annmarie: good morning from new york. i'm annmarie hordern. this is "bloomberg daybreak: europe." stocks push higher amid falling jobless claims in the u.s. confidence in the fed's view on inflation. european finance nesters meet in lisbon in person. negotiators back vaccine passports in a bid to save the summer. israel and hamas agree to a cease-fire ending a deadly 11

day conflict. resident biden praises the accord brokered by egypt. the morning to you, happy good friday morning. good news is dominating the market direction today. at the end of a busy week, economic recovery narrative is winning over this morning over inflation fears as u.s. jobless claims yesterday came in better than expected. asia-pacific, the regional benchmark up 0.2%. a little pullback in hong kong and china due to what is going on with tencent. nasdaq futures up 0.2%. tech making a little comeback yesterday. 10-year treasury yield 1.62%. the 10 year treasury auction was met with weaker demand, but what that suggests is confidence thing in the fed narrative on inflation, that this potentially will be temporary.

bitcoin back above $40,000, a volatile week to say the least. we are ending up $8,000 short of where we were a week ago. definitely not one for the faint of heart. you have to have a tough stomach in the crypto space. joining us to break down this data is peter schaffrik, global macro strategist / analyst, rbc europe. thank you for joining us. i want to get your take on what is going on with the market spirit it seems the narrative is back on the economic recovery, given the better jobless numbers. what you make of this? -- what do you make of this? peter: over the last six weeks or so, we have a slight change in tone. nominal yields going sideways. inflation expectations going up.

real yields going down. this was suggest interview that the markets took the view everything is not as strong as we expected before, but inflation is still there. over the last two days and today we have a change around again where the expectations of economic activity is improving. and inflation expectations are pulling back. all of these things have given us a slightly better sentiment in the market. annmarie: what camp are you in when it comes to inflation? are you on the fed side that this is temporary and fleeting, or do you think we could have price pressures for a bit longer? peter: i think there is an element of truth to both sides. when you look at what the fed and most central banks are looking at the here and now with

supply disruptions and the base effect that comes from oil and other energy markets, some of that element will be temporary, no doubt about it. then you question how the inflation pressures and dynamics are unfolding thereafter, particularly in an environment where interest rates are relatively low and public spending is relatively high, and we have the green revolution -- there is an element where we can say maybe the strong disinflationary pressures we had before have come to an end and give way to something different. it does not mean we have to go back straight to where we came from before the pandemic broke out. annmarie: where do you see commodities going? china is putting pressure on the fact they want to halt some of this rise, especially looking at iron ore. peter: one of the things

interesting from china at the moment is they seem to change the policy again slightly. they are going back to what we had a couple of years ago where they tried to rein in excessive leverage and the high debt level in the corporate sector. that is probably going to weaken demand to some degree. one of the things we have to see , how excessive is that policy push going to be, and what will be the ripple effects for us in europe. we have a strong connection to asia in general, and china. annmarie: i want to get back to the treasury market, you are talking about being quite bearish. when you look at the 10 year, what do you see as the year-end target? peter: for starters, before we

go to the year-end, i think the critical hurdle for markets, about 10-12 basis points away, and there is a decent chance we can overcome that. we had a little taste of the fed minutes, the debate on what the fed will do with the purchase program is going to happen. the question is what debate will come thereafter. when rates are going to move. in a recovering economy, that will push the narrative. for the time being, we could overcome that and approach 2% as we get closer to the end of the year. annmarie: what is the timeline you have in terms of the fed starting to talk about tapering?

peter: it is difficult to nail it down on the exact day. it is not as important on the day, but if you take a strategic view, somewhere over the next three to five months, the debate is already here when you look at what the market is saying. some members of the fed have already mentioned it. in my mind it is almost inevitable. annmarie: i want to close out in terms of what is going on this week specifically, a very volatile week especially in the crypto space. you see any underlying shift? peter: not necessarily, because the crypto space in particular as far as i am aware, there are a lot of leveraged positions. have to keep in mind, not the

same regulation in that market as in most of the markets. it is easier to create these significant swings. we have seen that to the upside and the downside, of course. one thing we have seen is the ill effect into other assets. the slide happened in another market where institutional investors are present, the ripple effect will be there. annmarie: thank you very much peter schaffrik, global macro strategist / analyst, rbc europe . >> the number of u.k. cases of the coronavirus variant from india has doubled for a second week. health officials are monitoring a new mutation of the virus that is adding fresh doubt to fully

unlock the economy next month. the government is increasingly optimistic about the effectiveness of vaccines. more than 70% of u.k. adults have had at least one dose. china has defended retaliatory at sanctions on the european union after the bloc's lawmakers agreed to freeze an investment deal from late last year. the european parliament decided the restrictions as a reason for the move, calling them baseless and arbitrary. all makers say no talks on ratifying the deal will be held while sanctions are in place. morgan stanley's chief executive has unveiled his biggest leadership change in over a decade with a slate of potential successes that resemble the old guard. days after jp morgan pushed two women to the front of the field to succeed jamie dimon, morgan stanley's top picks are all white and male. the bank says it is committed to

diverse talent at all levels. the u.s. treasury wants transfers of at least $10,000 of cryptocurrency to be reported to the internal revenue service. cash transactions over $10,000 are already subject to the rules. the white house is calling on banks to boost tax compliance. 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. annmarie: just ahead, europe's road to recovery. eu finance ministers meet today in person. optimism about the economic rebound grows. we are live in lisbon, next. this is bloomberg. ♪

>> we don't want to declare victory prematurely, but if we can get 70% of adults vaccinated with at least one dose by july 4, i think the chances of there being a surge or a rebound is extremely low. that is the reason why we want to continue to get people vaccinated. annmarie: dr. fauci speaking to bloomberg yesterday. european finance ministers are gathering in lisbon for the first in person meeting since september. optimism out the recovery has seen european stocks jump the most in two weeks. maria tadeo joins us from

lisbon. finance ministers are trying to assess this recovery. what is the mood and what about vaccine certificates? will that be something that happens? maria: yes, you make a good point because finance ministers are meeting in person for the first time since september. that encapsulates the story which is europe reopening and the vaccinations accelerating, and growth accelerating in the european union. yesterday i spoke to the portuguese finance minister, and i was told they see growth revisions coming and a recovery. >> we are becoming very optimistic. it was a very tough winter. now the cases are extremely low. we are opening most of our

economy, and numbers remain low. >> i believe the optimism about the prospects for the euro area are justified. >> we want to revise upward our gdp. we were at 4%, and we expect 5%. >> we should be optimistic about our prospects for the second half of 2021 leading into a strong start for 2022. i do believe it is possible we will see further revisions in our growth expectations as we move through the year. maria: that was the portuguese finance minister. they said they are expecting a faster recovery. in the case of the portuguese, they expect a one percentage increase for their forecast for 2021. it is also feeding into markets. european stocks jumping the most in two weeks on the optimism

that europe is vaccinating and the economy is reopening. annmarie: portugal looking to raise forecast as tourists return. i want to get more insight on the vaccine certificates, vaccine passports. people keep asking me when europe will be open for business. what is the technicality, who can enter and leave? maria: i have good news for you, because if you are in the u.s. and vaccinated, you are good to come to europe and not have to quarantine for your summer vacation. the way this will work is you have to show you have been vaccinated, tested negative, or gone through coronavirus. the idea is the travel certificate, which we believe will go into effect in late june, will help streamline the process to make this easy. from the experience of the past summer, if it is complicated, people will not travel.

this should make rules for all countries the same and make it faster and easier for potential visitors to come into europe. optimism is feeding into travel stocks. if you look at what stocks are doing, they are up 13% and picking up on the optimism. annmarie: thank you, maria tadeo . she will track the finance ministers meeting all day. peter schaffrik, global macro strategist / analyst, rbc europe is still with us. i'm quite taken that the european union seems to be the first economy out front when it comes to the certificates, which any say can speed up the recovery.

assessment, and which sectors will get a boost from a vaccine passport? peter: europe has generally been -- already last year was trying hard to keep the economy open, particularly as tourism as concerned. when you think about why, it makes sense because those countries most affected by the crisis are the southern european countries. those countries have a significant tourist sector. you try to help these guys, it is what the european union wants, and it is one of the things to get going first. i'm not surprised they are talking about vaccine passport so certificates, that makes perfect sense to me. when you look at the other support mechanisms in place that primarily support the southern european union. it is a story about which

geographic region do you want to help, and that is clearly southern european. going forward it is clearly those sectors that have been decimated before hand, such as the travel sector. and also the banks and global sectors that generate from high yields, and reopening and trying to boost their earnings. those sectors should be doing quite well. annmarie: when you look at the bond market, you talk about the difference between u.s. treasury yields and the bund market. we see treasuries going sideways. are there changes in perception of the narrative between what is going on in the united states and germany? peter: i would not necessarily say a change in perception. it is a change in speed over here in europe. in terms of the vaccination process, what happened with the bund market happened in the treasury market a few months ago, so we are playing catch-up. the speed of vaccinations have exceeded those in the u.s., not the total numbers but the speed, and the market is recognizing

that. all the reopening talks that follow from that need to be factored in. when you look at growth expectations, the u.s. already accelerated earlier this year. the expectation for europe hasn't. that is the catch up story driving bund markets. annmarie: this all sounds like good news, but the united kingdom, the number of cases from the variant from india doubled for a second week. what is the risk of a delayed reopening in the u.k., which was at the forefront of the vaccine program? peter: if you allow me to not only focus on the u.k., clearly these variants are concern for a reason. it is very fast, and we have not

finished our vaccination program. they then cause renewed outbreak amongst those who have not been vaccinated. even more concerning, the question they could evade the vaccines in the first place. in the first part, we have pockets where the country has been vaccinated, and particularly in the region's most affected. the good news is the evidence that comes out seems to suggest the vaccinations are still viable. i think for the u.k. there is a reasonable risk that june could be pushed further out, but the key thing is we are at a stage where we have opened quite a lot. in my mind it is a question of

time where we get to a stage were most the things we all love will be allowed again. it is a question of the time we get there. annmarie: the comments from the government is deja vu from december and the potential to lock down again. peter schaffrik, thank you for joining us, global macro strategist / analyst, rbc europe . just ahead, israel and hamas implement an egyptian brokered peace fire early this morning, ending 11 days of conflict that has killed hundreds. more on that next. this is bloomberg. ♪

annmarie: good morning, this is "bloomberg daybreak: europe." i'm annmarie hordern. israel and hamas agreed to an ejection brokered cease-fire ending an 11 a conflict that left 200 dead. president biden praised the effort. we are joined by bloomberg's international editor. what are the next steps? the cease-fire has taken effect. >> the first thing that needs to happen is to ensure it sticks. after 11 days of nightly barrages, each side feels they got what they wanted from this. prime minister netanyahu said he wanted to degrade hamas' mil

itary. hamas sees itself as a leading voice for the people in the palestinian region. the mediators look to put systems in place for the cease-fire, are there communication channels? there is a lot of work to be done to ensure the cease-fire which is in its first few hours sticks, let alone sustains for the longer term. annmarie: as they try to make sure the cease-fire holds, what is the risk that fighting breaks out relatively soon? rosalind: they have fought three inconclusive wars in the past. there is always a risk breaks out again. they have long-running and

painful issues underpinning this. the israeli-palestinian issue is just one part of it. the rights to housing are things -- you have had intense communal violence alongside this. there are issues particular to benjamin netanyahu and his hold on power. there are a lot of complicated problems that remain. as we have seen from history, these tensions dial down for a while but it does not last. it does not seem like countries including the u.s. want to take the lead on the broader issues for a broader peacekeeping process. annmarie: thank you so much for that update. just ahead, open for summer. the eu agrees on travel certificates, offering hope to the battered tourism industry. all the details, next.

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♪ annmarie: good morning. 6:00 in the city of london. this is daybreak europe. here's what you need to know. stocks push higher amid falling u.s. jobless claims. confidence in the fed's view on inflation. european finance ministers meet in person. negotiators back vaccine pacific it's -- certificates in a bid to save summer. israel and hamas agree to a cease-fire.

president biden praises the accord brokered by egypt. very good morning to you. happy friday. 90 minutes away from the start of european equities open. good news is dominating market direction today. u.s. and european equity futures pointing higher. it's been a busy week. the economic recovery narrative is one that is taking hold this morning. the other one has been inflation fears. yesterday, fresh data on the u.s. labor market. jobless claims came in better than expected. what is shaping up in the market? we are seeing the benchmark index move to the upside. higher than we were 30 minutes ago. a mixed picture across indices. japan higher. a pullback in hong kong and china. nasdaq futures about 3/10 of 1%. we had tech make a comeback yesterday, rallying past its 50 day moving average. 10-year treasury yield that 1.60%. yesterday, tenure inflation

auction. weaker demand suggests the fed's narrative is starting to gain a little bit more confidence on what's going on with inflation. bitcoin this morning, 40 k flat. what a week it's been. since we could go, we've lost about $8,000 on bitcoin. i believe it's the second worst week ever for the cryptocurrency since we had that turmoil last year with the pandemic. moving onto europe. finance ministers gathering in lisbon for the first person euro growth meeting since september. optimism about a strong economic recovery is growing. take a listen. >> i believe the optimism about the prospect for the euro area are justified.

we have over 30% of european businesses who have received a vaccine. i believe we will deliver our target of a large majority of participants receiving their vaccine by the summer. this combined with really good and sensible economic decisions mean that we should be optimistic about our prospects for the second half of 2021 leading into a strong start for 2022. therefore, i believe it's possible that we will see further revisions in our growth expectations as we move through the year. >> minister shao, in the case of portugal, the central bank is saying we could see an uptick in growth. we are seeing you reopening for tourism. it's a key factor for your economy. how optimistic about you -- are you about the prospects? >> we are becoming very optimistic. very tough and intense.

now the vaccination program is working very well. the number of -- of cases it -- is extremely low. the numbers remain low. we are actually very optimistic. we expect that gdp growth is going to be up higher than the last months because the number -- for an example, last month, they are higher than pre-pandemic levels. the recovery is on the way. >> would you say when the market looks at the recovery and they assume that the same dynamics that are driving the u.s. economy and especially the debate around inflation, is it wrong to assume that the same thing will happen in europe? they are two different recoveries in nature. >> the recovery in every part of the world i believe is likely to be different. even though we've experienced the common difficulty in the pandemic, it has experienced

different economies in different ways. here in europe, if i look at where we are, i think it's to be expected. we will see a change in price levels as companies in europe try to get more raw materials, try to hire staff, try to reopen supply chains. i believe it's to be expected that you will see a shift in inflation. i believe it will be temporary. the reason why i believe that will be the case is if you look at other economic indications, where we are with unemployment, where we are with underemployment, i expect to see big improvements in those areas across this year and next year. >> the irish and portuguese finance minister in lisbon in person. joining us now is ardagna. fantastic research. europe after covid-19, make or break. you say starring effects will

hamper the economic recovery and widen the performance gap between the euro area. you talk about this represents a credible threat -- threat to the future of the emu. the economic and monetary union. let's start with the starring effects. where do you think they will be the most acute? silvia: good morning. in our research, we show that there will be more flattening more acute [inaudible] this has to do with the fact that the structure of this is different. the south relies more on the service sector. sectors that are in travel, hospitality industry. they have been affected more than -- by the pandemic. as we move forward, we think that even though fiscal support has been extraordinary and is likely to remain, [inaudible]

some scarring effects will emerge. mostly in the labor market and corporate sector. annmarie: something like vaccine passports, could those programs help southern europe as they are a major destination for tourists? >> certainly. [inaudible] we had growth rates higher in the south than the north and european countries. when we move forward, as we look into next year, the labor market underlines its weaker and european areas. labor participation has dropped more.

we start seeing bankruptcies increasing. we think that the leverage that has been accumulated [inaudible] investment problem -- projects will be put in place in a different way. this will take many years to come. annmarie: i want to get into your thoughts about the potential economic and monetary union. didn't the debt crisis really teach brussels a lesson? the fact that the recovery fund is an indication of that lesson to be learned. silvia: yes. that's also our view. we don't think that we will see

anything like what we have seen in the crisis. [inaudible] that will be more diverse after the crisis. it's really the opportunity for the european union to go even more -- one sector ahead. we think that the political and europe understand that the one-size-fits-all policy, monetary policy of the euro area is difficult to withstand. more fiscal integration needs to come to make this project more valuable in the future. annmarie: if you see capital market integration, what kind of camp -- timeframe could that be? >> -- silvia: [inaudible] they take time.

[inaudible] in the next 12-18 months, what we see is important. [inaudible] i like the analogy. we have 10 years. annmarie: [laughter] it's a very good analogy. it's a good point. you say in your notes, a deeper economic divergence within the euro area could be a catalyst for momentum towards more eu integration. how?

how could more divergence lead us to more integration? silvia: more divergence means many things. [inaudible] they face different inflationary pressures. the monetary policy is more difficult. the countries will face different shocks. when they are affected, we know that they will have different fiscal capacities. we learn from this crisis that the european central bank has valuable monetary policy. we think that all these efforts are very well known. divergence means adding more difficulty to those policies and the euro area.

the resurgence [inaudible] these parties are lesson popularity. it doesn't mean that if we leave the country behind, their consensus cannot come back. it could. [inaudible] the majority of european citizens are a part of these projects. i think they will interpret the preferences. others might do it because of the fear of exit. [inaudible] it would have very high cost could be measured by the degree of financial integration that there is between countries. i like to look at the statistics

on cross-border exposure of banks. if you compute the expansion of french banks to italy, it's analogy [inaudible] how deep the cost would be. [inaudible] i think it will be a catalyst for working more together. european citizens like that. surveys show that more than 50% are in favor. annmarie: thank you so much. her latest research, make or break. head of economics research at barclays. thank you so much for joining us. to the united states. they are calling for a global minimum corporate tax of 50%, less than the 21% rate proposed for the overseas earnings of u.s. businesses. a level that some nations argued

was expensive -- excessive. michelle, why are they going lower? if you are in a negotiation, shouldn't you always start high and slowly battle your way lower? they are starting low and saying, we would like it to be higher. michelle: that's right. good morning. it's an interesting tactic. there are a lot of numbers floating around. the 15% global minimum which is a minimum in the negotiations. janet yellen has stressed that it's a starting point and she would help that countries would be on board with higher in the talks. it will be difficult to get others on board going forward. it's already higher than the 12.5% that the oecd has been trying to negotiate with some 140 countries for years. the trump of was highly opposed to that. they are starting on the back foot and trying to move forward up to 15%. it looks a little different from the domestic situation they are proposing.

it's also not popular with republicans or moderate democrats. the 21% for u.s. companies, 28% for the domestic corporate tax rate. a lot of numbers throat -- floating around. a big debate ahead. the administration's push against corporate and trying to get them to pay more in revenue has taken on new meeting in the pandemic. they are making this a political move. economists are tracking the widening of inequality through the digital divide. tech companies are succeeding while other sectors continue to suffer. it has become quite a political debate. it's not unanimous rejection from the corporate world globally. some firms would welcome a more organized system. it will take a lot to get there and work out the inconsistencies and loopholes and to figure out compliance efforts going forward if they agree on a specific number. annmarie: what's the biden administration doing around cryptocurrencies that was not

welcomed by the community? michelle: yeah. they added a wrinkle to the crypto moves this week. they are proposing a larger tax proposal to get more revenue and people filing their taxes. they are proposing a requirement that transactions through cryptocurrency of $10,000 or more be reported to the irs. this is the current and long-standing cash transaction guideline. they are really trying to bring cryptocurrency back into line. most to have followed and filed taxes for 2020 would notice on some individual tax forms that they are mentioning cryptocurrency more. they are calling for banks and cryptocurrency exchanges to report transactions to the rs. it's a push to bring crypto exchanges and crypto transactions into daylight. annmarie: thank you so much for everything that's going on down in d.c.. gone are the days when ibm and exxon mobil top the list of the worlds biggest companies. in the last 30 years, we've seen

the rise of so-called mega firms. what exactly makes one? the big take, coming up next. this is bloomberg. ♪

♪ annmarie: good morning. the world's biggest businesses were doing fine until covid-19 arrived. now they are doing even better. the top 50 companies by value added $4.5 trillion in stockmarket capital in 2020. times have changed. gone are the days when i began and x on top the list of the world's biggest companies. tech titans like apple and amazon are on the top. joining us to break down this bloomberg big take report is just any minute. thank you for joining us.

your research looks into the world's biggest firms in the way various ways that they have come to dominate the global economy. how big have they gotten? justin: that's right. we dove into the financial data for the 50 largest posted companies by market cap over the last three decades. one of the most apparent ways they've got bigger has been in their growing market valuation. the market value of the biggest 50 listed firms as of the end of 1990's totaled about $1 trillion. that's equal to about 5% of growth gdp at the time. fast forward 30 years. as of the end of 2020, that figure ballooned to about $23 trillion. that's equal to about 28% of global gdp. in part, that reflects rising asset prices. it also reflects investor expectations about future profit ability. they expect that the biggest companies have the potential to

get even bigger. annmarie: as firms become bigger, they command more market power. have you seen that show up in the data? justin: yeah, we have. that increase in size gives them the ability to respectful competition, to milk their customers, to squeeze their workers. it gives them the ability to shape regulation. what we've seen over the past 30 years is that these mega firms have seen increasingly higher profit margins. increasingly lower tax burdens. the median profit mind -- margin in 1990 was just 7%. by 2020, it had doubled to more than 18%. over that same time, their tax rate fell by about half from 35% in 1990 to 17% in 2020. annmarie: thank you so much for joining us. that's today's big take. you don't want to miss that. you can find it on

bloomberg.com. bitcoins wild week. after manic trading, the choppy markets continue. this is bloomberg. ♪

♪ annmarie: good morning. this is daybreak europe. a volatile week for bitcoin. that's an understatement. joining us now is dani burger. are there any signs that more stability will come from crypto's now? dani: we are a long way off to be able to associate stability with bitcoin. this regulation concern is still very present. whether it be from china or whether it be from the u.s. treasury yesterday. they are proposing that anyone who has transferred $10,000 of

bitcoin are more have to reported to the irs. the bitcoin proponents would say this is a good thing. it's getting treated more like cash which is what bitcoin is supposed to be like. for others, it means there could be more regulation to come. we've seen mass liquidations this week. it's not the end of the month. that short-term volatility is sticking around. annmarie: i saw a few meme accounts saying, transfer 9999 if that's what the treasury wants to do. what does this latest episode mean for bitcoin in terms of wider spread adoption? the pboc took to we chat to say, this won't be used when you want to buy consumer goods. dani: for any institutional players who haven't already gotten in that are concerned about its volatile profile or how it is treated by governments, this episode is not going to make them feel any better. socgen had a note out saying, if you try to comparable to bitcoin, you can't do it. the volatility gap is too big. bitcoin doesn't have a place in

a traditional portfolio as a piece of protection. for the bitcoin bulls like jim bianco, this is proof that this decentralized system of currencies works. i do centralized exchange has held up during these times of bitcoin volatility. it's a win for the new form of finance. annmarie: interesting. dani burger be all across this today. it's her birthday. happy birthday. dani: thank. annmarie: she will be tracking bitcoin on her birthday. lucky girl. that does it for us. ahead is the european market open. u.s. and european equity futures are looking brighter this morning. we are in the green. the market is looking into the narrative of economic recovery, less on the extent about inflation given what we had in the u.s. yesterday. jobless claims were better than expected.

nasdaq futures were rallying this morning. nasdaq blew past the 50 day moving average. optimism at the end of a volatile, busy week. bitcoin now just below 40 k. this is bloomberg.

♪ anna: good morning. welcome to the european open. mark cudmore joins us in singapore to take us through all the market action this hour. the cash trade is less than an hour away. here are your top headlines. stocks push higher amid falling u.s. jobless claims. confidence in the fed's view on inflation. european finance ministers meet in lisbon today in person.