that will drive consumer movement. annmarie: you say skinny jeans are out but on the conference

call you talked about there being a denim resurgence. what does that mean? are people now going out? harmit: the consumer is becoming a lot more casual in their dressing. what better product to where then denim -- to wear than denim? we put our best foot forward. we launched a looser fit. that is the beginning of another denim trench. we make a lot of denim but we also make a lot of non-denim, and the casualization of

our consumer -- we just launched a loungewear and we are getting into athleisure. this plays to our strength. annmarie: we so recently with the suez canal blockage, issues about supply chain. are you worried about bottleneck issues in your supply chain? harmit: we solved delays. we were able to mitigate them. having said that, the recovery and the growth expectations we have, has been able to offset that. we are also improving our operating cost. our growth hit a record in q1.

[indiscernible] margins are better. we have been able to offset some of the supply chain conditions. largely given our relationships with vendors. i think these factors are playing to our strengths allowing us to mitigate some of the uncertainty. about a third of our stores in europe closed in q1. annmarie: global retail companies are facing a lot of backlash in china due to the fact that they have said -- companies have said they will stop purchasing cotton from them. can you talk about your cotton supply chain especially when it comes to china? harmit: it is a complicated situation. we do not source products there

or have relationships with fabric mills there. we rolled out terms of engagement and specifically eliminated forced labor in our supply chain. we continue to have fairly decent business in china. it is a small business, about 3% of our business. but we do believe it is the business that can grow longer term. i talked about some of the terms of engagement that we have rolled out. annmarie: the other thing i want to get your take on is what levi strauss is doing in terms of sustainability. when it comes to denim making, it takes about 2000 gallons of water to make a pair of jeans. how are you supporting the

climate at levi strauss? harmit: sustainability is in our dna. it started with u.s. jobs 150 plus years ago. we are focused on water, climate, chemicals, and peter. let's talk water. we introduced a waterless finishing technique. it eliminated 96% of the water in the finishing process. 76% of our products today use this waterless technique. these techniques have saved us four point 2 billion liters of water since they were introduced. we are really focused on doing the right thing for the planets. we also have climate based

targets and i can talk about where we are on the reduction of carbon emissions etc. and last but not least, people. on the front, we are focused on driving and improved culture in our company. we have looked into putting our money where our mouth is and it is a journey. we still have a ways to go but we are making a difference. annmarie: because carbon emissions, more than maritime shipping comes from the fashion world. you have a new program in the u.s. which is secondhand selling. how do you make money off of this? harmit: the secondhand market is

a large market. close to $30 billion and growing. it is how the younger consumer shops. a look -- a lesser known fact is that since we took active control of our own products, levi products were being sold by a lot of other retailers as a secondhand product. we launched it in q3. the testing is not about making money in the short term. it is about making sure that you engage with the consumer and started a recycling process of our genes. and over the long-term, it is a big market and a big category. we think it allows the business to grow. annmarie: harmit singh joining us from san francisco. thank you for joining us.

the global shipping industry this last month has been anything but smooth sailing. we speak to the ceo of the shipping giant, hapag-lloyd next. this is bloomberg. ♪

annmarie: 6:45 in london. china's producer prices have climbed the most since july 2018. this is a worrisome sign. juliette saly is in singapore with more. >> well above consensus for ppi prices. above estimates of 3.6 percent and adding to the global inflation fears.

china calling for estimates to stabilize prices and analysts wondering if the surge in price leads to tapering from the pboc. consumer loans are still trying to play catch-up. cpi is no longer in deflationary territory. that will mean that the pboc could remain on hold in terms of not tightening monetary policy. we have seen a stronger than expected -- way on sentiment. you have china csi 300 following along with the china index. you did see a rally in a lot of metal players. and the yuan on track for its first weekly advance since february. annmarie: the csi 300 now down 0.6%. thank you for joining us.

a strong economic recovery in china is fueling demand for shipping. the industry has spent the last year trying to meet demand. despite the drama, robust demand for shipping is showing no signs of slowing down. that is according to the ceo of hapag-lloyd, rolf habben jansen. i want to get your thoughts on the continuous impacts you are seeing and supply chains due to the blockage we saw in the suez canal. rolf: it did have an impact but i would say it is short-term. it lasted six days and it took another five days to get it resolved. today, there is basically no backlog. of course, that means in the northern, european ports, that

will take another 4-6 weeks to work through. and we need to get the ships back to asia which means we will miss a couple of voyages on the way back to europe later in the quarter but i will still expect that in the third quarter, we should be largely back to normal. annmarie: how is it at the moment in --impacting the spot container rates? rolf: if you look at the rates for the second quarter, most of that was done before the suez incident. the annual contracts have been closed and there is a large chunk of contracts done. some small seem to be fairly stable. annmarie: outside of the suez, rates right now appeared to be

unsustainable at these levels. when will we see that start to normalize? rolf: i hope they will start to normalize fairly soon. that means we need to get out of these issues that we are not only seeing in europe but also in the u.s. it means that the amount available under weekly basis is less than it normally would be. for a service where you would normally need six ships, you now need seven or eight. or if it is a ship to europe and you need 12, now you need 14. annmarie: are you going to be looking to add ships to take advantage of these current rates? rolf: every ship available is sailing these days. there are no more ships available at this point. you can see it when you look at the charter rates for ships. if you were to look at a normal

ship that would go for $7,000 a day, it is now up to -- per day. annmarie: do you believe the order book for liners is it rational? rolf: it is difficult to say. one would expect it because it was bid too low and small. right now, it is -- it has been coming up quite rapidly. i expected to go up a bit more. it will probably land at about 20% of the global feet. that is on the high side but they do tend to go up and down. as long as we don't get to the levels that we had in 2008 or 2009. i think it should be ok. we should also not forget that many ships are reaching the end of their life. that will mean that scrapping will also go up. annmarie: the pandemic has

forced everyone to shop online. we are starting to come out. we are going to see shops reopen, especially in europe, they are already open in the u.s. and china. will year and the year after mean there will be a surge in e-commerce meaning shipping will continue? rolf: i don't have a crystal ball but i think if you were to have talked to an expert year ago, they all predicted wrong. i would think that many of these things will stay. the pandemic has changed the way that we live and operate. and i don't see that changing. i do expect online to remain strong even though brick-and-mortar will also come back. annmarie: nothing to do with rates, but when you look at the shipping industry and look at what happened in the suez canal, we see that over years, ships

have become much bigger. could this prompt shipbuilder to go back to a more normalized, smaller ship? rolf: i personally do not think so. every year we have about 20,000 ships going through the suez canal and many of them are quite big. i do think though that this will lead to some adjustments and may be some slightly different rules on when ships can go in. it will depend on how strong the winds are and how big their line of sight is. the big ships are a lot more efficient in terms of cost and they are a lot more environmentally friendly because they have a significantly lower emissions. annmarie: probably a little lower -- more weather dependent. thank you for joining us, rolf habben jansen from hapag-lloyd.

just ahead, we bring you the main events of the day. it is friday morning. this is bloomberg. ♪

annmarie: good morning. i'm annmarie hordern in london. take a look at what is going on in the banking industry. a lot of changes with junior bankers and barclays. >> this comes after the presentation from goldman sach'' junior bankers. barclays saying we are going to lighten your workload. anchors should not work from 9:00 p.m. on friday until 9:00 a.m. on monday. and they want to be more specific about what they are working until lighten the workload. and the approach from bank of america is to pay them more money. analysts will get a $10,000 boost adjusted for currencies in

the local market. and the vice president's associates will get a $25,000 boost. they will also have small groups to take a poll to see how they are doing. the question from people in the industry is will these reforms stick around even once people are back in the office? annmarie: is this because of the presentation from the junior goldman bankers? >> i think it was the catalyst. this is conveniently coming after that. and the backdrop is that people are working from home so their mental health is taking a toll and banks are doing well with more deals. banks are expected to be stacked with more deals. annmarie: our things to dani burger. that does it for daybreak: europe. matt and mark will have european open. european futures in the green. the ftse 100 up more than 0.1%.

this is bloomberg. ♪

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if for any reason you don't want to keep it, we'll give you a super easy refund. we'll even cover the return shipping. this is a limited time offer, so go to aerotrainer.com to get the body you want with aerotrainer. matt: good friday morning, welcome to bloomberg markets, this is the european open. i am matt miller live in berlin, and mark cudmore markets live editor joins us this hour. the cash trade is less than 60 minutes away. here are your top headlines. stocks trade at record levels as dovish comments from jay powell