manus: good morning from our middle east headquarters in dubai. i am manus cranny. dani burger alongside me at london hq for stories that set your agenda. tapering. they call for a reduction in the asset purchases as soon as the autumn. the e.u. decides not to impose new travel curbs on the u.s. despite the spread of the delta

variant. the u.s. sees the biggest weekly jump in virus deaths december. the pboc fuels expectations for more policy easing. they warn investors not to pull the wool over their eyes when it comes to china risks. a very good morning. the voices rise on a taper. one man or woman's taper is another man or woman's tightening, isn't it, dani burger? bostic and kaplan have a variety of opinions. this is what i am drawn to. he differentiates the actions on fed funds from what actions are going to be on asset purchases. we must differentiate and disaggregate. good morning. dani: good morning, mr. cranny. you are spot on on pulling this out. this is something jeffrey rosenberg over at blackrock wentz out as well. the market is believing it, too.

it has not moved as much as the backend which suggests we will get not necessarily raising rates anytime sooner but perhaps we get asset purchases. manus: what are the eurodollar futures telling you? this is where the differentiation comes in. you have dollars pricing and 25 basis points. is that too dovish? we can debate that in the next 30 minutes because lack rock institute were with me 30 minutes ago and they took the other side of that trade. they said we are not that hawkish. it's the end of 2023 for them before you begin to see a hike. we can debate what is on the board. dani: on the board, we have more calm this in markets -- clamness in markets. some of the is settling down a little bit. not too much direction in the dollar for most of the morning, can hire one basis in lower yields.

we are about 1.31 on these 10 year yields and we are seeing a little bit more strength coming through in oil which had fallen. finally, i want doubt iron ore because even though oil is doing better today, some of those growth scares in the metals centers and commodities is still present. manus: indeed. we have wrapped up this potential hawkish tilt from the fed, haven't we? yet nanette fed, raphael bostic. let's get to callum pickering -- the fed, raphael bostic. let's get to callum pickering. the prospect of a taper in the autumn. loretta mester will come along later. talk to me about the speed of taper that you expect at barry berke. good morning -- you expect. good morning. callum: the taper will be gradual. by the middle of next year, the

fed will no longer be adding assets its balance sheet. the thing to focus on here, listen to what central banks are saying very carefully. they are saying that qe seems to be very effective at a time of a crisis when there are severe liquidity issues but during normal times, it seems to be less effective. that is what the bank of england said last week. it basically thousand that internally, central bankers think that the assets they are buying are not affecting economic outcomes and that is where you get this conclusion. bankrate, fed funds rate, so the central banks, as long as they have a predictable path to the balance sheet, whether that is no change in asset or even a gradual passive rundown, it will probably not impact economic outcomes too much. markets should be looking

at that as the marginal tool. dani: does that mean that in order to fix some of the inequality in the market and wage is that it is all up to governments at this point? all up to fiscal policy? kallum: i cannot put it more bluntly than this. central banks have no business dealing with those kind of issues because monetary policy is not a precise enough tool. balance sheet expansions do very little to impact things like wage inequality unfortunately. regulators cannot do a lot about that. central banks can hit general targets such as average wage and ration, average inflation, nominal gdp growth, those kinds of things. manus: you might say that but the chair of this federal reserve has made it his business . he has vocally made inequality his business. what you and i might think is

their business, the chair has brought in other legs whether you or i like it or not. where are we in the inflation? let's do something more precise. where do you think medium-term inflation will run to? that is a consequence for the rate hike trajectory in 2023 so take us through your targets on inflation and when will the first rate hike come? morgan stanley say the first curve is -- kallum: the break even suggested five years from now, u.s. inflation will be to five that seems fairly reasonable, above the target. this short-term high-pressure economy of high inflation, that will fade but what the fed will realize is inflation is well above it target and it will remain there on a sustained basis.

that's probably late next year and the key thing to focus on we will get sustained above target inflation with the red and central banks reach with they say is full employment. this is the real fly in the ointment for central banks. you can get wage inflation before you reach full employment if that inflationary dynamic is there. central banks under all circumstances are not able to achieve full employment. dani: just before we came on air, you were talking about how you see the fed following the boe. what exactly do you mean by that? kallum: what central banks are probably going to start doing is producing more research which suggests that during a market panic period, during more normal times, it is less effective and hence what you will overly see is central banks focused markets towards what is happening at the front end of the curve, the

funds rate in the case of the u.s., and less about what central banker doing with their balance sheets and the bank of england has already said when the bank rate gets up to 0.5%, so 0.1 is the current rate, it will start to passively unwind its balance sheet. the bank signaled need to get to 1.5% before this happens but their argument is if the unwind happens in a predictable way, the market can handle it and that is what we are going to hear from the fed when it comes to that balance sheet data g. manus: predict -- balance sheets strategy. manus: predictability. can the fed achieve -- where will i be tomorrow? -- can the fed achieve a tantrumless taper? kallum: yes, simply because its balance sheet is so big, it can probably do enough manipulations in order to calm markets.

that way i see the problem in markets at the moment is the bond market does not reflect the likely outlook for inflation of nominal gdp growth but bond yields have been held low by central banks massive purchases. they are essentially creating a huge negative turn. markets realize this. the macroeconomic framework is so credible, if they buy these bonds and get caught out with too much of ration, they -- the central bank traders will buy bonds off of them so that is what will happen. central banks will move so slowly and predictably that if you want to get rid of bonds, you will not feel like you need to do it into much of a hurry. he will trust that the central bank will take that taper off of you. dani: i have to say, i think your pause after manus's question said it all as well. you will stick around without spread we have much more to discuss. kallum pickering from baron berg -- kallum pickering.

they will vote on the infrastructure bill later today and they will be considering the 3.5 trillion dollar budget plan afterwards. this is all according to chuck schumer. let's get more on what is happening. we have enda curran with us. the vote because the timing -- we learned about it a few hours ago. what do we know about the deal so far? it is a done deal. when the vote happens, it will pastor easily? >> it is -- passed through easily? >> there is a side debate going on about an amendment over new rules on cryptocurrency. there is not yet agreement on that so that might slow things down but the bigger picture seems to be that an agreement is close. you heard mr. schumer himself describe it as the biggest coming together in decades in terms of a spending package on infrastructure in the u.s. and it is comprehensive when you look through the list.

it is not just roads and bridges and rail. it goes through broadband, fresh drinking water, and across the gamut of the economy, making progress. if it does get across the line, it will be a recovery story. that will fuel more debate about inflation tory in the u.s. -- story in the u.s. manus: what comes next in the wider economic plan? we will get into the much larger fiscal long-term plan, aren't they? enda: exactly right. clearly, there is a lot of division on both sides of the house in the u.s. about how much spending the economy does require. we know there is broader debate among economists in terms of how much support the u.s. economy does need right now given the recovery has been robust. with the virus surging the way it is, it comes as a reminder that the economy is not yet out of the woods. the bigger picture that the biden administration argues is a lot of these changes are longer-term.

talk about infrastructure that will yield evidence 10 years from now. we heard janet yellen argue that over a period of decades, it is not really a here and now game for the inflation story. it is about longer-term productivity rewards for the u.s. economy. the next stage of debate over the broader multitrillion dollar package that mr. president wants will be more fractured. the question becomes how much can get done? manus: thank you so much. enda curran wrapping up the very latest moves from capitol hill. first word news with annabelle droulers from hong kong. annabelle: thanks, mama spirit world leaders face mounting pressure to end the use of fossil fuels after a you and backed climate change report warned time is running out to stop global warming from exceeding 1.5 degrees from

preindustrial levels. coal is a major sticking point with india facing out of use of the u.k. says it will ease quarantine and travel rules to allow tens of thousands of officials to attend october's top 26 summit in glasgow. in the u.s., the delta waves that started in low vaccination dates in the south have engulfed the country with cases and hospitalizations at their highest since february. 38 states have transmission levels considered higher by the cdc, meaning they are posting at least 100 cases per 100,000 residents. we will have positivity rates of at least 10%. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: annabelle droulers, thank you so much. coming up, the pboc raises

expectation for policy easing. we will get into the outlook for china as the central bank highlights risks to the growth outlook. this is bloomberg. ♪

>> investors for a half decade were basically pulling the wool over their own eyes on the capriciousness of the policy environment in china. that is coming home now to bite a number of investors. it is one of the many risks that you really need to take into account but investors have not. manus: capricious. carson block speaking to bloomberg yesterday about the risks of china and the impact for chinese stocks. a quick snapshot. slow continental drift.

you have the hang seng up point percent. it has been nine months since we dropped by more than 5%. europe indicated flat at the moment. it seems we have ignored at the moment the taper talk. good morning. dani: good morning. we are coming back from friday all-time highs from the exit 500 pulling back a little bit this morning. how much of the risk is this market ignoring? manus: capricious. dani: capricious china. i know you love little bit of alliteration. china's central bank raised expectations around monetary easing. the pboc said in its latest quarterly report that inflation shares are controllable and highlighted the risk to the growth outlook. kallum pickering is still with us. the china question, the economic growth has vexed a lot of

people. do you do the same? has your view on china's growth materially changed? annabelle: china's growth is moderating, struggling to meet the growth targets met -- the political growth targets which are set by the parties. what we should remember in the western world is that china is now in our mess -- in our mess -- enormous, the biggest economy in the world. if we can get 4% or 5% gdp growth, that is more than sufficient for a positive global growth tory, equivalent to the 10% and 12% growth we saw a decade ago. the other thing to emphasize is that for this global growth story, it is the western consumer which is the main driver, the u.s. consumer, the european can tumor, with the excess savings on the balance sheet driving near term demand. it is the e.u. and the u.s.

supporting medium-term growth. what we need from china is a little ability, no serious downsides to prices, and the global recovery will be fine and that is exactly what we will get. manus: that is not what we have gotten so far. we had major policy, i suppose, changes. certainly delivery. maybe it is in the rhetoric have used, not the outcome. maybe we should have been more aware of that. we have not had mellifluous drift. treated isolated on its own investment. they say the word is underway china, structurally underway china, but they like government bonds. where do you want to be structurally more overweight in china? annabelle: the western world -- kallum: the western world is probably where the exciting growth is. china is above its pre-pandemic level of gdp. from our perspective, we need to

emphasize that policymakers consistently intervene. this is a multiyear story. when domestic momentum starts to slow down to a level that is undesirable and we get this acceleration in growth. later this year and early next year, we will see china surprising to the upside. the china credit impulse, we can keep an eye on that. we have for the last 15 years. as soon as it turns negative, the authorities step in, spend money on public works, and the economy accelerates. so long as china has the policy headroom, it will stimulate to stabilize growth. this is something we have seen three or four times over the last five or six years and the same story plays out each time. dani: i hear you on what is happening in china for the western consumer but i wonder if we can zoom out a bit. does the chinese economy still tell us something about the global economy? kallum: of course, it is a main

driver of global trade. whether it is a marginal driver of global trade now that the u.s. and european consumer is spending so much is an open question. china has advanced and normatively. -- in normatively -- enormously. it's underlying growth momentum is slowing. if we take a long-term view on china, we would like it to moderate a little. we need it to remain consistent with its underlying growth potential. if the authorities force growth beyond that, you will create capital misallocation and that will eventually need some cleansing so this process of moderation to a certain extent should be welcomed. the question is, do the authorities acknowledge that growth momentum is flowing over time and start to reset a more realistic growth targets on a multiyear view? manus: maybe we should be

thankful that it is the authorities letting the air out of the tires and doing the job that the ebs globally might have more of an impact if it is the pboc that pulls back rather than the authorities. thank you very much. kallum pickering, senior economist, and guest host on global markets. jp morgan boosts to pay for more staff, raising the stakes on wall street's battle for talent. that is next. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe." with me, dani burger at london hq. to jp morgan, they are raising the stakes on wall street's intensifying battle for talent, expanding a previously announced pay increase to a broader range of staff. rivals across the industry are paying up to hold onto junior

staff. nabila ahmed is with us. it is one of these moments where you say, maybe i should just off my cv. it is time for me to come back into the city paid last week my wanted to be a junior banker. now, i want to be just any banker. nabila: so many options. i'm not sure you want to put in those hours. they are pretty brutal. another bank raising pay. a red hot talent were going on. we are in a record year for dealmaking and somebody needs to do that, the number crunching and the analysis. this is why junior bankers are in such hot demand for jp morgan, which had already given a pay rise to junior bankers, extending that rise to its junior sales trading and research analysts. the baseline now for first year analysts is $100,000 which is up

from $85,000 and then the pay for second and third year analysts will go up by 15,000 a year as well, so not bad if you can get it. dani: at this point, it is not necessarily has raised their pay. it is who has not. are there a lot of banks that have yet to announced pay rises and can we expect that across the whole industry that this is the trend that will continue? nabila: that is exactly right. what we are seeing now is that the banks that announced these pay rises earlier on like morgan stanley, deutsche bank, they raise their pay until 100,000. they are now looking like they are falling behind because you are seeing goldman sachs and jeffries going to 110,000 so these banks that announced their pay rises earlier will have to do something to bridge that gap an extra bonus payments are that thing because you cannot have these discrepancies at the

junior ranks when all the bankers are pretty much in line and have not yet started to stand out from each other. that is where the talent is and there is a lot of poaching going on between the banks so if you want to retain your staff and attract young guys, you are going to have to pay the market rate higher than others. dani: thank you so much for the update. i feel like we are probably going to have to have you on again to give us another update on raises their salary next. let me just say, you might not want that job because it would be tough hours. i don't know. i think your hours might be pretty competitive with what some of these bankers are putting in but here is a snapshot of the markets right now. manus: asian markets a little bit higher. let's test pause for a second. a long day 30 years ago, 12 hours followed by clients in the evening. that was your average day so please, i am open to optionality on what a long day is.

cry somewhere else. dani: exactly. coming up, we talk about the rally in u.s. stocks. this is bloomberg. ♪ (announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning.

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dani: good morning from bloomberg's european headquarters. i am dani burger alongside manus cranny, who is in dubai. this is "bloomberg daybreak: europe." here is what you need to know. eye on the fed tapering. they call for a reduction in asset purchases as soon autumn. the e.u. decides not to impose new travel curbs on the u.s..

the u.s. sees the biggest weekly jump in virus deaths december. the pboc fuels expectations for more policy easing. carson block warns investors not to pull the wool over their eyes when it comes to china risks. manus, another day, more jobs data coming in. we have the opening data yesterday and what really struck me is comparing those job openings to the unemployment number. i more or less stole this chart from tom at rbc who says this is back to normal. we have more job openings than unemployed. this is what it was like before the pandemic. he said if you are looking for wage pressure, the recipe is right here. manus: absolutely, and that is down to the potential tightness in the market, the supply, the mismatch. i am drawn to robert kaplan, who has spoken to bloomberg and basically said you must differentiate between what a taper is and what is tightening.

if we taper a little bit more judiciously, we have more latitude when it comes to when we had to tighten so let's take that narrative, the tightness and the taper debate and the relentless rally in u.s. stocks. 200 days and the s&p 500 has not faced a 5% drawdown. it left some investors wondering when a retrenchment might come. let's talk about that question right now with the cofounder and cio at human edge investment in technology. i want to get a sense from you first of all on how you look at risk right now. we are debating taper and hikes. how do you look at the narrative of when a taper will begin and are we at the beginning of a repricing of the bond market in that context? good morning, welcome. >> thank you very much for inviting me. it is the first time i am here with you with my new company. thank you very much. the way i look at this is we are

in a strong economic recovery. i used to call it the supercharged and super fair recovery. the story is that we have an extremely strong economy with an extremely strong equity market and that is exactly what yellen use to run the fed, now running the treasury, what she has been looking for, and in that context, i think you need to be short duration, you need to prepare for the next move up in bond yields, and you need to hold onto your equities because this has legs. the risk is always there but as we look at it with our algorithms, the risk is not larger from a large correction now than it is a normal rally even though it is so long-running. dani: i look at some of your allocations pick 100% equities in your largest funds. in another one, imbalance fund, you have equities and high-yield bonds, something that is a focus

that they would be shocked at, not to have a more diversified into some of the safe assets so what is the thinking behind going all in on risk? mads: maybe i should not comment too much. our thinking is that you want to capture the rally so when we look at our funds which we have developed, we are 40 percentage points overweight equity is at the moment. -- equities at the moment. last year in march, we went to zero so what we are trying is almost the opposite of bridgewater. we are saying once in a while, you really want to be overweight equities and once in a while, things are risky and you want to move out so rather than saying it is just a question of time in the market, it is also a question of realizing things are going wrong and you need to step up. it is the same with the fixed

income. we have opportunities and we hope warm front has 10% emerging-market and 10% split between them instead of government bonds. we are for years are underweight the seven year benchmark but that is fine. what we want to do is see if the rally continues, we stay with the risky asset and it is much better once in a while really to step out. manus: there's a whole lot of phrases we can use for your positioning but they are too crude for this show. 300 basis points was enough for hired marks in high-yield. he was resolute. high-yield, i am all in with 300 basis points over treasuries. is that enough for you? how much cannot compress and over what period of time cannot spread, do you think? mads: it is dangerous to say we

can go to all-time lows but you can also ask yourself, when you look at the earnings season, i know you have been reporting on it, how strong is the recovery in the revenues? which companies are going to be defaulting in large amounts here with such a strong recovery? maybe even chinese -- i said this month that they are pursuing the same goals as the u.s. but with the liquidity of the growth, i think the spreads will come in and it will be much less painful to be in high-yield and then it will be to be in government bonds. people are relaxing a bit now because we had the big move up in bond yields, government bond yields, and then they have been coming down but i it is going to 2.5 to where it was before and i think what will trigger it is when people start relaxing and saying, ok. when we are over the hump in the recovery.

i am in high-yield's. we have 30% high-yield in the portfolio where we normally would have 15. we can have 100%. dani: you have none. ok, i know you also have a large u.s. equity allocation but you mentioned china. that's go there. what do you do with the region right now? are you an owner of chinese assets? mads: a very little bit. we are underweight china, underway emerging market bonds. if we don't hold any local currency bonds. we will grace my positions in emerging-market equities and we are not buying anything more. we think that the recovery is going to be a technology -- i'm sorry to be a little bit boring. and we think that u.s. equities are the best risk-reward so we have a large overweight in u.s. equities. i had it in my previous

position. it was in 2015 and we still had it. it works especially now this year. i think the fed can do more. it will be more difficult for those central banks. manus: you just said that you think bond yields are going to turn to 3%. some equity traders would utterly go to lunch instead, a very long lunch, at 2.5% to 3%. what does that do to your equity story? mads: if it happens over 1.5 years to two years going into the next recovery, i think what happened last time was that we tapered and tightened at the same time and it got a little bit much especially in late 2020. i think earnings recovery will relax. the economy will relax. inflation will come down but the target of the fed is a higher inflation rate that it was before so going to 3% is the

lower real rate. if it comes gradually, we are going to climb this wall of worry and we are going to have a nice big, beautiful recovery in the u.s. economy just as the treasury and the fed are looking for that. if it goes wrong, then there is no tapering. but first, there was no tapering probably in the autumn. dani: a big, beautiful recovery. that is a very optimistic call. mads pedersen, cofounder and cio at human edge investment technologies. thank you for joining us. let's get to the first word news with annabelle droulers. annabelle: world leaders at this year's -- face mounting pressure to end the use of fossil fuel's after a u.n. back to climate change report warned time is running out to stop global warming from exceeding 1.5 degrees from preindustrial

levels. coal is a major sticking point with india holdout. the u.k. says it will be ease quarantine and travel rules to allow tens of thousands of shows to attend october's top 26 summit in glasgow. u.k. retailers reported this lower sales growth in five months during july. according to the consortium, the volume of goods sold in shops and online grew 6.4%. they warned retailers that they are feeling the pinch of brexit, worsening staff shortages. bayer has lost another appeal, finding its roundup weed killer cost cancer. a california appeals court refused to overturn a 2019 verdict in favor of a couple who claims they ll after using the

herbicide for more than 30 years. the company set aside an additional $4.5 billion to deal with thousands of roundup lawsuits. the company says the verdict is not supported by the evidence at trial or the law. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus. manus: annabelle, thank you for the roundup. coming up on the show, countries impose travel restrictions on each other at the delta variant spreads and threatens the global recovery. we take a look at the very latest rules and regulations. this is bloomberg. ♪

>> there is a big appetite to

travel. everywhere people can travel, we see bookings coming in. >> demand is strong among our guests, who are thrilled to be back. >> people are much more comfortable to be in hotels, resorts, all the usual lodging use cases. >> we see an increase in demand for leisure business demand. >> the crews industry, -- cruise industry, we have among the best protections. >> overall, we are seeing bookings and experiences. >> we will continue to see that. i don't see delta having a particularly large impact on it. manus: some of the biggest travel companies speaking to bloomberg on the demand for travel during the pandemic. let's stay with the story because the u.s. raised travel alert for israel, france, and the delta variant there of. the e.u. decided on monday not

to reinstate restrictions on nonessential travel from america despite the new covid cases exceeding the threshold. just look at florida. let's get maria tadeo. lots of rules and regulations on where we travel, where we go, and how we grapple with those this is a big move. the e.u. keeps the u.s. on the safe list even though they are saying over 100,000 cases a day. why? maria: and you know, manus, the united states in principle, by every measure, when you look at it just purely based on the numbers and the science, should not be on that list. when you look at the cases that have gone past the threshold that the european union would consider safe, when you look at the pace of vaccinations, the e.u. is now vaccinating more people and also faster than the united states. when you look at this decision, which took a whole day of deliberations for the e.u. to

keep the united states on the safe list, this was controversial but also one of the sources said we have to look at this from a 362 perspective. this is the politics of the diplomatic relationships. it is the economy. europe has three weeks left to cash in on the summer. this is my personal experience. it really is full with americans so that was an influence. maria: it is not just about -- dani: it is not just about travel. there is the vaccine past coming into effect in france. do we expect germany to follow suit next? maria: angela merkel is meeting with the heads of the regional government today. they had to deal with the delta variant and the autumn campaign when it comes to the vaccination. we have seen the numbers in germany stall. are we going to see similar measures to that effect where we

don't have vaccine, no proof of vaccination, you are not able to do anything. in terms of germany, what we hear is that, if anything, for the time being, it will be about phasing out the free testing, encouraging people to get the vaccine. the cdu in particular, angela merkel not keen on restricting freedoms before the election in september. dani: that is maria tadeo. manus, when it comes to allowing for into the country, the u.k. making what might end up being a controversial move. they will allow diplomats in without having to quarantine even if they do not have their vaccination yet. manus: this may come as a shock to you but i am not the irish ambassador to the united arab emirates. i know be ambassador. i will see him in a couple weeks. we are having a get together. i did a trip a couple of weeks ago.

five days away, four covid tests, three locator forms, and bloomberg spent about $500 on my covid test so that is the reality of travel. dani: it is much more expensive and there's a lot more admin, as you know probably better than anyone else, manus. manus: there's also the price of soundbites. coming up on the show, it was expensive -- coming up on the show, after a volatile start for global markets, we assess the outlook for gold, oil. this is bloomberg. ♪

>> we run mining businesses for the long-term, or we should, and the short-term-ism is something

that comes and goes. more importantly, your question around the bed and what it is going to do on the back of the economy, the u.s. economy, i think we ought to look further than that to the global economy and whether we have actually seen the full impact of the irrationality of the way the world has managed covid and the impact it will have on the global economies. so very short-term in the u.s. sense as it is, in times like this, we are taken back to 2008, 2009, we only saw the full impact of the global financial crisis in 2013. dani: fair enough, but along those same lines, if you see the higher gold price, that winds up pushing of the cost of everything else. oil, copper, all the inputs you have to deal with. your efficiency gains were enough to offset the cost

increases but i'm wondering how long you think -- how much more can you ring out of those efficiency gains if we continue to see higher costs? mark: there are two things that drive up costs. many of the commodities are the same because we measure cost per ounce, not in unit cost, but her time. one of the things the gold industry is facing is the cost per our measure. we have looked at the impact. there is evidence of higher -- the biggest driver for our costs is is steel and that impacts capital products. we brought a lot of our steel forward. people are talking about transitory impacts. we have expanded our stocks so we can manage that. we are still consolidating the two, spirit there is bigger buying power.

approaching slightly differently to many other, trees -- other companies but for me, the quality of the assets and the great keeps our costs under control. dani: marc bristow -- mark bristow speaking after a volatile run for gold. it fell as much as 2%. it is starting to pare back some of those losses but let's get the view from our mliv mark cranfield who joins us now. we are starting to see a very slight tick up from gold. are we going to get reprieve from the gold bugs? mark: i think the outlook in the near term is probably a bit more pressure on gold. it is the flipside of higher treasury yields and a stronger u.s. dollar so that is obviously what is weighing on gold. of course what we saw yesterday was an exaggeration. it happened on a monday morning in asia.

two countries on holiday. somebody tried to sell the large event of gold at the opening and we saw a tremendous spike down in the price and it has recovered quite a bit since then. the underlying sentiment for gold is pretty fragile and while you have a situation where the fed is talking about tapering, slightly hawkish comments already this week from fed speakers. obviously, we are moving in that direction so all of those things are not too good for gold in the short term. further down the road, if we get back into a situation where we get a very broad risk aversion situation in equity markets, not doing so well, and people generally wanting to be very defensive, gold may start to come back into its own but it has been highly affected what happened in the dollar market and with treasuries.

manus: talk about a flash crash, 4% for gold in the space of an hour. great to have you with us this morning. that screams volumes about the risk of reported in these markets at the moment. what are you hearing now about the renaissance of? bitcoin has had a rally in the past couple of months. relative to this kind of illiquidity that has appeared in gold yesterday, does that chime at all for you into bitcoin out of gold or is that an overplayed narrative? mark: i'm not sure if it has got too much to do with other precious metals but when you speak to people in the crypto world, there is a sense that there is traction in the idea that the big cryptocurrencies are genuine alternatives to some other form of financial assets and there is a core holding among people that they are not trying to give up.

going back even just a few months ago, there was a dealing among some people that it was all very flimsy, that every time they had a soft, that would probably be the last chance it would ever have, but increasingly, particularly because of what happened in the our world, you can see it is quite reasonable for people to buy and sell art based on an fts by the use of cryptocurrencies -- nft's by the use of cryptocurrencies. people are taking it more seriously as an investor. when you get a dip in the price, it does not have to be the end of the world. dani: mark cranfield from our market some live team and we are seeing oil start to work up a bit. concerns about china still hanging over this market. manus: we have had blackrock. they are saying they may

distance themselves from carson block's capricious comments about propertius china. "bloomberg markets: european open" next with mark and anna. ♪

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anna: good morning, everyone, and welcome to "bloomberg markets: european open." i am francine lacqua. mark cudmore joins me from singapore. the cash trade is less than one hour away. the push to taper the feds -- calls for a reduction in asset purchases as soon as autumn. the dollar falls again. raising the state, jp morgan boosts pay for more staff, upping the ante