>> good morning. we are just gone 6:00 a.m. in the city of london. i'm dani burger. this is daybreak: europe. here is what you need to now. jay powell signaling tighter policy earlier than expected. omicron uncertainty. germany moves a step closer to making covid vaccination mandatory, following a state

curve in greece and norway. plus, the white house is considering testing all travelers to the u.s. within one day of departure, regardless of vaccination status. good morning. another pebble pitted that this market is attempting to wrap its head around -- powell pivot that this market is attempting to wrap its head around, ending the use of the word altogether. what was remarkable in powell's testimony yesterday was his very clear stance, clear turn to being more hawkish, saying the economy is where it needs to be, the labor market is where it needs to be, and we can start the tapering sooner, and we can do it a few months sooner. bond traders were quick to take notice of this, especially on the front end of the curve. whiplash in the two year yield, jumping 13 basis points in the span of just a half-hour. to keep -- keep in mind this is

a market that rarely exceeds a 10 point range. they were able to wipe that out in a matter of minutes. at the same time, the 530 spread, a lot of the yield curves moving to their flattest since march 2020. this is an extreme reaction. perhaps powell and the fed can take solace in the back end of the curve not moving much. it was the front end that gendered markets, and we saw stocks fall off as well. that is not necessarily the case when it comes to what markets are doing today. it is decidedly risk on after we saw that move from powell that really rattled markets. you can see that in the asian equity session. up more than 1%. we are seeing a rebound in the u.s. after stocks tumbled even further yesterday. nymex crude up 3%. had just entered a bear market. got roiled again after powell's

comments yesterday. how long will this last question mark despite all that, we are looking at a 10 year yield up by two basis points. but let's get back to that main story, with jay powell blend siding markets with his hawkish -- blind siding markets with his hawkish pivot. >> inflationary pressures are high. it is appropriate, in my view, to wrap up the taper of our asset purchases, which we announced at the november meeting, perhaps a few months sooner. dani: let's get to mark cranfield. thanks for joining us. give us your first initial take from those more hawkish comments from powell. >> i think that is exactly how we need to read it. it is a big adjustment for people in financial markets. with jerome powell being one of the most dovish central bankers out there. you have to take him seriously when he says to get on with rate

hikes. that means to be priced into markets. that is why you are seeing the yield curve flattening. i suspect when you look at the inflation situation, which has gone much further than they thought, and they have acknowledged that, if there is anything to come out of this new variant we have in the virus, it is probably going to disrupt supply chains even further, which keeps up with pressure on inflation. when you put all those things together, there is a decent chance the fed will frontload their rate hikes. dani: it is interesting you mentioned the mu variant. because of the new variant, we had previously seen a shift in the market where interest rate bets had started to be taken off the table by markets. what are we pricing and at this moment? mark: we are looking at the possibility for two rate hikes

in 2022 and more in 2023. the fed meeting becomes more significant, not only because they are likely to signal that tapering will be out of the way by the middle of next year, but they probably will adjust their dot plots as well. the language will probably also be clearer on the timing of when rate hikes will start to happen. two hikes for next year is a real possibility. there could be even more than that. but the game has changed. this is a fed that appears to want to get ahead of the inflation narrative, not lay behind it, and that really opens the door to a quick succession of interest rate increases that the market may not have priced in enough you two years. they may even need to go for more. the market needs to wake up to the fact that there may be quick hikes. dani: and perhaps no longer ambiguous terms coming from the

fed. mark, thank you so much. as the omicron variant spreads, the biden administration is planning to tighten travel rules to limit its spread. rules have been enacted threatening to derail the aviation industry's route to recovery. i johnson is at the world aviation festival. that morning. looks cold and dark, and travel and leisure stocks have been beaten up over the past several days. is this an overreaction? guy: i think that is what everyone is trying to figure out. airline buses are going to arrive later on with new travel rules having already come into place here in the u.k., the new quarantine rules over the next 24 hours. they set up rapid testing programs. omicron is making its presence felt quickly. isaac that is the big surprise this time around. governments have reacted quickly. in the past, they have been

cautious about implement a new travel rules. they have done it overnight -- implementing new travel rules. they have done it overnight. morgan stanley thinks this may be is an overreaction -- maybe is an overreaction. governments are being cautious. they could roll things back later. we have seen big selling. we have seen sing of can selling. -- we have seen significant selling. everything was thrown out and the idea was to figure out who is going to fare better later on. the markets have started to do that. you look at iag versus ryanair over the last few days. iag down double-digit percentage points, ryanair recovering, down only around 8%. the markets are trying to decide who is going to be affected. we are looking at the long haul versus the short-haul. the atlantic is still open, but the white house, the cdc yesterday indicating new rules

are coming, so the markets are trying to figure out what is happening next. we will see if the governments react as quickly as they have. dani: it be interesting to see how the markets reacted to the potential new restrictions from the u.s. today. guy, thank you very much. meanwhile, the new mutation continues to rattle european nations after dutch investigators found the variance was probably already in the country early in november. at the same time in germany, the incoming chancellor suggested the most sweeping measures are yet to come as the country battles its worst wave of infections. for more, we go to our reporter in brussels, maria tadeo. are beginning to the point where we are going to have a vaccine mandate in germany -- are we getting to the point where we are going to have a vaccine mandate in germany? maria: that is a good question, and it looks like the answer will be yes. yesterday, the incoming chancellor gave a long interview

to build tv. that is relevant, because this is middle germany watching. he said, at one point, we should put this to a parliamentary vote. we could perhaps do it at the end of the year, but the situation is more serious. we anticipated it. every politician in germany, particularly on the campaign trail, said they did not like vaccination mandates and there would be no lockdown in the country. the tone is changing. he also said we could see more contact restrictions kicking in. going back to what guy said, in europe, there was also a conversation as to whether or not we could see more travel restrictions. behind the scenes, there is a very active conversation as to whether just the vaccination passport is enough or if you actually need a pcr test. if that happens, you could see a complicated winter season as people fly across europe to get back home. dani: thank you for staying on top of this for us.

let's get over to the first word news with juliette saly in singapore. hi, juliette. juliette: hey. the european union plans to mobilize 300 billion euros in public and private of researcher investments by 2027. the global gateway program, which will be unveiled today, will outline digital, transport, energy, and health project. it is seen as an alternative to china's program. new holdings has trimmed the valuation of its ipo while also attracting the interest of softbank. his proposed price of eight dollars to $9 billion -- it plans to lift class a shares on the new york stock exchange while also offering resilient depository receipts. the uk's antitrust watchdog has -- marking the first time a global regulator has forced big

tech to unwind a completed deal. facebook's parent played $350 million for the search engine last year, raising concerns from british regulators. they now say the deal reduces competition between social media platforms. meta says it is considering all options. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: thanks. coming up, end of the road. jay powell tells congress it is probably a good time to retire the word transitory as inflation proves more powerful and persistent than expected. plus, s&p global rating releases its macroeconomic and credit outlook for 2022, everything from growth to china's ongoing crackdown. we will take a look at that story later and whether this power will pay if it changes that -- powell pivot changes

that outlook. ♪

dani: welcome back. team transitory is throwing in the towel. clear signs the fed is shifting to tighter monetary policy. jay powell, who spent months arguing the pandemic surge in inflation was largely due to transitory vectors, has told congress it might be time to retire that word. >> the threat of persistently higher inflation has grown. the task we have articulated has been met. inflation has run well above 2% for long enough. transitory has different meanings for different people. it is probably time to retire that word worker -- that word and explain more clearly what we mean. we will use tools to make sure

higher inflation does not become entrenched. the economy is very strong and inflationary pressures are high, and it is therefore appropriate to consider wrapping up the taper of our asset purchases, which we announced at the november meeting, perhaps a few months sooner. dani: joining us to discuss is the fund manager at invesco asset management. thank you for joining us. you initial take on this more hawkish pivot from powell. >> good morning. thanks for having me. it is interesting timing that everyone has been waiting for some form of reaction to the inflation data that has been subsisting for quite a period of time now and watching very closely the reaction functions, if you like, of central banks and when they start to respond. on one hand, it is not a surprise, given what the data has been doing, but in light of the recent news flow around the mu variant come -- around the

new variant, i think markets are grappling with that. dani: speaking of that, yesterday, a note from rbc was talking about powell -- let me read this quote to you and get your take on it. i will should have been expressing his current level -- powell should have been expressing his current level worrying about inflation many months ago. he made a mess of the entire conversation, which is not instilled confidence. worse than that, he played a role in the sharply rising inflation expectations. what is your take? georgina: that is quite a summary. i think a lot of that is fair in the sense that central banks generally have taken quite a long time to respond to this combination of data we have seen. there was a lot a commentary a while ago, if not now, when do central banks respond, given the growth backdrop and also the

inflation backdrop that is changing rapidly. set against that is the pandemic was very much imposed on the global economic system. there are hangovers, if you like , that central banks have to be quite mindful of in terms of how quickly they can tighten policy and how fragile the economic system is an hostage to that low rate environment. we have had quite a shift from the central bank and the responding. it is quite a change, and i think credibility is at risk a little bit as people try to work out what this guidance means. dani: speaking of trying to work out what this guidance means, it was quite the reaction we saw in markets yesterday, something like a 13 basis point move in the two-year within just 30 minutes. does this volatility makes sense to you, this reaction function of the market? georgina: maybe it is what

happens before the rate hikes that have been priced in got taken out very quickly. i think there was a resetting of that that, had enough changed in the news flow on the covid situation, the new variant which was going to hugely impact what was priced into markets, the interest rate rises next year and over the next couple of years. i think it is the combination day-to-day that is quite interesting, but what it probably reflects bigger picture is that markets are trading lower as opposed to taking the slightly longer term view. to investors, that is complicated because you are moving from data point to data point as opposed to more strategically thinking about the broad path of inflation. we all have to incorporate that into our thinking now and how you manage risk around that is quite important. i am not surprised at the shift

from one sentiment to another. it is quite surprising how quickly that has happened. but now i think the market takes stock of that combination of data. dani: let's take a step back and look at the longer-term view. when we see risk assets start to set aloft, would you want to be buying into the step if it is just a quick reaction to the news? georgina: selectively, yes. i think there are some markets that have lagged slightly. the u.s. has done incredibly well. we still want a bit of exposure. we have to be careful of the concentration of some of these indices and within the sectors that have been very much supported by that low rate environment. i think for us, a little bit in europe could be interesting. a lot of economic data coming from parts of asia is quite supportive for europe. we are a little nervous because

volatility is on the rise. but i think selectively we can add into this environment because the profit backdrop is relatively good and the growth outlook has not been damaged much as of yet. dani: we have not even really talked about the omicron variant. yesterday, it was really dominated by powell. there has been an overriding there and have that a new variant and allow central banks not to move as quickly. how do you way up the two of this potential threat versus the hawkish pivot from the fed? georgina: quite a combination. it is the timing of all this happening in such a short time. it has only been a few days of trying to understand this new variant, and to suddenly have a pivot from the fed at the same time. i think generally we would say not only from a covid standpoint that the central bank has to be a little careful and go a little bit slowly, but there are also

other factors in terms of debt situations, how hostage we are to keeping the policy environment. it puts a cap on how quickly central banks can respond. messaging is in the right direction. the next stage of the story is how quickly, how much. we believe there is a cap come ultimately. it cannot go too much higher. i think flat curves paint a picture that there is still a limit as to how far this can be priced into high yields globally. dani: georgina, you're going to stick around with us. coming up, we are going to be discussing the latest travel curbs around the world and how that is impacting the sector. we are live from the world aviation festival in london with guy johnson.

this is bloomberg. ♪

dani: welcome back. part of yesterday's news, some of the extreme whips we saw were not just the bond market, it was the u.s. dollar as well, on track for its worst day of the year. 30 minutes later, after powell's testimony, you can see that spike. it was up on monday, then started to soft and as we got through to the end. -- soften as we got through to the end. georgina, what do you make of the dollar right now? are you assuming the strength will go from here, or is it a downward trajectory we are going to face for some time? georgina: we like the dollar, but what we need to be careful about is people often refer to

the dollar smile, and if things are going well in the u.s., than the u.s. dollar can perform well . a little more risky, then you get defensive policies coming through. that we like the dollar -- though we like the dollar, we understand it has done well because of rate differentials. it has not done well because it is needed to be that defensive asset of choice. for us, we like it, but we are being careful in the near term as people move around, taking rate rises out then putting them back in. if you think a bit longer term, something like selling the euro versus the dollar still makes sense from a differential perspective. also, how policymakers are using their currencies. the euro area needs the weaker currency to be part of the solution, so maybe those types of drivers come into play. dani: what do you make, then, of

the yen, which perhaps is more of a reflection of that haven buying than the dollar? is this just a technical short squeeze we have seen in the yen, or is that going to be a more attractive asset? georgina: the yen is interesting because it has not been great, has not really behaved over the last couple of years as you would have expected. we are multi-asset investors, and finding currencies or assets that operate slightly outside that policy differential, inflation theme, japan has its own narrative running, so i think there is support for the yen. given that uncertainty of the dollar, i think you could see people revisiting the and as having that bit of protection in their portfolio, but also somewhere that has its own narrative, driving things like

the euro dollar for example. buying the yen versus the euro is interesting. you could see support for the yen given different drivers across the currency space. dani: georgina, so great to have you on this morning and get your thoughts. for gina taylor, fund manager at invesco asset management. we are still looking at futures moving higher in the u.s. by nearly 1%. the mx and p index moving higher by 1%. oil rebounding as well. wti up by 3%. this was just entering a bear market, so it is remarkable to see this turnaround, but it is clear this is a market that continues to have jitters. is this a market where we want to buy the dip, or are we going to start to sell these rallies? it is a debate that will continue to unfold. ming up, we are going to have

s&p level ratings, which has released their outlook for 2020 two, covering everything from inflation to growth to china. we are going to dive into the details. ♪ mom, hurry! our show's gonna start soon! i promised i wouldn't miss the show and mommy always keeps her promises. oh, no! seriously? hmm! it's not the same if she's not here. oh. -what the. oh my goodness! i don't suppose you can sing, can you? ♪ the snow's comin' down ♪ -mommy? ♪ i'm watching it fall ♪ watch the full story at www.xfinity.com/sing2 dani: good morning from

bloomberg's european headquarters. 6:30 here in london. i'm dani burger. this is "bloomberg daybreak: europe." jay powell turns hawkish, tighter policy earlier than expected. omicron uncertainty, germany moves a step closer to make covid vaccinations mandatory.

tightening travel rules, the white house is considering testing all travelers to the u.s. within a day of departure regardless of vaccination status. it was a powell pivot that markets have had to adjust to. the drama is filtering through the front end of the curve. this is powell, not only captain of team transitory, but has a different word to have a faster taper and wrap it up months sooner than many expected. the two year yield jumped 10 basis points in the span of 30 minutes. this is after days we saw the two year yield fall over the omicron fears, with powell days before trying to have a more dovish stance. this pivot means we saw the u.s. spread fall to the flattest since march, 2020. this is a market that has had a

lot to reconsider. there is not just drama in the treasury market, let's get into credit markets, and tell me if this sounds familiar. bankers are repackaging assets and selling high-yield debt instruments. we saw that movie in 2008 and it did not end well. structured credit and asset-backed securities, loan obligations have grown at the fastest pace of the financial crisis. in the u.s. it amounts to more than a half trillion dollars, and a record 100 billion euros in europe. assets range from fast food franchises to fitness centers, all because investors are hungry for yield. they are looking for an inflation hedge. what are the risks? to help us answer that question, let's start with the basics. what is driving the markets? >> it is the perennial hunt for

yield, people are looking to hide from inflation. because they are a little complex and do not offer as much liquidity, they offer a premium, so you can make more money than in traditional bonds. that is why we see deals and asset-backed securities, clo's. dani: clo's are the largest part of the market, seeing a record year in 2021. what does this mean for the outlook next year? >> analysts have come out bullish and are forecasting a similar record year next year, but that was before the new virus. it remains to be seen how that will affect the market. the deals that have come this week, we saw a little widening in the prices, but because the market is less liquid, is the

last to go down and the last to go up. dani: are we hearing warnings about the market? >> not in particular. the bullish market on clo's, the aspect of the product that they offer, and the fundamental backdrop is solid. if we look at the underlying assets, those are corporate loans, and if you look at the default environment, it is benign so far. that is what is driving people into the market, they are seeing a low default rate environment, and some are forecasting lower rates to stay low longer. that makes clo's a good investment. dani: fantastic reporting, that is our credit market reporter. let's continue the market conversation, and here to delve into the details is alexandra dimitrijevic, managing director / global head of research, standard & poor's.

so great to have you on. i want to talk a little about what we were discussing, the risky products moving up the risk curve, hunting for yield -- how much in danger is that strategy as we undergo this pivot from powell and the concerns over the new variant? alexandra: good morning. indeed it is striking if you look at the investors in the u.s., over one trillion u.s. dollar price through october, and this is a record here. that is pushed by the conditions . yields are low down through the triple c category, but the good news is through 2021 the default rates have really come down significantly. if you look at the annualized

default rate since april in the u.s., in your it is up 1.4%. most of that is restructuring payments. we have no bankruptcy of corporate sin europe in 2021 -- of corporates in europe in 2021. solid momentum, but getting into 2022, we should not forget 30% of corporate credit are rated b- and below. dani: it is fascinating to see this lack of bankruptcies. it was true for a lot of the pandemic, not just now. what does that mean about where we are in the cycle? is that yet to come, or did we skip that? alexandra: this is a very good

question. the cycle, we were talking about late cycle behavior and flagging the high number of credit. we have a higher share of credit. even if we expect tightening, central banks start exiting monetary conditions, if this is orderly -- which is our base case -- we expect the rate to remain fairly low in 2022 at 2.5%. there are big risks that could derail this positive momentum. some of it is around inflation, and obviously the variant. dani: it is fascinating, because you put out your 2022 outlook,

and shortly thereafter we get this pivot from powell and have a big reaction and markets. how surprising was this, and does it force you to read look at anything in this outlook? -- re-look at anything in this outlook? alexandra: it was an interesting outlook. we had omicron and then jay powell. the key thing we are watching for in 2022 is inflation. central banks have to exit the extraordinary monetary stimulus. it is positive to normalize funding positions. the key risk here, monetary tightening in the market, pricing in the market for the

vulnerable credit at the bottom of the scale, and as well for emerging markets. not a big surprise. just slightly earlier. dani: one of things that stood out to me in your 2022 outlook was corporate margins. this past season they held up well in supply chain disruptions, but you talk about how we could see pressure play out in 2022. how drastic could that corporate margin pressure become next year? alexandra: first, it is good news that in 2021 the corporate world weathered so well the supply chain disruption, and we expect they will end the year strongly. our analysts have seen 70% of cases, corporates have been able

to pass through the inflation cost pressure, or use hedges. where we see pressure next year, again in the survey our analysts expect in half of the sectors, supply chain issues will last until the end of next year. as demand slows, companies might have less flex ability to whether the supply chain disruption, and this will put pressure, and an increase in the cost of debt, that could put pressure at the bottom of the scale. dani: what does it mean to have debt overhanging the markets now as we potentially face a quicker tightening from the fed? alexandra: it does not mean that we expect an immediate debt crisis or liquidity crisis. even if there is some

tightening, the conditions remain extremely accommodative. half of the trillion i mentioned earlier was used for refinancing. in most of the markets we do not have a maturity wall, but this is a reminder that there is some normalization that we should pay attention to credit risk. we have over 30% rated d-and below, which means some vulnerability. if there is some derailment on the base case. dani: fantastic to have you on. that is alexandra dimitrijevic, managing director / global head of research, standard & poor's. enjoy the rest of your day. let's get over to the first word

news. juliette saly is in singapore. juliette: the fed is due to start his policymaking december 14. >> the task we articulated has been met. inflation has run well above 2% for long enough. transitory has different meanings to different people. it is a good time to retire that word and explain more clearly what we mean. juliette: germany's incoming chancellor indicated his support for making covid-19 vaccinations compulsory. olaf scholz once parliament to have measures by the end of the year, saying he would allow lawmakers to have the final decision. a mandate would be a major step for the new administration. the european union lands to

mobilize 300 billion euros in public and private infrastructure investments by 2027 to offer to developing countries. numbered understand that you global gateway program, which will be unveiled today, we'll outline spending on digital, transport, and health projects. the plans are seen as an alternative to china's massive belt and road program. 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: thank you so much, juliette in singapore. coming up, turbulence. we are live from the aviation sector with guy johnson london, next. this is bloomberg. ♪

dani: welcome back to "bloomberg

daybreak: europe." as the omicron variant spreads, the biden administration is planning to tighten its spread, global travel curbs have been swiftly enacted. we spoke to the ceo of easyjet yesterday. >> we thought this winter was not going to be straightforward. there is an underlying recovery. we knew there would be uncertainty. we think this year is going to be a year where there will be uncertainty over the winter, which is evident of what we are seeing. we also believe it will be a strong pickup into the summer. dani: guy johnson is up early for us at the world aviation festival. we saw travel and leisure stocks get hit hard, dropping 10% in the last three days. is this a reasonable reaction to the curbs we have seen?

guy: morgan stanley and citi think not, they think it is an overreaction. the market is looking at the situation saying, these are the obvious stocks to sell. incredible turbulence this year. the sector has been up 25% year-to-date, and now it is down 11%. the market is trying to discriminate after indiscriminately selling from the get go. it is trying to figure out who will be affected, maybe the long haul carriers. then we will start to see the short haul carriers affected. the ceo of easyjet was optimistic, but if you are trying to fly the atlantic, the risk is it gets shut down. that is the fear for the likes of iag and virgin atlantic. dani: it sounds like flights are

not stopping yet, one is going off behind you. what could happen next with travel restrictions and precautionary lockdowns. ? guy: that is what everybody is trying to figure out. the big surprise this time as we have seen governments reacting as quickly as they have. we went to the first few waves of covid, what we saw with governments imposing travel restrictions, and the u.s., when they imposed them stuck with them, but it took a long time to get there. this time around, governments are tightening the screw quickly. the u.k., new travel restrictions coming in place today, new quarantine rules, new testing rules. whether or not they last is the critical question now. does the north atlantic stay open? a lot of people are concerned

about their skiing holidays, but the real fear for the aviation sector is getting to january, look at the summer season, and people not ready to book yet, and they rely on that cash flow. dani: i know you're are talking to virgin and jetblue, so stick around for that. that is guy johnson at the world aviation festival. he will be talking to jetblue, virgin atlantic, as well as executives. let's get to a covid update. we are looking at what is happening on the ground. china's outbreak is worsening. germany is considering making vaccines compulsory. governments continue to clamp down on restrictions and travel curbs. we are joined by michelle cortez. i want to start with the outbreak in china. china having a zero covid policy

perhaps versus the western world, how severe does the new outbreak look? michelle: china is having a number of infections close to the peak it has had for the entire year. 91 new cases in a border town in the north. these are not from omicron but from delta. it is a good reminder that it is not just the new variant we are concerned about. we are concerned it will be more infectious than deltek, and delta is still causing problems worldwide. dani: to that point, some of the new cases we have seen, new delta cases in china or omicron throughout the rest of the world, do we have the sense that this is the calm before the storm? michelle: it is absolutely the calm before the storm, unless we do not have a storm.

it is early days, but it harkens back to the situation and will hanan 2019. -- in wuhan in 2019. everybody got walloped. because south africa acted quickly, we know this is coming, we just don't know if it will be sars or mers like, or like delta or worse. we are watching it day by day, but it is so early now. remember the first cases in your country, and you thought it was only three people, eight able, 10 people. now we look back and laugh. hopefully we are not doing that months from now. dani: it was easy to say this is a problem in china, and in the u.s. could say it is a problem in europe. are we seeing that play out in

terms of hesitancy to put more restrictions, or is this a faster reaction from policymakers? michelle: we are seeing faster reaction from policymakers, and faster reaction from financial people who have seen what happened before hand, and they are anticipating what could happen in this outbreak. we know the travel curbs will not stop a more infectious or virulent virus. we are seeing increasing cases across the world. japan and other places, we are getting a pickup of cases. what they are trying to do is get it under control so we know how bad it is. once we can figure out if it is a more mild or severe version, then we can crackdown on mitigation measures that we know , such as masks, social distancing, maybe more lockdowns or quarantines, and to bring it

back full circle, if you want to get to covid zero, china is doing it, and it goes further than travel bans. but that is the effort you need to keep this variant out. dani: exactly as we are talking, the nikkei putting out a story that japan will halt incoming flights for one month. exactly what you are pointing to, playing out live. that is michelle cortez, our senior medical reporter. coming up, we have an interview with deutsche bank's cio, christian nolting. that is one you do not want to miss. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." i'm dani burger in london. at 11:00 a.m. u.k. time we get the latest job numbers from ireland. a few hours later, 1:00 p.m., manufacturing pmi data out of brazil. we are concentrating on em a lot given the outbreak. we will have u.s. economic data on construction and mortgages. at 3:30 we have a former facebook employee testifying in front of congress on proposed reforms aimed at holding big tech accountable for user created content. a lot on the docket today, but what is dominating the market moves is powell's testimony from yesterday. this is your gmm screen, and it is decidedly risk on. equities are outperforming. forex commodities outperforming.

yields been higher. up next, "bloomberg: markets." this is bloomberg. ♪

hey, angie! you forgot your phone! hey lou! angie forget her phone again? yep. lou! mom said she could save up to $400 on her wireless bill by switching to xfinity internet and mobile. with nationwide 5g at no extra cost. and lou! on the most reliable network, lou! smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season. anna: good morning and welcome

to "bloomberg markets: europe." i'm anna edwards in london. mark cudmore joins us from singapore. the cash trade is less than an hour away. jay powell turns hawkish signaling tighter policy earlier than expected. the treasury curve flattens in minutes. tightening travel rules, the white house is