manus: good morning from our middle east headquarters in dubai. i'm manus cranny alongside dani burger in london. concern, not panic. president biden urges americans not to overreact the new variant . modernity see a says vaccines will struggle with the strain. jay powell warns omicron

threatens employment and inflation. jack dorsey steps down as the ceo of twitter. his successor will be the youngest ceo in the s&p 500. there is a from the modernity ceo which talks about the veracity of vaccines against this variant. this is setting off what two people said is a shock. it looks like we are at the start of a new reappraisal of risk. dani: let me read this line from the ceo of moderna, saying, i think there is no world where the effectiveness is at the same level with which we had with delta. that is what set off the risk market turning, it is a global fixed income market that got a rude awakening, and a stock selloff after recouping losses. it is oil and every risk market starting the morning positive and taking a spoon for the

worst. -- a swoon for the worst. manus: currencies are immediately reacting. you have the aussie down, the canadian dollar down. if you look at oil, down two 2.25% after a rapid turnaround yesterday. equities are lower. dani: i think mark cudmore make a good point about the action yesterday. it was not omicron complacency but the promise of easier liquidity and the promise of continued accommodation from jay powell that helped to ease markets. this shows we are very fragile, it just takes one headline from the moderna ceo to turn things around. manus: two very different messages, biden says do not

panic, and then i think powell said basically this variant has the potential to impact growth, inflation, and his overall narrative. optionality has been brought. dani: that optionality helping equities yesterday. that may dig further into market moves -- let me dig into further market moves. s&p 500 futures down 1%. the more risky assets also falling this morning. european futures falling more because it is tech that has outperformed in these moments of panic. we are also looking at brent crude falling 2.6%. a few hours ago it was up 1%. we are turning around risk assets.

we are also looking at buying coming into the u.s. 10-year yield. this is a global bond market seeing a rally. the bloomberg dollar spot has been weak all morning, it is currencies that are seeing jitters play through, even though not happening at the moment. the dollar still lower. manus: the new omicron variant spreads, travel restrictions are expanding. u.s. is expanding travel curbs on nations and africa. president biden says it will not prompt restrictions within the country. pres. biden: i will put forth a detailed strategy on how we will fight covid this winter, not with shutdowns and like downs -- lockdowns, but with more boosters, testing, and more. manus: the manage charge of the

is rollout program says he does not have enough data, and here we have the ceo of madura -- of moderna questioning the veracity of vaccines. >> yes, you said two things that are shaking markets. the first thing was the number of mutations in omicron, which is double the other variants, around 30 mutations. it has stunned some scientists who have looked at it, that may make it potentially more resistant or less effective to the vaccines already out there. he went further, saying a new

vaccine is required and that will take months to ramp up to scale. that is understandable but shaking markets. dani: thank you so much. that is our global virus coverage czar. jack dorsey is handing over control. despite the global communications platform being widely used, is struggled to keep up with it social media peers. let's bring in juliette saly. what does this mean for twitter's future? juliette: it looks like jack dorsey, the 45-year-old, will focus on his world at square, so he will not try to helm two separate companies, and handing over the reins to a 37-year-old, who will become the youngest ceo in the s&p 500, narrowly edging

out mark zuckerberg. it seems like jack dorsey is giving him a lot of confidence. he wrote his work over the past 10 years has transformational. it is his time to lead. we know jack dorsey, who founded the company into thousand six, stepped down into thousand eight, then returned in 2015. there have been a lot of pickups. we had a business turnaround, and attempted sale of the company, and activist investors attempt to boost him from his job. many thought he would focus more on twitter rather than square. we have seen the business improve. it has not delivered the same returns. twitter stock up 67% since dorsey returned. bloomberg intelligence is saying when you compare twitter to

other social media they were never able to monetize it as some rivals. it will be interesting to see with the new ceo will do, and born after mark zuckerberg in 1984. manus: he is welcome to deliver my twitter content if he has time on the side. juliette saly in singapore. let's turn to the inflation picture in germany and spain. price increases we have not seen since 1992. that is adding pressure on the ecb to back up their case, that inflation worries are temporary. what does it tell us about the readings we will get today? maria: did you say 1991 was your

first bloomberg? manus: yes, my very first bloomberg at the west end of london, a long time ago. maria: it is good context to see the inflation we see in spain and germany to have to move back to 1992. these numbers in many ways paint a picture of growing price pressure on food and energy, but they set the scene for numbers we could get today from france, italy, and the euro area. a lot of this is feeding into questions on what the european central bank will do in three weeks and they meet in december. they were repeating this was a one-off and will cool down in 2022, but how long can you say it is transitory without hurting your credibility? the flip side has to do with economic sentiment.

yesterday there was a dip in sentiment, and there is more concern on whether the vaccines work on the new mutation. dani: thank you very much. bloomberg's maria tadeo. let's get to our first word news with juliette saly. juliette: the moderna ceo says that existing vaccines will be less effective at attacking the omicron strain. it may take months before companies can manufacture new variant jabs. the pfizer chief executive says the drugmaker will know within weeks how well it's vaccine handles the variant. he says the jab specifically

designed for the variant would be available within 100 days. >> if the virus escapes the protection of our vaccine, we have started the process of developing a tailor-made vaccine that not only we have a high level of confidence that we will have it within 100 days, but a high level of confidence that we can manufacture it by the billions. juliette: sweden's first female prime minister has been reelected after narrowly winning a vote in parliament. the social democrat will form a one-party government using political turmoil prompted by her resignation last week. she stepped down as prime minister hours after being appointed when her junior partner quit following a budget disagreement.

talks to revive the 2015 iran nuclear deal have begun positively with iran ready to engage in serious work. it could lift sanctions but u.s. officials are increasingly pessimistic over the chances of a deal with iran's new hard-line government. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you very much, juliette saly in singapore. a new headache for the central bank as jay powell says the new variant poses risks to their mandate. more on this story. dani: we will also have the ceo of dhl. we will discuss supply chains, inflation, the omicron variant, and what the latest comments about the vaccine mean to all of that. this is bloomberg.

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>> i would not expect this to change their opinion on what is happening in the local economy. inflation is running hot. >> the disinflationary effects of a resurgence in the virus would be larger than the inflationary ones like supply chain constraints. >> if there is going to be a repeat of winter lockdowns, it would be us apprised of central banks continued on course. more likely they would delay the pace of the start of the tightening process. >> it is not surprising the markets have bounced a bit. >> the variant, trying to impose a travel ban now -- >> investors count to 10 before moving again. dani: a number of key market

voices commenting on the new risks that the variant could pose. jay powell says omicron poses risks to both sides of the mandate to achieve stable prices and maximum employment. he prepares to testify to the senate taking committee later today. joining us is ben emons, managing director of global macro strategy, medley global adviso. one -- that acted as a soothing agent yesterday. powell talking about the risk and the hope for more accommodation but just hours ago we had the ceo of moderna talking about his questioning of whether vaccines can be effective against the omicron variant. what do you make of this ensuing selloff? ben: i think it is a combination of what powell says. you have a where you have a new

variant coming along that knocks it off against the certainty about what the variant can be about and how fast it can spread, and what vaccines can do against it. on friday we saw a rally in vaccine stocks. it carried on yesterday, and then the ceo of modernity out -- the ceo of moderna came out and said we can map this but there are challenges, and it may take some time. those things make markets wary of dealing with the variant in a way that will affect the economy. this is what you get traction in markets this morning. manus: in terms of the reaction function when we look across the assets, where are you most concerned about? volatility has erected.

are you a buyer of volatility, and if so, where? ben: i cannot be a buyer in equity markets because the market is taking it as an opportunity to reset risk and go on with the same pattern that the variant will slow down the economy but stimulus will continue. the currency markets, if you look at friday at the risk reversal, that blew out so much for the u.s. dollar, that is where more volatility will occur because it is not clear how fast the fed could taper if the omicron variant affects the u.s. economy. we have other central banks in play too, how much will that

result in more tightening? currency markets will be more volatile from here. that is where i would be a buyer, fx volatility. dani: looking at the dollar-yen climbing 0.3%, we see that across the currency space, is this a momentary blip of people running to the haven of the yen, or is that the direction we will continue in? ben: it started on friday and showed some flight to safety. it is a sign of uncertainty that has come into the market and may continue for some time. this is unique to japan, they immediately reacted by closing off borders even though they planned to reopen in the near

term. that affected the yen. yen is a good barometer on flight to safety markets. we could see more of that. manus: at of the sovereigns, which bonds would you want to own for protection? would you want to belong twos in treasury? ben: if the fed cannot follow with more rate hikes after the taper ends, and there is uncertainty about when the taper will end, and the two year moved up 65 basis points isn't interim parking of cash, a safe haven. i will caution as much as we are uncertain about the variant, we have experience with previous variants. they come into countries and affect economies, but you will

get a recovery. i would only do this temporary and the treasury market, there is not a lot of value there. for uncertainty, yes, for fundamental reasons, no. manus: thank you very much. stay with us. our guest, ben emons, managing director of global macro strategy, medley global advisors . coming up, we will look at what you should be watching out for, including the latest inflation numbers from italy and the wider euro area. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe."

i'm dani burger in london alongside manus cranny in dubai. at 10:00 a.m. u.k. time we will get the latest inflation numbers from italy on the euro area, that is after germany and spain registered price increases not seen since 1992. we also expect portugal gdp data and retail sales in industrial production. manus: 2:00 p.m. we will get the u.s. data on house prices. later in the afternoon jay powell and janet yellen will testify before lawmakers at a senate hearing on the pandemic recovery. powell is expected to get his renomination, and he made a vocal point last evening in prepared testimony about the risks to his mandate. our guest this morning is ben emons, managing director of global macro strategy, medley global advisors. we are grappling with this risk

off temporary interruption. one of those markets shattering is europe. i was looking at volatility. stoxx 600 down 5%. the stoxx 50 rolled over. would you look at euro and try to look through this vaccine variant risk, how do you look at equity risk in europe if we come out the other side with a robust vaccine as we have done so far? ben: if you look at those patterns, each time we had a new variant come along, the market had a drawdown, but about 5%, that is when the news hit first,

europe reacted first. the euro has weakened quite a bit against the dollar. expectations the fed will lift sooner, and the european economy is facing some challenges because of the resurgence of the virus is happening faster than elsewhere. this becomes another opportunity of those looking to buy this dip. the pattern seems to be reoccurring. if you believe the omicron variant is not much different from the other variants, despite doubts about vaccines, this is your opportunity. you have a cheaper currency and weaker stocks, and volatility that seems to be peaking. buy the dip at the moment. dani: you write in one of your most recent notes to clients -- i read them religiously every day -- how the liquidity finds

its way into them. what do you mean by that? ben: it is another important point. let's go back to march 2020, nobody knew what the virus was about. everybody moved into t-bills in cash. we are not in that situation today. the cash people have today, they are willing to redeploy it. if this omicron variant is different, then what you want to watch is the core of the markets, t-bills are cash. it is not happening yet. if you do get that situation, it could get tense. going into year end, this could

be a phenomenon. dani: unfortunately that is all we have time for. that is ben emons, managing director of global macro strategy, medley global advisors . coming up, we talk more about the virus as this is elodia. she's a recording artist. 1 of 10 million people that comcast has connected to affordable internet in the last 10 years. and this is emmanuel, a future recording artist, and one of the millions of students we're connecting throughout the next 10. through projectup, comcast is committing $1 billion so millions more students, past... and present, can continue to get the tools they need to build a future of unlimited possibilities. dani: good morning from

bloomberg's european headquarters. 6:30 in london. i'm dani burger alongside manus cranny who is live in dubai. concern, not panic. president biden urges americans not to overreact to the new variant. moderna's ceo predicts vaccines will struggle with the strain. jay powell warns omicron

threatens employment and inflation. jack dorsey steps down as the ceo of twitter. his successor will be the youngest ceo in the s&p 500. it was a headline that crossed an hour ago. the moderna ceo saying current vaccines will be less effective on the new strain that has developed. we have been touching on these assets, the risk assets, commodity currencies, small-cap indices, oil -- all of them going lower as we get closer to the european open. manus: i think the word that comes to mind, the volatility of these markets in terms of one headline that has a very dramatic capacity to impact markets. if you look, the complex about mobility, commodity -- i spoke

with the gentleman running the is really program, and he said we will do everything that is possible to avoid close downs. dani: when you look at the policy response especially from jay powell, who has testimony today that could move markets, yesterday we saw concerns about what this means about employment and inflation, but we are still very fragile. one headline can turn things around. manus: let's take a quick sweep. the s&p had its best day yesterday in four weeks. you are looking now at yields, the five year yield. was friday a forced liquidation of positions? pfizer below where they were. volatility rising again but

nowhere near the highs on friday. it is the equity complex where ben emons would buy fx volatility as money flows into the yen. dani: also interesting hearing him say he would not necessarily by treasuries. that uncertainty will drive it for the near term. manus: indeed. the question is what currencies you want to hold as protection. the short end of the treasury curve is where he would be but not necessarily out of choice. dani: let's continue to talk about the new variant, the omicron variant. travel restrictions are expanding. the u.s. has imposed curbs on nations in southern africa, but president biden says the new mutation will not prompt new restrictions in the country. pres. biden: i will put forward a detailed strategy on how we

will fight covid this winter, not with shutdowns or lockdowns but more widespread vaccinations, boosters, testing and more. dani: let's get to emma o'brien, our virus global coverage czar. how much of a game changer is this if the current vaccines are not as effective? manus: we are going to prompt emma to tune in. shall we pause for a moment? i think we will leave it there. in terms of the rest of the narrative, i said we had caught up with the lead man in israel. they banned foreigners from coming into the country for two

weeks. the chief innovation officer at health services, the chair of the is really covid 19 advisory board. >> at this point we should not jump to conclusions. it is likely that even if the vaccine takes a hit and its ability to prevent infections, i think it will -- at least our working hypothesis is -- it will have residual ability to protect from severe illness, especially after the full regiment of three doses which is what we are trying to do here in israel. this protection will be important. in the practical sense, even if the vaccine does take a hit, it is the best protection that we currently have and will have in

the coming months. my personal conclusion is one should enhance our efforts to complete the booster dose campaign that we started in august, and vaccinate the remaining one million people that have not yet received a booster dose in israel. manus: let's get back to emma o'brien. the is really's will do everything to avoid closing down the -- the israelis will do everything to avoid closing down. we will get to emma in a moment. let's pause and put some context around this. the message from the white house is do not panic. the israelis made it clear. i said when will you know

whether you have enough data? he says, i do not have enough cases. then you have the ceo of moderna making this line in "ft." then you have the line in the bloomberg interview that he will not have enough data in two weeks. there are a lot of strands to this. dani: here in the u.k. there was a healthy lament three debate yesterday -- healthy parliamentary debate yesterday. for them it is about the hospitalizations, but as you point out, there are not many cases here yet. hospitalizations showing through will not happen for some weeks. it is a waiting game at the moment, and for markets there is nothing they hate more than uncertainty. manus: and it is a bigger geopolitical debate. it is about the delivery of

vaccines to emerging markets on the developing world. 24% of south africa is vaccinated. until you raise the amount of vaccination, delivery and transmission into society, not just south africa but all around emerging markets, you will continue to have more variants. this is variant number 13 according to the world health organization. dani: the emerging market story is so important, and something from the u.k. to the u.s. to the western world and beyond that it is being debated, are we doing enough to get those vaccines to the places that need them? manus: juliette saly is standing by with the first word news. juliette: sweden's first female prime minister has been reelected after a narrow vote in parliament. the social democrat will form a one-party government using political turmoil prompted by her resignation last week.

she stepped down as prime minister hours after being appointed when her junior partner quit following a budget disagreement. the eu chief nuclear envoy says talks to revive the 2015 iran nuclear deal have begun positively with iran ready to engage in serious work. success in the end could lift sanctions but u.s. officials are increasingly pessimistic over the chances of a deal with iran's new hard-line government. jack dorsey is stepping down as chief executive twitter, handing over control of the company he cofounded in 2006. the chief technology officer is becoming the youngest ceo of an s&p 500 company, just ahead of mark zuckerberg. dorsey remained ahead of the doodle payment company, square. goldman sachs added new employee benefits as part of a package of changes to address worker burnout. the perks include higher

contribution, paid leave for miscarriages. junior goldman bankers had been complaining about declining physical and mental health due to work related stress. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. dani: coming up, we speak to john pearson, ceo, dhl worldwide express. do not miss that interview, next. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe." i'm manus cranny in dubai, dani

burger in london. we have a new report from dhl that suggests he could see a decoupling of the world's two economic giants, the u.s. and china. it says we could be moving toward a more regionalized economic system. what does that really mean? we go to john pearson, ceo, dhl worldwide express. thank you for joining us. how much damage has been done to global connectivity as a result of covid? a flesh wound or a mortal blow? john: neither of those. i think this is the report we have been waiting for. it is the 10th year of participatin in the study of global connectedness. it has 3.5 million data points that suggests the world is more globalized and connected than

ever before. and trade has bounced back significantly to 5% higher than pre-pandemic levels. picking up on a point about regionalization taking over from globalization, one of the most fascinating parts is that simply is not the case. the average distance traveled for trade has continued to increase. within that point, i would like to say the 83% of the senior leaders pulled a year ago said localization was one of the most important agenda items. 82% has gone back to 23%. that does not surprise me, same for after the icelandic ash cloud crisis, which was a significant event. dani: for me that statistic was

surprising considering anecdotally we hear different executives talk about supply chain issues that were caused by covid and wanting to change the supply chains, or governments bringing them closer to home. why is the opposite that has happened? john: supply chains tried and tested over many decades are built on a combination of efficiency and economics. the supply chains that existed pre-pandemic have served companies and industries extremely well, and they are very efficient. it is very complex to change and adapt your supply chains. the proof in the pudding is that those supply chains served everyone extremely well over a long time, and even during the pandemic. in the first few months it was

the biggest thing that happened in a hundred years, and here we are trading at 5% higher than pre-pandemic levels, and the supply chain is working pretty well. there have been traffic jams and congestion, but people are getting what they need pretty much when they need it. manus: the worst of the supply chain has passed? i'm paraphrasing, but is that what you are telling us, and there will be no supply chain shortages coming up to christmas? john: as i heard you say earlier, we have been through 17 different types of variations. we are getting through the pandemic more successfully as time goes by. supply chain leaders are getting more comfortable with how to keep their own production lines going. there may be difficulties over the end of the peak season, our

whole organization is ready for the season. we have 100 more aircraft than 16 months ago. it is a case of capacity. if you get left, the supply chain moves smoothly. we are well set up for that. dani: the market is concerned that the peak is not over, especially with the emergence of the omicron variant, and the movement that could take lace in asia with a zero covid policy. are you concerned as well? john: no, we have been through so many variations. the lockdowns and the like that we went through in april-may last year, then we were declared an essential service. i do not think in any one of our 220 countries, we claim to be the most international company on the planet, suffered a lost

day of operation. if you think of how more organized and aware governments are now than year ago, i think we will move through this latest variant in any more variant or mutation that comes our way more smoothly than in the spring of last year. i think by spring of next year we will be in a different place again. long-haul travel will come back, and the data points within the studies suggest people are moving about more than before, month by month. manus: stoicism, indeed, but what does it mean in terms of a supplier? our freight rates -- are freight rates going to continue an upward trajectory? a manufacturer based in dubai,

will they get their goods from the rest of the world? john: there is a shortage of supply in the freight market that has pushed prices up. from an express point of view, our pricing structure is rational and consistent, and our prices have been maintained. most customers have only heard once from us in the last 12 months, which was the general price increase at the beginning of last year. our pricing has been stable. there has been recovery of aviation costs we have had to make, but pricing has been stable. thus supply in the market is limited from an airfreight point of view and that is why escalations and prices have gone up over the course of the year because supply is in such short demand. dani: let's dig into the air cargo capacity story. if flights are cut back because

of omicron, how exacerbated do you expect prices to get? john: i think the pricing will go up and down as demand increases or decreases. from a dhl point of view we have our hands and all the aviation assets we can get our hands on. there is a lot of interoperability between our divisions, and our focus is on making sure we have the right aircraft to provide lift. dani: really great to have you on the program following your new research report. that is john pearson, ceo, dhl worldwide express. coming up, goldman and new employee perks to address worker burnout. we get the details, next. this is bloomberg.

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manus: it is "bloomberg daybreak: europe." i'm manus cranny with dani burger alongside me in london. goldman sachs have new employee perks. the overall benefits are aimed at addressing burnout. what do we get? >> i was going to say unlike in 1991 when you were at your bloomberg terminal for the first time, you have to work a little harder to retain talent. this is goldman's turn. many banks are doing this. they want to increase retention

and contributions for younger employees, and more interestingly they are attacking the social side, addressing potential burnout. you could take a six-week sabbatical, unpaid, to recharge your batteries and unplug to get more work-life balance employees complained they do not have. dani: you are going to see if you can retroactively get that six-week unpaid sabbatical. how surprising is this from goldman? they are one of the most aggressive. >> they are. if you recall earlier this year, ceo, david solomon, the best he could do was try to ensure people did not have to work saturdays. it was not a blanket, but i will do my best.

everybody is recognizing they have to be mindful of what people want. there are options for young people in the financial services sector. you can go to exciting new startups. there are jobs in the crypto space. there is a lot of competition for talent. dani: thank you. i want to know what you would do with your sabbatical and what beach you would be on? manus: i would be bored for six weeks. one line from solomon when he was of the new economy forum, he said it is nearly 50% of goldman are under 30. i would need to fact check that, but there is one wonderful piece people often miss.

it is about a network you create. there are people doing better than me running investment banks that i knew when i was 24. it is about the infrastructure come on the network, and the people you connect with in a marketplace. you cannot buy that or get that at smaller startups, it does not exist. dani: that is the reason behind the argument of why it is important to get in the office. it is about getting that in person experience. some of these perks from goldman like time off for miscarriages, i do not know if you can classify that as a perk or a human right, a good thing to do. manus: you have to read through and see the details. a six-week sabbatical, i am up for that. let's close off with a rate redux.

euro-dollar spread, they are rolling over, the market is not convinced the fed is in high commode. -- hike mode. dani: that is it for us. "bloomberg markets" is up next. ♪

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"bloomberg markets: european open." i'm anna edwards in london. mark cudmore joins us from singapore. the cash trade is less than an hour away. concern, not panic. president biden urges americas not to overreact to the new variant. moderna's ceo predicts vaccines will struggle with the