make the fed uncomfortable. >> if people and expect inflation they are more willing to accept it. >> it's manipulated by central bankers all over the world. >> the fed's objective right now is managing expectations and they are doing a great job of that. you look at the goal of reacting so they want to wait it out but market prices don't wait things out. >> this is "bloomberg surveillance." jonathan: kicking off the month of june, good morning. this is "bloomberg surveillance." equity futures up 17 on the s&p. what a month we've got coming up. the ecb coming up in a week. before we get there, friday, payrolls. tom: those will be big. and centering on the fed meeting june 16. and the idea markets are doing

what the fed wants. they're doing the heavy lifting for the fed. a very sharp note from deutsche bank in the last few hours really talking about it's just like a rate cut to see the dollar dynamics in the short rate market with a wall of money the fed has given us. >> we've got some stability we need to talk about. your average 10 year yield stopped out of the end of march 161 or 162. that's probably good news of the last couple of months. >> where the pros are in the short rate market there's a lot to watch for. overnight reserves, it hasn't really ballooned out to new highs over the long memorial day weekend. but the wall of cash that's out there as we end the pandemic in america is moving markets. in the united states, i'm calling it.

but it's shocking and other nations that are behind on vaccination. >> that your estimate this friday. >> transitory is the key word. i'm wondering how much we will get any nuance to what could be transitory from official before their blackout periods ♪ given the fact this wall -- blackout period given the fact this wall. >> people are sounding very hawkish. we's opinion of the fed speakers. you have to look out for that. that list of peoples from to build quickly. >> with the commodities busting out all over. you are right, there will be different nuances here. i'm not a big fan of the parlor game of the fed speak but the idea here of look at the markets as they try to price a global recovery from this natural disaster. >> tuesday morning, good

morning. equity futures up on the s&p 500. with us and of a 4/10 of 1%. how many times have you said that. can you hear it again and again in the fx market, euro-dollar unchanged. leads to yields just after 162 on the 10 year. just creeping higher by a couple of basis points. lisa: the name of the game's stability. we see that in bond markets. i am trying to understand what the marginal deciders could be for the federal reserve as to when to start talking about tapering and transitory which may be a bigger deal. here's what i'm looking at, we get a slew of manufacturing data. we u.s. construction spending and manufacturing data later but the dallas fed manufacturing index. a key question is how much of input costs increased.

in other words the inflationary in pulse into the producer, how much has that force them to consider pricing in terms of pricing higher for the end consumer. how much does this crimp what they actually produce. these are questions people are looking at to determine and decipher how long-lasting and transitory this inflation could be. the fed governors speaking at the fed club. what are they looking at to determine when they should move away from the temporary. what will that potentially reconsider and will they follow in the footsteps with respect to taking a little more of a hawkish tone. today, this is the key market story of the day. opec-plus to discuss july output. we see prices on brent, prices on wti rise to the highest levels in about two years. people are driving places and flying places. this has led to something of

marv a tightening in supply demand dynamics. the key question is iran and what happens if the agreement comes to a task to start shipping oil. jonathan: your take on the latest move out of china. lisa: this is a huge deal. china allowed the u.n. to strengthen versus the dollar and then yesterday took a pretty big measure starting to take them out there was weaker than the expected reference for the u.n.. today for the first time since the financial crisis required banks for higher reserves of foreign currency. basically trying to weaken and offset the rise in the u.n.. i wonder how far they will go, what triggered this and what this means rate, that a lot of people thought that would allowed to continue decline. jonathan: it's a move in china's favor. nobody wants a stronger currency. this one will get more.

we will see dollar weakness in the months ahead. tom: a major pro carriage went out to strong euro. we go to john, one of the overlays is stronger euro. jonathan: oppenheimer asset management chief investment strategist. let's start right here, and month ahead of us. the federal reserve payrolls this friday. the big downside paired with the lessons learned into this friday? >> i have to think investors will have some trepidation as we get closer to that friday for the nonfarm payroll number. looking at about 650,000 versus 266 gains which is what we got last time. there were some predictions it is going to get to 2 million. we will have to see how it goes.

our understanding of the markets for where we've been in the markets the past 30 years is this is not uncharacteristically -- uncharacteristic, the uncertainties we are dealing with. >> no want to congratulate you on being a persistent increase just bowl in the heat of the pandemic. you were right. what's the thing you are studying or the thing that would trigger you to a more cautious outlook? >> it would be an indication the federal reserve was indeed asleep at the wheel. that it had become locked in to this idea of leaving the faucets running regardless of inflation taking off. should become no longer a transitioning or transitory kind of occurrence. that's what would worry us. we look at the economic data on

a daily basis and so far, so good. it's not great but it's not poor. progress is being made. the inflation occurring facing some of the disruptions. it why variety of areas from food to technology. lisa: the economy and the stock market aren't necessarily on the same trajectory. whether it's the ipo market where you're not seeing the same type of profits are used to. a feeling that things are actually hitting their peak. do you think this is a blip, a pause in the rally or is a sign of what's to come? >> our focus is really on the poor equities. what we are looking at is a combination of value and growth. stocks that are doing quite well in this we think when it comes to the fact when it comes to the

ipo's, that's where you saw the draws. that's where they are not the center of the circus. there what you might call the sign polls, the line -- the lounge acts. jonathan: way too many fancy terms. are we sticking with the banks? >> we want to stick with the banks, we want to stick with the industrials. and for the third and fourth quarter we think you want to do now accumulate big tech and you also want to accumulate consumer discretionary which is the big benefit from the successful reopening in the u.s. economy. >> fantastic work as always. on the equity market, after delivering another tidy month of gains, here's the quote.

fed president speaking to the financial times, i'm evolving toward the judgment were labor markets should be interpreted as tight. he says even though it's a booming economy, i'm not sure employment is going to follow. you said -- you saw that in the interview. tom: there are three americas out there. the research heritage is saying is a fully employed america across all the different --. there's another coming back from the pandemic. and then there's a part of america, jeff has been brilliant on this. this whole piece of america the chest is not in the game. adjusting the labor dynamics for that group that's not in the game. jonathan: he did not expect

monthly job gains it gains as high as one million. lisa: i wonder what the pressure is on him to take a different tack. is it worried about financial stability. talking about all that cash, it's got to go somewhere. if we don't see more employment, you get asset price inflation and that has to scare federal reserve officials. you wonder how much that's underpinning concerns. jonathan: he is worried about consistently above target inflation. pretty much what he says in this interview. the labor market is tighter than they all think, that really raises the prospect of being behind the curve. lisa: it also means he doesn't have faith that the fed has the tools to address that in a calm way. which is counter to what a lot of people are saying.

tom: we slotted in a pendulum of stability here. jonathan: that sounded more doomy than stability. lisa: really just pump up the gloom. [laughter] tom: i have been told by 42 family members to stop everything and watch kate winslet on hbo. lisa: it's fantastic. jonathan: -- thomas is too distracted. from new york, this is bloomberg. ♪ >> china has making test taken

its most substantial move yet. beijing is forcing banks to hold more foreign currency for the first time in more than a decade. it reduces supply on shore and that puts pressure on the you want to weaken. president biden will unveil plans aimed at reducing the black-white wealth gap today in tulsa with the president will mark the 100th anniversary of the massacre the took place in a prosperous black neighborhood. president biden is expected to aim at proposals to boost homeownership. naomi osaka has dropped out of the french open due to the mandatory press conferences. she said she suffered from depression and social anxiety disorder and says taking part in press conferences makes matters worse. she was ranked second in the world. -- she is ranked second in the world.

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. i'm ritika gupta, this is bloomberg. ♪

>> the president keeps saying in

action is not an option. time is not unlimited. the american people expect us to deliver and that's my hope that these conversations over the next few days will be productive and lead to that. jonathan: secretary buttigieg doing the rounds on the sunday shows. i'm jonathan ferro pared tuesday morning, a price action set up. equity futures up 19 advancing for 5/10 of 1%. up by a couple basis points and kicking off the month of june in the fx market, euro-dollar around 1.22. brief mention of crude, a tighter commodity market later this year. opec-plus on wti up about 2.7% on the session. tom: there's a lot going on in

the markets. his optimism as well. staggering through the weekend in a four-day workweek, bloomberg editor-at-large. it is sort of an arcane topic but there it is. over the weekend, texas democrats waltzed on the legislature, the republicans are stymied. it is a battle brewing in 2022. how does washington affect states -- state decisions on voting rights. >> the issue who is eligible to vote is a statewide issue. if washington wants to inject itself into the debate it will be rancorous to say the least. the washington establishment tries to enforce voting rights on the states.

it will probably end up in the courts. and then it will just be a basic states rights issue. who decides who gets to vote in national elections. lisa: as we talk about voting rights, as we talk about what's going on in washington, d.c., we also talk about what happened in china. i wonder what the international implications are president biden doubling down on investigating the theory this could have initiated from the wuhan lab, talking about covid-19 crisis. >> it's an extraordinary sensitive issue for the chinese. even though there is no specific evidence, of the joe biden sent this issue back to his national security team for analysis has got to be really concerning to the chinese. joe biden has basically taken an approach that his predecessor is

taken which is ironic to say the least. lisa: people are saying this is potentially dangerous because china has tried to avoid this theory for a long time. what is the big international potential consequence? australia also raising questions here. tensions rising between china and the u.s. -- and the u.s.. >> if it's ever proven that they somehow hid the fact this escape from a lab, of the international consequences would be severe. my own feeling is it's probably never going to be proven. someone out there probably knows the answer but if we ever hear it i'll be surprised. >> does anything get done in washington in june? the heritage of the city, am i right, nothing gets done? >> very little gets done.

the framers decided to place the capitol in washington so that it's so warm there that congress doesn't meet so they don't do anything in the summer months. tom: -- >> i will say it looks like this whole infrastructure issue will come to a head pretty soon. lisa: that's an interesting -- that's where he to go that people are pricing in the spending infrastructure plan. with the contour of this given the bipartisan effort taking shape? >> this meeting this wednesday will be critical. the issue, jonathan is talked about this all the time, they cannot even define what infrastructure is. if they are able to come together with a definition that works for both sides, than the big issue is how to pay for it and that's where there is a deep

fundamental philosophical divide. tom: what's -- lisa: what's the latest headline number? >> somewhere south of $1 trillion. if they can agree on a number like that and agree on how to pay for it than i think you will get a deal. jonathan: got to leave it there. breaking news for you. share sale from amc entertainment. looking to use the proceeds from this to maybe purchase some theater assets and leases and maybe look at deleveraging opportunities as well. lisa: that's a key issue you were talking about. they need to redo some of this debt. my question is what is their business model going forward? will it just be movie theaters and if so, does that look the same post-pandemic as it did pre-pandemic. two people want to go back to

theaters -- do people want to go back to theaters? jonathan: no idea. tom keene in the premarket, amc up. tom: it's a bull market and odd things happen. a few years ago where you were attracted to prime brokers if they could offer you krispy kreme to short and that it was put out of its misery and now we have krispy kreme thinking ipo. all things krispy kreme. lisa: tom's way of breaking news. tom: i need dunkin' donuts to come out with headlines. jonathan: the phrase you used. bull market. you were talking abut a bull market. tom: i'm removed from it. lisa: are you happy?

jonathan: he sounds miserable this morning. amc part of the story this morning. krispy kreme. if you look at the weightings of the russell, the number three on the russell, gamestop. number eight on the russell, amc entertainment. lisa: the idea amc entertainment has been a neem stock. how much will people and a benefiting from this. you think about some of these key players, what that does. jonathan: i'm not ignoring you, tom. just inching towards the end of the segment to give it a punch line. do think that would help the flow? lisa: you didn't think i was can have a punch line?

jonathan: coming up. you and i were not invited. lisa, you know he is watching that. equities doing ok to kick off the month of june. this is bloomberg. ♪

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jonathan: kicking off the month of june, your equity market looks like this. for tens of 1% of the nasdaq. on the russell up 6/10 of 1%. that rally continued. we switch up the board. payrolls coming up on friday. yields going in higher by a couple of basis points on the 10 year. over the last couple months we talked about this continuously. the amount of stability you see. it's been pretty phenomenal when you think about it. the average has been about 1.61

or 1.62. the opec-plus team looking at a tighter market in the second half of this year. up to .65 own crude. -- up 2.65 on crude. 68 on brent. brent 70, wti 68. some doubt this can continue. tom: frank duke -- frankly it's a more active market. there is a real correlated lift. dovetailing into an equity lift. we start strong this first of june and we do so with the right guy at the right time because we did not know over the weekend china would finally change birth policy from one child to two

children, to three children. what is so important here is the ark of your service to the nation goes back to nixon and truly the opening of china in the 70's. explain the baby policy long ago and far away. >> you correctly point out, traditionally the one child policy to avoid a very large continued increase in population. now their population is turning downward, they want to keep an active vigorous workforce so they are now permitting people to have three babies. a lot of chinese families would like to do that, that's part of the tradition of having large families, one of whom takes care of the parents, this is

culturally going back to china. >> this is really important. you mention the culture of china. is america and its bipartisan policy to china blind on the culture of china? >> i think we need to understand it better. your understanding of history in the united states and the weights taught starts with atoms and moves wet -- athens and moves west. whereas a whole portion of the world have their own cultures and their own histories. shyness is 5000 years old and we have to understand that culture is not going to change and they change their government since the revolution in 1949, but the culture of china is a very deep

one and one of the things to remember is education is a critical part of that. it has been for centuries and will continue to be. we are dealing with a country is very formidable in its emphasis on education now and particularly in technology education. jonathan: do you think that perspective on his -- on history led to us to think we could adapt a system that is driven the growth of the last 50 years? robert: that's right. he said one of the major things we've done is open china up. the chinese were not permitted to study abroad. including the united states. he said no repair open

university students to study in america. he said one thing to remember, we will learn from you, you've a lot to teach us, but it doesn't mean we will change our system. you have to make the deception -- decision to learn from you and that caused us to change the fundamental system on china which is based on 5000 years of culture. so we have to understand a lot of americans were of the view once they became a more marginal open economy, they will also move towards a democracy. the chinese even early on said we have our own way of doing things and because we move in one direction, it doesn't mean we will move in a democratic direction. jonathan: when you look at the

approach of this administration, do you sense continued naivete? robert: no. i think they have a very good understanding of china, they've worked with china. jake and i went to china several times with hillary clinton when we were in the state department together. tony has been there with biden when he was working with biden. campbell knows china as well as anyone there. they are not naive. they are very knowledgeable. i think the chinese respect the fact that they understand china quite well. lisa: distinguish what their approach is to president trump's. what they want to accomplish with their chinese u.s. policy that perhaps trump did not. robert: i think the tone has changed quite a bit and i think

they want to do two things. they want to have a good dialogue with the chinese. they said that. the first meeting did not get off to such a great start but it was certainly a meeting. the second thing they want to do is work with allies to a greater degree and they have a view they will be more effective in influencing china long-term. the trump administration picked fights with all of our allies in the chinese said how will the americans do anything vis-a-vis us if they can't get along with her allies. lisa: if they want a better relationship with china, how does this investigation into the origins of covid-19 fit into that?

people are basically saying that which could potentially really throw a kink in the relationship between the two nations. even though they aren't necessarily significant health consequences in the near term that would stem from that. robert: the answer is i don't know what they know or what they don't know and what their objectives are in this. i can't comment on it. i will look beyond that and say over a period of time, in the health area and climate area and many others, of these are the two most powerful countries in the world with also a substantial amount of scientific expertise and over a period of time we will have to work with the chinese and get through this to deal with the pandemics of the future. we get a lot of early-stage information on flu from the

chinese. that helps us develop our vaccines here. so whatever happens now, whatever the reasons behind it, i don't know what they are, over the medium term we will have to work with the chinese on health issues and numerous other issues. don't forget, we were able to deal with the 2008 financial crisis in part by working closely with the chinese. we have to turn these into short and medium-term elements. lisa: we're does trade come into this? there's been tariffs and certain agreements china came to but we've not necessarily fulfilled. what does the biden administration want to see with trade between the u.s. and china? robert: certainly as you recall there were a few issues in phase

one. mostly china buys more stuff from the u.s., agricultural products, natural gas and things of that nature. now we have to move to phase two which is in agreement on intellectual property, trade secrets, in whole range of things. we have a very competent trade negotiator. there is an understanding that at some point we have to move not to some grand grand deal, but identify two or three or four areas where we need to reach some level, at least a framework for dealing with these issues. what we're doing now is moving apart. we are becoming more self sufficient. in certain areas that have to deal with very high, highly advanced when he first century technology. but over that time we need some degree of understanding of rules

to deal with the framework for some of these newer technologies, safety issues for instance. technical issues, in whole range of things, dealing with ai or cloud computing. someone has to set international standards for these things. the two most important countries are china and the u.s.. we look at the legislation being produced now, part of it is have the u.s. be a leader in setting international standards. china says they should also be a leader. this fragmentation of the world and each country with its own national standards and that's not healthy and doesn't improve efficiency. jonathan: we are against the clock. from new york city, good

morning. equity futures up 4/10 of 1% on the s&p. up 18 on the s&p. free -- for our audience worldwide, this is bloomberg. ♪ ♪ >> with the first word news, u.s. oil futures climbed higher in more than two half years today. west texas intermediate rose. the global market will tighten up. they say it has almost gone. french president emmanuel macron demands to know if the u.s. is still spying on eu leaders. he's responded to a report that the u.s. monitored angela merkel and other politicians with the

help of denmark. the danish are among the u.s. closest allies in europe. there's a report japan will allow some spectators at the summer olympics. organizers will let domestic fans attend the games. they required to have a negative virus test or vaccination certificate. fans from overseas will not be allowed to see the limb fixing person. the world biggest meat supplier has become the latest casualty of a cybersecurity attack. gbs says they shut their north american and -- and australian computer network. the attacks takes place three weeks after the operator for u.s. gasoline pipeline was targeted. instacart has a plan to replace its army of gig shoppers with robots. but of a long-term strategy to cut across -- cut costs. bloomberg's review documents the detail they plan involving

building automated film and centers around the u.s. were hundreds of robots would get boxes of cereal and soup. 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. i'm ritika gupta, this is bloomberg. ♪

>> it is vaccination,

vaccination, vaccination. we need a very important effort to be able to get vaccines into the arms of people in developing in emerging economies. without that, we won't be able to say that we've overcome the crisis. >> the oecd secretary-general there. good morning. counting you down to the opening bell. in new york, equities up. we advance 4/10 of 1% after slim months of gains. your yield is higher by two basis points. fx market euro-dollar unchanged. crude at 68 and wti up. tom: on the way up i look at

brent and on the way down a look at west texas intermediate. $70.64 on brent crude. right now, let us wander out to 2025 or maybe out to 2030. what is so important here is people like dr. adele joe -- wander out into parts of china looking at bat research and how would ling cindy people research and what it means for the future of covid. out for years or five years, do you just assume there will be more covid's? >> we definitely have to assume there will be more covid's. we know the coronavirus family has many different viruses that are circulating in bats, some which will have the pat -- capacity to infect humans. we have to understand how this

found its way from bats into humans in order to make us resilient to the next covid emergency. there are other viral families we have to be resilient about prayer there will be more infections and we have to be ready. tom: is that the warfare in terms of funding it will do look to larger government and ngo institutions to drive forward the research? dr. adalja: it's really all of the above. infectious disease, that is a national security emergency and it's incumbent on governments to think about public health infrastructure as part of national security infrastructure. right now we have a chance to get this right and enable the u.s. government in terms of pandemic funding as well as globally with ngos that are engaged making research they are involved in.

that's where a lot of the failures happen, of the fact local health departments didn't have the ability to test or contact trace. now everybody -- when everyone's been talking about decade after decade. lisa: i'm shocked tom did not start with the idea with alpha betacam a delta. the new names because the old names were too confusing. the question is going forward will we get a debate, -- will we get a debate -- beta or gamma that will break through? jonathan: we might have lost him there.

you just put them to sleep. about the greeks. lisa: this is interesting. they came up with names for variants at this point. they sort of designate them because we are expecting further iterations. tom: what i find so important here -- i'm not an expert on this, but i get more questions from people about the effect of these variants than any other thing than we do. let me rephrase the important question. what should we actually study from alpha to delta on the variants? dr. adalja: it's confusing now we have three different names. i do think what's important is to try and understand are they more transmissible, what

mutations make them more transmissible, do they have the ability to evade the immunity you have from natural infection and lastly, are they able to evade vaccines? what we've seen so far as none of them have the ability to evade vaccines especially when it comes to what matters, hospitalization and death. it's important to keep a database of all of them but the solution remains all of our vaccines out there work tremendously well with that. that's the way we get out of the variant problem. lisa: in the meantime, this weekend it seems almost normal. people are walking around without masks. is this appropriate, is this the new normal where we go back to the old normal? dr. adalja: i think we are that point in the united states with the trajectory of the pandemic is such we will be back to normal probably before the fourth of july.

memorial day was a good marker. that that inflection point at israel where cases fell. i think people are understandably and justifiably feeling this is getting back to normal. we will still have cases. we won't get to covid zero. we want the vaccines to be as high as possible. we are on the way back to normal. jonathan: thank you sir. going back to normal, i wonder if we remember how to socialize. on southwest, the videos of the rowdiness. lisa: people are struggling, but more than that people don't have patience for anything. hitting flight attendants -- jonathan: i think southwest and

american airlines following. good news for you, tom. in the business cabin you will be ok. tom: i don't know what to make of this. jonathan: people have been pushed and are exploding. i think people have forgotten how to socialize. they have forgotten how to interact with people. lisa: there is an element of desperation. the idea of 14 months of not being able to engage with the world in ways that are familiar lead to depression, you see that spiking, you wonder if that will percolate out. how much is that going to continue and how much will that go down as people relearn social norms. jonathan: in florida, the governor threatening to find any company that asks people to prove if they've been vaccinated. the washington post, one florida concert promoter thinks he has a workaround. $18 for anyone who's vaccinated

and charging $999 for everyone else. coming up next. good morning. tom: we are trying to do it as well. jonathan: equities up 19. this is bloomberg. ♪

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♪ >> everything is in place for inflation to rise, and i think it is going to rise significantly enough to make the fed uncomfortable. >> the risk-free rate right now is manipulated by central bankers all over the world. >> the fed's objective right now is managing expectations, and they are doing a great job of that. >> we look at the fed's goal of reacting, so they kind of want to wait it out, but market prices don't week things out. -- don't wait things out. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the final month of q2. good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. tuesday morning, up 19 on the s&p 500, advancing zero point 4%. what a couple of