>> we have to cooperate. we should cooperate on a range of issues. we also cannot permit the kind of aggressive military buildup, the kind of efforts to dominate maritime navigation, the intimidation of nations in the larger asia-pacific region.

>> hillary clinton with a warning about china. good morning from singapore. it is "daybreak europe" and these are the stories that set your agenda. calls for a fed hike next summer bringing forward the target. yields pickup with stocks mixed admitted china tech selloff. european covid cases sore. germany and greece restrict access to the unvaccinated to stem the rise. plus it is the final day of the bloomberg new economy forum. the key themes include china tension, climate change, and cryptocurrencies. warm welcome to the show. in terms of markets, i have decided to channel my inner robert frost. the road not taken. two roads diverged in a yellow wood, chinese equities and american equities.

u.s. equities, you are looking at perhaps the second-biggest annual number of records since 1995. apple and tesla, who is going to win the electric vehicle war? the s&p 500 said to rise by another 11% even in an environment of reduced stimulus. you want to belong the cyclicals. the nasdaq up 0.5%, apple up 2%. 10 year yields grounded. if you want protection from the rising covid cases, do you want yen or swiss? i take you to the land of euro swiss. down in the euro, up in the swiss, this is all about sniffing out where is the resistance point at the central bank in switzerland? we are on the brink of a fourth wave of covid around europe. the market seems to be wont to have swiss franc in its back

pocket, seems to be one of the havens of choice. it is about finding the pinch point. let me show you quickly what is happening. we also have the lira. the longest losing streak since the middle of september. it is a politicized decision summit would say and they have left the door open for a christmas cut. this is about how much attention you pay to the currency. equities. it is the final day of the bloomberg new economy forum. china tensions are the key theme. >> of course we have to cooperate. we should cooperate on a range of issues. we also cannot permit the kind of aggressive military buildup, the kind of efforts to dominate

maritime navigation, >> on a fundamental level is going to want to stay within the united states. europe will not want to be seen or want to start navigating between china and the u.s.. there are concerns about a bad patch in our relationship because we have taken actions in violation of agreement which do not have an explanation. >> the australian government has not played this well. sometimes when china has been excessively assertive, the australian government responds rhetorically to cater to its own domestic political constituency. >> let's bring in our mliv editor. i think hillary clinton set the

counterbalance to a bullish readout everyone has given us in terms of the stabilization between china and the united states. mark: she sounded aggressive. that rhetoric the past couple days, people are nervous the u.s.-china relationship, but as we follow the u.s. consumer last week, look what people are doing, not what they are setting -- saying. i think we are seeing concrete positive signs. there are three things that have happened. one is the president she-president biden virtual summit. number two, they are collaborating on climate. number three, even though clinton was sounding aggressive, she said they are likely to reduce tariffs. to me it is very positive what we have seen. manus: we did have a little laugh about the joke, the robert frost poem, and i am jesting with you. but this political risk is something that could perhaps

come down a notch and that can help markets that has a global impact. mark: it is important to emphasize that while we have had positive steps, they are minimal. i think they are more positive than the soundbites would lead you to believe. but they are only steps and it can collapse at any moment. everyone is making the point how crucial it is, how the world depends more and more on that china relationship despite the fact we talked about other economies. it is really about u.s.-china. manus: to that point, john kerry in his speech at the new economy forum, this narrative that is rising. i caught up with the danish energy minister. we are in an energy crisis. gas prices around europe -- it is not -- through nord stream 2. mark: it is the most difficult time to be targeting coal prices. we are curtailing the life of

these coal plants, they may be going to bring them forward five years, optimistically. the energy crisis is not going to last the next few years. if we are talking about bringing the coal plant's life force or 2030 to 2025, that could help. it is just not the right time to put the pressure on. manus: i'm sure anna is sitting waiting for her gift from alibaba. did you join in? mark: i could not believe the kind of scale of the reaction to alibaba. that shows the market is still nervous about china. more interesting that some of the data is sentiment. these are people who have positions in alibaba buying into the economy. they are not buying because it has medium-term discount. if they were they would ride this out. but they are panicking. manus: i want to pivot. i want to listen to john kerry for a moment. >> we are making good in the

first year we have an opportunity to do so through the budget. in addition, loss and damage has not been accepted in a major part of the agreement. we accepted the idea it is important to deal with and that we do have to have dialogue how we begin to deal with this. we don't want to shut the congress down putting money in. we cannot accept the opening of liability which is going to tie up for us in the structure and not get the money we need for allocations. we ought to be putting more effort into that where we are doubling the money. the truth is a lot of countries decide to grow in coal, not nuclear, not gas, not other alternatives. and coal is the primary culprit today in warming the planet and polluting the air and creating the intensity of the storms that comes with the increased moisture that rises from the

oceans. we have to start with the greatest amount of omissions if we are going to win the battle -- emissions if we are going to win the battle. if countries are committed to a 1.5 degree track, what we have to do is go to the countries where the greatest amount of emissions are and begin to reduce the greatest amount of emissions as fast as we can. that means china, russia, india, mexico, south africa, brazil, a group of countries -- indonesia. those are the countries we have been doing climate diplomacy with. south africa has excepted a new plan. we have to all of us be able to put the deals together that will phase out coal fast and provide the alternative renewable energy and the other alternatives are going to be necessary to provide a holistic grid that works for

the future. manus: i mentioned the danish minister for energy, etc. but it is about building on that narrative. it sounds like kerry et al want to accelerate. this is about money and following the money. he has been involved in corralling the american banks to commit. mark: india made that very clear. they are not going to sign up unless they get the financial backing to help them. i think this is important to realize, that some of the biggest polluters are developing economies who cannot afford to move beyond coal. we are talking about china building more nuclear plants in china alone than the rest of the world put together. china can afford that investment. many countries cannot. manus: thank you for being with

us this morning. mark cudmore with the latest on markets and the new economy forum 2021. let's get across to the first word news. >> germany is applying pressure on citizens to get covid shots, restricting many leisure activities to the unvaccinated across almost the entire country. while avoiding a full national lockdown, measures will allow access to restaurants, bars, and events in areas with high hospitalization rates only for people who are vaccinated or have recovered from the illness. india is to scrap three controversial farm laws that have seen angry street protests by farmers groups over the last year. in a televised address, prime minister narendra modi apologized for failing to convince some farmers and said parliament will repeal the legislation by the end of the month. the announcement comes ahead of key provincial polls that show farmers are an influential voting bloc.

mexico's president has urged joe biden to reduce north america's imports into loosen immigration restrictions. the remarks came during the first north american leaders summit since before the trump era hosted at the white house. the meeting with canada's justin trudeau also discussed supply chain pressures, climate resilience, and recovery from the pandemic. the women's tennis association has told cnn it is willing to pull out of china if tennis star to schwing's safety is not accounted for and her sexual assault allegations are not investigated. she has not been seen in public since early november when she accused a former senior chinese leader of rape. serena williams tweeted that she is devastated and shocked about the news. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

this is bloomberg. manus: coming up on the show, the taper timeline. the call for faster tapering. we look at comments on the state of the u.s. economy next. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe." new voices joining the call for faster taper by the fed. raphael bostick joining. jeremy siegel is a finance professor at wharton, calling

for the fed to accelerated timeline. both get to the deputy cio at tylan. thank you for joining me. bostic is putting forward his call for hikes by june of next year, quite an acceleration. talking to jeremy siegel, i'm going to review what he had to say. he things we are going to see 25% cumulative inflation over the next few years. he does not see markets that are prepared for how fast the fed might go. are we underpricing that tail risk? let's take a look at his comments for our audience this morning. are we underpricing the tail risk of a faster hiking strategy from the fed? good morning. >> i do believe there is a certain interest to tell us the

right story, which is transitory inflation. they have not let it fall under the table. inflation has come to stay and inflation is going to be much more than powell -- they tried to help also in this difficult situation. i think also they do not reach this anymore. this is a problem for central banks. it means they will lose control over the situation. manus: they are worried the fed is verbally falling behind the curve and then will actually fall behind. but there is a shift from tb, citibank, morgan stanley, all talking about buying this.

do you think that kind of positioning is the correct positioning? buying the fall of curves? how do you mimic that in the portfolio? how do you get ready for that? >> i would say be careful dealing with banks. sometimes they have other interests. we are very much focused on our interests with our clients. at the moment, we are trying to run a new risk sector, stagflation, which is not been a risk factor for quite some time. we are trying to broaden the positioning of investors. you can get things very wrong.

manus: do you think they are wrong on the steepeners? >> i think there is a certain risk. i do not say they are wrong. there is a healthy amount of critical thought. manus: give me the top trade to prepare for 2022, then. >> i have a boring recommendation to make. diversification is what you should look for. there are high concentration markets today and it has become even higher. with big tech outperforming, we see a little in china. i think for developed markets in particular, investors should be ready for high growth expectations. it might revert, for instance,

if inflation is going to stay and investors have to prices and -- price in future growth and consumer behavior which would bring down the high valuation. manus: sometimes boring calls can be the best calls. it seems that mark and the team would be more cyclically driven. are you more tech heavy relevant -- relative to cyclicals? >> this year and previous years, we have seen a particular part of the market that grows, and this is contributing to the rate hike. it could be if this is conversion, the markets are

rising. people who have strength in the portfolios may suffer from it. this part of the portfolio might have this momentum that has been running very long the past couple years. this is why i reiterate on diversification. this is going to capture the market risk premium and help you carry on further. manus: i started the show talking about euro swiss at a five-year high. the swiss at a five-year high relative to the euro. i understand that is stretching the equation, but at a certain extent, a covid hedge into 2022

-- what more defensive trade or positioning should i have? is it the traditions of some fx? what is the defensive trade on the barbell? >> this is what i would like to say, that i was surprised investors think it is decoupled from the european union. when we talk about defensive trades, one thing we are saying to investors is to use strategic options or option positions on the equity part. it would actually limit the downside. what we are also talking a lot about is adding crypto's.

they are collaborative and if you think about it, these efforts are going to work differently. putting up to 5% of cryptocurrencies, we can talk about bitcoin, ethereum, even others, this is going to help you decoupled from traditional assets and something that will revolutionize our traditional finance industry. manus: i will take that bitcoin crypto dive as a diversifier. thank you very much for being with us this morning. coming up, crypto a little bit more into focus.

that is next. this is bloomberg. ♪

>> the pandemic and everything that happened the last 24 months will expose faultlines, like the supply chain. it has given us impetus to transform the industry. >> some shortages will last into 2023. what you see i believe going forward is continued improvement. and the benefit of all the investment in the semiconductor ecosystem.

>> right now what they are looking at is making sure they have greater resilience, greater diversification. the question would be supply chains going forward. >> before we are able to ensure bottlenecks are clear, we are seeing demand rising. manus: it is "bloomberg daybreak: europe." just some of the voices the past 24 hours at the bloomberg new economy forum. stocks are trying to find a risk-on narrative. futures up 0.4%. 66 records in a row. 5200 on the s&p 500. yes you are going to go into an environment of reduced stimulus. you just heard from my guest

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manus: good morning from singapore. it is "bloomberg daybreak: europe," and these are the stories that set your agenda. calls for a fed hike next summer. treasury yields pickup with stocks mixed. a china tech selloff. european covid cases store. germany and greece restrict access for the unvaccinated to stem the rise.

a banner day at the bloomberg new economy forum. china tension, climate change, cryptocurrency. it is "daybreak europe." we are live in singapore. the bloomberg new economy forum wrapped up three days of conversations about geopolitics, trade, covid, and multilateralism. i want to show you one market that is on the move. why is oil bouncing? yesterday everybody was talking about a coordinated relief between china and the united states. goldman sachs are saying this morning that the oil market has already priced in a joint release. expectations are at 100 million barrels. this is the important point. the u.s. likely to sell 20 million to 30 million barrels of crude from the spr and a combined $30 million of other countries. it is in the price. that is what goldman is saying.

let's have a look at other markets this morning. euro swiss. natural gas, the danish gas minister said we are in a severe crisis. the answer is not nord stream 2. gas companies from russia. you cannot live on that trade. we can debate that in the next 30 minutes. but how do you get your agenda set for 2022? what is it risk? well, we are fast approaching the end of another year which saw the world grapple with recovery, supply chain straining, surging demand. what brings for 2022? let's get to the chief economist at northern trust to get through the outlook for the coming year. this morning, waking up in singapore, i'm listening to hillary clinton and john kerry. and yet, i look at the inflation

story and covid and new restrictions for germany, austria, and greece. how underpriced is a resurgent covid risk in 2022? good day. >> good day. certainly that is one of the key transitions we highlighted in our outlook for 2022. can we learn to live with covid-19? by that i mean can we find a level of public health policy and restrictions that lead to that outcome but still allow a level of commerce with growth rates -- growth rates we desire. we have to give ourselves credit, just a year ago the first candidate vaccines were announced. 40% of the world has been double vaccinated. that number is much higher in developed economies. that is not a pure insurance policy. the virus still can trouble us,

but severity seems to be on the wane. the number of hospitalizations and for tallies has come down -- fatalities has come down. now it is a matter if the public health officials can get comfort with rising cases if they don't mean severe outcomes. hopefully we can find equilibrium that will support growth in 2022. manus: i think that narrative as we go from pandemic to endemic, the sadness of death versus getting through with triple vaccines. the bayer ceo was with me yesterday. i was surprised, the first answer, he went with wage gains. germany is quite idiosyncratic when it comes to negotiating with unions. but it was part of the first answer. he expects higher wage rises next year in running the business. how severe a spike will you

expect in inflation in the united states next year? we had the biggest shock since 1990 so far last week. how much worse can it get? >> we are all against the exercise of separating the transitory from the permanent. there are elements that should get better. the supply chain issues will likely get better as we continue food prices have been stressed but should level out. there are two things that worry me that are much more persistent. one of them is the global boom in housing prices. you have highlighted the other one, a wage price feedback loop that is starting to form. workers have much more leverage than they have at any time i would say in the last 25 or 30 years. they are asking for better wages and getting them. at the same time, the surveys of

corporate pricing power are showing a level we have not seen in 20 or 25 years. workers are getting more and to preserve their profit margins, companies are able to raise their prices, which means workers are paying more for the things they consume. all of a sudden they escalate wages and prices go up and you get a reinforcement cycle that can continue -- that can turn transitory movements in inflation into something more lasting. manus: one central banker that has been taking heat is andrew bailey. when you look at the bank of england, do you think they are going to be more aggressive even than the fed? >> i very much think they will be first. the fed is behind the curve due to the epilation -- the evolution of growth of inflation in this country. they have tried to match what they did in 2009 to 2015.

today's circumstances just don't match that policy path. the bank of england facing many of the same issues. some idiosyncratic ones, a product of -- has been making noise about raising interest rates more aggressively. they decided to pull away in november. it is very likely at the beginning of the year they will make that move to make sure inflation does not get out of control. manus: gas prices in europe, you know, i said to the danish energy minister, we go from existential angst to almost palpable relief. we are down by 12%. when you look at the energy crunch we have, goldman says it is all in the price. gas prices are rocketing again. coal prices are being -- coal is

being hoarded. from an energy perspective, we break $100 on oil, do we see higher natural gas prices? >> i think relief is on the way. the advice i would offer to our viewers is you might want to order a sweater to get through this winter, at least fiscally sound condition. the sweater will probably get caught on a container ship somewhere. but energy prices have escalated. it is likely they will level off. we are seeing supply response in the united states and pressure on the global community to come up with supplies to keep europe in particular warm for the winter. with cop26 just to the background and certainly the bloomberg forum in singapore, there was a lot about climate change. the transition will have to be

paced appropriately. it is likely even under aggressive assumptions about transition to alternative fuels that we will be using plenty of petroleum, natural gas, and even cold during the next decade or even two. a failure to sustain investments in those sectors could leave them in short supply and make us vulnerable to high prices. manus: i'm going to order a jumper for christmas. we don't need many where i live in dubai. carl tennenbaum, chief economist at northern trust, thanks for being with us. let's get back to annabelle droulers. >> india is to scrap three controversial farm loss to have seen angry street protests by farmers groups over the last year. in a televised address, narendra modi apologized for failing to convince some farmers and said parliament will appeal the legislation -- repeal the legislation by the end of the month. the announcement comes ahead of

provincial polls where farmers are a key voting block. australia's biggest bank has taken us block -- stock in a group currency exchange. the ceo of commonwealth banks as one of the biggest risks the industry faces when it comes to crypto is being left out of the market altogether. >> we don't have a view on the asset price itself. we see it as a very volatile and speculative asset. we also don't think the sector and the technologies going away anytime soon. we want to understand it. we see risks in participating, but bigger risks in not participating. >> global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus?

manus: thank you very much. it is day three of the new economy forum and one of the topics in focus is cryptocurrencies. we spoke to the ceo and cofounder of binance. >> crypto is about 5% adoption globally. out of 8 billion people, probably 500 million people have it. it is probably bigger than the fourth largest country in the world population wise. it is significant. at 5% we probably cannot call it mass adoption. 50% is mass adoption i think. >> when do you see it happening? >> the next five to 10 years. it will take time. when we talk about mass adoption, we talk about billions of people. they take time to learn about this and adopt it. >> we are seeing how bitcoin surged to $68,000, slumping

afterwards. as long as volatility remains, it cannot be an asset class. a store of value, especially when you are looking at retail investors piling in in a huge way. >> number one, volatility is relative. if you look at one bitcoin equals one bitcoin, the u.s. dollar is volatile. >> if you are slumping 15% it is volatile. >> fundamentally though crypto is not just one asset. there is bitcoin, there are other things. some of them have stable properties. some of them don't. some people like volatility. the traders seek volatility when the market is flatlined. there is no action. but for payments, everyday use, we want a currency that is relatively stable in terms of purchasing power. the fiat currencies do not have stable purchasing power. they decrease. it depends what you want.

because it is volatile, i think the 500 million people who hold it and value it -- >> more and more summer looking at their own digital currency. how will that change the playing field? what does it mean for bitcoin? is it dead? >> any new crypto -- blockchain base currency or tool is good for the industry. it is a strong validation of blockchain technology. now that central banks are showing it. they also provide an education channel. the government is educating the masses on blockchain technology. when you learn about blockchain you have to learn about bitcoin. people will learn, why is it valuable, why does it have properties of limited supply,

freedom of access, ease-of-use. people compare those properties of different cryptocurrencies. central bank digital currencies are great. having a digital option is good. what china is doing is not so good. even in china only bitcoin, holding bitcoin is perfectly legal. manus: the ceo and cofounder of binance on the future of cryptocurrencies. coming up, we talk about the case surges in europe and the themes for the unvaccinated. this is bloomberg. ♪

>> the vaccines are good news. the supply constraints will be largely solved in the middle of next year.

we will be limited by the logistics and the demand. the idea that economic activity will resume in full once you get two levels, it is very likely. manus: he thinks covid will go from pandemic to endemic by the end of 2022. it comes at an interesting time. we look at europe once again becoming the epicenter of covid-19. a number of countries are now placing restrictions on the unvaccinated. they include germany, urging citizens to get shots. austria, germany, and -- on the unvaccinated. what do you make of constraining

the movements of the unvaccinated? smart move or an infringement? >> it is perfectly reasonable. we have had -- vaccines have been available to everybody across europe for a long time. since the beginning of this year. the thing about people -- the delta variant is it is very effective. if you have had the two doses of the vaccine, that does reduce your chance of picking up the virus and passing it on. if you are not doing anything else to stop the spread of the virus, you can -- somebody with covid can pass it on to up to seven other people. that's how infectious it is. i think it is reasonable to say if you have not had the vaccine,

there is no medical reason for that, you should be not coming into contact with lots of other people. for your own good and the good of people around you. manus: let's talk about what that might mean for the u.k. and europe. you have lived through covid. borders are open, flights are flying. the correlation, the consequence of waiting for europe and how that might affect the u.k.. have you had any thoughts? >> the u.k., we have been running up between 40 and 50,000 new cases per day. the fact that some countries in europe have overtaken it in the last week or 10 days or so, i'm not sure it makes any particular difference. we have been running it very high levels.

we are at 1000 deaths a week. maybe there will be more cases from people in other european countries but i don't think is going to make that much difference to us. manus: what about the third booster? that has been put forward, some could say as the panacea by a number of leaders. is it? >> we know that in order to get the virus under control using the vaccine, we need to get to a point where 85% of the population are fully covered. in countries like portugal where they have got -- i think they are at 86% of people have the two doses now. the number of cases, the number of deaths are quite low and they are keeping them low, which is good. other countries such as the u.k., we have not been able to do that. we have found that immunity is waning.

what we have seen is that the booster is really very effective. really very good. it gives you well over 90% extra cover on top of the two doses. it reduces your chance of infectious covid very dramatically. the third dose, which might turn out to be the full course, will be good. we are only starting to get that to the people who had the vaccine early in the year. most people don't have that until after christmas. manus: let us see. hopefully the booster shot will have an impact around not just the united kingdom, but around the world. dr. sarah pittman joining me on

the latest wave of covid across the european continent. coming up, delay to president biden's economic agenda. we bring you the latest. this is bloomberg. ♪

manus: this is "bloomberg daybreak europe." house democrats pushed the expected passage of the mammoth tax and spending bill to friday after kevin mccarthy delayed a vote with a lengthy floor speech that lasted past midnight. derek wallbank will be relieved

if it gets past. talking about a taper. what is going on with this legislation? >> there is a fascinating thing at the capital of the united states where time moves in mysterious ways. technically the head of the republican and democratic parties are allowed one minute to speak. kevin mccarthy is using that one minute, except there is a privilege that you don't get cut off. mccarthy's case, one minute has become more than five hours. marathon speech democrat the record for the longest such speech that has ever been given -- marathon speech that may just crack the record for the longest such speech that has ever been given. it is expected to delay until friday. they are going to come back at 8 p.m. a.m., maybe vote after that -- 8:00 a.m., maybe vote after that. it is not expected to derail.

it is kind of around democratic expectations. democrats say cbo did not take into consideration the full rate of money that would be raised by some of the irs enforcement actions in there. i have only seen one democrat say they will not go for it. so far they seem like they might have the votes to get this through maybe as early as morning washington time. manus: let's see. counting down. i'm going to be all over the singapore studio finding derek. that's all from the new economy forum for me. a quick snapshot of the risk this morning. keep an eye on that. apple posted its first all-time

high since september. they are going to go head-to-head are bumper-to-bumper with elon musk's tesla in the race for electric vehicles. next, "bloomberg europe." -- bloomberg markets europe. ♪

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♪ anna: good morning. welcome to "bloomberg markets: europe." mark cudmore, our markets live managing editor, joins us from singapore to take us through all of the market action this hour. here are your top headlines. german covid cases hit a new high. the government announces no restrictions for the unvaccinated. powell or reynard -- brainard? joe