>> from bloomberg's middle east headquarters in dubai, i am manus cranny. it is daybreak, europe. the market focuses on inflation risks as warren buffett adds to the debate on prices. u.s. futures are higher, but your band, -- but japan, china, and the u.k. are closed .

robinhood and the spec craze. daily deaths in india had a record as the prime minister's party loses an election in a key state. it is red in the united states. that is the message from warren buffett. the spac's are crowding me out, but i will build my buffers, and the world seems like a casino. it is a frenzy out there, a gambling impulse, and that, he warns, creates its own reality. nobody tells you when this clock strikes midnight and it all turns to pumpkin and mice. 14.5 billion dollars in the bank -- 105.4 billion dollars in the bank. it is time to talk about tapering. mr. kaplan raises the specter. the dallas fed president says it is time to talk about the excesses.

it is time to start talking about the taper. that is very much at odds with jay powell. and never left out of an argument or a discourse, not an argument, it is a discourse on the bid and the offer. do you want to belong in a bubble? sure in a market is the easiest place to die. let me assure you a market that is far from short. three weeks in a row, the money has rolled into the equity markets. we have not seen that since july 2020. the calls on euro-dollar are quite literally splendid this morning. comments by deutsche bank, 125, 127. we are all going to the moon on euro as the covid vaccine rolls out. nymex is down by 0.4%. 63.34 as covid grips india. 10 year government bond futures. if another person at bloomberg

tells me the cash market is closed in treasuries, i will choque. 132 is where we are. that could be the jobs market at the end of the week. bitcoin by all, a rally by $10,000, but its share of the party is dropping sub 50%. let's put risk in context. the good to see you. it is good to have you back on the daybreak course. let's start with the dollar, ok? because there is a great debate. kaplan says it is time to start talking about taper. you have buffett talking about excesses. what is your read? are we in an excessive risk taking mode, and is that why the dollar has been dropping? guest: first of all, as far as excessive risk taking is concerned, we are talking about a period where you have global

growth and global trade upswing. you have excessively loose monetary policies, and one of the biggest fiscal stimuluses that we have seen for decades. that implies it could be naive to think we would not be in a risk-taking environment. that is very clear and pretty much sets the stage for the things that we have been experiencing and continue to experience. i think risk-taking behavior will remain with us as we have this very loose monetary and fiscal policy. as far as the dollar is concerned, i think we have a relatively stylized fact that tells us the dollar depreciates in the periods of global growth and trade, especially when that upswing has been very swift.

on the other hand, you have the elephant in the room, the fed, that basically tells you we have a new framework of the targeting framework. we are at 0% interest rates. it sets us on a level playing field with other major central banks. and you have the dollar, which if you consider it looking from real yield differential perspectives, it seems to be between 10% to 15%. all the fundamentals, and i am putting personality aside or technicals aside, all the fundamentals tell you we should expect some further dollar appreciation. manus: potentially overvalued by 10% to 15%. let's break some of it down. the kaplan lines that came across the tape will set the debate about taper.

with the jobs report later in the week. let's talk about taper. kaplan raises a very early warning flag. that is contrary to powell's guidance of last week. when do you think it will come a little bit more forcefully, the debate about taper, and when will it happen and over what pace of time? guest: first of all, i think kaplan is a non-voter. as you very correctly pointed out, what he suggested is a big contrast to what powell has been saying. i think as long as we don't get any black swans and global growth and trade persists as we expect, i think that is the consensus view, i think it is natural to start expecting the actual break taking place at the end of the year, beginning of the next year.

eventually, there will be growth and inflation recovery. it will probably take about a year or more to completely unwind. we are going to start contemplating about interest rate increases. obviously, the big thing the fed has told us, a couple of things which are very important, first of all we do expect the inflation to pick up substantially in the near term, but this is going to be largely temporary. this will be due to the fiscal stimulus, which is going to give money to the american people to spend, and therefore chase more goods and take prices higher in the near term.

the second thing is how unemployment and the general employment picture is going to pan out. but we have to bear in mind, the average inflation target, which means the fed will have to see inflation picking up in a sustainable manner. it will have to go to 2%. they have not given us exactly guidance. but it will have to take a long time. we are talking about significantly tighter monetary policy, i think. manus: i always get nervous when the person at the front of the bus who is driving it does not have a roadmap and a destination. it is just a thought. let's talk about inflation. it is coming, everybody is telling me this. the ceo of philips told me this, the ceo of ask told me this --

of netflix told me this. the question is, how enduring will it be, and do you want to hide in an fx environment? iron ore, $200 from citi this morning. commodities are going to rally another 13.5%. where do i take my inflation trade in the fx spectrum? guest: let me say one thing. i think the fed does have luck. it will not be completely ironed out because we don't know the future. i am not going to break any new ground here by saying you want to be in trades, which i linked to infrastructure and the chinese cycle because things are going very good. i think that is going to imply

-- the domestic fundamentals, we are talking about the more stock issue -- the more stockish issues. if you look at emerging markets, obviously you have a number of currencies which are very much commodity and trade exposed. i understand there are some concerns about the sanctions already imposed, although we seem to be on the lighter side as one would expect. the ruble is a good high-yield commodity exposed to currency. if you look outside in latin america, things are a bit more difficult because the fundamental story is a bit more complicated. i am not a big fan of brazil,

although it is quite commodity and trade exposed. i think mexico stands to outperform brazil, especially in the fact that it is very much linked to the u.s. manus: as you said, not breaking new ground, but reinforcing some of those traditional narratives that we have. some quotes from vasileios gkionakis. stay with me, vasileios. we will be back with you very shortly. first word news. let's get to annabelle droulers in hong kong. annabelle: thanks, manus. nds prime minister has lost a key election amid voter backlash amid his handling of the pandemic. last month, he predicted his see jp would win more than 200 seats in west bengal out of 292 up for grabs. in the end, itwon just 76. daily deaths in india hit a record yesterday. the country has become the first

atop 400,000 cases in a single day. in the u.k., pressure is mounting on part minister boris johnson. he is under investigation over who paid for the refurbishment of his official residence. he has insisted that has been no wrongdoing. the conservatives in the polls ahead of local elections. the tory leader of scotland says johnson should resign if he is found to have broken the rules. the billionaire owners of manchester united facing a mass protest yesterday. hundreds of fans gathered at the stadium with dozens breaking onto the pitch to express their anger. it meant the team's match against liverpool had to be purse boned -- had to be postponed. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus? manus: annabelle, thank you very much. annabelle droulers, we will catch up with you later. coming up, siemens beats the

estimates and lifted guidances. we speak to the cfo right here on bloomberg. erg.

manus: it is bloomberg "daybreak: europe" with me, manus cranny, in dubai. the numbers are in for siemens. strong sales of the coronavirus testing equipment drove the company's quarterly revenue up by nearly 4 billion euros. the medical tech firm is also issuing guidance for the full year. joining me is siemens' cfo. a very good day to you. you have raised the guidance. i see the diagnostics have done very well. you are raising your guidance by 14% to 17% in terms of

comparable sales. that is up from 8% to 12%. is it a conservative guidance uplift, or can we expect a serious real rating again as the year progresses? good morning. guest: good morning. thank you very much for the question. the raise of the guidance on the top line is 5% to 6% respectively. about 6% of this raise is due to antigen testing. we had initially a guidance that assumed 360 million euros of antigen tests. now we expect 750 million euros worth of revenue from antigen testing. we are also very satisfied with our core business development, continuing strong growth in the

core business of diagnostics as well as imaging with 7%. when you look into the details of the guidance, you also raise the diagnostic guidance, but the guidance for imaging from 7% to 8% now. additionally, it is now 6% to 7%. manus: and the actual imaging number comes in at just under 500 million euro. that is down 6% on the year. when will you be back at pre-covid levels in that? and who is showing the fastest recovery? it is the u.s. and then europe will catch up in the same way? just roadmap for the markets the speed of the u.s. imaging recovery and the europeans to come. guest: it sounds a bit

counterintuitive when you look at the pandemic. but we have seen strong growth from the pandemic. we have seen demand coming out of the space when the pandemic started hitting last year until this quarter, last quarter. this quarter, we have seen double digits equipment order increases in the free markets. europe, is a pacific -- asia pacific, and the united states. the rebound in revenue growth in the united states is as expected. manus: that is a colossal

reinforcing message to the market. let's finish off with the covid test kits. we know that covax is delivering vaccines. are you in it conversations with covax countries to deliver the rapid test? guest: so far, we have as major customers central european countries. we have germany, austria, france. we participate significantly in the soft testing markets. we received testing which puts everything in a regulatory frame. it is very solid now. on the emerging-market side, it is still not picking up yet, but it might create an opportunity

for the future. manus: jochen schmitz, come and talk to us very soon. siemens healthineers cfo. the eu's beleaguered vaccine rollout is finally picking up, as we just heard from the cfo. the bloc has given around 150 million jobs. maria tadeo is tracking. have we turned a corner? i look at the data from germany, like three quarters of a million people in one day. there is a seismic shift here, isn't there? maria: yes, and you are very right, this is a rollout that was hit by so many issues at the beginning of the year. but if you look at the data, it does paint an optimistic picture. some of this has to do with distribution. it has been doubling every month. the european commission expects that to continue until june. when you look at these specific countries, germany is vaccinating around one million people a day.

that means that the pace of vaccination has almost tripled in a month. when you look at the french, president macron made a promise. he said from june 15 everyone over the age of 18 would be able to get a vaccine from june 15. clearly the picture is changing. the vaccination is speeding up and a lot of this has to do with the proof take up, but also distribution. as soon vaccines slow, will people take them and will that be reflected in the numbers? manus: so we are all waiting to hear, me whether i can get back to the u.k., the traffic light system. what does this vaccine momentum mean for a summer season and growth in europe? maria: the europeans say that for them it is crucial to save the summer holidays. we know last year it was disastrous. they still believe they can fix

that and have a more normal holiday. this is a huge industry for them. they are looking to introduce a travel certificate from june that would essentially tell authorities whether you had been vaccinated, whether you had tested negative or have antibodies after covid. on the national picture, we are seeing countries that are reopening. the french say that by the end of june they will be in a position to welcome tourists. some would tell you this is a risky measure because infections are pretty high in europe. you are reopening, but taking a risk potentially that you may do it too quickly before you are able to catch up on the vaccinations. manus: maria, let's see who reopens and when. a great deal of politicking involved in these corridors. maria tadeo live on the ground in brussels, as always, part of the team.

coming up on the show, the fed is dovish on issues of the euro. we have been in contact with euro bulls on the run. this is bloomberg. ♪

manus: that is on all new sound for me. "daybreak: europe." i am still the same, though. the euro bulls out in force as the fed has pushed the withdrawal of monetary support off the agenda. the vaccine rollout, revise growth forecasts are fueling the euro rally. it gained more than 2% against the dollar. sydney sees the euro reaching 1.27 against the dollar by the end of june 3. vasileios gkionakis reckons the

dollar is overvalued by 10% to 15%. that was in my last conversation. so just let translate that i want to be long euro equivalent to that? is the bullish case building in your view for the euro-dollar? guest: yes, i think it does. i can't say that i prefer long over the dollar because we are fighting a negative yield. to a certain extent, you're going to have the ecb choke holding the currency. not that they can actually do it, and they know that, and they know the market knows it. but nonetheless, i think there is a clear case for europe, especially when you add trade recoveries. you get the euro-dollar rallying from its fair value, which is estimated to be around 1.20 and

7%. it is definitely within the realm of realistic expectations. we expect to be at 1.23 by the end of the year, but the risks are on the outside. not a lot of news has been priced in since the vaccination rollout. it is gathering pace in europe, and that is definitely going to be an important thing for the bulls. manus: i wonder who will come out first. will they chat in regards to euro strength, or will it be on ecb day? hopefully we will have you back on a more regular basis here on "daybreak: europe." my host on his calls on the dollar and the euro. vasileios gkionakis, head of fx strategy. it is your monday morning show and he is the oracle of omaha. he pulls no punches.

he warns on the spac craze. of course, it is the event that people wait for. what are we going to do? berkshire hathaway's agm. some like it hot. what does run it hot really mean?

manus: from bloomberg's middle east headquarters in dubai, i am manus cranny. it is "daybreak: europe." these are the stories setting your agenda. the market refocuses on inflation risks. warren buffett adds to the debate on prices. u.s. futures are higher, but japan, china, and the u.k. are closed. the article of omaha pulled --

the oracle of omaha pulled no punches at the annual meeting. he warns on robinhood and ways in on the spac craze. and the daily deaths in india hit a record as prime minister narendra modi's party loses an election in a key state. 6:30 a.m. at home in london. it has just gone 9:30 a.m. here in dubai. our words reverberating globally from warren buffett. it is as the american economy is on a hot roll. there is a gambling impulse. the market is more like a casino. he may be pulled the punch too soon on apple and curbing his airline position, but my gosh, has he got a horde of money, $1 45 billion. according to buffett, this is what creates its own reality. nobody tells you when the clock strikes midnight. nobody told me when i should go

home. but that is when we turn into pumpkins and mice. this is a warning which reverberates around the markets from warren buffett to robert kaplan at the dallas fed. and bridgewater. do you know were the easiest place to die is where you think there is a bubble? it is shorting the market. some run it hot, but red hot. that is what warren buffett said, his take on the u.s. economy, and he called it a buying frenzy. he issued a big warning on spac s. who is crowding me out of this bar? dani burger has the lowdown. good to see you. spac me up. dani: it is the annual meeting, the woodstock for capitalists. everybody loves to hear what buffett has to say. it is no surprise he has really concentrated on spacs because you mentioned the cash pile he has, more than $145 billion. i think there are questions as

to why he didn't spend that. why didn't he do more acquisitions? he spent a lot of the past year going for buybacks. this is where he glop to onto spacs, saying it is a killer that will not go on forever, but it is where the money is going now and wall street goes where the money is. this is his reason, he says, why it has been harder for him to do deals. these spacs that move quickly, can go in and make a splashy deals and outdo a bargain-hunting buffett. manus: what caught my eye, because everyone is shaking the tree now, but he had the second-highest sale of stocks in that quarter in five years. there are a couple of nuances here. and this translates to a much broader market. income tax is coming, and the question is for a lot of americans, where do i go to protect myself in a rising

income tax environment? it is one of the most read stories. where is it? dani: it is etf's. it has been a story as long as etf's have existed. you want the definitive evidence that people like etf's because of their tax profile. look at the difference between the u.s. and europe. the u.s. has so many more people fleeing to atf because it is more attractive for taxes. you get more control over when you realize gains. you get more control when you realize capital gains taxes. because of the creation and mechanisms of etf's, you have less tax penalties in general. there is a lot of analysts coming out and saying this tax coming from biden will drive more people toward etf's. but manus, one analyst bloomberg spoke to made a very good point. it would be remarkable to see a bunch of people start to sell mutual funds to make this

switch, because by selling mutual funds you are going to get hit with that capital gains tax. i would assume it is more likely new investments will be going into etf's over mutual funds. this has been a trend for a very long time. it is only set to accelerate from where we are at. manus: or the redomiciling tax. huge numbers of wealth owners and asset gatherers are redomiciling here to dubai. some places you can avoid tax, some places you can evade tax, but there is one place you can protect your wealth. we will see you later on. let me show you what is going on in markets. the economy is running hot, and inflation will not be a problem according to janet yellen. we are in a frenzy. there is a buying frenzy according to warren buffett, and that is what has irked the

dallas fed governor. the dollar-euro at 1.17. the bulls have been awakened. city calling -- citi calling 1.275. the 10 year paper, trades on volume. it is virtually flat this morning in futures. bitcoin up 2%. the share of bitcoin in the crypto world's sub 50%. you go to the record high of $64,000. we keep an eye on crypto's every day. let's get the first word headlines with annabelle droulers. she joins us from hong kong. annabelle? annabelle: thanks, manus. apple's high-stakes antitrust fight with epic games kicks off in front of a california federal judge later today.

the maker of fortnite is trying to show that the app store is run like a monopoly. apple insists it does not abuse its market power. the case has come on the heels of the eu accusing apple of breaking competition laws over music streaming. the global semiconductor shortage will not be resolved for a few more years. that is according to intel ceo. he told bloomberg the company is reworking factories to increase production, but it may take a few months for the strain to begin easing. elon musk's spacex has successfully returned for astronauts to earth, ending its first-ever mission to the international space station. the capsule splashed down, ending a five month voyage. spacex is nasa's only commercial partner so far capable of ferrying humans into space. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

this is bloomberg. manus? manus: annabelle, thank you very much. annabelle droulers there. over the past -- over to the u.s., i should say, where president biden's tax plans continue to dominate the headlines. biden wants to raise taxes on the rich, saying it is time they pay their fair share to support america. we spoke to the commerce secretary about the proposals. >> the president is actually proposing cutting taxes. he is cutting taxes on a lot of hard-working middle-class, working-class americans. he is raising taxes on the wealthiest among us and closing loopholes in the corporate tax structure, loopholes that were so large that last year almost 100 very large multibillion dollar american companies paid nothing in taxes. when you talk about taxes, you

want to be competitive. you don't want to be so far out there that it is anti-competitive. and his proposals are competitive. but more important than all of this, the investments that the president is calling for in infrastructure, in broadband, in job training in basic research are absolutely vital for american businesses to remain competitive. and necessary, and it has been delayed for far too long. i think it is good for business, both big and small businesses. david: what about the claim, and you would know this because you had to raise funds as a venture capitalist, that if you eliminate the preferential treatment it will be more difficult to get the capital put together? people will not invest long term. >> first of all, i do not believe that to be true. second of all, there is not really great evidence to back up the claim that an increase in capital gains taxes will result

in an increase in innovation capital. also having been in the business and having spoken over the past week and a half to many folks in the business in one-on-one conversations, they will tell you the same thing. entrepreneurs like to invent, to create businesses. venture capitalists, they are going to continue to invest in those entrepreneurs. truthfully, i think there are many who believe even in the business that taxing, giving preferential treatment was never really fair. i think the right thing to do, i think it is good for business, i think it provides the money we need to make these investments, and i do not worry too much about risk capital drying up. manus: that was the u.s. commerce secretary gina raimondo speaking to bloomberg on biden's proposed tax hikes. coming up this monday morning,

narendra modi loses a key state in a side of voter backlash. we have the latest from india. this is bloomberg. ♪

>> millions of indians around the world are watching in horror as india reaches record numbers of covid-19 infections. a new york resident struggles to find ways to support his relatives overseas. >> a 32-year-old an hour apartment complex has corona. his mother is sick. one of his first cousins in another part of the city, he got sick relatively young, and he was on a ventilator, then he passed away. i was like, this is getting serious.

>> as the death toll rises to more than 200,000 deaths, the 4.2 million indian-american to make up the diaz bra can only look -- that make up the diaspora can only wait for bad news to reach them through a barrage of whatsapp messages, call, or social media post. >> a lot of people immigrated to the united states, but the parents are still back in india. somebody's wife is still back in india. so there is that disconnect. before covid, people were going back and forth, but now it is very difficult. >> images of hospitals overflowing with the sick and dying are overflowing social media. in the u.k., british indian communities took part in a 48 hour bike relay, covering the

distance to new delhi. >> as indians, it has been quite distressing for us to see what has been going on at home. we can't be there physically at the moment. we are just doing our little bit away from home. >> it does not escape me there is a dire situation in india right now. as an indian, i have friends and family in india. i cannot do anything for them directly. there is opportunities to do something like cycling. you could raise some good money, which i did not expect. >> you are evaluating and watching everything by the minute. you can call your parents, call your loved ones, see how they are doing, but there is only so much you can do right now. >> when beds are not available and the vaccine is not available, what can you do? >> as life in the u.s. and u.k.

goes back to normal, the lack of access to the vaccine is becoming evident to indians abroad. only 2% of the people in india have been fully vaccinated compared to 30% in the u.s. and 21% in the u.k. >> that is the most frustrating thing that after one year, they have to call the countries who sent aid to say, do you have enough? that is what is frustrating for us. manus: those were just some of the stories from the indian diaspora. many indians across the globe are struggling to find ways to help their relatives as the covid-19 ravages the country. despite the ongoing crisis, elections are underway in india. the country continues to see a system contending with record

cases. but international aid has begun to arrive. prime minister modi remains popular, but the vote is seen as a key test of his handling of the pandemic. jeanette rodriguez is our bloomberg mumbai euro chief. -- bureau chief. what are the results showing at the moment? is it a short-term hit to modi? reporter: we have seen significant develop it's over the weekend. -- developments over the weekend. let me explain why this is significant. modi and his government has been criticized for dragging their feet. we could have elections in a relatively short amount of time, but has been -- modi has been

criticized for dragging it out because he wants to campaign. he has been accused of gloating about that on twitter. in fact, modi and his right-hand man have gone on record before the election to say the party would win more than 200 seats in the state. when those numbers came out yesterday, modi's party only took home about 77. therefore, it is seen as a massive backlash against prime minister modi and their handling of the coronavirus. a group came out and said we need a national lockdown. whatever it takes to stop the

spread of the coronavirus. remember, they had initially had a national lockdown. prime minister modi had been testing a national lockdown. but this came out of his election. manus: what is his position on global assistance and the evolution of this emergency? i look at the rhetoric from the u.k. has this aid, oxygen, ventilators begun to arrive? how long will it be before it impacts the emergency state? reporter: we are seeing lockdowns. what we are keeping a close eye on his those who need it the

most. there is a line of checks and balances. they had to go to twitter to plead for oxygen. manus: jeanette, stay safe. jeanette rodrigues, our bloomberg mumbai bureau chief on the latest. coming up on the show, bitcoin's crypto dominance, is it being challenged? other digital tokens are soaring. we discuss the race to the top, the challenge for the crown in crypto. this is bloomberg. ♪

manus: it is "daybreak: europe" with me, manus cranny, in dubai. bitcoins dominance is a mark of value of cryptocurrencies. it is declining because of momentum for other tokens increasing interest in a variety of investors. let's get more context with joanna austinger. what is it that is competing so aggressively with bitcoin? reporter: you have ether, the second-biggest token, which today hit a record. bitcoin hit a record, about $64,000, a few weeks ago, and it has struggled since then. then you have bytedance coined that is doing well, and even doge coin, a cryptocurrency

that started as a joke, has been soaring. manus: i love what charlie mungo had to say. i don't welcome the currency, which is useful for kidnappers. that is his opinion, not mine. it is a currency created out of thin air. he said, there are hundreds of thousands of people watching this who own bitcoin and probably two who are short. it is still a very popular cryptocurrency. but why is ehter stealing the -- why is ether stealing the coin? reporter: they are benefiting from of you things. we have trends like decentralized finance that are really coming up, the non-fundable tokens that everyone has been talking about for the art world. that is based on the etherium network. they had some recent upgrades and supply might be reducing soon as well, so there are a

number of things that are starting to look early good for either in particular, -- for ether in particular, in addition to these other alt coins that have been taking a little bit of market share away from bitcoin as people broaden out in the crypto space. manus: we have seen a heck of a rally happen from those lows just last week. joanna, let's see what the market challenger really comes out as being in this crypto space. our bloomberg mobile markets editor joanna ossinger. the debate is this, are you in a bubble? the american economy is red-hot. is american exceptionalism dominating? equity markets according to warren buffett, the economy is running hot. but he does have a warning in regards to a frenzy in these markets. he is more cautious on stocks and buybacks. he was a net seller on stocks in the first quarter.

that is the second-highest net sales in the first quarter in five years. euro-dollar trade that 1.2020 this morning. that belies a more substantial note from the likes of commerzbank and other houses who are saying that the euro could rally. cirti has a bullish -- citi has a bullish call. even bloomberg intelligence are saying the vaccine rollout will take you to 1.25 by the middle of the summer. net shorts are the lowest since early march. and treasury markets, yes, in case anybody is of any doubt, i do know that the cash markets are closed. there you go. we get a print in the futures. you see? 1.32 is where we trade on futures -- 132 is where we trade on futures. the question is whether robert

kaplan is right to talk about talking about the debate. how will the fed allow the inflation narrative to run? i leave you with the crypto craze and a currency that the boys at berkshire hathaway are rather disparaging of. this is bloomberg. ♪

>> wood costs added 24 thousand dollars. number prices are expected to stay elevated for months to come. -- lumber prices are expected to stay elevated for months to come. >> good morning. welcome to "bloomberg markets: european open." i am matt miller in berlin. the cash trade is less than one hour away, where it isn't a holiday. hopefully, you are sleeping in. here are your top headlines from the bloomberg terminal. red-hot growth. that is what warren buffett's words on the u.s. markets were. he says the market is seeing

almost a buying frenzy. we