♪ >> the economy, many accounts, has fully round-tripped back to full capacity. >> the supply-demand balance has prevailed. >> i don't think the forces that lead to inflation or disappearing. >> the fed is going to have to make some hard decisions aced on data that is not perfect. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. lisa: how big a difference one day makes. this is "bloomberg surveillance ." i'm lisa abramowicz, alongside kailey leinz and anna edwards in london. tom ferro, john keene -- john -- jon ferro, tom keene both off. what we are looking at this morning is a market in turmoil, reassessing all of the rate hike expectations, reassessing the reopening trade with the

stay-at-home trades surging. everything else absolutely collapsing in the face of a new potential variant that could be more contagious. i am struck frankly by the shift in rate hike expectations at the federal reserve. kailey: a quick shift when we have been pulling over expectations of when the fed was going to lift off. we were looking at june of next year, now the market has pushed that further into 2022. it is a quick and stark reversal. i also have to wonder, it is just fresh off the thanksgiving holiday. a lot of people are probably off of work today. could this be a thinner liquidity kind of situation, or will we see elevated volumes? lisa: people are scrambling back to work. over in europe, this is the issue as we see immediate reaction in the travel sector. anna: the travel sector really getting the brunt of this. just looking at the airbus share

price, this is the giant of a business, down by over 10%. it is not the biggest weight on the stoxx 600 this morning in europe. that is lvmh. luxury goods, champagne, perhaps not what everyone wants around this news around the variant. lisa: i thick it is really compelling that united kingdom health officials came out and said we are watching this closely, we see concerning signs, we are ticking some action on the travel side, but not with respect to covid restrictions. anna: one of those has been for a long time the emergence of another variant. if we do have another variant, we could go down that road. but we are a long way from that. i guess the interesting and sad thing about the european story more broadly across the european

continent is that there are other parts of europe already dealing with icu units getting very busy and close to capacity in some places, and very much not in others. we are already dealing with that. that was just the delta waves. that is what we are going to be looking forward to see how this new variant makes life even more difficult for people still dealing with an outbreak of delta. lisa: even in the united states, also a decline in the number of health care officials in the great resignation, as some people in the medical community have been talking about. we are seeing steadily risk off and pretty traditionally risk off with stocks down, bonds up. you can see s&p futures off the earlier lows. the euro gaining. that seems like somewhat of an aberration. the yen saw the biggest surge against the dollar going back to march 2020 at one point. this was the also gaining on that. the 10 year yield down nearly 12 basis points to 1.5 2%.

complete retracement. also in the two-year yield, really seeing a massive move, and particularly the fed funds futures. crude lower by more than 6%. $73.56. got to think, probably the administration got what they want it for the wrong way. anna: absolutely, not by the means they intended. that is for sure. the stoxx 600 down by 2.5%, and we are seeing pressure on travel and leisure stocks, but also pressure on some of the big banking names across europe today as broader concerns around what this does to the european economies takes hold. we are seeing money flowing into the perceived havens of the bond market, so germany and italy. we are seeing money going to those as yields are on the move there. gold miners also seen a some thing of a haven today at the market sees some money going into those, particularly in the south african session, which has

some strange symmetry to it. lisa: interesting to see the peripherals gaining more in germany as the expectation is that the pandemic emergency purchase program could be extended, particularly benefiting some of those peripheral nations. right now a focus on europe because we have been talking about projections in the united states for but the s&p will do in 2022, and in europe, the question is a lot more difficult to get a sense of, especially with some of the waves of the pandemic. we are lucky to have nick nelson with us, european equity strategist at ubs. how much are you reassessing your valuations based on the current virus transmission? nick: we've got a pretty constrictive view looking out into 2022. we think profit recovery and earnings this year in europe will be up about 60% or so which is a huge -- which is huge.

we thing a lot of that strength or some of that strength will carry into next year, and we think you will get about 15% earnings growth which is almost double where the consensus is today. so this news today notwithstanding, we still see the underlying strength both in the economy, but also incorporates and their ability to deliver higher prices and to keep this pricing power, which has been pretty incredible in europe this year. obviously we have to reassess every time we get new information. i think we will wait and see what happens the next two days, what w eight -- what do you ho says, and get a response -- what who says, and get a response. anna: european equity markets reacting here. do you get a sense that we will see liquidity markets reacting in a knee-jerk, and maybe when everybody is back in full force

come monday, we are through the long thanksgiving weekend, things will go different? or will we be in a fairly negative mindset for markets and for risk assets until we get results of the biontech/pfizer vaccine testing, her example? -- testing, for example? nick: this is almost he worst possible time, the end of the week, close to the end of the year, for taking risk off, taking risk budgets down. obviously the thanksgiving holiday in the u.s. it almost could not come at a worse time in terms of liquidity and market positioning. i think it could take a few days to work this out. we also could not get more information on what the new variant is going to do in terms of transmission, how much more dangerous it is, how the vaccines, most importantly, can counter it. but i think in terms of liquidity, as you point out, this is not the best time to

have a big external shock to equities, so it could take us a while to recover from this and see where we are going in terms of the economy here in europe. lisa: one of the mystery -- kailey: one of the mysteries of the price action is the bid into the euro. even with some strength gaining today, it is to let $1.1279. how do you assess where the risk is? nick: some of this might just be positions coming off. so maybe people who were long dollar against the euro, maybe some of that comes out in the very short term. but you are right, the currency is very important. over half of european sales come from outside of europe, so we are exposed to exporters particularly in the dax and germany, and we are exposed to the currency. we actually believe that over the next year, we will see the euro strengthened, but obviously

that helps corporate profits right now, the weaker euro. lisa: nick nelson of ubs, thank you for being with us. we continue to get information from european leadership to try to get a sense of how big of an effect the new covid variant could potentially have on the economies. the prime minister of belgium coming out and saying that the belgian health care system is crumbling. he is referring to the effects of the sick individuals on society, as well as the record number of cases, saying he is more pessimistic than previously forecast. obviously, some really stark language out of the belgian prime minister. anna: absolutely. you talk about your health care system is crumbling, and we knew the belgian government was going to be meeting today to talk about their it was going to be required to have tougher measures, so we will keep watching and see what comes out here. yesterday we heard from the health minister and belgium, saying he's going to be pleading for immediate measures to be introduced in schools and private lives and in industry to try to do something, and it is

worth repeating what you said, that this is long before we are dealing with any new variance, -- any new variants, although markets are selling off on the new variant out of south africa. we are really dealing with delta in parts of europe. lisa: how much of this is potentially messaging? is this saying to all of those people who are vaccine hesitant, get used to it, this is the new normal, go get vaccinated? anna: we saw some really tough leg which from the german health minister, saying there were three outcomes for the end of this winter. either you are getting vaccinated or you are recovered, or you might end up dead. that is the kind of language we are seeing from european leaders because it seems there is only so far you can take the population without some tough measures and some really tough choices being put put -- being put in front of people. lisa: this speaks to this whole idea of how health officials

have been put in a really tenuous position of trying to affect change at a time when people are not listening, and frankly, when they disagree with each other, and they are dealing with a new science and trying to come out with it, which is the reason why i wonder how much of this land which is trying to send a very strong message. kailey: maybe more clarity from government officials while you are trying to figure out exactly what this looks like, and we talked a lot about the mixed messaging we have got when it comes to boosters. what is necessary, the efficacy of different vaccines. all of those different factors may the vaccine hesitant a little more hesitant, so maybe they are trying to send a clear signal here. lisa: markets are decidedly risk off. we have been talking about how much this potentially has to do with low liquidity. the answer, it will be determined, but we are seeing people retrace rate expectations. from new york and london, this is bloomberg. ♪ ritika: jack: -- ritika: global

health officials say it could take several weeks to determine just how dangerous a new coronavirus variant is. the world health organization are holding a special meeting today to discuss the new variant, which they say was first identify november 11. the variant that has caused stockmarkets to swoon and lead the european union to recommend a pause in flights to south africa. shoppers return to in person shopping for black friday, but the new coronavirus variant is adding to a long lists of concerns facing the retail industry, and deals are shipping up to be underwhelming. discounts on sporting goods and appliances will be lower than margins amid rising inflation. -- is the latest sign he is liquidating personal assets to help stave off a de facto -- a default. chinese regulators have opted to use -- his empire.

london tube drivers are on strike today after they failed to resolve a scheduling dispute over the restoration of those overnight services. that has been a key demand for businesses such as bars and restaurants that were amongst the hardest hit by covid-19. the drivers union says it plans further strikes on night and services on the lines every weekend through december. 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. ♪

> we are proposing to revise the coordinated approach on free movement during the pandemic.

the rules need to take into account this volatile situation. lisa: the eu justice commissioner talking as we grapple with a potential new strain of covid that could potentially be evading some of the immunity production -- immunity protection people have gotten. anna, you came in and said why are we talking with th -- talking about this. i want to talk about shopping. you don't even like shopping, i don't like shopping. anna: but i would rather be talking about shopping than this. lisa: it is depressing to talk about this. over in belgium, some pretty harsh words and potentially measures out of the prime minister this morning. kailey: the prime minister singh the health system there is crumbling. that is a very selective word choice. you are seeing restrictions being put back into place. they are closing nightclubs for three weeks, bars and restaurants need to close by 11:00 p.m.

they are banning indoor sports events for at least in this couple of weeks. that is not to say if we get another greek letter variant into the picture as well. lisa: right now we are seeing this originate in south africa. we had a doctor on earlier saying it is fantastic that they did a good job tracking this variation and getting on top of it quickly. birds south africa if you bureau chief joining us now from johannesburg. what is your sense of how prevalent the virus is at this point? reporter: scientists who identified the variant thursday in south africa say it is fast becoming the dominant variant among new infections in south africa. still, they are exercising caution and advising south africans not to panic. that is as researchers try to determine whether this variant

is more lethal than the previous strains, and just how it will respond to vaccines. but of course, there are fears of new outbreaks into several countries. efforts to reopen economies and borders will become more complicated, and that is really what is playing out in global markets this morning, as well as slight bands that have been imposed on south africa and some of its neighbors -- like bands -- flight bans that have been imposed on south africa and some of its neighbors. at last count, about 35% of south africa's population has been fully vaccinated. messaging from the government is coming out very strongly to say please do go and get your

vaccines. it is our best course of action at the moment. there has been some vaccine hesitancy. our reporting shows that government officials say they have more than 100 days of stock left, and that has printed them to ask companies like j&j and pfizer to delay the delivery of vaccines to the country before they run out. there is hope that with this new variant being identified, that that will add some momentum to the rollout of the vaccines. anna: that is an added complexity, perhaps a silver lining if you think it encourages further mutations, so maybe that helps. let me of -- let me ask you about how severe this variant is in johannesburg because it seems the viewpoint now is a lot of data available locally about the spread of this, and that is to

the credit of the scientists. about anything at all on how this particular variant is? are we seeing hospital numbers go up as yet, or is it too soon? reporter: at this moment our reporting shows that it is too soon to look at hospitalization numbers. south african scientists have been praised particularly by the world health organization for just how open, transparent, and fast they have been in identifying this new variant, and south africa is one of the very few countries that has -- with a high lumber -- a high number of people with hiv living in the country. what we know is that the new variant that carries a high number of mutations, researchers

are trying to determine whether this will be more lethal than previous strains as a respond to the vaccine. lisa: i do think you so much. a key question as we look at all of the action is just how thin the trading is. the idea that a lot of people are out for the u.s. holiday, so is anyone trading at all? what is on the ground in europe? is it feeling volatile just because there are not that many people making big moves? anna: it could be this day, of all days. it was the worst day here in europe yesterday, and there was plenty of news around the covid-19 fight across europe. so we were still talking about elgin because there might be further clampdown measures. we have seen that coming through. so i suppose you would assume that desks would be well enough staffed because they have plenty

of views coming through on covid-19 and things have been moving very quickly. but you do wonder how much of this is a program trade somebody wants to go into for weekend. lisa: i do think, looking at where we are three days ago, we are talking about the incredible data dump in the u.s. two days ago that showed really strong resilience, really strong momentum. the consumer coming out very strong. morgan stanley upgrading some of their upgrades. everyone bringing forward rate hike expectations. two days later, pam. -- two days later, bam. kailey: jan hatzius publishes, and 24 hours, this news hits the wire and markets go haywire. in europe at least, volume is quite elevated right now.

on the stoxx 600, the average volume is about 90 percent above that, so it will be interesting to see come the u.s. open given that so many are likely taking thanks will -- taking long weekends to see how volume looks the side of the atlantic. lisa: i am very glad they are having a day off. i can imagine what they are buying. perhaps they are expensing it all. i am looking at aig in particular, the parent company of british airways. we saw the cross atlantic corridor reopened. how exciting? we are going to get travel back of an running yet and then again, all the shutters or -- think they can close. anna: it is not just the route

to southern africa. it is also the willingness of what people want to book. kailey: coming up, -- lisa: coming up, we will speak with david riley of bluebay asset management. from new york and london, this is "bloomberg surveillance." ♪

♪ lisa: this is "bloomberg surveillance." tom and jon both off, shopping for bowties in soho. we are lucky to have anna edwards and kailey leinz in the scene on a risk off friday. it is scrambling back to work friday after the thanksgiving holiday as we assess the potential for a new variation of covid coming out of south africa and potentially having more mutations than other identified strains so far. we are seeing s&p futures lower on .7% -- lower by 1.7%. we are seeing the 10 year yield plunge, although not as much as before, 1.5 3%. crude tumbling by more than 6%. this to me is really shocking,

the idea that we had a coordinated oil release that did not move the market nearly as much as the threat of a new strain of covid that we don't know that much about. lisa: anna: anna: -- i anna: anna: suppose this plays into -- anna: i suppose this plays into what we were hearing from opec and opec+. we will see where the meeting next week takes them. the stock situation in europe, open for a few hours now and down by 2.5%. the only bit of silver lining i can offer is that we are off our lows. we have been down, but lower than this earlier in the session. this is a haven for germany and also into italy and bond markets , and also into gold, up by 1% on the gold price. interesting to see that move away from airlines, but also away from banks, and it is a

move in the bond market, a flatter curve, as well as what a new variant might due to economies that seems to be weighing on the banking sector. lisa: i do wonder how much we are dealing with people who are frustrated at the idea of a pandemic that they want to be over not so long ago, and now they have to think about it once again. kailey: anna was just talking about how we are seeing on lines under pressure in the european session. that looks like it will be true in the u.s. session in about two hours. it is really the travel complex in general that is feeling it hard today. carnival cruise lines down 10.2% before the bell. united airlines off about a point think -- about 8.9%. you were talking about a move lower in crude prices. that is reflected in the stock of apache in early trading. at the same time we are seeing losers related to covid-19, you are also seeing typical penned event related winners getting a

lift in premarket trading. stay-at-home stocks like peloton . you are also seeing a lift for vaccine makers across the board. moderna up 8.5% before the bell. lisa: thank you so much. how much of what we are seeing is true risk off, and is a reassessment of the global growth picture, and how much is liquidity with everyone still in their thanksgiving comas? david riley joining us, bluebay asset management chief investment strategist. what do you make of today's move? david: i think the movedavid: is reflecting that the market viewed the pandemic essentially in the rearview mirror, and i think what this unwelcome news has done is challenged some assumption that we would go from a pandemic to endemic where we kind of learn to live with covid

. the macro and market impact is pretty limited, diminishing over time. instead, we get this news that maybe it is a much more infectious variant, may, heaven forbid, it is less effectively dealt with in terms of vaccines, and that clearly increases the risk of a much bigger impact on global growth, but the reality is that we actually don't know. i think the market, because of liquidity coming into year end, it is reacting as if this is a greater rift that we can really price at this time because we simply don't know. lisa: the move and bonds really gets my attention. bonds should not be this volatile, especially with the fed still putting their thumb on the scales here. but we see the implied volatility in treasury yields surging to the most since march 2020, when everything was falling out of bed.

we have seen the idea of a complete retracement of rate hikes next year. does this make sense to you? david: i think the reality is that we have seen a lot of out of the -- a lot of volatility for some time, particularly in short-term interest rate markets. that is because we are at an inflection point in terms of monetary policy and the fed. the move today are very large. yesterday the market was effectively pricing something like a 60% chance that the fed was going to announce acceleration of its tapering of bond purchases at the meeting in december, and then actually start hiking rates probably in may or june, with three rate hikes in the course of 2022. today's action is taking at least one of those hikes out. i think this is one of the dilemmas now that the fed is facing because it has allowed itself to get behind the inflation curve. it is caught between a rock and

a hard place. it needs to start tightening policy, given where inflation is an those inflation pressures that are broadening out, and i think broadly speaking, that element of the u.s. economy is pretty strong. but now, add in potential uncertainty as to what is going to happen with covid and the pandemic and the global and locations of that as well. anna: let me ask about an extension of that, that is the banking sector. we are seeing that being one of the big sectors being hit hard in europe. it looks as though u.s. banks will also be hit by the same thing. this is to do with, if there's going to be a flatter yield curve and that takes us back some months, that leaves banks in a sticky situation. does that make sense to you? do you think some of the selling in that sector is being overdone? there's also concern about what variants could do to economies in europe.

but is it really about the yield curve? david: i think it is a combination of the two. if you have concerns around covid coming back to the forefront rather than being in the background, then banks are a cyclical asset and they are going to take a hit, just as we are seeing oil going much lower, other cyclical assets moving lower, this move to safe havens, the preference for stay-at-home stocks versus the reopening trade. so i think it is kind of consistent with what else we are seeing happen in the market, but actually, i do think it is overdone in the sense that we have gone for a very severe stress test with the financial sector and with banks in particular as a result of the works of the pandemic to the

course of earlier this year and last year, and actually come out with stronger capital buffers, stronger liquidity buffers. so as investors, you need to stay calm. i would not be doing too much in these markets. but where you have a call conviction, and actually if we see much more of a selloff, i think that is an opportunity if you've got some dry powder to add to your risk condition. kailey: you said investors need to stay calm, and a lot of times you need to know that you are at least somewhat protected. what you tell investors is the best hedge in this kind of environment? it is difficult to hedge a portfolio against a tail risk which would be a very bad outcome. so what you have to do i think with the portfolio is you say

i'm sticking with my call convictions. if i think there's opportunities in the market that have overshot, then i look to add to that, but also be disciplined in where you have low conviction trades within your portfolio. you take the opportunity to start reducing your exposure there, and that is some than we have been doing going into what we thought was going to be quite a volatile year end because of these major central-bank meetings we have in december. but you can't hedge away from the extreme tail risks right now in terms of markets. lisa: david riley a bluebay asset management, thank you so much for coming on the show when we should be talking about shopping an incredibly strong data, but instead we are talking about a new variation. we are getting word from u.s. officials on not necessarily on travel just yet. kailey: dr. anthony fauci, the top infectious disease expert in the u.s., saying u.s. officials

are going to get with south african officials and try to get some more information. they will find out if the variant evades immune response. but unlike places like the u.k., which acted quickly to halt flights from south africa and neighboring countries, the u.s. is waiting to find out more information before it puts into place any kind of flight ban. lisa: which is perhaps why you see airlines falling out of bed. when you get a variation, you get an immediate response and crackdown on travel. how significant is this, given your background covering the airline industry extensively? how concerning is this, especially for airlines with such a debt buildup? anna: we are going back a long way there, lisa. [laughter] but yes, it is fascinating. the aviation sector is still on very shaky ground, given the years that we have been through, the last year certainly, and the sense that it is just

recovering, and now they are faced with this. so they are quick to sell those stocks that are going to be exposed to this. interesting to see we have seen european policymakers jumping first with these restrictions on movement around people coming from south africa, and planning to ask questions later. a different approach in the u.s. , but you have to wonder, where is this variant already? if it is in hong kong, it is hard to get to hong kong from south africa, according to our colleagues. lisa: and frankly, every health official says that travel bans don't generally work. the issue is, can you stave off any potential influx to prevent some sort of super-spreader event? coming up, we will take a look at the commodity complex with amrita sen of energy aspects. from new york and london, this is "bloomberg surveillance." ♪ ritika: with the first word news, i'm ritika gupta.

global health officials are holding a special meeting in geneva today to discuss the new coronavirus variant first identified on november 11. the who spokesman spoke ahead of the gathering. >> it will take a few weeks for us to understand what impact this variant has. researchers are working to understand more about the mutations and what they potentially mean for how transmissible or verlander -- or violent -- or virulent this is. ritika: several nations are stopping travel from southern africa on the news of a more transmissible covid variant. oil is falling today on the outlook for demand ahead of a key opec+ meeting to decide production policy for january. the group has been under pressure from the u.s. and other consuming nations to tap strategic stockpiles to tame energy prices that were rising this week.

bitcoin tumbled 20% today from record highs earlier this month. a new variant of the coronavirus causing traders to dump risk assets across the globe. bitcoin has been under pressure since reaching a record high of almost 69 thousand dollars earlier this month on enthusiasm over the first u.s. exchange traded fund to futures on the digital asset. 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 ritika gupta. this is bloomberg. ♪

>> we think it will happen in the first half of next year and then we move on our merry way.

it is not the end of the world. but we have to deal with higher rates, title financial conditions. lisa: the expectation for more pain, perhaps not from another variation. people have been calling for some sort of volatility in markets after reaching 66, 67 record highs so far in 2021. now you are seeing the opposite, although s&p futures are retracing a little bit from the earlier lows. you are seeing the 10 year yield also off some of its lows, still down nearly 10 basis points to 1.53%. crude not getting a bid this morning, down 5.4%, $74.16. the real action has been particularly in the stoxx 600. we have seen the biggest swoon going back at 1.2 march 2020 -- at one point to march 2020.

anna: maybe there are discounts available today, but they are not in the shops. they are on some of these assets we are talking about, a lot cheaper than they were yesterday. there are some standouts to the upside is that stay-at-home economy get back to the fore. lisa: i hope we don't go back to a zoom future. dave wilson is with us for his chart of the day. how do stocks typically fair the day after thanksgiving we typically talk about black friday? dave: you look at really the period between thanksgiving and christmas, and i went back the last 30 years, and you don't see a whole lot of volatility over those six weeks or so. that is what makes today stand out in a sense. it is unusual to see much

volatility in stocks at this time of year. you have to go back to 1991 to see the last time there was a 10 percent plus move in the s&p 500 between thanksgiving and christmas, and that was a gain. the biggest drop, a little more than 6% back in 2002. you end up with an average increase for the s&p 500 of 1.8%, and a lot of years when the index was just sort of around that average, so it is unusual to see much volatility going into the end of the year, even with the thought that maybe investors have to play catch-up and make sure they make their money in a market, given how well stocks have done in any particular year. lisa: dave wilson, thank you so much. we have to get to what is going on in the bond market. ira jersey, we are lucky, woke up at 7:43 to join us today. [laughter] does it make sense to you that

people are suddenly canceling their rate hike expectations for next year on the headlines we have gotten out of the past couple of days? ira: i don't know if it is canceling the whole year, but this is one of the things we have been talking about for the last number of months when, as rate hike expectations kept moving forward and forward, will they go may in march and taper faster, we thought there would be some kind of pickup that would delay that initial hike. it is still completely possible that the fed could hike a couple of times next year. i just think it is not going to be until june at the earliest and probably in the third quarter before they do. but interestingly, if we get over this variant hump, and we don't know how long this is going to last, which is one of the reasons why you have this risk off rally in the treasury market right now, eventually this will go away, and if inflation remains reasonably high, which it probably will, the federal reserve will

probably act slowly, and that will have an impact on the rest of the yield curve. kailey: how could the liquidity flecked or -- liquidity factor be a play in the market today? ira: i think certainly liquidity is going to be really challenged, especially later today. you still have london open, and you will sue have reasonable liquidity probably until 10:00 or 11:00 this morning, and then it is going to really dry up. i suspect we will wind up having some reasonably big countertrend moves soon after the close as traders close out their positions before going away for this weekend, and then monday everyone will reassess and we will probably have another big move overnight. that is something that has happened quite a lot during the pandemic, and that is that a lot of the moves wind up happening

during london hours because that is when the news come out. that is when traders wind up adjusting their portfolios. you see these massive moves because of what is going on in the global bond market, and treasuries are being pulled along with it. anna: good morning from london. we are coming just through lunchtime here in london. what are you expecting out of the next couple of weeks? what do we need to brace ourselves for? i say two weeks because we have heard from the world health organization. it will take about that long for them to do with analysis -- to do their analysis. that is how long it will take to get this virus tested against vaccines. i am looking at some headlines saying belgium has found a case of this new variant. is that the kind of risk on news flow we will have to watch for? what holds us in place over the

next two weeks? ira: i think now that we are talking about covid-19 again and not talking about inflation or retail sales are some of the other traditional indicators that we look at, it is going to be all of those headlines. you could wind up seeing e-cig in the amount of volatility. i suspect we get risk off. in the 10 year yield we probably go back down to the recent lows at least in terms of the 10 year yield at 1.45%. i think one of the big things we should look at is what happens to those inflation breakevens, so in the treasury inflation protected securities market and in europe, how do inflation petitions change? because if you are going to have more lockdowns come up resume bleed demand for a lot of goods and some sectors that have seen large price increases, the expectation is for further ice -- the x petitions for further price increases may come down significant lee. i suspect that if we get more and more covert related headlines, you're going to see in place and expectations come down quite a lot.

lisa: ira jersey of bloomberg intelligence, thank you so much for being with us. you can see the five-year rate down to below 3% from its highest at 3.2% just a couple of days ago. the idea here that people are really retracing how much prices could go up. i do wonder how much this really has to do directly with oil. kailey: probably a lot to do with oil, given the wti was up on the fact that a bunch of countries, including the u.s., released reserves earlier this week. now that the demand question is in play, what could this do for oil demand if people aren't getting on airplanes and be earnin -- and burning fuel? lisa: especially because they are dealing with a cross atlantic tussle over how much people want oil prices to go down. right now we are seeing everything going down except for bonds, except the swissie, except yen which surged the most

going back to march at one point. as people take a look at this new covid variant, how much will this affect the double recovery? we may have -- the global recovery? we may have years more of this. from new york and london, this is "bloomberg surveillance." ♪

every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

♪ >> is not the end of the world, but we have to deal with tighter financial conditions, and that means lower multiples overall. >> the fed will only go as far as the markets can handle. >> we have definitely seen signs of euphoria, signs of risk in the short-term. >> we saw a pretty dramatic shift in hedging. >> the world will be less correlated than it was and there will be a lot of divergence. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. lisa: go back to sleep. you do not want to be awake for this one. good morning. this is "bloomberg surveillance ."