♪ manus: good morning from bloomberg's middle east headquarters in dubai. it's "bloomberg daybreak: europe." setting the agenda with your top stories. continuing to downplay inflation concerns, hinting at taper talks. wall street's's biggest banks face a grilling on capitol hill.

washington, d.c.'s attorney general brings an antitrust lawsuit against amazon. the first to target the retail giant in the united states of america. welcome to the show, good to have you back. this morning, what we deal with is the setting up of a soft taper, i put that to you because he talks about talking about tapering in the upcoming session, adding to the number voices we have heard from. i think it's interesting that the market leaned much more into his inflation guidance with the bond market repricing on that. this is a soft taper. annmarie: certainly, and we also heard from mary daly from the

san francisco fed. she was a little bit more specific, saying initial discussions are already there. she was talking to cnbc. as you say, what this has to do in the bond market, at least the fact that many are starting to potentially believe in the fed's believe that it's going to transitory inflation, that is starting to cool some of that volatility that you brought to my attention this morning with the bloomberg terminal chart. also what were seeing in terms of the bond curve, that is starting to flatten as well. we have jackson hole ahead, the potential on the pullback of the tapering, will that induce any sort of volatility in the upcoming months? manus: you talk about volatility, this is the swaps market, it's about quashing volatility in the united states of america and to a certain

extent, the european bond market. the lowest rate since march, and i put it to you that this is what the fed wants to achieve. this is what they want to get a handle on an pullback, they want to build a narrative that stop -- not just a number of people talking about tapering, but building a quorum, and how we react to that and if we can get through it without a taper tantrum as an 2013. it's good to have you back. annmarie: volatility is lower because the fed has crushed it. what we are seeing in terms of stocks this morning, after yesterday, wall street modestly in the red. i put the kiwi in there because last month it was canada, this month it is new zealand, talking

about the fact they could have higher rates as soon as next year. then you see the spike in the kiwi against the dollar with the moment like that. manus: and of course is goes back to what the aussies and the kiwis do really sets the agenda for everybody else. thank you so much for joining us. the discussion is this, whether we're in the structure of the soft taper, is that what the bond market is reflected to you yesterday afternoon? good day, sir. >> good morning, always a pleasure to be with you. i think there is some confusion about the whole debates on u.s. monetary policy, what it can and should try to achieve. i think the prime objective of monetary policy and central

banks in the u.s. and europe is to ensure financial stability, a contained degree of volatility because you want to prevent excessive risk taking in the market and the buildup of asset bubbles. therefore inflation of goods and service, nowadays money policy -- monetary policy no longer transmits to the credit system as it used to happen until the late 2000s's in the europe -- in europe and the u.s.. annmarie: at the moment, it does seem like the market is coming around to the fed's view, slowly but surely. so when you look at inflation, do you agree that it's going to be fleeting? yves: i think what we are observing is part of the broader theme of distortion.

we've had this recession triggered by a shot, the first of its kind since world war ii. everything is massively distorting. there are some real economy bottlenecks, people talk about semiconductors and the auto industry, for instance. but these are normal events in the context of what happens with all the disruption. all the -- are these long-lasting disruptions that potentially could shift the supply curve to an extent that it would trigger inflation? we don't believe so, and things would eventually normalized by next year. manus: absolutely refreshing that somebody who works in financial markets for so long says there is profound confusion. i'm so glad you said it rather

than us. goldman sachs say you want to allocate to companies in the u.s. that allocate globally. do you want to be long u.s. with a global lien? yves: i think, first of all, in equity context, [indiscernible] whether or not you're going to be slightly overweight is a function of the kind of -- is there a big case today for more value that would lead new toward europe as opposed to the u.s., over quality group -- growth that would lead you to favor u.s. equities rather than european?

i don't think so. consistently, with what's happening in the bond market on the 10 year yield, and by the way, interestingly, consistent with the extension we see that the rotation in the market is actually fading. they're not really tradable, so there's no trend leadership anymore. the demand is probably waiting for evidence of whether inflation is on a more sustained ride or temporary type of increase. annmarie: you say that earnings for s&p 500 companies this year should be 2019. are you worried about potential tax hikes in the united states hitting margins and inflationary measures hitting margins that could potentially derail that view? yves: i think we are going to

have higher and probably we see these initiatives at the g7 or the g20 for more uniform taxation of global companies. i think that is coming. that's the direction of history. but i don't think this is going to have a major impact on corporate profitability. the stock market has only reflected corporate tax rates. it will to a certain extent reflect a slight increase in corporate tax rates but i don't think it's a major game changer. we had an absolutely off the chart earnings season. every dollar of criminal revenues in the s&p 500 index produced $.50 of additional profit pretax.

the marginal profitability of corporate america has never been as high as today. annmarie: thank you so much. yves stays with us this wednesday morning. let's get a recap the the first word news. >> the e.u. has moved to impose further sanctions on belarus over the forced landing of a ryanair flight and the rest of a journalist on board. adding to an existing list of sanctions, he could be a month or more before the european measures take effect. >> it is absolutely clear that there must be -- i'm very happy that the e.u. decided that first. >> sources tell bloomberg european governments are increasingly confident a deal can be made on a minimum global corporate tax. last week president joe biden

floated a plan of at least 15%. european nations are also pushing the u.s. to focus on big technology firms like amazon and facebook. and getting them to pay more in the countries where they operate. russian president vladimir putin is said to be meeting u.s. counterpart joe biden in geneva next month. it will be their first in person session since biden took office. it comes amid big tensions between the two nations over cyberattacks, military aggression, and human rights. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: annabelle droulers in hong kong. coming up, back on track, the u.s. as half of adults will have received their first shot by the end of this week. this is bloomberg.

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>> we are on track to reach our goal to have enough doses being delivered to vaccinate 70% of the adult population in the european union by the end of july. >> the most important thing to do now -- >> both vaccines and essential substances. manus: european leaders meeting for a two day summit in brussels. saying half of e.u. adults will have received the first dose of vaccine this week.

let's get to brussels, the e.u. committed to sending the vaccine to developing countries by the end of the year. the u.k. mortar concerns grow. maria extent -- maria is standing by. where are we by the end of the summer on herd immunity and the vaccine? >> the numbers in europe really speak for themselves. the head of the european commission said that by the end of the summer there will be herd immunity. what could change this year is that she's looking now at the end of july. the initial goal was the end of september and now she says the european union can get 70% of the adult population by july. it is a stunning turnaround for

the european union. the rollout was hit by so many complications at the start of the year and is now really taken off. the numbers are reflecting big progress on a national level. new look at germany, is the biggest economy in the european union and they say this week they are also going to get to 40% of the adult population vaccinated with at least one shot. just a comparison of how quickly this is taken off. seven weeks ago during the easter break, it was 12%. so they've managed to go from 12% to almost 40%. the promise is that herd immunity will be achieved in july. that's good news for the commission and would be good news for the german government. keep in mind there's a crucial election happening in september. they want to say were able to get the vaccination rolling and provide a holiday to our citizens.

annmarie: what about internally, the borders within europe? is france considering these measures with the u.k.? >> this is now looking into the united kingdom, which is now a third country to the european union. this is about the variance and in particular the indian variant. they want to save the summer season and be able to reopen and they don't want those plans to be derailed. the french could announce the need for more restrictions when it comes to the french-u.k. border. the french government says that's to some extent not a good idea. the u.k. argues that this is not about a variant that has taken hold in the u.k., just the fact that the uk's very good at tracing and sequencing the new variants and they were the first to discover the indian variant in europe. annmarie: maria, thank you so

much for joining us this morning. maria really outlining the recovery in terms of what's going on with the vaccine program. where do you see the european recovery and what does it mean further european equity market for 2021? yves: i think european recovery is increasingly on track. paradoxically, a gradual reopening of the economy is actually more favorable for risk assets, rather than another potentially bumpy time of a recovery path. i think the fact that we're gradually reopening, maybe later

, because simply what we've noticed is it's not enough to be reaching herd immunity to enable travel and the reopening of usual travel routes. you need also other countries to be reaching herd immunity. we are not quite there yet. we've also seen that depending on what type of vaccine the population is administered, the efficacy of preventing transmission can vary quite significantly. manus: when we look at the performance on the currency, a great deal is being built into that herd immunity, a tighter ecb. i asked myself the question, have we gotten a little bit ahead of ourselves in terms of the euro strength? the euro strength, when does it

agitate the ecb? yves: i think we are seeing territories where there is no reason for major concern at the european central bank. the more interesting question is, what could trigger a move significantly out of that trading range? more concern on inflation in the u.s. and that's not a function of ecb. maybe a perception that the ecb is getting to hawkish, and could push the euro further out and create some euro level concerns. but overall, there's not much going on in currencies. other than fundamental forces pushing the renminbi slowly but surely higher.

that's all favored currency, but were not so keen on cash and low risk assets of the treasury, but if someone wants to keep some money in such instruments, the preferred choice is renminbi related government bonds. annmarie: yesterday francoise gilroy said the ecb is not there yet when it comes to the likes of tapering. you have canada, new zealand getting out front. at some point the fed, can it push the ecb ahead? yves: i think every central bank has to have its own methods of normalizing. i think the ecb has been through it before. we are not in a situation in europe where asset valuation --

the situation is more tense in the u.s., with bows -- both the housing market suffering a structural shortage of housing supply, and a lot of appetite for home purchases, as well as valuation on risky assets. europe is not there, the valuation of european risk assets is not as demanding as the u.s. counterparts. the main rationale to taper i would view first by the fed is really the whole idea of talking asset prices rather than the real economy. and to a large extent, the same logic applies to europe. i would say does less argent for europe to taper. manus: certainly the bund market

has moved since the last meeting. let's see if they deliver any kind of jolt today. thanks so much for being with us today, our guest host. coming up, amazon faces its first antitrust case in the u.s. . washington dc has sued the tech giant for allegedly violating competition laws. we have the details. this is bloomberg. ♪

>> this could be a very good

summer for the world, by the way of the tax race to the bottom has stopped. manus: the german finance minister talking to stephanie flanders about his optimistic for digital tax. the e-commerce giant is being sued by the attorney general of washington dc which accuses amazon of an aging and anticompetitive practices by raising prices for consumers. is the first antitrust lawsuit to target amazon in the u.s. dani burger has been looking at the details. the attorney general for

washington going it along. what do you read into that, dani? >> it's almost sort of it test to see if other attorneys general would join in on this as well. part of what makes it sort of novel in terms of a lawsuit is that it is new, but the approach is almost something of an old-school manner in that maybe it something you would expect to be raised against 19th-century railroad baron, for example. not only is it about competition, it's at their forcing prices higher. the allegation is that they will charge a certain merchant of fee and their price has to be raised by amazon. however, if they also raise their fee on another platform, amazon will allegedly bury that merchant's results within the amazon platform, and as we know, that is key for what people buy. let me quickly read to you this response from amazon that says,

the d.c. attorney general has it exactly backwards. sellers sell their own -- set their own prices for the products they offer in our store. amazon ended the day up .4%, so it didn't exactly hit the share price. ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network. ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30.

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>> good morning from new york. i'm annmarie hordern with manus cranny from dubai. this is "daybreak europe," and here is what you need to know. fed officials continue to downplay inflation concerns as richard clarida to the ranks, hinting at cheaper talk. the ceo's of wall street's biggest banks face a grilling on capitol hill to testify on lending to struggling americans

and diversity. washington, d.c.'s attorney general brings an antitrust lawsuit against amazon, the first to target the retail giant in the united states. 6:30 a.m. in the city of london. i am in new york, you are in dubai. futures are higher and taper talk. you are calling it a soft taper. i like that. richard clarida to saying it may be that the point we begin to discuss tapering. and then we also heard from -- who says we are already there. that is in the cards. is jackson hole going to be where we see a shift in tone from jay powell? manus: claire do is setting the agenda for a softer taper. the bond market leaned much more into his guidance rather than talking about tapering so the taper debate is now at play.

the long end of the curve has become unwieldy and volatility is quashed. the swabs market showing your 10 year government bonds and volatility is at levels we have not seen since march and to that extent, you are just, i suppose, getting ready for a taper but it's possibly going to be a little bit better than it was in 2013. let's talk about the markets. goldman sachs saying you want to be long. those stocks in the u.s., p growth in the second quarter. the kiwi is on a rise. they deliver a new form of guidance from the rbnz. they are saying rates may well rise in 2022 in the second half. that is something they are not calling her with guidance that they are resetting the agenda. bank of canada, bank of england.

the dollar is at a year to date low. they are resetting a quiet short dollar position. government bonds taking the tapering discussion very much in stride. let's turn our attention to geopolitics. antony blinken reiterated washington's commitment to israel's right to self-defense. in talks with benjamin netanyahu in jerusalem. lincoln pledged u.s. funds for reconstruction efforts in gaza. >> the united states will work to rally international support around that effort while also making our own significant contributions including some i will announce later today. we will work with our partners, closely with all to ensure that hamas does not benefit from the reconstruction assistance. at the same time, we need to work to expand opportunity for

palestinians in gaza and the west bank including by strengthening the private sector, expanding trade and investment. manus: simone foxman joins us from doha. what sort of response have we seen? what are the headlines that he is delivering? simone: this combination of aid for the palestinians and reconstruction in gaza coupled with his defense for israel's right to defend itself, something he said publicly, this is signaling a return to the more traditional role that the u.s. has had in sort of dealing with these conflicts between israel and palestinians, harkening back to the obama administration. no surprise. lincoln was part of that as well. another thing we heard from the u.s. secretary of state was that

the united states wants to reopen its consulate in jerusalem. this consulate was something that closed under the trump administration but it had previously dealt with most palestinian issues separately from the u.s. ambassador. this move really being welcomed by supporters of the palestinians and of the palestinian cause as a sign that the u.s. will engage further with them. seeing some pushback from netanyahu and again, underscoring this more complicated relationship between the united states and israel. annmarie: president biden potentially will be naming a new ambassador to israel. what do we know about this individual? simone: his name is thomas. he is the vice-chairman of morgan stanley and has long been

an important democratic donor, not just for obama but later for hillary clinton. there were reports at the time that he could even serve as clinton's chief of staff had she won. he does have foreign policy experience. the deputy secretary of state for two years under the at -- the obama administration. there was a puzzle between supporters of liberals, pope palestinian candidates versus -- slightly more conservative but i think the message here is exactly what we are seeing from blinken, more traditional goal for the u.s. and israel, a little bit more complicated role as well. manus: all of these negotiations take place with a backdrop of the other set of negotiations, the return to the 2013 nuclear deal, the jcpoa. so israel has always been

resistant to that. how does the u.s.'s policy factor into this? simone: the u.s. and the biden team have very much been pushing for a return to that 2015 nuclear deal and despite pushback from netanyahu even yesterday, i don't think that will change. no one thinks that's going to change. experts believe we are likely to see a deal reached on a return to the jcpoa, potentially even as soon as the end of june and perhaps even before the iranian presidential election. the iranian presidential elections will be key not just to the u.s. and iran relationship the way that israel and iran send messages at each other. seven mostly hardline candidates. those are the only folks that are going to be on the ballot. particularly, an ultraconservative cleric, seen

as the frontrunner. iran always taking a pretty hostile message towards israel but if we get a more hardline person looking out in the months ahead and years ahead, we could see even harsher rhetoric between the two sides. manus: thank you very much. simone foxman at our studio in doha, tracking the middle east headlines. first word headlines with annabelle droulers. annabelle: president biden is being urged to reshape the leadership of the federal reserve including dumping device chair. criticized his record on banking oversights. she said the financial system will be safer when you are gone. his term as vice chair and sit in five months. president biden says he hopes for a deal on overhauling u.s. law enforcement. his comments came after he met with the family of george floyd

on the anniversary of his murder. negotiations on capitol hill over new gestation is progressing the lawmakers did not meet biden's goal of sending a bill to him by tuesday. the u.k. could block some listings from the london stock exchange if they posed a national security threat. refusing math is said to -- the current rules allowed the russian oligarch to list his energy company in 2017. he is the subject of sanctions in the u.s. 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: annabelle droulers in hong kong. bitcoin is rallying towards the $40,000 levels. cryptocurrencies recovered some of the ground they lost and we spoke with the ceo of btc markets. she thinks bitcoin will likely

remain volatile. take a listen. >> some traders -- i think we will see this story play out as the maturity of the sector evolves. the future will be sticking around for the shorter term and is certainly not help by the supply side shocks with the announcement that came out of china with regards to additional restrictions on bitcoin. we all saw the impact that had on the price but keep in mind that we should expect to see volatility of this nature. >> when you take a look at the brats of the demographics of your user base, can you tell us a little bit how it has changed over the last 12 months and how the nature of these transactions have perhaps changed as well? >> absolutely.

the stereotypical thought process has evolved and moved on. in our exchange, previously, we would have been dominance from young men, we have seen that shift to involve men and women now but also a stretch in terms of the age profile. previously, we saw 5% of our user base being aged over 60. in the course of that, we have seen that shift double to 10% of a much larger user base, so i think we are seeing the evolving and speaking to that maturing but likewise, we would like -- course of 2020, a fivefold increase in the number of estimates that were investing in cryptocurrency, which is a remarkable figure, a remarkable point of growth, longer-term investing, looking at this profile in a much different way. collects how long do your

investors actually hold those cryptocurrency these? caroline: the perception is everyone is moving in and out but what we found is over 50% of crypto investors in australia are looking at this longer-term, within one year to three years. they are not necessarily buying just to flip it. they see the longer-term investment opportunity here. >> do they care about those environmental concerns? caroline: that is not feedback we received at any kind of volume from our climate base. this narrative around the environment is probably just another stone to throw at bitcoin. this is something that has been known in terms of the consensus mechanisms, the type of energy that's used. what is interesting is how the narrative is shifting from being a problem for the producer to being a problem for the user. we went from unleaded petrol, we

moved to where the source of the problem was, the point of production, and we made the changes there. in ireland, we moved from -- to smokeless. that is where the narratives are about we are looking for another stone throw at bitcoin and this is the latest one. manus: caroline on her thoughts on the recent volatility in the cryptocurrency markets around the world. coming up on the show, while talks with iran fade away for its return to global energy markets? we discuss all things oil. this is bloomberg. ♪

annmarie: good morning. 6:45 in the city of london. i'm annmarie hordern alongside manus cranny in the city of dubai. world powers starting a fifth round of negotiations to revive a deal of iran's nuclear program. joining me now is the head of research. let's get right to it in terms of what you expect. when do you think iranian oil barrels can come back onto the market and, initially, how much can they be sending? rita: the critical thing is let's see when the deal gets signed. positive noises but i think the u.s. side is a little less positive in terms of all the twitter feeds you have seen. they are saying significant progress has been made.

i think both sides are aiming to get the deal done for the iranian presidential elections on june 18. it does seem like a hardliner is going to be winning. they definitely want the nuclear deal that needs to be back before that happens. even after that, that is the important thing. just because a deal is done doesn't mean iran comes back immediately. especially if the biden administration decides to send the deal to congress under the act of 2015 which effectively was and asked during president obama. congress passed bill which said any nuclear deal with iran has to go back to congress for them to go through. that will take a minimum of 50 days and in any case, even if the biden administration decides to -- which we don't think they well, the u.s. will wait for

iran to comply with all the restrictions and only then will they allow the strike. you are looking well into q3 at the latest -- sorry, the earliest would be august but perhaps slightly later on in the year. they can start gradually increasing production from july. that is what we have got but oil hitting the market will be later than that and probably slightly later in q3. manus: we have those to deal with which is congress and compliance. set the stage for us. does iran come back? does it do so with a saudi blessing, a public lesson from saudi arabia? they won't have unfettered production through next year? amrita: i would think so, yes. our conversations with delegates -- they are aware that when iran

comes back -- same for libya and nigeria. it has been a few years of sanctions so iran will fight for the fact that there should be no quotas. we have long had this that production will climb back to pre-sanction levels by year-end and then 3.6 or 3.7 the next year which is where they are capped. this is one of the reasons why and i talked about this. they have been so aggressive and trying to get inventories down well before iran comes. later in the year, the easier it will be for the market to absorb it because demand is picking up and the inventory overhang is all but gone. annmarie: the saudi concern about getting these inventories down. what is the concern that if iran comes back sooner rather than later, that they can be dealing with another glut? amrita: and i think this is

always going to be the tricky thing. the first of june meeting of opec-plus. this is going to be a critical point of discussion. if a deal is agreed before that, you at least have a timeline. if deal is not agreed before that, you know the timelines remain vague and there is always a scenario, death not our base case, but it is a scenario that the delayed, and then it would take quite a bit longer and you are looking for in iranian return in q4. what i think the saudi's are going to push for is after the july increase, hold off on any further increases. get clarity around iran. let demand inventories draw down. if you are in a deficit, you add the barrels back. there is a lot of in depth demand for when iran returns. they are holding back because

they are expecting iran to return, expecting them to give better prices. it's not that you are going to see a glut -- i do think the refinery demand will pick up right at bit as well. manus: the demand is out there, pent up demand. we have a sharp drop on the back of substantial progress. if iran comes back, 3.4 by the end of the year, that is your timeline, does that cap this market at $65 or do you see the propensity of iran plus pent up demand taking you to goldman's level of $80? good morning. amrita: we have been in between for a a while. $70 of q3 and $70 for q4. on our balances, coming back from july onward, i should clarify -- 4.2 rent.

it's a big number. don't get me wrong. the important thing is as long as demand keeps up with it, i don't think it will cap prices. the critical thing will be for us to absorb all these barrels in the next year, a lot of upside in prices to well above $80. manus: great to have you with us. hopefully before the end of the year, we can all be together again in vienna. chasing ministers, breaking news. amrita sen, great to have you with us from energy aspects. remember vienna? annmarie: i miss the lobbies, breaking faces with you in hotel lobbies. manus: i miss you playing the piano, eating strudel while i was chasing ministers. you had a fine old time. exactly. we are going to talk about the ceo's. the biggest banks on wall street are set to go to capitol hill today. the testimony. what will they say?

this is bloomberg. ♪

annmarie: good morning. this is "daybreak europe." i am annmarie hordern with manus cranny. the ceo of the biggest banks on wall street will be testifying at two separate hearings on capitol hill. elizabeth warren has weighed in the head of the appearance, saying the chance to quiz the executives will be fun.

i would like to be there. jamie dimon, david solomon, brian moynihan, james gorman, and charles scharf will all appear. there they all are and they are going to get grilled today. manus: i wonder where they are going to get grilled about lending. is it about their green credentials, diversity in terms of where you lend? let's say the start of that banking senate committee today -- they will be quizzed across a broad spectrum. risk management. the practices along with diversity. there is a lot on the agenda. should we finish with a bit of a flurry on the kiwi? you said it at the start. it's all about steven major. it is not forward guidance. the possibility of rate hikes going into 2022.

literally flying high. dollars on the year two. year two. annmarie: our mliv says rbnz met the kiwi out for a run. maybe a big one on the heels of bank of canada. that does it for us. this is bloomberg. ♪

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anna: good morning. welcome to "bloomberg markets: european open." i am anna edwards. mark cudmore joins me in singapore to take us through all of the market action this hour. the cash train is less than an hour away. here are your top headlines. that officials continue to downplay inflation concerns as richard clarida to join the ranks at taper talks. e.u. pledge to