♪ >> i think the frothier areas of the market will continue to have headwinds. >> inflation in materials, inflation and logistics. >> inflation hurts, unemployment hurts. >> where do all the workers go, and are they ever coming back? >> we have this narrative of fire and ice, and we think it is going to be icier. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: payrolls 90 minutes away. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures on the s&p -0.25%. 125,000 for this payrolls morning. tom: i believe there is a number that has never been a greater fiction and that number. it is a movable feast south

because of omicron. jonathan: and we have no idea if it is a plus sign or minus sign in front of that. that is how movable it is. tom: today you've got to look at wages because on this jobs day, i'm looking at one number on the bloomberg terminal that may be out to a new high, $82 $.94 on brent crude. jonathan: just look at the other central bank, the ecb. the more recent pivot in the last week. lisa: i'm surprised the market has not reacted more, despite the fact we have talked about the main reason that yields have shifted so low. yet we are not seeing an additional changing u.s. yields. jonathan: italian yields up another seven basis points after a massive move in yesterday session. amazon is positive 11% or so.

the nasdaq 100 up 0.3%. wti with a $92 handle in america. tom: you are behind by 10 minutes because you were worried about opening the show. we are about ready to print a $93 moment ago. this all happened the last two minutes. jonathan: we can discuss it a little bit more, tom. what did i do to you this morning? we brought down the coffee as always. what's wrong? tom: the car i have takes premium. jonathan: is it bumpy? tom: no. jonathan: oh, premium gas. not premium people. tom: fancy gas is going to be five dollars a gallon -- fancy gas is going to be five dollars a gallon by tuesday. lisa: happy jobs day. jonathan: we are still friends. on the s&p, we are down 0.1%.

did not predict this this morning, just a bit of a domestic with tom. [laughter] tom: is that what they call it in britain? jonathan: the ecology domestic. is that a british term -- they call it a domestic. is that a british term? i didn't know it was a british term. lisa: we're going to have a domestic over the payrolls report at 8:30 a.m. we're going to look beneath the headline at the participation rate and whether it continues to increase based on the continued suppression based on prepending norms. then of course the wages. i'm focus on wages. carl riccadonna does that does not matter either because it is really noisy. they are expected to surge because there's not only a smaller pool of workers, but also composition. a lot of the service sector jobs that are lower paid are the ones that were harder to fill which is the reason why you may see a bigger pop. 10:00, we will hear from

president biden talking about the january jobs report. how does he dovetail this with an unemployment rate at about 3.9% and wages increasing as quickly as they are? i am looking for some sort of immigration policy. what is he going to say about gas prices? vladimir putin and xi jinping are holding their first in-person meeting in more than two years. the kickoff of the winter olympics in beijing. this may be one of the biggest points of the olympics, this cohesion between russia and china that is increasing as they continue to try to preserve the strategic reserves in places like kazakhstan and ukraine. trying to solidify their natural resources as they continue with this green revolution. jonathan: looking forward to the events through this morning. priya misra joins us, the head of global rates strategy at td

securities. why does the rate not matter this morning? guest: it is all omicron. we think it is going to be distorted. that is part of it. omicron seems to have surged in some parts of the world, some parts of the u.s.. but even though this fed is embarking on a hiking cycle without forward guidance, they have pretty much given us forward guidance for the next meeting. they have already told us they are likely to hike in march. our kits are well priced for that. i'm not sure that the distorted number because of omicron that the fed is looking through will actually matter much for market pricing. it is going to come down to other things. it is going to come down to equities, russia. i would think global rates much more. tom: our heads are spinning. it has been an extraordinary week of new slow, facebook and amazon and everything else. what is the relationship you are focused on in your world for the

next six weeks or eight weeks? is it a certain spread? what is the thing you study first every morning? priya: we look at a bunch of things, but if you ask me about one thing, it is 10 year rates. where you can look at five-year real rates. it is the real rate component as fed rises, and i think this is where the fed is telling us this is going to go up. the speed come in the magnitude of it, i think that will depend on other factors, but if those rose higher, and we expect them to rise higher, i think the bank of england is going to make those real rates go up. we have seen that move up this week as well. lisa: why has there not been a bigger reaction in markets over what happened at the ecb and the pivot? priya: i am surprised by that, frankly, because i think global rates matter a lot for the u.s.. what we call term premium, this

demand for treasuries that comes from the rest of the world, as well as domestic, it is in the global context. i would say of global rates are rising, it would mean less demand. it is this fear that the fed is going to overdo it, that inflation is going to force them. all of the talk around 50 basis points is lowering the terminal rate, so even if term premium is going up, i think the fed is going to have to cut rates next year because they have overdone it, that is overshadowing the idea that long-term rates should be higher. so if we hear from the fed, i don't know if we will get forward guidance, but if we get this idea of gradual or the idea that they are not behind the curve, that they are going to hike, raise rates at a steady pace, this idea that they are not behind the curve, if we can get the market to believe that, i think this inversion in the forward curve that we are noticing, which is the market

already pricing in the end of the hiking cycle next year, if that goes away, longer-term rates should start to rise. lisa: how difficult is it to get a narrative from this market given how things are reacting or not reacting to variables? we are not necessarily getting that kind of signal from the ecb. is this a lack of liquidity sending a lack of signal? priya: absolutely. compared to the last hiking cycle or the one before that, there's market microstructure and fixed income, as well as less liquidity. we saw this in march 2020. there's a lot of talk over form -- of reform, but nothing happened. we are looking at less risk appetite, and we had a significant run-up in all assets. so as we are seeing positioning shifts, i think the overdue moves in both directions, and we are entering a hiking cycle with

balance sheet runoff, and the fed is telling us they are going to be nimble and humble. there's no forward guidance and less liquid markets. i think we also have to factor in that there is going to be a volatile ride. jonathan: when does crude become a problem. are we there now? priya: i think we are there. the market is pricing in this risk with russia, but it is even just beyond russia and ukraine. it is also the longer-term esg initiative. as we are turning more green, we're going to have to live with higher oil prices. how does that fiscal drag that hikes? you've got a bunch of things going against the consumer, and we've got savings, but is not homogenous? we think it is not. so that is one downside risk for the consumer the certainly we are already watching. jonathan: priya misra of td securities on this payrolls report.

td looking for -200,000 at 8:30 eastern time. this move in crude, $99 on brent. tom: it is important to go back to 2010, 2014. it was not $100 a barrel. the stasis was about $110 a barrel, and we are legging up there as we have once before in 2018, 2019, but has a life of its own. jonathan: i remember the ticker back to 2013, 20 14. you will see the rig count grow quite aggressively as we started to see oil prices pickup to the backend at 2014. the saudis flushed everyone out and we never really recovered in a big way, did we? tom: i'm not a big fan of the rig count dance, but i will say it shows the angst up there, and maybe what you will hear, particularly from republicans today, which is where his american oil to come on with new

supply. javier blas with us, world class, in minutes. jonathan: really looking forward to that. the reluctance to bring new crude online. lisa: we are going to get that rig count today at one a clock p.m., and the expectation is for it to increase, but why it has not increased faster when you have this dearth of supply, will there be a push in the intermediary to try to get more involved? tom: do we get an auction today? i am missing the auction talk. lisa: i will call you over the weekend. i will give you ton of auction talk. jonathan: i knew that lisa knew what time the rig count comes out. [laughter] lisa, this is the rest of the show, just you and i talking to each other, and no idea what tom is up to. futures up 0.2% on the s&p. 15 on wti. -- up 15 on wti.

this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. amazon is giving the market back some of what meta platforms took away. they are at poised to add almost $200 billion in market value. if the stocks gain to the premarket close -- in the u.k., the crisis engulfing prime minister boris johnson's government has gotten worse. four aides have resigned in the partygate scandal. one ally quit over what she called the scurrilous remarks johnson made about opposition leader here starmer -- leader here starmer -- leader keir starmer. the seven-day incidence rate

which has been climbing since the start of the new year set a new market. the average price of gasoline in the u.s. is now at the highest since 2014. regular gasoline rose three dollars 43 since i gallon, a challenge to president biden, who has been trying to combat surging fuel prices. 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. ♪

♪ >> inflation remains well above our longer run goal of 2%. supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. these problems have been larger and longer lasting than anticipated. jonathan: powell, we have a problem. lisa making me laugh in the commercial break. futures down six on the s&p. tom: we didn't talk on the break. jonathan: you and i did not talk the commercial break, all seven minutes of it. the nasdaq 100 up 0.4%.

don't get me going, tom. yields up a basis point on tens. [laughter] tom: there we are. it is jobs day. i will take it from here. there's only one statistic in the data check that matters today, and across this nation, and is $92.83 -- it is $92.03. javier blas will join us for global wall street in particularly for those of you working out of our dubai shop. right now, we start strong with annmarie hordern, who has had uncountable breakfasts at cafe vita in vienna. the breakfasts in vienna are like legendary, right? annmarie: they are. i like it. tom: so does your amex card. this goes to her europe

gallivanting and opec+. describe the power of russia this morning on a gallon of gas in america. annmarie: these numbers on brent and wti are going to be welcomed in moscow. president putin has a budget for russia that is about $40, $45 for brent. this gets to the heart of what the issues were always in opec+, moscow and riyadh. moscow, especially when you look at transfer to rubles, even though the ruble is weak right now, these are great numbers for the oil market. it is also a difficult position for the united states. tom: does he have power to drive the price of oil higher in america? annmarie: of course. geopolitical risk is also why we are seeing prices higher. part of that is people pricing and geo-political risk if russia was to invade ukraine. they are one of the biggest

suppliers and exporters in the world. of course they have a handle on this. natural gas as well. lisa: how much will the shale patch become a voting issue? annmarie: i think it comes down to the price of gasoline. what you are seeing today is the highest since 2014. this is how people vote. they are not thinking of president putin's handle on the market or riyadh or even what the numbers are. it is what they feel. how do you feel today? are you better off today than you were last year? are you paying higher at the gas pump? are you paying a higher for your grocery bill? this will be a problem, especially as we go to inflation data next week. lisa: how does joe biden feel about today's labor market report? how does he dovetail this with the cost of living that is increasing and the wage increase we are expecting in today's number? annmarie: the administration will say it is confusing because of covid and what happened with omicron. you just had priya misra on,

basically saying the same thing. it does not matter this month. what the administration is going to do because they have been trying to dovetail, don't focus too much on inflation at the moment. at least we are making progress in the labor market. this is going to be a little more challenging to spi forn them. but the president is also likely going to talk about his bill back better agenda, or chunks of it, about fighting inflation. he says the american people are on board with him when it comes to things like prescription drug prices, that that is a way to help consumers do with higher costs. tom: a note moment ago, and the headline, this harkens to what i said yesterday about the 1970's, nixon, ford, and now bailey. the answer for gerald ford was whip inflation now, and that literally didn't make it to the weekend. what is the thing they are afraid of if they come up with a

plan and the plan fails? annmarie: they don't get reelected, right? what is the point of politicians? it is to get reelected. they are going to face tough midterms. jonathan has said this countless times. inflation, crime, and education. the president tried to address crime yesterday. today he is going to have an inflation problem. jonathan: i am back. i pulled myself together briefly. we will see how long it lasts. bailey is an unelected central banker, and chairman powell, and the view of many, has let this a adminstration down by keeping things loose for far too long. not my opinion, the view of a lot of other people. we look at the situation, i am often surprised that people come on this show and backup chairman powell the way they have done. i was surprised he got a second term from a president that might

actually be overseeing a party that gets cleaned out in the midterms over a situation that could have been helped out by a central banker that, for some people, did not do his job as well as he could have done. tom: it is going to be interesting. mr. johnson is a little bit distracted. jonathan: he would have been in massive trouble for this. this is a central banker. the central banker is saying today, i do not think it is right. i think it is wrong. clearly, they have not done their job at the bank of england either. before the federal reserve to be sitting here and letting the flak for this i think it is a little rich. tom: we got lost in translation today. someone said we would look at the marine carpet as he did in the mood -- the maroon carpet as they did in the movies years ago. i will translate this from the keene household on the weekend. a bit of a domestic. what is a bit of a domestic? jonathan: just an argument that takes place in the house. tom: so like this weekend, if i

have a bit of a domestic -- jonathan: if you had an argument? this is a domestic every morning , from 6:00 to 9:00. [laughter] tom: lisa, can you help me here? i know you've never headed to mystic. lisa: no come -- a domestic. lisa: no, i've never had a fight. . jonathan: the controversy of the bank of england saying don't ask for a big pay rise -- i find it difficult to bury that. tom: this is with the fed hearings going on right now. what is going to be a bit of a domestic between the white house and the fed if we get one more month at 7%? jonathan: i do keep saying the one thing on their side at the moment is the calendar. the hope is the base effects kick in the other way and things improve from their, but for a

lot of people, chairman powell has let the administration down on this front. we are still doing qe. we are still doing qe. yields in a basis point on tens, 1.82%. we will be back in seven minutes. [laughter] r]

♪ jonathan: feel so well rested now after that. futures look like this this morning. good morning to you all, from new york city, on tv and radio. on the nasdaq 100, up 0.6%. a helping hand today from amazon. let's talk about the move in crude. seven weeks of gains on wti. year to date, up more than 20%. right now, short of $93 on brent. energy kicking higher again. these central banks are starting to move. the bank of england goes along for the ride. then it is the ecb stepping away from the t word. switch up the board and get to this. the german two-year has been beneath zero going back to 2014. it has been 6, 7, 8 years since

we have been above zero on a sustainable basis, and even then we were nipping and diving around the zero line around the charts. right now on the german two-year, -28 basis points, and yields are up by five. the ecb stepping into rate hikes may be at the back end of this year. socgen in that club, goldman in that club. the changes keep pouring in. tom: i wonder about the behavioral construct. jonathan: it is a massive change. for a lot of people for a long time, that german bund market has been like an anchor for the global bond market, a center of gravity. euro-dollar with a $1.14 handle, 1.1472 -- 1.1472. in europe, you are not quite sure why we are not seeing this bleed out a little more. out of germany come out of italy specifically, into the rest of the world. lisa: it has provided the bid

into the u.s. treasury market because yields were so high. they are less high today based on what we are seeing in europe. jonathan: 10 year yields creeping up a basis point. in just a moment we will catch up with morgan stanley. -215,000 on payrolls, that is what they are looking for an hour from now. next week, 7.3% on cpi. we will touch on that in just a moment. that is the process at price action. let's say good morning to romaine. romaine: meta platforms coming off a phenomenal day yesterday for all of the wrong reasons, losing more than $200 billion in market cap, the single worst decline we have seen on a valuation basis for any u.s. stock in history. no one is really buying the dip here. the share is up by 0.4% on the day. maybe because a lot of folks are buying amazon, up 12% now. that adds about $170 billion in market cap to that company.

that is setting up for what would be one of the biggest valuation gains in u.s. stock market history. that was a record just broken last week by apple after its earnings report. despite that, there were a lot of red flags and that amazon report, so it will be interesting to see how that folds over into the cash open. despite the fact that amazon is up 12%, futures on the nasdaq 100 only up about 0.5%, and s&p futures basically flat on the day. other than amazon, really nothing of significance right now in those indices is moving higher today. you look at the eye-popping numbers on snap, up 47%. that is not in the nasdaq, not in the s&p. unity software, a lot of these names are not moving seen it can we hire -- are moving significantly higher, but they are not in the major indices. flip up the board here. another reason you're seeing weakness on the s&p this morning is this of clorox, guiding lower because of supply chain issues,

higher costs. similar story for ford, which will take longer to work through some of its supply chain issues. those shares down about 6% in the premarket. one of the stealth rally's we have seen in this market has been with a lot of the names setting up for a 10th straight day of gains as we look at wti hovering right around $92 a barrel. brent crude up around $93. tom: thank you so much. it is the oddest of jobs days. we will rip up the script because of inflation. ellen zentner, chief u.s. economist at morgan stanley, joins us. anyone knows what we will see at 8:30. i want to talk about your important research note a number of weeks ago you said inflation and the ebbing of inflation is critical. do you still stand by that call that we will see inflation ebb? can you do that with $93 oil? ellen: absolutely.

if we are talking about core inflation here, what we are looking for is not just for inflation to stop moving higher, which we are not at the peak yet, but when we start to get the february data in march, that we would start to come off that peak. one reason why we have gotten more and more confident in the forecast that that will turn later this quarter is that we can see that the inventory building is going on. it is a slow process and it is not super broad-based, but it is going on. companies are telling us they are able to build inventories. companies are telling us some of those cost pressures are starting to ebb. that does not mean costs are not still rising, but that they are rising at a slower pace. that is really what you look for in the inflation data. we are not looking for declines in price levels. we are looking for the growth rate in those price levels to slow. our global supply chain index turns in the fourth quarter, and

that leaves cpi -- that leads cpi by several months. all of the evidence we gather tells us we are going to see that turn, but inflation is going to remain very high even into the middle of the year, so there's nothing in terms of inflation driving the fed's intent to start raising rates. jonathan: let's talk about this payrolls number, negative two hundred 15,000. on a program like this one, we often read out the payrolls figure when it dropped at 8:30, then we quickly read out the on employment number. outside of our world, i am not sure how many people realize that we are talking about two different surveys that spit out two different numbers. can you give us a basic 101 clinic on why the household survey is different to the establishment survey, and why you should look maybe at the unemployment rate still and perhaps not payrolls? ellen: we get a lot more detail about what is going on under the hood of the labor market through the household survey. when households, are you

working, were you looking for a job, and those sorts of things, and you capture a good deal more information. that is where we get other data from as well that are important on the ethnic breakdown, the age group bring down of the labor market. so it is a very important survey. we follow the payrolls survey, which is businesses like morgan stanley that would report how many people are actually on the payrolls that month. the methodological differences come in, the fact that when you go through the survey week for these surveys, for payrolls it is not just where you on the payroll that week, but did you actually get paid. that is why when you have natural disasters, when you have things like omicron that comes through, it is more difficult especially to pick up part-time workers that might not have been

at work at that restaurant that week, so they did not get paid. that is why we are going to have probably a much stronger print for household surveys on jobs than the payroll print, which can be behind that negative sign, and we won't be surprised to see it. lisa: are we still underestimating just how strong this labor market is, how tight it is, and how much wage pressure we will see in the rest of the year? ellen: we were certainly underestimating that in the beginning. who would have thought that over the last six months, we would see the unemployment rate dropped by 200 basis points? that is unprecedented. if you were just to take that trend and stretch it forward, you're going to be well into a 2% handle on the on employment rate by the end of this year. it is just unthinkable. what we have really been waiting for is for labor force participation to pick up more strongly. in prime aid workers, we are

seeing it pickup. we want to see it pick up faster. for that, health concerns have to resecede -- have to recede . jonathan: thank you very much. -215 thousand the estimate coming from morgan stanley. i'm not sure how much value there is in a median estimate this morning when a range is that wide. tom: jim glassman has great anecdote about the fabric of the labor economy. i want to go to a three-month moving average. when in doubt, go to a three month moving average. it is still important. i believe we will be under 4% unemployment rate, and there will be people out there saying this is a fully employed america. jonathan: lisa, you have not given up on this jobs report this morning. you think there could be some signals somewhere. lisa: not only could you see the tightness coming through the on

implement rates and the wages increase coming down more than expected, i am curious about the shift as omicron picked up and people who did work and service sectors who say we don't want to do this anymore, who said we want to work in an office. we want to work from anywhere. you're seeing those people remain out of the workforce as they transition to another type of job. how does this feature into wage dynamics? does that mean the service sector is going to see higher wage increases than, say, office jobs? jonathan: some people are describing it as strong. the chairman of the federal reserve did that. i wonder how strong this labor market actually is. he's got -- if you've got 10 million, 11 million job openings in america, is that a strong jobs market? lisa: i think that mystery is being solved gradually, but we are not seeing that part dissipation rate go up which raises a lot of issues going forward. jonathan: we have breached $93

on brent or you through $92 on wti, up 2%. yields are ok at 1.816 7%. the backdrop is energy prices picking up. clearly the outlook for inflation spooked the bank of england yesterday in a big way. to hear those words from governor bailey, just unbelievable. tom: and then the follow on at the ecb was just a bombshell. jonathan: even in the statement, the opening statement, when we went through those headlines for the news conference, the t word was still there. you did not hear that and that news conference. tom: i think it was very much the german bank stepping in. i think that will be the back story. jonathan: tom keene, lisa abramowicz, and jonathan ferro. you nasdaq up 0.5%. amazon is holding in there. crude up 2%. this is bloomberg.

♪ ritika: with the first word news, i'm ritika gupta. today's u.s. jobs report could be a tricky one. the median estimate in a bloomberg survey of economists shows a gain of 100 when he thousand jobs in january, but the individual forecasts are all over the map, from an increase of 250,000 jobs to a loss of 400,000. white house officials warn the report could be confusing or misleading. in the u.k., labor unions have slammed bank of england governor andrew bailey, who called on workers to hold off demanding big pay hikes. bailey says restraint is needed to help control inflation. one unit official called it a -- one union official called a sick joke. it was pointed out that bailey earns about 18 times the average earnings. new steps to fight the coronavirus. chief executive carrie lam says tightened rules will be

proposed. the vaccine mandate will eventually require three shots and rapid covid test will be handed out at all hong kong residen -- to all hong kong residents. jens stoltenberg has been chosen to be the head of norway's central bank. the pic is likely to become traversal because he is a former prime minister. 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. ♪

>> what i would be wary about if the oil price goes to $100 or

higher, is that going to make the fed more hawkish because they really want to put a stopper in this inflation bottle? jonathan: we are close, let's put it that way. brian nick of nuveen on crude. futures up 0.8% on the nasdaq. the s&p up a little more than 011%. we've got to talk -- more than 0.1%. we've got to talk about what is happening in the oil market. seven weeks of gains, year to date up more than 20%. just short of $93 after breaching it earlier. tom: we will get to javier blas in a moment. an extraordinary perfect time to talk to him. right now, kriti gupta come what do you have today? kriti: the oil index is made up of 12% energy, so the oil market has a direct read through into high-yield. i will look at high-yield spreads for my chart of the day, especially because at a time when you have wti prices crossing the $90 a barrel

threshold, he would think that would owed well for some of the high-yield energy bonds, but you're starting to see the spreads widen. high-yield is more price and yield driven, but this really points out the idea that the upside or the risk from the fed on the high-yield market actually outweighs any benefit from the $90 oil price. you can see that with the spread widening. you can also see that in october when you have natural gas prices affect prices as well. for high-yield, instead of tightening those spreads, they actually widened. it speaks to the idea that because a lot of these energy companies had already refinanced last year and cleaned up their balance sheet once again, the upside is really limited. tom: with oil at $93 a barrel, javier blas joins us with bloomberg opinion. his acclaimed book on hydrocarbons, "the world for sale." are the saudis and the russians on the same page?

javier: they are. i think they are very happy with what they see at the moment on the market. they are producing a lot of oil. the market is above $90, heading towards $100. they are going to megaton of money. the russians perhaps are more worried about the response of shale, but i don't see russia putting any pressure whatsoever on saudi arabia to drag more barrels into the market. tom: five dollars a gallon gas. when we get there soon, it will be something to behold. can america turn on the supply effort? javier: america is actually drilling a lot, and i think that shale may surprise to the upside this year. potentially it is not going to be known because the main problem on the oil market is now. now is when we are beginning to see this. we are seeing the refiners

paying huge premiums over the futures market to secure oil in the physical market. the shale production is going to come, but it may be too late to stop this rally. lisa: people are saying that once the russia-ukraine conflict gets resolved, the oil price will come back down quickly. do you agree? javier: i think there is a geopolitical premium, just in case there is trouble with russia and ukraine, but i think that physically, the market is tied. while there may be a premium for the potential in ukraine, i don't think it is as large as some people think. can we go five dollars of everything gets resolved? sure, but that brings us to the high 80's, and that is not cheap. lisa: what is the upside surprise that could push oil to that $100, $105? javier: the upside surprise for

me, i have been talking about this for a while, is the options market. we have huge levels of call options, and then going all the way to 150 dollars. we may be in a situation where the financial flows may take over, and those options may just push prices well above $100 if we move significantly higher than $100. jonathan: typically when you get up to these levels, especially over the last 20 years or so, something breaks. last time around it was the saudis just in terms of the market share war they started at the back end of 2014. you have talked about why it could be different this time around because shale is so much less responsive. i wonder what you would expect to break as crude starts to

shift higher. is it a demand story? javier: i think the white house makes the phone call. biden gets on the phone with saudi arabia crown prince mohammad bin salman and ask for more oil. i think the white house breaks, and then we get the saudi response and we get more saudi barrels. jonathan: are you saying out the moment which we are seeing in the oil market, some of it is a blinking contest between this white house and riyadh? the fact that this president does not want to deal with the crown prince? javier: absolutely. biden is with using to make the phone call. the saudis once the recognition they think they deserve, and the americans think that they don't, and i think it is a bit of ok corral of who blinks first. tom: what is the power of mr. putin right now? javier: mr. putin sits on a lot of power. he just produced 11

million barrels a day. he has a significant geopolitical tool in his oil exports and gas exports, but i don't think putting is going to use that geopolitical tool because for him, it is more valuable just threatening to use than actually going ahead with the use. jonathan: javier blas of bloomberg opinion, fantastic. lucky to have him with us. one of the best journalists in the commodity market on the planet. a blinking contest between this white house and riyadh right now. that is some high-stakes stuff. tom: just to give you a vignette into the bloomberg world, when he walks into a room in davos, there's all these very important people around, and what is important is they are ignored by everybody else talking to javier, and then you realize the very important people are talking to javier. that is the layer's here of his knowledge. jonathan: are you saying that when you hang out with how the air, you just stay close -- with javier, you just stay close? tom: me and him shut down the

piano bar. jonathan: you did the lockdown? nice. back to the topic of the day. tom was falling asleep earlier. don't want you to drift off. lisa: i actually am still thinking about what javier blas said about president biden making a call to riyadh, and if he actually gave mom and been psalm on a little more recognition, they might actually cater a little bit more to the concern about oil prices. i still wonder how much control they have at a time when opec+ isn't able to produce as much as they are saying they want to. jonathan: when do you make the call? $93, 90 four dollars, $95 -- $93, $94, $95? we are higher than where we were in november. tom: on the break i will do an inflation-adjusted oil study that will suggest where mr. biden will make the call.

jonathan: that will keep them coming for more. lisa: seven minutes. go for it. jonathan: looking forward to it. nadia lavelle of ubs joining us -- not you love -- nadia lovell of ubs joining us. ♪

>> i think the frothier areas of the market will continue to have headwinds. >> we are talking about inflation in materials, inflation in just ask. >> inflation hurts, unemployment hurts. >> where do the workers go, and are they ever coming back? >> we have this narrative of fire and ice, and we think it is going to be icier. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is jobs day. on radio, on television,