manus: good morning from our middle east headquarters in dubai. i manus cranny. this is "bloomberg daybreak: europe." asian stocks sent -- stocks look for economic optimism. u.s. and china taking steps forward for gradual reading engagement. oil extends its gains after his

size level since 2018. an upbeat assessment on demand outlook. in the world's top meat producer looks to reopen most of its u.s. plants a day after a crippling cyber attack and a notorious russian linked group is sought -- thought to be behind the hack. welcome to the show. everyone is aflutter and there is a hint of optimism in the oil market. one of the shortest news conferences i've ever been to. april 2020, we are still committed to it verbatim, no more output increases until 2022, keeping the market jumping in terms of supply. the consensus is you have a constriction and supply going in the back half of the year. will it lead to inflation? that's the other major debate in the market. and the saudi energy manager --

minister had this to say about that issue on the mind of all investors at the moment. >> and inflation increase may impact the economy, that's true, but the current market situation is impacting inflation, i'm not the economist to talk to. talk to goldman sachs, talk to the others and they will tell you hopefully it is minuscule. manus: it might've been exciting for everybody else, it was exciting for me, it's the first news conference up into in a number of months. but i didn't quite know what to do. the point about it is, what is politically acceptable on the global stage? would $80 be inflationary or politically acceptable? one analysts as $100 is politically toxic.

so it's about trying to keep a goldilocks scenario of where we are in the oil market. our lead on the energy side said this is one of the most upbeat news conferences from the prints on the clear signs of improvement on demand. russia talks about a gradual increase in demand. so we are just seeing this reasonably bullish construct on the demand. let me show you what's going on with the markets. is it a warning sign? that's my question, more than a statement of fact. u.s. equity markets back a little bit in the red. european stock markets flying high. minors, oil, all doing very well. european stocks are now the lead equity market on the global stage recovery. the oil market, the hedge funds are not exactly -- you could see

a reset in the positioning on the oil market. are we hearing the awakening of this lumber from the inflation hawks, which could reprice the bond market? as neel kashkari says, it will last for three months. the schools will reopen and the inflation spike will rollover. to the global market, ahead of the jobs report on friday, the concern around some of the optimism for reopening remains. mr. kashkari repeating that the central bank matching high inflation would only be temporary. saying the risk are on both sides of monetary policy. still, the world's factors are powering ahead. jamie morgan saying is climbing

at the fastest rate since april 2010. the head of asset allocation and microstrategy. good day to you. how bullish are you? >> on the positive side, there is strong recovery everywhere in china, the u.s., and europe as well. on the other hand we have a negative force, essentially an inflation threat putting some [indiscernible] as the allocation stands, and

second we favor since a long time ago u.s. equities. manus: can i just talk about the assessment of risk at the moment? there is a shift, it's called crash preparation. it is tail risk equity protection, the highest in a number of years. my question to you is, are you becoming a little bit more worried about fully valued and with price pressures you might see some margin profit headwinds ahead of this? do i need to prepare for some retracement? >> yes, you have to be ready for that.

due to the inflationary pressure, for sure, and it could put at risk some corporate margins in some sectors. for these companies it could put downward pressure on the margins. could enjoy the recovery and usually it sets the cost because today what is going on, through four channels, and

[indiscernible] deterioration of the margins which are at a very high level. manus: everybody that joins the show has a view on when the fed might talk about tapering. to actually taper would be rather shocking, wouldn't it? or would it? >> it's a consequence of what we are discussing, in the fed response in terms of capital rates first. there is concern of the fed response but it is a risk.

things are not as good as they were in past years and you have to be aware that we are in a very long trend and it's a very venture and. -- trend. the question mark is because, should we monetize the monetary policy? markets will question the fed's response now and in the months to come for sure. it's a high level for july. manus: as you say, we may pause

on profit outlooks etc.. then we have to understand what is real average inflation targeting. i sound like a broken record. annabelle droulers has the first word news. annabelle: thanks, the world's largest meat producer is recovering after the shock after cybertek shut -- cyberattack shut down many of its plants. bloomberg understands a notorious russian-based group was behind the attack. opec sticking to its plan of monthly production increases for july but refusing to give any hints about further moves until there is clear evidence of war demand.

they agree to a hike in july. the forecast is global demand up by 5 million barrels a day between now and the end of the year. for the first time since the start of the pandemic, the u.k. has reported zero deaths within 28 days for positive covid-19 test. the milestone brings forth business call for the government to push ahead with plans to end all social distancing guidelines as planned on june to any first. some health officials are urging caution over a new surge linked to variance first detected in india. they had of the bank of japan financial market department has told us country must accelerate efforts to prepare the transition away from libor. he says the biggest risk of the switches at some institutions may choose to save money by waiting to see what others do first.

>> we are no longer at a stage to wonder whether it is doable or not. we are at the stage where we have to get it done. >> 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: thank you very much. coming up, u.s. equities hit an all-time high. will get the very latest. ♪♪ this is bloomberg.

>> the second and third wave, very difficult situation has been broken. the numbers are much better than they were. manus: an optimistic message from the german health minister. those incremental moves and rhetoric shift sentiment, the market rallying to an all-time high yesterday. closing up by .8%. i look around the world and europe has this absolutely resplendent victory, european stocks are beating the u.s., so

one thing does need to be differentiated. you say you do differentiate between italy and germany, the speed of these reopening's will drive the narrative for you. talk about the differentiation first of all of the top line. >> exactly. you have to remember that china, in a sense, is back to the brink of trajectory and economic growth since last year. now coming back to the trajectory

and will take more time to come back to the pre-pandemic trajectory. we will have a gap with the new trajectory this summer because for europe, it's for now and the months to come. we expect growth to occur faster during the summer after the u.s., after china. second, i would say we have three groups of countries that are most at risk in the euro zone. on top of that [indiscernible] this is why we have to distinguish countries like the u.k. and the rest of the

eurozone and the rest of europe from germany and others. manus: you would dissect it even a little bit further and say the trajectory for the u.k. is even more dominant relative to its old neighbors within for europe, wouldn't you? is that a bit of optimism there? >> it's a combination of things. it's the combination of the pace of vaccination, it's a combination of that and policy. and in terms of production and supply and demand. the u.k. is going faster than the rest of europe from that

perspective. manus: can i just return to a statement that we set the agenda with, and you reset it to china. china will return to normality ahead of everyone else. but china tried to stop the you want from strengthening. that had a major dollar consequence. what is the ramification of this new angst about the yuan position? >> there's something very interesting going on in june. we saw structural change. we mentioned many times in the past that china is a challenger of the u.s., and also china is a very big economy compared to the u.s., things are -- with the

trajectory in terms of size, within the world economy. china is opening its financial markets, both the bond market and equity markets. and it would make sense for the international investor to diversify, taking into consideration the chinese asset classes. as a result of these different positive changes in china, including the u.s., for the next 10 years. this is what we're seeing from the technical point of view.

and this is major currencies. we haven't for a long time, and for years to come, this is what we are seeing day after day, month after month, quarter after quarter. manus: sosa tactical intervention at the moment on the yuan strength. let's get you the business from annabelle droulers. annabelle: one company has sold all his stock in amc after the movie theater changes call of bolstering its finances the same day. sources say they no longer hold

amc stock and disposed of his stake after concluding it was overvalued, propped up by a recent wave of day trader enthusiasm. zoom has given a sales forecast that topped analyst estimates for the current quarter. revenue in the period ending in july will be as much as $990 million, beating average forecast. it offers hope the company will obtain and add large customers even as demand created by the pandemic eases. deutsche bank is the latest company to launch a new remote working policy. the lender said it will allow staff to divide their work between home and office. earlier this year it said a range of 40%-60% of work at home makes sense. that is your bloomberg business flash. manus: thank you very much. the work from home debate, we

will hear more about that in just a moment. coming up, a russian link hacking group targets the world's largest meat producer. details on jbs, the hack attack. this is bloomberg. ♪

manus: it sure midweek edition of "bloomberg daybreak: europe." with me, manus cranny, into by. -- in dubai. the attack forced jbs to disrupt output from facilities that provide almost a quarter of americans apply of meat.

thanks for being with me. what do we know about this attack? >> what we do know so far is that it occurred over the weekend and it hit the computer networks of jbs, which is headquartered in sao paulo brazil. not only did it force the shutdown of all the facilities in the u.s., it took offline operations in australia and one of canada's largest beef plants. jbs has said it made significant progress to resolve the cyberattack and should be able to have the vast majority of its plan operational by wednesday. we have been able to report back the group responsible for the attack, we don't know if they only operate in russia but we know they are at least russian linked.

and they've been responsible for previous ransomware attacks. what they do is offer ransomware as a service, so you can actually hire the malware that gets executed on a company's i.t. network, it seizes them and encrypts them and steals them. so then you are doubly extorted, as we say, where you are charged to decrypt your data and also to have it released back to you so it's not posted online along with company secrets and intellectual property, etc. manus: it is an entire industry all on its own. holding industries for ransom quite literally in the cyber world. you just think of where we are with that with the colonial pipeline a few weeks ago, the size and scale of these cyberattacks is great.

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manus: good morning from our middle east headquarters in dubai. i manus cranny. this is "bloomberg daybreak: europe." asian stocks and futures look for direction amid inflation concerns and economic optimism. positivity on another front as the u.s. and china take a step forward toward a gradual real engagement. oil extends gains after closing

at the highest level since october 2018 is opec-plus provides an upbeat assessment on the demand outlook. the world's top producer of meat looks to reopen most of its u.s. plants a day after crippling cyberattacks and a notorious russian linked group is thought to be behind the attack. a warm welcome to the show. equity markets are driven by the manufacturing of the good news, neel kashkari said inflation will be temporary. both sides of the market back in the green, but we are literally dipping in and out here. money is gushing into money market funds level we haven't seen since 2009.

that was pre-the great financial crisis. so equity markets and money flowing in, the cost of protecting a crash is higher. european stocks trading at records. not every body is arriving at records at the same time. there little more circumspect, action for the u.k., rent is up by .4%. the demand outlook, will hear more about this in just a moment. this is a tight market were going into. you'll find the nerves will jangle on the potential for higher wages toward friday. awaken from your slumber and inertia.

let's turn to the opec story. they're forecasting a tightening in the oil market. recommending to raise output through july, but not giving much of a hint as to what comes after that. a concern the energy minister commented on. >> this may impact the economy, that's true, but the current market situation impacting inflation, i'm not the economist to talk to. talk to goldman sachs, talk to the others and they will tell you hopefully it is minuscule. manus: keeping notes all in check on the news conference last night.

sticking to the 2020 agreement. no more oil for you boys and girls until 2022. can we survive that long? where do we go from here? juliette saly is in singapore. let's set the agenda. is the pathway clear to $75? juliette: certainly you been hearing this positive calls from not only the iaea but also ing here in singapore. morgan stanley also upgrading their forecast by $10 a barrel for both print and wti on the longer term trend. bullish momentum coming through in the print market as it clear $17 a barrel and that has everyone wondering if we will get to $75.

they're saying the market will welcome additional supply and that opec-plus remains in full control of the oil market. they also see wti at $72 a barrel and saying considering the broader positive outlook for what they're expecting from the oil market, they are reiterating their advice for investors with a high risk tolerance to state for longer dated oil contracts. manus: the bullish calls are coming hard and fast. i just wonder what is politically palatable, whether $80 would calls phone calls from the white house saying can you hurry and get 30 million barrels. i was paraphrasing what might happen on the global political stage. juliette: that would be an interesting phone call. it also depends on the overall global economic recovery.

a little more bearish on this outlook, saying you will see low $70 coming through for wti but it won't surge much higher on a sustained basic. saying because the current capacity will get redeployed and i ran increasing output as well. that's a similar line that will are getting from bloomberg intelligence saying perhaps the market has already matched bullishness and wti may have little room above $70 a barrel. manus: thank you very much. good to have you with me this morning. do you think we're seeing bullishness? >> our view is the long-run price for oil is about 60 four or 65, a marginal cost for producers to make a decent return. we are five or six dollars above

that today which is a little high, but frankly the comment you were making there suggests, and i totally agree, we will get inventory draws in the second quarter and second half, or quarter, fourth quarter. we will most likely see $80 oil by the end of the year. it's not that expensive in people's pockets, if you take the biggest market, the united states, gasoline is 1.5% of disposable income. i remember 2007-2008 when it was 4% of disposable income. it's not relatively expensive today at this level. manus: in a relative sense, you are right. but the politics of oil you have to bear in mind as well. what is politically acceptable, $80? $100? his excellency was deflected in terms of the propensity for oil

to add to the inflation narrative. what is palatable on the upside? >> what is palatable and what is possible to constrain, the problem is here we've added 2 million barrels a day and institutional investors have really pushed back that growth narrative on 10% of global supply. people don't want that to grow. it's not going to grow this year and most likely next year. we've had the biggest wave of consolidation in that universe of growth companies and they certainly will not go to the same extent before the rest of non-opec. there's only canada and brazil which is having any real supply this year. really therefore the only place it will come from is opec, and i think they view this as a long game. they want to produce their supply at long-term. to some extent you are right, they control the political

angle, but as you know, they need $75 to balance the books and pay a $75 billion dividend. if you went over 100, i totally agree. manus: then we would talk about demand destruction, but we don't have time for that with three minutes left. the line in the news conference was april 2020, we are still committed, no more output increases until april 2022. can we really survive until april 2022 with no more taper? >> i think you're absolutely right. we are looking at similar balances, maybe another 250 million barrels of potential inventory during the second half. that takes us with an eight or nine handle on oil and they will have to come back. if that pans out, they will have to come back and give us more

supply. his touching extremes of prices which may not be acceptable, you are correct. manus: let's get another couple and quickly. everyone's talking about iran. apparently they didn't talk about iraq, he didn't even make the table yesterday. i say that rather skeptically. let's say they do a deal before the end of june which is what everybody is telling me. what do you put on the supply, and how sticky is iran's supply? >> last time the sanctions were lifted, a million barrels a day added over 11 months. that was quick, i thought, being a geologist, geophysicist, i thought those fields would take longer. so i'm kind of thinking that certainly up to a million barrels a day as possible on a 12 month basis.

that's what we are assuming. but starting by the third quarter of this year, so right into three q year would be our base case estimate. i suspect it will be a little more challenging this time with another three or four years of underinvestment. it should not spring back that quickly, but that's what i'm penciling in. manus: maybe i was wrong the last time, but that is me paraphrasing on your behalf. that's ok, i am wrong on many occasions. does it perhaps reduce the scale of the taper that you might have penciled in for the rest of the year from opec-plus? >> that's right, and some of the comments yesterday, the last meeting he used the phrase bend it like beckham. ben supply as the data comes in month by month. it's not about these forecast for the next six or nine months.

frankly they will be wrong, and global supply and demand is revised for the prior two years. it's still not correct. so i think you just watch it and if iran comes back, saudi needs to put in less than the rest of their friends. manus: absolutely. thank you very much, my guest this morning on the oil markets. let's get your first word news with annabelle droulers and hong kong. annabelle: thanks, manus. the world's largest meat producer says it's made significant progress after a cyberattack force a shutdown of all its u.s. beef plans. jbs said the majority of plans are back in operation today. a notorious russian link hacking group is said to be behind the attack which also for shut down

of slaughterhouses in australia and canada. for the first time since the pandemic, do you caz reported zero covid deaths within 28 days of a positive covid-19 test. the milestone reinforces business calls for the government to push ahead with plans to end all social distancing guidelines as planned on june 21. some health officials are urging caution over a new surge linked to a variant first detected in india. the world health organization has approved china's sinovac's covered vaccine for emergency use. who has recommended its use for people age 18 and older with the spacing of 2-4 weeks between shots. sinovac is already shipped 380 million doses two countries and regions ranging from hong kong to zimbabwe since late last year. 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: thank you very much, annabelle droulers with the latest. coming up, optimism for the uk's economic recovery and the outlook for the ftse for the rest of the year. that conversation coming up next. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." you're with me, manus cranny, in dubai. the u.k. has seen a milestone in the path out of the pandemic, for the first time since last

march, the economy reported -- the country reported zero deaths yesterday. it's adding to optimist him around the u.k. economic recovery, hoping the prime minister will push ahead with ending the final restrictions. what is the best case for the u.k., you've got the euphoria around the u.k.. a senior european equity strategist is with bloomberg intelligence. we have this euphoria on the vaccine and business optimism. the equity market has underperformed the european markets recently, but will that continue? >> it's rather ironic in ways, you've got all this good news and yet the ftse has underperformed pretty dramatically. up 10% year to date, but the rest of europe is up between 10% and fort -- between 14% and 20%.

it's about valuation. you have a chart right here which shows the relative valuation of the ftse over a number of years, and we are at a multiyear low. the multiple is about 75% of the euro stocks for example. we are favorably disposed in terms of sustainability of the economic recovery, and that does open opportunities to think about the ftse in particular because there is a lot of leverage here. manus: let's dig a little bit deeper into that. people talk about the ftse what about minors, oils, and banks. where do you think the best companies are, how do you dissect the best companies position in the ftse? >> we print out a note that looks at opportunities. we focus on companies that fall

into three buckets. one of them is very much what you just talked about. the banks, the miners, energy, they have cyclical leverage to not only the u.k. but the global pandemic recovery. the second group are restructuring or self-help type opportunities. there is some overlap with the first. got the banks, barclays, lloyd, you have telecoms like bp, you have several other companies all in the financials. then there's a third bucket that you could say is more thematically driven. things like a green super cycle recovery, or 5g and how that takes off, to mention a couple. and again, there are some overlap with the first two, but you can think about companies like glencore that have the

right metals in place for the global pandemic recovery. that's how we have broken it down, and there is an interesting overlap as well with where we see real value across a host of different metrics. where some of these companies, and a couple of others, our trading not only at cheap absolute multiples but cheap relative to their 10 year history on those multiples. we think there is some real opportunity when you think about how some companies are positioned accordingly. manus: absolutely. thank you very much, tim pig -- tim. 1.79, that's the inheritance. murdoch capital probably dumps

the stock for-profits. that is next, this is bloomberg. ♪

>> this has been an extraordinarily productive year. we haven't missed much as a result of being out of the office. longer-term, it has impacts on the ability to train, recruit and retain the best of our people. this ultimately has been experience, i expect by the fall we will be more in the office. manus: the chairman and ceo ken jacobs exclusively speaking to bloomberg on firms and the return to the office.

something dani burger has been following closely. management is saying one thing, and there's one story that encapsulates it all. they feel that were not working if they can see us. it's a power-play thing. it's generational and it's all down to the baby boomers. dani: and i would argue it almost seems like something the bullish banks are diverging with. hsbc is trying to get rid of some of its office space so they can save costs. what i think there is a real argument here we can make that says if you wanted diverse staff, you have to allow for some flexibility, if people need to be home for child care or caring for adults even. you need that flexibility. this is a model that works for everybody. manus: like you said, a little

more flexibility in all of our lives. there are few boundaries and they get blurred. another story, murdoch went in for 230 million dollars of stock and then dumped it and said we've had enough. you've got to add disclosures, then would murdoch disclose, it's like a crossing of a regulation file. >> it's incredible, it's kind of a brilliant trade. the kind of shares they bought they can sell at any time. so that was in a disclosure there. but because they bought at a premium, the market says amc can do all these acquisitions they want to do, they can go on the offensive, shares about --

rally, and then they sell out of that. it's really unusual, but you have to assume this wouldn't have been possible, but it sees volatility that shares could move. it would not have been possible if it wasn't one of these stocks. manus: i would recommend reading through it on your terminal. 1411 percent up on the year. and they got in. they went in, probably when a lot of people didn't want to touch that stock from a restructuring point of view. we will catch up tomorrow, we've got one more day left. we can do whatever we like. we will see you in the morning, dani burger with the story on amc from the team in london and dubai.

the european market is open. let's see if they can set the agenda and beat the pace that we set here. this is bloomberg. ♪

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♪ >> good morning. welcome to "bloomberg markets: european open." i am matt miller in berlin. mark cudmore joins me out of singapore to take us through all of the market action this hour. the cash trade is an hour wait. here are your top headlines. the tussle between economic optimism and inflation concerns continues to play out in markets. investors wait still f