♪ >> some type of a pullback just seems natural and normal. >> is inevitable that the boost from reopening and fiscal stimulus. . will stay >> you will get periods of setbacks to the markets because that is what they do. >> the market likes higher rates and people just don't want to buy into that idea. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: can we just have one quiet morning? from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. lisa abramowicz will be back with us on monday. romaine bostick with us this morning. it is a readout from the white house the gets your attention. an executive order on promoting

competition in the american economy. tom: i'm going to get right to this, there's a magical thing in western massachusetts every weekend, the great barrington farmers market. that 72 point executive order is a complaint of the administration over fair pricing and boosting farmers markets. you've got to be kidding me. president biden is going to somehow adjust the great barrington farmers market? jonathan: i've got no idea if that is achievable. the broad strokes are clear, they don't like the broad consolidation that has taken place in this economy. over 70% of industries of the a was economy. they worry it has been pushing down wages and pushing up prices, and they want to do something about it. tom: a major shout out right now to catherine mann of m.i.t. and citigroup, now vetted by the bank of england. dr. mann at least three years

ago gave out a primal scream over the consolidation of american enterprise. she was right then. she is right now. jonathan: romaine, i know you will be focused on the broad sector story. romaine: there's a lot of minutia in adminstration. i think some of the language about unionization, about right to work, with regards to state

licensing requirements, these are huge issues that this administration can by cass congress to get done -- can bypass congress to get done. jonathan: it talks about regulatory bodies looking at past mergers that may be previous and ministrations didn't take a close enough look at. what do you think they might be talking about here? romaine: they are talking about google, amazon, facebook. progressives on capitol hill have been pushing this idea long before biden got into the office. the idea that he's on board with this means that some of those deals are going to be screwed knives. talk about facebook and whatsapp , some of the deals of smaller competitors who weren't a threat at that time but were on their way to becoming a threat. that could have huge invocations for how these companies grow. jonathan: these could take a long time to sort out. elsewhere in this read, there are things that can be done pretty quickly tom: it is -- pretty quickly tom: it is an executive ash pretty quickly. tom: -- pretty quickly. tom: it is an exec it of order. when will this go into effect? jonathan: on the s&p, we advanced 16 points. yields are higher, treasuries are lower. 1.4411%.

euro-dollar, you are stronger. euro-dollar positive a little more than 0.1%. let's head down to d.c. and catch up with emily wilkins on our bloomberg government reporter. what is your take? emily: this is a really wide-ranging executive order. there's everything in here from airline luggage to big tech to gas prices. as we talk about this reconciliation price -- this reconciliation package coming down the line, we acknowledge that the reconciliation process we are talking about is very limited. this is a process that really deals with the budget, with spending come with how the government spends money and controls the debt and the deficit. these regulations out this morning from the biden administration really cover a lot of areas congress would not be able to touch through reconciliation, but deal with those overarching themes of

competitiveness, of trying to make the economy a little more even for consumers. tom: why the kitchen sink approach? it seems like they have dumped everything into one document. does that surprise you and biden watchers? guest: i don't think --emily: i don't think it is the pace we have seen with these executive orders. biden has been around d.c. for decades. he very much knows government and fee structure. he has a staff that's very well aware of these things. by putting all of this into one package, instead of doing a small thing here and a small thing they are, they are coming out with a comprehensive message that they want to try to make businesses more competitive. they want to make things more equitable for consumers,

and they want to target these areas. take it together, it since a much wider message about what the administration wants to do. tom: page six, paragraph three, there will not be a couch for the italy hot -- a gouge for the italy-england football game. jonathan: thanks for that. on substance, what would your read on that be right now? emily: executive orders are great because it is the president acting alone, and not so great because the next president can undo everything with the stroke of a pen. it doesn't have the long-term stability you might get through law. you read through the list the white house put out this morning, and a lot of it has words like encourage or ask agencies to look into or have them go into. it doesn't actually have a lot of very clear and direct this must be done, that must be done.

it is more like giving agencies instruction and guidance. romaine: he can certainly instruct people leading these agencies on what direction this might go, particularly at the doj, at the -- at the ftc. you have seen this with the biden administration, with the trump administration, with the obama administration. is there any sense that we ever get around to this idea that the checks and balances that congress is supposed to represent does become a factor in how these types of rules, major overhauls of u.s. industries and how those are regulated, congress has a say? emily: right now if you look at congress, look at the antitrust legislation they are trying to pass. it has bipartisan support. both parties are saying something needs to be done. yet, you had a mostly partisan bill passing through committee,

and now democrat leaders are saying they can't even bring it to the floor for a vote because california democrats have concerns with the overarching bill. even on something that has as much agreement about antitrust and big tech, you are seeing congress get stuck in the details here. it is not necessarily a partisan thing. tom: to me, i am looking at grass fed beef. the fact is i'm going to be go out to ben's chili bowl in washington this weekend, and i know they are going to use grass fed beef and it is american-made, except this documents says much of it is not , so they are going to micro tune the department of agriculture to pull it back from trump things, or to make new law, new initiatives? emily: a lot of this is a reversal of what we saw with the trump administration.

we see that from the fcc's net neutrality rule that biden is asking them to look into. a lot of his general comment. but it is a reversal from the trump administration, and biden is going to be able to do this very quickly. he's able to send out a message. but the fact that he's doing this via an executive order means it is going to be very easy for the next president to quickly undo a number of these. jonathan: emily wilkins down in d.c., it is good to catch up. for anyone who thinks tom goes off on a tangent, i know people wonder whether we actually get on. we do. i remember going out to lunch with a former central banker and we talked about tom's interview style. he said when he mentions these random studies and thing, they are real, and they are appropriate for the conversation we are happening. when tom mentions beef, the

first thing i would do is just go to the particular statement from the white house this morning and search for the word beef, and here we go. let me add some meat to the bones of what you are talking about. four large meatpacking companies dominate over 80% of the beast market -- the beef market, and former share has dropped from 51.5% to 37.3%, while the price of beef has risen. that's just a little example of the things they are trying to get out in this economy. tom: it is a stunning document, i have to say. it is a compendium on what from president trump may have been 15 executive orders, all laid out with immense precision. jonathan: that is just one anecdote, but the broader story is clear. it's consolidation. romaine: you can make the case

that it has not only harmed consumers, but in the document he talks about how it has potentially harmed workers. the idea of being to switch jobs and face noncompete agreements or have their licenses from one state to the next. it will be interesting to see what the follow-through is here, and what kind of pushback he gets. i'm sure some of these industries are going to push back hard. tom: are they going to legislate amazon prime? jonathan: it's over, like the growth scare this morning as well. we have to talk about the labor market in all of this as well. i manage this to danny blanchflower. i understand from our producers that danny can join us in about 20 minutes. tom: they didn't tell me that. jonathan: i usually get first word on these things. coming up in the next hour, david riley of bluebay asset management. from new york city this morning, good morning. really interesting morning.

4320 naomi is in the, -- 4329 on the s&p. yields higher to 1.3411%. alongside tom keene, on jonathan ferro, together with romaine bostick. lisa abramowicz is off this morning. this is bloomberg. ritika: with the first word news, i'm ritika gupta. president biden is signing a wide-ranging executive order today and get promoting competition in the economy. amongst other things, it calls for supporting programs that would import cheaper prescription drugs from canada, save money on internet bills, and make it easier for people to get refunds from airlines. the president also seeks greater scrutiny of the tech industry. the biden administration will reportedly at least 10 chinese entities to its economic list, according to reuters. the move has to do with china's

alleged rights abuses against ethnic uighurs. pfizer's plaintiff request u.s. emergency authorization for its boosted u.s. covert vaccine after it increased protection from coronavirus. still, signals say they would take a cautious approach to approving a business "bloomberg surveillan -- approving a booster shot. police said 28 people carried out an attack against the president of haiti. two were described of u.s. citizens of haitian descent. billionaire richard branson has made his reputation with a series of their devil exploits.

he returns to that on sunday, when the 70-year-old is scheduled to take a riot power trip to the edge of space. it would be a step towards taking ticket buying passengers. i'm ritika gupta. this is bloomberg. ♪

♪ >> we aim at having more than

50% for the minimum taxation -- more than 15% for the minimum taxation. this is a unique opportunity we have to have a fairer, more efficient international taxation system for the 21st century. jonathan: it is fair to say that maria tadeo did not get the short straw. maria tadeo with bruno le maire, the french finance minister speaking at the g20 conference. where are they? tom: they are in the east side of venice, which is incredibly historic, and the visit is jaw-dropping. it is where they built all the stuff to battle the genoese over in western italy out in the adriatic and then over to turkey. jonathan: and you are very unhappy you are not there, i'm sure. tom: even worse, i am told that francine lacqua is leaving today to follow up with him. for starters, ferro, italian. if anybody should go, it should be you and francine. jonathan: you and i could have

gone and watched the game on sunday. tom: the metropole is halfway to arsenal from the fancy hotels. jonathan: tom keene, jonathan ferro, alongside romaine bostick this morning. lisa abramowicz off today. s&p futures up, 4331. we advanced 0.3 percent. yields are higher by four or five basis points. your yield on the 10 year this morning, 1.3411%. tom: it has come back. it is a better tape, plain and simple. jonathan: the nasdaq basically unchanged. tom: we need to get ready for next week. we will do that with jim paulsen of leuthold group. how important is this earnings season? jim: i think it is important.

this market is facing a lot of negative things right now, everything from being up on his biggest 15 month advancement in stocks ever in postwar history. you have got covid variants scaring people. you got inflation surging. you've got the fed talking paper. you got the m2 money supply contracting. you've got the stock market wondering what the bond market knows. so there's a lot of negative pressure. one of the things that could alleviate that would be another earnings season which is going to probably be phenomenal again, and what is really going to be important is not so much the raw numbers, although they will help. it will be if some of the ceos still have confident outlooks for the future. i think that will take the sting out of some of this and maybe start re-rallying the stock market again. jonathan: can we get into that wall street cliche you just used tongue-in-cheek a moment ago?

the idea that bond investors are doing their own thing and they don't talk to the stocks investors, and the equity investors sit in the other room and go, what do they know that we don't? do we really think that way when we see a move in the bond market? jim: i think we have kind of come to get used to that because certainly the bond market has a good record. i have been burdened by it in the past come over the bond market is doing something stocks aren't, and the bond market ends up being right. so it does gather your attention. i think there's special factors with quantitative easing being such a heavy influence on bond yields, but of got to tell you, i look back historically and we've got an interesting situation going on here where yields have been falling the last several months, and yet when you think forward over the next six months, almost everything fundamental is going to go up. jobs, incomes, profits, and not

only will it go up, it will go up strongly. when you have this combination historically going back to 1950 of falling yields for several months, followed fundamental improvements, that has been really good for stocks. since 1990, the stock return in the next six months after a falling yield like this has been nearly double the return of all the rest of the time. so i am not as concerned. i think before the stock architect finally gives way, we are going to have to see higher yields. i would be much more concerned if the bond market was at 2%, worrying about inflation, than i am at 1.30% worried about we growth. because i don't with that week coming. romaine: there are a lot of cues in the bond market for equity investors area how much attention do you have right now and what has been happening with the dollar? that's seemed to be the call a lot of folks are making.

i'm not sure what the dollar has really said just yet. jim: i think the dollar has a very similar message to the bond market. the dollar rally we have seen, which has been fairly significant, occurred almost coincidentally with the drop in bond yields. i think they are both saying the same thing. there's a bit of a fear premium here. the rest of the dollar i think is rushed to safety, which kind of reflects the same thing going on in the bond market. i don't know if they are right, but they seem to have a very consistent message. the dollar rising certainly hurts the cyclical sectors, international stocks, and hurts small caps more, and i think it helps people return to growth stocks. it has been part and parcel of the leadership we have seen as well. i personally think the dollar is going to come back down and yields are going to go back up. jonathan: i will give you a choice. nasdaq 100 for the rest of this

year or the s&p? which one do you hold? go the russell if you want. there's three choices there. jim: that's the one i'd go with. i would go with small-cap stocks. . jonathan: i thought you might. that's why i gave you the option. it's good to catch up. jim paulsen, leuthold group chief strategist. this gives you an idea of which part of the equity market people still like. small caps for jim paulsen. tom: the big issue is you've got to be in the market. take gina martin adams of bloomberg intelligence for the mantra. you've got to be in the market. how many people aren't in this market? jonathan: and how people are worried about being active or being passive today? take your pick. romaine: you look at futures this morning, it is russell futures out front of pretty much everything else. a lot of people saying that people were too quick to turn

their back on some of the cyclical names, some of those small-cap names. that maybe that was a bit too premature. maybe that bid comes back end. maybe that brings us back up to the levels we were at a week ago. jonathan: yields this morning are higher, and guess what is happening elsewhere? you would probably be right. we've got to get at this speed with that executive order from the white house. i mentioned earlier we would catch up with a labor market expert, one of the best worldwide. we will do that with danny blanchflower of dartmouth, next on this program. tom: his book "the wage curve" was definitive when it was published. what is so cool is he has continued he's research. he has been extremely productive in the last 24 months. jonathan: danny blanchflower of dartmouth joining us on the program, next. alongside tom, i'm jon ferro, together this -- tom keene, i'm jonathan ferro, together this

morning with romaine bostick. we advanced 0.4%. what does the mod market now that's the bond market know that you don't this morning -- he market know that you don't this morning? from new york, this is bloomberg. ♪

(announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body

so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs and to strengthen your back. do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me, it works 100%. (announcer) think it'll break on you? think again! even a jeep can't burst it. give the aerotrainer a shot. pain and stress is the only thing you have to lose. get it and get it now. your body will thank you. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.

jonathan: live from new york city, for our audience worldwide, good morning. here's the price action. s&p 500 futures doing ok, approaching 4330. we advance about 0.4%. nasdaq totally flat at the moment. your clue comes from the bond market. eight straight days coming into the friday of yields lower. the banks have been hurting. down about 11% on the s&p 500 banks. can they get just a little but of reward from this bond market with yields up in the curve a bit steeper? on 30's, we advanced about four or five basis points. still sub 2%. want to look at the curve. here we go. this is five 30's. i went to acknowledge some of

the thinking. ed bradford on twitter with a wonderful chart of fives-30's. this is fascinating. the second peak came on may 13 for the yield curve. that is important because that was a single day after the april cpi report. that steepness in the curve, since we got that come of this curve has been rolled over. it has been flatter. if it is peak in fishing -- it is peak inflation fears that are core here. take a look at the piece about the yield curve and what some of the people on wall street are saying about it. here's a stat for you. citi did the work. they looked back pre-2008 when the yield curve peaked on average, 12 months before the first rate hike. think about that for a moment.

have we already seen the peak of the yield curve in america? it is kind of difficult to get your head around because the cycle is moving so quickly. tom: i agree. i think we will have so much more clarity after earnings season and after some of the hard data comes in out of not only the next fed meeting, but the next two or three fed meetings as well. jonathan: this chart right here, fives tens -- fives tens. romaine: let's start off with the biden administration, set to sign this executive order on competition across a wide variety of industries. the reaction has been relatively muted. facebook down. comcast would be affected by some of the net neutrality rules. railroads slightly higher, that we should point out that erodes sewed off -- point out that the

railroads sold off yesterday because of this. it will be interesting to see how much saber rattling the biden administration does and how much follow-through there is because we've been here before, even with previous administrations. concerned about consolidation, about competition, but not a whole lot came out of it. the other big story we are going to be talking about, particularly heading into next week, is the start of the earnings season. the big banks kick that off. that might be because of what we are seeing in the yield space, but also relatively high expectations going into that earnings season. dan ives out with an interesting note this morning. he's been relatively bullish on tesla for a while and its ev strategy. now he is bullish on gm and its ev strategy, initiating coverage there. gm is one of those companies that is not only managing to catch up with tesla, but more importantly has the potential to get out in front of it. tom: thank you so much.

from the advent of bloomberg on the economy, what we have tried to do is go to the experts. that's been the demand of all of our audiences and particularly global wall street. david blanchflower -- danny blanchflower restructured our labor thinking with his book "wage curve." we all know that our wage curve as a society has been shattered and the recent decades. he is at dartmouth college. danny, i look at where we are, and the first name i came up with -- and you are the first name i came up with. what i want to talk about is the primal scream nature of the 72 point executive order. who is screaming about consolidation in america? danny: i guess the way you would think of it now is that workers have been hurting. nonworkers have been hurting. they've been hit by a serious

pandemic, and it's had a big impact on the world. but this sits on the end of many decades of poor wage growth, and the balance of power between workers and firms has shifted quite considerably compared to where it was. so this is, i've read it very quickly in the last 20 minutes, the kind of primal scream to try to redress the balance of power between workers and firms. i think the market response is very little. the question is, does it have any teeth? is it merely wishful thinking? so this is trying to think about some of the stories about big firms, about google, facebook, and so on. but this is a scream, and it is hard to think about that balance . whether it can do that is unclear. tom: what is important to me is the idea of you or all krugman

or conservatives as well, the overwhelming theme of that document is technology is here, and we are using and adapting to technology every day. within the economics, can we take the deadweight loss of technology and basically put the genie back in the bottle? danny: probably not. the teeth is the big story. i do think there is some sense, i like to think of it this way, firms have the ability to pay a higher wage. they see no real need to do that , and they haven't shared those wages and the profits they have made, so this is trying to do something about that. i've written about it for 30 years area even with the growth we have seen, real wages today

are still below what they were in the 1970's, so this is about trying to thick about coming out of the white house who cares about these questions. the issue is, can you change this? there appeared to be sensible things there in terms of let's think about this in ways in which we can get prices down. but in a sense, i read it as we would like for these things to happen. we would like to try and stop the world from rolling. there's going to be a white house competition counsel. jonathan: forgive me for jumping in. the knee-jerk reaction from conservatives this morning i think would be to say i'm from the government and i'm here to help, run. this is a problem. but i hear competition and the lack thereof, and, i think

rightly mentioned alan krueger and some of the work he did on noncompete clauses and the labor market. this is about trying to reintroduce competition where there hasn't been enough competition. can you just sit there? that is your world, the labor market. non-competes, and the problem that has caused. danny: this is about the balance of power. when the balance of power sits with firms, firms can put in occupational licenses, and they differ by state, and in the u.k. they can do these things called zero out contracts. that is what happens when the bargaining power shifts strongly towards firms. if you can somehow take those occupational licenses away, that increases the power of workers. that's what this document is about. but it doesn't have any teeth. you can say it would be a good

idea to lower drug prices, good idea to let people have refunds, and in some sense, what we will see, workers' ability to bargain these things becomes greater is the economy moves towards full employment. so we have seen these adjustments going on, and in the last six or seven months, the increasing power of workers trying to deal with the bottlenecks that we see. so i think this is an opening salvo. alan krueger's work is really important in that area. firms getting imposed rules when there bargaining position is strong. we will see what happens. but i just think this is an opening salvo. romaine: professor, when we talk about some of the market forces that have pushed a little bit more, giving the workers a little more bargaining power here, the idea that the administration now wants to nudge that even further not

necessarily a surprise, but when you start talking about these right to work issues, this is now a major shift if he's able to get it through and sort of enforce these things. this would be a major shift in the u.s. economy and the u.s. labor market. danny: i think it would be, and there are signs around the world that this shift is underway. in the u.k. we have seen rising unionization rates, and in the united states, the last data that we have, union rights as a proportion of workers has risen. why is that? it is because in the last years or so, nonunion jobs have actually declined. so i think there is some evidence that there is a move for laws to be imposed, and there's plenty of workers around. i think you are right, the balance between workers and firms seems to be changing.

this is a really important and interesting document. let's increase the power of workers, but whether you are going to impose that is another thing. jonathan: we are trying to reduce the friction of corporations. at the same time, i don't want to introduce more friction on the labor side with unions. you know that is a political point. danny: of course that is a political point. that's true. i am just suggesting that there are trends that are moving, partly because that is what is happening out there in the world. i don't think it is a left-wing view. i think the reality is where we are. how that is come to change will depend on how tight the labor market is. jonathan: we agree, we need more competition. we will carry this on a little bit more.

danny blanche power of dartmouth college, thank you. -- danny blanchflower of dartmouth college, thank you. equity futures on the s&p advancing 0.4 percent. yields are higher by five basis points to 1.3444%. i think we all agree that we need more competition. it is just how you achieve it. from new york, this is bloomberg. ♪ . ritika: with the first word news, i met a gupta. president but -- i'm ritika gupta. president biden's team is worried that time is running out to revive the nuclear deal that president trump abandoned. the stalemate is compounded by iran's technological advances and the election of a new hard-line president. a british study says most young people face an extremely low risk of onus and death from covid and have no new -- risk of

illness and death from covid and have no need to shield from the virus. the u.s. is one of the few countries that offers the covid vaccines to children ages 12 and over. european finance chiefs are trying to reassure their group of 20 counterparts that the region will unite behind that global corporate tax deal. bloomberg spoke to spain's economy minister in venice. >> i think a lot of work has been put into these negotiations for a major breakthrough, and i am confidence that this will set appropriate legislation throughout the world. jonathan: the u.s. once -- ritika: china is trying to make it easier for banks to lend to smaller businesses. central bankers cut the amount of cash it must hold in reserve.

the people's bank of china cut that by 0.5% for most banks. that should free up about $154 billion into the economy. 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 governing council considers that price stability is best maintained by aiming for

2% inflation target over the medium. the new formulation removes any possible ambiguity and resolutely conveys that 2% is not a ceiling. jonathan: that was president christine lagarde of the ecb. this whole review touches so much on europe. all that effort, all that time dedicated to making the smallest of possibly incomes which moves the european central bank. tom: i'm worried more about italy-england. i didn't see that until now. you've got to be kidding me. jonathan: i think the bond market heard what you heard, not a lot from the ecb. do you think that is christine lagarde, or just the natural consequence of the construct of the european central bank and the bundesbanks rolling all of this as we go on?

tom: my eyes are so bad i don't read anymore, but i've got a hallway of economics textbooks we've collected over the years. none of what we are living is collected in a single one of those books. they are all making it up as we go. someone who doesn't make it up as ian lyngen, bmo capital markets, giving guidance on price and healed. we are thrilled he could join us today. what are you writing today so i can think about it over the weekend to act on monday? what is a specific thing for this weekend? ian: this weekend, i think the primary focus should be preparing for next week's accelerated auctions schedule, as well as cpi on tuesday. what we have is, because of the settlement issues, we are going to have a 10 year reopening on a monday, which is very rare.

i suspect that is what is going to drive price action in the near term. from here, a period of consolidation makes sense. as the markets come to grips with the reality that this is a big repricing that has taken over from the reflationary notion. tom: in the equity market, i think you are aware that there are stocks out there that you can go long and short on. how about byt the disinflation dip -- how about buy the disinflation dip? are we seeing people act? ian: i think what we are seeing is people looking at the fed that we thought would be less responsive to inflation, not dissimilar from what the ecb is now signaling. i think that is where we have seen a flattening, and that

suggests that any type of near-term inflation we see, if it isn't transitory, the fed will get involved. if the fed gets involved, that is by definition the anti-reflationary trade. jonathan: you mentioned supply next week. we get a lot of supply from the treasury next week. you've made the point, you mention cpi out on tuesday. you've made the point repeatedly that you should ignore the data. do you think you can still ignore the economic data? ian: i think we should be ignoring the traditional reaction function to the data, so higher inflation, we might want to sell treasuries. i would say buy them. jonathan: interesting. carry on. ian: the notion is anything that brings the fed's lift off rate hike closer is going to be bad for twos, threes, and fives, but good for tens and 30's. i think that's what the market

has been telling us over the last two weeks. jonathan: that is not early cycle behavior, is it? that is what we would expect towards the end of a cycle, right? ian: exactly. that is the same argument we might be experiencing if there were a policy on the side of the fed. that is not our stance, but that narrative is out there as well, and that is just the idea that the fed is taking the excessive monetary policy accommodation away a little too quickly. this makes sense given what we are seeing from the global recovery perspective, as well as the risks associated with the delta variant. romaine: where is the equilibrium euro for right now. ian: at this moment, there's a chance that 10-year gilts can make it to 1.22%, but that would represent the local bottom of the yield range, and that won't occur for at least a few more weeks. what i dynamic equilibrium in the market would like with the something closer to 1.35% to

1.40% after we take down the auction, but before we try to trade the cpi numbers. it is really a reaction to the cpi that will help recalibrate the market expect patients -- market expectations. romaine: i am curious about the auctions themselves here and the participation we might see. with regards to foreign participation, is that really what is going to drive it next week, or are we going to see a limit more coming from the domestic dealers? ian: there's been a lot of price action that is occurred during the overnight session, so some of the extreme lows we have seen in treasury yields have occurred early in the morning during the overnight sessions. that does speak to the importance of foreign participation at the auctions. however, given the trends we have seen an option

participation, there is plenty of domestic demand to take down treasuries, and we are about to reach an inflection point into this year and perhaps the beginning of next which were not only we have the nominal auction sizes plateaued, but we will start to see supply become even less of a concern. jonathan: quickly come a new range on tens, what is it? [laughter] ian: for the next month and a half, i will call at 1.21% to 1.47%. jonathan: we will take it. ian, thank you. ian lyngen of bmo capital markets, head of rates strategy. tom: that is a window into the real world of institutional bond managers. jonathan: that is fantastic. should we talk about that new reaction function? the traditional reaction function of the economic data for this market, typically upside surprise on inflation, yields higher, curve steeper. in making the point that maybe

it is different now, maybe it is that later psychodynamic you might expect, where high reflection prints would lead to a more active federal reserve, and therefore it is a buy on tens come on 30's. tom: it is a market call. i am not in the business of market calling here. i do take the point of everyone in equities at the bond market now is leaning that way. but i am just going to say it, i believe in the resiliency. these corporations are going to adapt. are we going to get through this fiscal debt? the reaction functions are a mystery. jonathan: we will hear from the corporations next week. from new york city this morning, good morning. alongside tom keene, i jonathan ferro, together with romaine bostick this morning. lisa back on monday. tom: says who? jonathan: do you think she's going to be longer? tom: i think she could extend. jonathan: equity futures, 4345

on the s&p, up 0.5%. she's not in crete. yields higher. tom: but we can say she is. jonathan: where is she? tom: maybe the upper west side. i don't know. jonathan: from new york city, on radio come on tv, this is bloomberg. rg.

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 dollars. and they're number 1 in customer satisfaction. his number? delete it. deleting it. so break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds.

>> we are going to have another year or two of above trend growth, and i think that is going to be something we should be pretty encouraged about. >> some type of a pullback just seems natural and normal, and this is not a reason to exit the market. >> the market likes higher rates and people don't want to buy into that idea. >> you have the stockmarket rendering what the bond market knows, so there's a lot of negative pressure. >> when eventually rates rise, i think you will have a problem. but for the moment, the economic and monetary backdrop is very favorable. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz.