putin has managed to get everybody's attention in the west. >> they are vocally open to diplomacy. >> war is an altering event. >> we will see more demand for hedges on the back of the russia-ukraine news. >> if there is any small chance of an invasion, that would be very disruptive to the gas markets. >> this is bloomberg surveillance. jonathan: what a weekend, wall street getting back to work, from new york city, good morning. this is bloomberg surveillance live on tv and radio. futures are down about a third of 1% and vladimir putin making his move and the world reacts. tom: it's coming headline by headline. the nord stream 2 headline from

mr. schulz this morning is critical. jonathan: he put that project on ice for now. eu diplomats seemingly making a move as well. they are pushing sanctions against more than 360 russians. what tom: next? tom:the mystery of the morning is the coordinated way this is done. how coordinate are the allies. we have observed a steady stream of nation by nation headlines and i guess you decide today or in the coming days if everyone is on the same page? we don't know. jonathan: the president recognize the independence of the self-proclaimed independent territories. when you send in troops and call them peacekeepers, does that constitute an invasion? the russians deny they have

plans to invade ukraine so they have not called it an invasion. what is it mean for the sanctions to follow? secretary blinken has said that any troops to go across the border into ukraine would constitute an invasion. it seems to be far more nuanced this morning. tom: it's a testing of the moment. it's not for us to print picked what that testing would be. experts will suggest that if you see actual russian troops on post-minsk ukraine territory, that would be a decisive shift. we haven't seen that yet. jonathan: the u.k. is acting in a coordinated way on sanctions. we are not seeing a full-scale

invasion currently. we hear from the prime minister believe in about 27 minutes. katie: he will speak to parliament at 7:30 a.m. eastern time about what the sanctions will look like and we will have heard from the u.k. and we heard from the german chancellor about the state of nord stream 2 earlier today so when do we hear from president biden? he has remained quiet so far. jonathan: we've got to stay on top of earnings and we mentioned home deep though. -- home depot. the stock is up nicely in the premarket. tom: retail sales seems to be doing well. it just seems to be an economy that's there. i go back to the shock of 10 days ago were alert is not looking at 10% gdp but more like

three or 4%. jonathan: good morning to you, down a third of 1% on the s&p 500 and down 8/10 of 1% on the nasdaq. yields are higher by a couple of basis points and now we go higher by a couple of basis points. wti is $91.41. brent crude briefly at $99. katie: getting a taste of 100 but will we get to that level as the situation between russia-ukraine plays out? we will look at the response from western leaders to that stuff german chancellor olaf scholz is already addressing the situation. we are waiting from remarks from orest johnson, the u.k. prime minister who will speak at parliament at 7:30 a.m. eastern

time that the u.k. will put sanctions into place and then we will hear from the broader general affairs minister that will give a press briefing at 10:30 a.m. eastern on the outcome of their meeting earlier so hopefully that will give us a sense of how the european union is coalescing around a facet of sanctions and finally, we will hear from atlanta fed president rafael bostic at 3:30 p.m. eastern time. jim bullard is in the 50 basis point camp. he says it will be dependent on the data and whether the bed will raise 25 or 50. jonathan: thank you, stunning pictures coming out of russia. to fee that just to see that security council meeting and

everybody sitting 20 feet in front of him taking to the podium to tell the president what they thought about the situation. tom: including dmitry medvedev. let's get to this quickly because we have a wonderful wall street guest. this is the continued image -- imagery and you have to get out the map. this is between the baltic sea and the caspian sea. the distance from yurovan north to darabs is very short and that's where mr. putin learned a lot of lessons. jonathan: let's bring in the head of capital markets for cities private bank. what changed over the weekend if anything? >> it seems like what changed is that now investors are dealing

with what is a trifecta of concerns and challenges. the first one is the fundamental shift of the liquidity regime which we know about and the fed is reacting to and the second one is slowing growth and now we have rising geopolitical tensions. how exactly do i protect against the geopolitical angle? they are already positioning on the first two fronts but the third with these escalating tensions is where it's tough to focus on. katie: does that mean go to cash? >> one of the things we did within our portfolios is we increased our exposure to u.s. tragedies and intermediate bonds. it provides that nice diversification's not sure cash. you don't have the ability for appreciation with cash but we did have that exposure. one activity driven by

geopolitical events is gold. with rising rates in the imminence of rising rates, gold was not attractive but with the geopolitical events, gold could tactically go ahead over the next 2-3 months. tom: over the last few months, people have said europe is the vote. that change this weekend? -- europe is the vogue. >> not necessarily. we have positions with u.k. equities but there is more volatility there and there is more concern. in terms of our broad-based equity exposure is looking to global quality companies. more difficult to say i will be in one region or another but when you look at global quality companies and we are worried

about laois and come arising rates and geopolitical tensions, the companies that have been able to withstand those environments have consistently grown their earnings with strong balance sheets and leaderships and have grown their vetiver -- their dividends which have an important place in portfolios in terms of the cycle but also in terms of elevated market volatility. jonathan: this slice of the equity market has done so well this year. energy is up i almost 23%. so many people ask us what do we do now? great gains through the early part of 22, what now? >> last year was a surprise to a lot of people that energy was the best performing sector in the u.s. market. i think we have to bring this back to the oil discussion so looking at royal driving a lot of the activity, part of it is valuable part of it is not.

by the end of this year, we are looking for oil prices to go down but i think there is short-term technical pressure. in terms of the rising geopolitical tensions, there has been a lot of upside buying of call options in that market. these kinds of very risk off scenarios, multiple standard deviation events and oil gets a bid and if it continues to go higher, the hedges necessary that the traders are providing, they need to buy more futures so there is a technical aspect that the higher oil goes, you can see continued short-term pressure within that market. jonathan: fantastic as always, thank you so much. early this morning, we were talking about post sanctions coming from eu diplomats, katie: they say the package contains proposal to target those involved in the illegal decision to recognize the separatist rubes and target

banks financing russian military and other operations in those territories and target the ability of the russian government to access eu capital and financial markets and target trade from two breakaway regions which is what the u.s. took those initial steps to target those regions specifically. we are awaiting the broader sanctions package but we are starting to get details of what the eu package will look like. tom: i think you will see players of discussion as the allies go back and forth. it will be a long tuesday diplomatically. jonathan: up next, by mellon in the next hour. from new york, this is bloomberg. ♪ katie: with the first word news,

vladimir putin says he has no plans to restore the borders of the russian empire. he spoke a day after he officially recognized to republics in eastern ukraine ordered the heat called he's tripping -- peacekeeping troops to go into the region. the u.s. has said they will impose more sanctions. there will be mandatory coronavirus testing for hong kong residents in three months. they are trying to tame a growing outbreak. chief executive carrie lam says most restrictions will be in place until mid or late april. macy's posted fourth-quarter sales and profits with comparable sales that sort 28% and a forecast earnings from four years that are better than expected. home depot is forecasting a deceleration prop wrote after a bumper and to lesser which is a sign that pandemic spending is starting to fade. they beat estimates.

volkswagen is in advanced talks for potential ipo of its sports car rent which would help fund record investments and unlock value for shareholders. porsche could be valued up to $96 billion. 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. this is bloomberg. ♪

>> we are on our land. we are not afraid of anything or anyone. we owe nothing to anyone. we will not give away anything to anyone. jonathan: the ukrainian ambassador to the u.n., from new york, futures unchanged on the s&p 500, just about turning positive which is a turnaround in this market after futures down earlier this morning. crude is still positive, up 3.6% .it's within a whisker of triple digit crude. we came close this morning. the eu president says the russian actions in ukraine are

illegal, unacceptable in the first package of sanctions will be formally tabled today. tom: the former finish prime minister we also heard from a few minutes ago. joe matthew is in washington and has wonderful effort on bloomberg radio and maria pulling 26 hours in brussels. every bit of writing i have seen on putin is he likes to go i lateral most of is brussels giving way to i lateral or can there be a multilateral response? maria: he is hoping to get a bilateral reaction. it's completely off the table after this speech he gave yesterday. my sources said european officials were her a fight by the language he would use when

he said ukraine as a nationstate is a falsehood. he said it does not exist. he said it was created by bolshevik russia and is being handled by corrupt politicians who are trying to hurt our country. that's language from men trying to de-escalate. it's fair to say the european union will respond with one voice but what kind of details will we get? we are starting to get an idea of what will be featured in european sanctions. they will go after three russian banks and members of the group that would make those republics officially independent and they will target operations that include russian institutions including the central bank. tom: what is france doing? france has been relatively quiet, am i right? >> it's the opposite.

they've been vocal and they know that the united states and russia can go at a negotiating table and have an open conversation. there needs to be someone who is perceived as neutral. the germans can't do it because they are caught up in the nord stream 2 so it's the french that play that role. they say we are in the middle and want to create equilibrium before the two sides. katie: we have the eu responding with german chancellor oda -- olaf scholz halting nord stream 2 so when does the biden administration coming here? joe: they are feeling a lot of pressure. we talk about our european allies facing their own pressures and we are one week to the day away from president heading to the under -- other

end of pennsylvania avenue to deliver his state of the union address so i'm sure it will be redrafted. it's not the usual suspects we are hearing from. yes, ted cruz or tom cotton, they want at the present to implement sanctions weeks ago and not wait until someone crosses the order. kane, gemma kratz jeff merkley are out with stem it -- are out with statements. the time for taking action to impose significant costs on present putin and the kremlin starts now. the senate foreign relations committee essentially gave up on crafting a bipartisan sanctions bill and they said they were close a couple of weeks ago but gave up and left us with a non-binding agreement. we heard from the democratic and republican leaders of that committee.

robert menendez says crushing shank is that sanctions should be imposed. the republicans is recognizing the republic is tantamount to invasion. katie: what sanctions could we see now given the developments we have already seen or what things will we see if the u.s. identifies this as an invasion that comes down the line? how are they likely to go with this specific action? joe: we are from a senior administration official last night that additional actions that would involve sections would likely be implemented today beyond what was already targeted at the two separatist regions but they've been playing this close to the vest for weeks with a concern that they might find a diplomatic's. they are still allowing for the taplin appeared -- when it

appears the will have to become more specific. jonathan: brilliant work down in d.c. chancellor schultz halting the so-called certification process of the nord stream 2 then we got these proposals coming through from the eu, a package that contains proposal to target those involved in the illegal decision to target banks that are financing russian military and other operations most territories to target the ability of the russian state and government to access eu capital and financial markets and services and limit the financing of escalatory aggression. we will see with their move is later. futures were just about positive on the s&p 500.

the ruble was stronger and equities are positive in europe. it's worth noting where we are today. futures are just about positive on the s&p 500. tom: the last two hours have been constructive. what i would suggest is this sequential, not choreographed, but there seems to be an intent and it goes to after the ballet tuesday, maybe into tomorrow, what will be mr. putin's response, that is the mystery? jonathan: that is a mystery. katie: putin has taken his risk calculation in recognizing these separatist regions knowing full well what the western response would likely be. have deterrence or diplomacy reached limits? will we see that meeting between anthony blinken and sergey lavrov for has putin's decision already been made?

futures are positive for a moment on the s&p 500 stop yields are down higher. crude oil with a 94 handle. from a stunning new york city, this is bloomberg. ♪

>> let's talk about where we've been and where we are right now. the s&p 500 futures, down by more than 2%. the nasdaq at the moment down .4% and the small-cap, the russell, positive. and i we've had to move, a real move from the russian president and reaction from the eu. that is the equity story in the united states. let's talk about the global one and the local one. the global one for me, that's the story, isn't it? 9784. this is backing away from session highs. the ruble is not a major move.

in the ruble's favor, keep in mind that it has been moving in the opposite direction, 5% higher in just two trading days. that is a weaker russian ruble. that is the story on russia. let's finish with the treasury market and not lose sight of the federal reserve. president williams seemingly poor some ice cold water. maybe we could go 50. she wanted more data. tom, you keep saying it. we have one more round before those guys get around the table. >> we have headlines coming out of the white house. what is so important here is that it's not me. i'm just reading history whether

it's bernanke, anna schwartz, tannenbaum coming up in a minute. i'm having a mental freeze. >> it's a large hangover over the weekend. but with what you're doing right now, can we just indicate over the weekend, you did your own version? tom: it ruined remains weekend. but other than that, we have headlines coming out. lavrov, a real question. katie: we are hearing from the white house that we will get an announcement of some sanctions. national security advisor jonathan finis is discussing if it will happen on thursday and go ahead, starting to hear from the white house. >> we have to go to prime minister johnson in parliament

as well with an important headline, mr. putin establishing pretext through full-scale conflict. the prime minister has had the strongest language this morning. >> a lot to get through this morning. that curve just a little flat to the yield 152. that's across asset price action. good morning, romain. >> all eyes on the u.s. side. a little bit of a mixed bag. we did see the pullback on big tech and part of the reason why we saw the futures lower here this morning. they are often the premarket, but still low. that is pretty much the story for most of the big cap tech names. keep an eye on the airlines. exposure to international traffic out of eastern europe. and there are a few listings

here in the u.s. which went public about a decade ago, down about 14%. this is the big internet search company in the big ride-hailing business over there in russia. it will be interesting to see as we get more these headlines how these of the stocks work. tom: it's important with romain. look for that as you can. right now, we've got to do this headline. the prime minister says it must brace for the next stage of putin's plan. jonathan: i think this line is really important. that russian action, in his words is a renewed invasion of the ukraine. if that's the case, in the u.s. agrees, what other sanctions have they promised? these words from the prime minister are really important. and we have to see if they are

echoed by the administration. on the actions of russia, are they characterized as an invasion by the u.s. administration? there has been reluctance to use that language. the prime minister seemingly using it just moments ago. tom: these are the shades and the nuances from folks. i guess they are done over at morning joe right now. we will get more from the biden administration. let's move on to a discussion with leslie falco ne-yo. ubs growth wealth management, you can join us in the news this morning. the short order is this international relations bringing the yield down. i believe i have learned that his price up and kneeled down. is this the ultimate buy the di p? price up and yield down in fixed income?

>> i think it is this long-term growth prospect that we are seeing in the u.s. economy and it will be more of a selling rally right now. 3.8%, real gdp. you will have this safety. when we have this kind of risk and this kind of short-term volatility, investors focus on that opportunity. tom: fold in ubs economics. did the 50 point rate increase drift away this weekend? leslie: i think the probability has become increasingly low. even before this weekend, we don't think that they are going to start off with a 50 basis point rate hike.

it doesn't mean that they won't do 50 later on, but to start off , they are still buying bonds. they are still increasing their balance sheet. and i think they want to see inflation in the second half before they do such ingressive -- aggressive moves. katie: the u.s. is reacting to what we heard from vladimir putin over the weekend and we're hearing from five russian banks as well as individuals. when we look at potential implications for the fixed income market, specifically the energy complex, what is the readthrough and the breakeven for expectations and monetary policy? leslie: if you look at the breakeven today, we are not seeing this big rise in inflation expectations. i think it's a component and i think it's going to be a driver.

we think there will be five rate hikes by the end of the year. probably a bit gradual. but i don't think this will have a knee-jerk reaction. katie: there's the breakeven component and the real yield component. do we reach positive territory? leslie: i think time for real yields are very mixed. the five-year real yield has remained negative. by the way, we don't think it's going to retire, but we think the breakeven expectations will fall. probably close to the five-year spot at 2.3. it will be close to it. jonathan: leslie falcone he --

falco ne-yo -- leslie falconio. russian action is what he calls a renewed invasion of the ukraine. he sanction five russian banks, sanctions on russian banks, and he's calling this the first of sanctions. which implies there is more to come. tom: we will stop here because this is important. let me know what the clock is, brad, when you can. explain to the american audience. i was in a watch store and someone walked in with this join norma's fancy watch. the woman didn't bat an eyelash and said $150,000. explain russian money in london. jonathan: there is a big russian presence in london. and there is a big russian presence in some u.k. businesses as well.

how this rolls out and how it plays out remains to be seen. they certainly imply there is more to come. and when they use that language, i think that language is so important. to call russian action a renewed invasion of the ukraine, it remains to be seen if the president uses exactly the same words. if he does, you have to wonder what kind of sanctions follow. >> i wonder if president biden speaks to the nation this evening. i'm sure it's under discussion with ron klain and others at the right -- at the white house. i would say that this whole bilateral or allied effort is the focus of bloomberg today politically. jonathan: on that particular

question, we have to see if there is unity with eu members, the u.k., and nato members encoding the united states on that particular question. did the actions constitute a renewed invasion, the words of the prime minister. and if they do, where are these severe sanctions that they have promised? there has been a hesitancy to call it what the prime minister just called it. jonathan: futures down .1% and the nasdaq down .1%. for our audience worldwide with crude very close to 100 earlier today. and 99 handle on brent and we back away just short of 94. from new york, this is bloomberg. leslie: -- laura: western combination is growing after

russian president vladimir putin officially recognized self-proclaimed republics in eastern ukraine and ordered what he called peacekeeping troops to go into the region. the u.s. ones it will impose sanctions. germany's chancellor olaf scholz is holding certification of the pipeline which brings natural gas on russia to western europe. boris johnson is seeking to turn the page on the pandemic spite warnings from his advisors. he says they must learn to live with the coronavirus. he plans to lift all legal curbs. he says it will be replaced with personal responsibility. police have cleared a blockade. trudeau says there is concern that demonstrators oppose the vaccine mandate are prepared to review the protests.

>> the crisis over ukraine deepens and some others predict the world's largest cryptocurrency could slide towards the $30,000 level. it's a little more than $36,000 today before rebounding. gold is at its highest level since june. the cargo ship carrying around 4000 missiles last week could cost the automaker at least $155 million according to a risk modeling companies estimate. it seems all the cars were lost in the fire. global news 24 hours a day on air and on quicktake, powered by 2700 journalists and analysts. this is bloomberg. ♪

>> the deployment and the sovereign ukrainian territory amounts to a renewed invasion of

that country. we must now brace ourselves for the next possible stages of putin's plan. jonathan: the u.k. prime minister addressing parliament just moments ago. from new york, i'm jonathan ferro. futures positive, now unchanged on the nasdaq. yields are higher by almost one basis point. crude is positive. 93, up by three percentage points. the words of the prime minister, incredibly strong. and the actions back it up. the sanctions as follows. five russian banks and three high net worth individuals. is that proportional to what we saw? tom: everybody feeling their way through and i think we will go step-by-step. but only is it lateral or bilateral, it is a key sequence.

how will he respond? quick's we have to wait for the u.s. and how it will respond. and whether the u.s. administration uses the same language because many eu leaders have been incredibly reluctant to use the same words the prime minister just used. tom: we will look at the headlines right now. now back to four digits. 1.04 29. what we've done over the years is speak to people that actually know what they are talking about. on sanctions, he is expert. daniel tannenbaum has a fancy title. all you need to know is this is a guy that understands the landscape. this morning, what does apple do? what does coca-cola do?

what does general motors do if they are moving product to these territories in dispute? >> in my cab over here i would've had a different response than just the words out of boris johnson's mouth. in terms of the next salvo, even though we don't have the names of the five russian banks and the three high net worth individuals, it does change the game. you now have tangible actions that have market reaction. tom: i don't need to know your client discussions, that would be rude. but what are the conversations american companies are having? >> we have been hearing the same rhetoric since mid-december when russia began moving troops

toward the border. we were trying to understand how much risk they really had and understand potential asset strategies. until his remarks, you're not seeing companies talk about exiting the market or seeing assets move. everyone is waiting because that is a bit of a one-way offramp where you may not be able to reenter the market if you preemptively leave. jonathan: thank you for joining us. do you expect the administration in america to use the same language the prime minister did in the last 20 minutes? >> i'm not sure i would expect the same language out of prime minister johnson. that has been the red line over the last few weeks of what is an invasion and what constitutes an invasion. if you talk about the russian presence since 2014, is that the red line? i would argue based on the sanctions we saw imposed

yesterday by the u.s. which were largely symbolic that the redline is anything west. but that hasn't been made clear. i think you may have some clarity coming after the actions of the russian government yesterday. >> we have talked about the unity of nato. the u.s., the u.k. are we seeing a split? >> i don't know if we are seeing a split just yet, but i think you still have a fairly robust multilateral response. we see olaf scholz say that nord stream 2 was essentially done at the moment. we heard president biden use similar language that chancellor schultz would not use. i think the alignment is still there and this might be the cadence of how the actions are being rolled out more so than anything else. katie: vladimir putin had to make this calculation.

knowing full well the threat of sanctions is on the table. as the russian economy well enough fortified, and the repercussions that followed suit? can vladimir putin withstand this much better? >> the deterrent has been the real question. is the threat of sanctions enough to to determine -- to deter president putin? the answer is no. there has not been a scenario with this set of sanctions so comprehensive. so i don't think fortress russia could handle the full salvo of western sanctions. looking at markets, there is voting with their feet with how

well russia can sustain this. jonathan: no doubt we will be catching up with you through the weekend. just turning positive again on the s&p. >> i don't look at the nasdaq. we are down to 29.09. johnson's comments in the united kingdom, these are people close to mr. pruden. mr. tim? is also involved. these are billionaires and very successful oligarchs. >> the prime minister moving on three high net worth individuals and five russian banks. >> he heard something similar out of the eu as well and we got the outline of what the proposed sanctions were. they said that you stands ready

to adopt additional measures at a later stage if needed in light of further developments. that indicates the eu doesn't necessarily recognize this as an invasion at this point, but it will bring to light potentially the administration here in the u.s., how they will react to this move and what they will even the barrel in terms of something we could see down the line. jonathan: nasdaq futures down .33%. we were down by more than 2% on the s&p. it has had a turnaround for this equity market. tom: linked to the sanctions. various ones by various authorities. i think a constant theme here from the different nations including mr. schultz is there is more to come and the key single headline from prime minister johnson, they await how mr. putin will respond.

jonathan: still up on the day by 2%. up by three percentage points. yields unchanged at 19355, and the federal reserve decision less than a month away. this is bloomberg.

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>> from the world of politics to the world of business, balance of power with david westin. weekdays, this is bloomberg. >> putin has managed to get everybody's attention in the west. >> all eyes on russia. are they open to diplomacy? >> it is a world altering event. >> this is on the back of the russia-ukraine news. >> if there is any small chance of an invasion, that would be very disruptive. >> this is bloomberg surveillance with tom keene, and lisa abramowicz. tom: jonathan ferro, lisa abramowicz, and john -- tom