♪ >> the fed is in a box and people don't know what to do. >> the market is looking at is the fed behind the curve in real terms. >> we don't think they will start off with a 50 basis point rate hike. >> the preferred strategy is a steady pace of 25 basis point rate increases. >> if the market is pricing 50 basis points, the fed should walk through that door. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. thrilled you are with us on radio, on television. the message this morning within the quiet of the headlines, a

bounce, a recovering set of markets. jonathan: yields are moving with it, so what do we have? yields are pushing higher again at the front end and right through the curve. your curve is flatter. twos-tens, 37. tom: it is going to be the focus with our guest in a matter of minutes. the curve flattening, deft and from 0 -- flattening, distant from zero, distant from inversion, but it is the rate of change, the speed we move. jonathan: let's talk about the speed. bank of america says seven. where does this top out, and what is more important, the pace or the destination? tom: we will have to see. i am on the ruble watch right now. 80.3 the ruble, a weaker ruble in the last hour. lisa abramowicz, what matters is the auction watch. fold the auction action this

afternoon into curve flattening. lisa: it is the same point jon just made. what is the longer-term trajectory for rates, the long-term trajectory for growth? i keep coming back to the buy the dip moment because people are not necessarily pricing in the degree of oil shock, yet does it matter if it is an immediate shock or a slow grind of higher prices that just grinds people down and diminish some of the consumer appetite? tom: what is the buy the dip in bonds? have we seen buy the dip in bonds, price up, you'll down? -- price up, yields down? lisa: some people are looking at buying the dip in duration, basically saying that 10 year yields are not going to climb that much because we are not emerging from that low growth, low inflation kind of regime. tom: to full faith and credit on draghi's italy -- jonathan: that gets so difficult. what does europe face right now? faces potentially a growth

slowdown, and you talk about an energy shock, we have already had one in europe. let's be very clear about that. we have already had one with gas prices absolute lease urging. so where does the ecb sit here, and what do they have to do? if they want to raise interest rates, they have to unwind qe first. we have learned in the past that it is more of a hybrid and closer to a credit. tom: i am go to tear up. it is too emotional. there's no script. i go to italian paper, ferro nails it, and the chart there, btp italian, whatever it is. it is like we are a swiss watch. jonathan: i didn't see it. it is there now. tom: i will do the data check to start. euro swissie, i am going to call it indeterminate, but certainly

the fear of strong swiss franc is not out there. jonathan: i think people have other disruptions for us that is not a swiss watch. [laughter] you had plenty of tang over the weekend. yields up to 1.9773%. crude south of $92. tom: well-timed. we start strong this morning with marvin loh, senior global markets strategist at state street. it is simple. it is about the relationship of the two and the 10 year. which is the path to curve flattening? marvin: we've had a bear flattening. i think that is ultimately going to continue. it really does signal the quandary the fed is in on the normal response function or the fed being able to take a step back because data is changing, because geopolitical risk is

potentially capping and pulling out consumer enthusiasm to some that they can't take into his iteration right now. -- they can't take into consideration right now. ultimately, that indicates increased policy mistakes or increased session -- increased turnaround of recession. jonathan: i what point do you think the market would keep moving, keep on hiking? marvin: it is what you end we have been talking about for the last year. it is ultimately inflation. they do need to start to address inflation. i made the argument that they have, for the most part, been actively managing the process since october with their pivot. we do see mortgage applications starting to fall. but they need to put some action behind all of that signaling.

it is really a function of how they signal for the rest of this year, and what they do with their projections for the remainder of 2022 into 2023. jonathan: it is the dot plot that gets my attention, and how far they are willing to push this. from a risk asset perspective, what is more important, the pace of hikes or the destination? marvin: i think they are both important. i don't want to be flippant around that. i do think that given the view that they are on autopilot to a certain degree for the next several hikes, it is where we wind up that is most import for risk assets. you need to kind of parse that a bit, where u.s. has more tech, more growth associated with that. europe has a little bit more value, a little less duration, so maybe that belly of the curve. of course, what the fed does and

what the ecb does is key to that story from a relationship perspective. lisa: when you look at the long-term rates, a lot of people think that fed actions, ecb actions will have an impact on the longer-term run rate. there have been a number of studies that show a much less direct relationship between policy and controlling inflation , so what gives you faith that the fed does have control let this point at a time when inflation is running hot and people are for seeing a problem the economy longer-term, regardless of what the fed does. marvin: that really is the potential challenge the fed has come of the ability to influence that discussion when it is not the normal set of circumstances driving the inflation story at this point. certainly shortages in the supply chain is still a big part of this. energy is something they would normally look past. however, you are and an

environment where it is going to tax consumer demand. however, increasing rates will influence that. higher gas prices, higher shelter costs will impact that. but they won the impact of supply chain. we should look into regime change as a potential tail risk in this discussion, but certainly we also do think that some of the supply chain issues will work their way out and lower demand as a result of all of these things going together. it does get 2023 into a position where their actions now are going to have an impact. lisa: what is your highest conviction in markets? marvin: there are 70 crosscurrents to deal with now that unfortunately, that is something that will continue. i would say that inversion is

something that might be hard to a void as a get later this year. jonathan: as many have said, maybe before year end. thank you, sir. marvin loh state street, as always, thank you very much. some headlines from interfax. russia will give a strong response to u.s. sanctions. the report goes on to say they cite russian foreign ministry on the sections response, and russia will give a strong response to the u.s. sanctions announced in the last 24 hours. tom: united kingdom to convene meetings of banks, regulator on russian sanctions. that would be as good a place as any. what do you say to banks and regulators on russian sanctions? jonathan: in the media regulator looking at rt and what they are calling a disinformation campaign in the u.k., may taking rt off the air in the united kingdom. that was talked about in pmq's in the last hour, too.

tom: it underscores the next step as we wait. let's be clear, it is a holiday in russia, right? jonathan: it is a holiday. tom: i see a better stockmarket market. i got a dow lift, spa let -- spx lift jonathan:. it is a strong bounce -- spx lift. jonathan: it is a strong bounce. lisa: what is the exposure in the s&p to russia right now? jonathan: 0.1%. lisa: at a certain point, direct ramifications are negligible for a lot of developed market assets, and there has been so much isolation of russia at this point that it really comes down to the oil and gas transmission mechanism which is a lot harder to game out. i think that is what you are feeling and markets is a bit of a sigh of relief that we did not see the worst case an area just yet. tom: what is so important is to put it in perspective. the russian gdp i think is a little bigger than new york

state, was a huge oil impact. maybe this year it will be larger because oil is at $90 a barrel. but the per capita gdp we mentioned 5, 6, 7 days ago bears repeating. germany, 47 thousand, finland just below that. russia is way down at a 10,000 level. jonathan: that speaks to the failure of russian leadership to build out the economy over the last few decades. what does not speak to is how europeans are when it comes to things they produce. russia use the word direct exposure into the s&p. the indirect exposure, and acceleration in consumer spending, maybe even contraction which is why it is tremendously difficult to price and try to get your hands on what this means for the federal reserve as

well ask month. futures up 0.8% on the s&p. from new york, this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world, with the first word, i'm ritika gupta. ukraine is declaring a nationwide state of emergency that would allow officials to impose restrictions on movement and media following russia's recognition of to self -- of two self-proclaimed separatists in ukraine. sanctions are lightly to destroy even more wealth. on a list of russian billionaires who have seen their fortune drop, almost 1/3 of his wealth has disappeared this year.

in hong kong, the government is trying to offset the toll the escalating virus outbreak has taken on the economy. residents will get almost $1300 in spending vouchers. authorities have also earmarked $2.5 million for other antivirus needs. on congress is allowed to's -- is expected -- hong kong growth is expect it to slow to 2.2% this year. the chain posted better than quarterly sales and lows said operating margin lows posted better than -- lowe's posted better than quarterly sales. 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 but. this is blimp -- i'm ritika gupta. this is bloomberg. ♪

♪ >> if there is a full-blown invasion as u.s. intelligence seems to be warning, i also think putin will go further. i don't buy what i am seeing in some research that we will see de-escalation. we will see another round of sanctions. we are in what is called the fog of war, and russia has nuclear weapons. jonathan: the words of tina fordham, avon hearst -- avonhurst head of political strategy. yields up four basis points to 1.977 3%. crude back to $91.71. euro-dollar weaker, 1.1344. here are some of the headlines from the ukrainian

president speaking now to reporters. expecting more sanctions on russia. that coming from zelensky a moment ago. tom: there is a set of headlines from europe. we will continue to keep you abreast of these. right now, we've got the markets with a nice lift. right now with clarity, javier blas with his wonderful book and with bloomberg opinion, writing on oil worldwide. i want you to give us an update on how mr. putin is paid when he exports oil, natural gas, and the rest. i understand oil is dollar-denominated. what is the real story? is it in euros, dollars, or rubles that he receives for oil? javier: it is mostly in dollars. they sell mostly crude oil and refined products in u.s. dollars. the central bank in russia converts everything into local currency, and to the ruble. a lot of the sector is

controlled by the kremlin, by stadium companies or companies where they have a lot of influence, so at the end of the day, it goes into the russian economy, and that really feeds the aims of vladimir putin. tom: on the price that saudi arabia needs to have a fiscally successful budget, does dollar ruble matter for mr. putin as we see dollar ruble unravel? javier: at the current prices of oil, he is doing fine. at $75, russia is going to do very well, and i think russia can survive very well with oil at $60. probably that is more than enough. lisa: how much confidence does vladimir putin have that germany cannot come through with its promise that eventually it will be dependent of some of the gas resources as it will be

independent of some of the gas resources from russia, and they will -- it will be independent of some of the gas resources from russia, and they will have other sources? javier: can germany say goodbye to russian oil over the next 15 to 20 years? yes it can. can it do it in the next couple of years, when it really matters? no, there is no way germany can do that unless you are going to be shutting down huge swatches of the german economy. so in the short term, that is an impossibility, and putin knows that. lisa: are you a little bit surprised at the side of -- the sign of at least a pause in the oil markets as we reassess the landscape? the sense that perhaps we can avoid that oil shock people were gaining out yesterday. javier: the white house has made it very clear it is not targeting oil and gas as much, and europeans made the same signal. they don't want to goes here.

russia has signified he does not want to use oil and gas as a weapon in this conflict. in gas in particular, we are at the very end of february. there's very nice weather here in london. in another month, gas consumption in europe will really collapse because the springtime arrives. we use gas for power and duration -- for power generation, but the main use is for household heating. therefore, if something really bad happens now, it is not the same is happening at the very end of february with a very mild winter then something that happens around christmas. jonathan: how quickly could we close a deal with iran? javier: i think we may have a deal. i am going to go out on a limb, i think we have a deal by the

weekend. jonathan: talk to me about how much capacity they have and how quickly they could bring that back online and. exporting to the market. what kind of -- online and exporting to the market. what kind of a difference does it make? javier: the world really needs iranian oil if we are not going to see much higher prices. iran has a lot of oil on storage. what is floating in tankers and onshore in china. that is going to hit immediately. that oil is already hitting the market. how much oil is there, there are different measures. but anywhere between 60 and 100 million barrels in the storage, that could hit the market very quickly. then i would not bet against iran, the market suspecting that one million barrels took a year.

it only took six months. i don't know why this is going to be any different. jonathan: ijonathan: want to give you the opportunity to issue a corruption -- a correction. a man from spain saying the weather is good in london. is it actually good in london? javier: better than i expected this morning. jonathan: javier blas of bloomberg opinion. [laughter] anyway, i digress. on the bti, $96.93. you heard the words, we either get a deal done before next week with iran or we don't get a deal done at all. tom: i am going to go back to 6:00 this morning with the release of the bruise chasm and note at j.p. morgan -- the bruise chasm and -- the bruce kasman note that gets you back to $150 a barrel oil.

we are going to go to something lower and better priced. . jonathan: leadership here in america don't want it at $100 for sure. they don't want it in the 90's either. lisa: so many people are counting on demand actually waning as we get into the latter part of the year, that basically you will get a big surge and then they will calm down. so many variables to determine how much is going to be necessary in the meantime before we normalize. jonathan: don't get stuck somewhere i not be able to travel anywhere. you never finish the story for the audience. you went down to atlanta, got stuck there for a night, and then had to come back up to new york. that was your long weekend. lisa: with kids, which was really fun. jonathan: are they refunding you ? lisa: they are refunding me. jonathan: would you like to give the airline a shout out? lisa: [laughter] i won't do that.

jonathan: it is an airline with a major hub in atlanta. lisa: it is, and it has relevant to the covered acronyms. -- the covid acronyms. jonathan: i think that was discrete, wasn't it? [laughter] from new york, this is bloomberg. bloomberg.

jonathan: live from new york city on tv and radio this is bloomberg. yields are higher, up three basis points on tens. crew backs away, down .1% to 91.78. the focus of the moment, sections out of europe on russia. this from the polish president, calling on russia did yes play tensions and withdraw troops. he goes on to say -- calling on russia to de-escalate tensions and withdraw troops. tom: movement in the west and on the polish border as well. there was an essay from jeffrey

sachs of columbia university talking not of appeasement, but how do we move forward after this with russia? the authority of jeffrey sachs is truly enormous. it goes back to january of 1994 with a yeltsin regime that change to something different. when jeffrey sachs got off the airplane on jfk, the interview was shopping. jeffrey sachs joins us. we all got force johnson -- boris yeltsin wrong. do we get mr. putin wrong? jeffery: i think we got our own policies not right. we have been on a provocative course of nato enlargement, seen by the russian side of encircling russia, a point that has been made for more than 30 years, first by the soviet union

, then by president yeltsin, now by vladimir putin. we do not want to think about that in the u.s., we do not want to discuss it. we are dishonest. the leaders said clearly to mr. gorbachev and to vladimir putin -- and to yeltsin no enlargement to the east. then clinton decided because of the pressures domestically and from central european countries that nato wooded large. it was predicted by many at the time, including clinton's own defense secretary, william perry, that this was a dangerous and provocative move. now we are here. we need to plow a c on our side. all we are -- we need diplomacy. all we are doing is sacrificing ukraine in the name of a theory.

if you talk to senior officials they say there is no way ukraine will actually join nato. then they say publicly ukraine has every right to join nato. if you put the two together, it is the worst combination for ukraine. tom: what is so important as i've jeffrey sachs the liberal from columbia on the same page as the archconservative. that is extraordinary. to steal a phrase from a younger jeffrey sachs, what is the diplomatic shock therapy to jumpstart a legitimate dialogue to come to a good resolution? jeffery: we need basic points agreed. russia out of ukraine. ukraine sovereignty are shirt. nato not enlarging into ukraine. the minsk agreement being implemented.

four basic points. they are not so hard to come to the table. the difficulty is on the nato side. nato says everyone has the right to join, as if it is a moral right to have a military alliance that increasingly runs up against the border of antagonist. that is not a right. lisa: you're talking about diplomacy. can we have diplomacy of people question whether vladimir putin is a rational actor? jeffery: it is a great question. you cannot have step theory if you do not have diplomacy. what vladimir putin said in his speech is we call for new security arrangements. the united states would not discuss them. that is the truth. the u.s. and nato is large meant. it is the right of ukraine. i do not call that smart

diplomacy. when the response is a failure, which was predictable, we say nothing could have worked. my view is we should try real diplomacy. it might not work. if you do not try it you cannot help. what is always true throughout negotiations is if you start with the premise the counterpart is just a madman, if you start with that premise, you will end up in conflict. there is no way to reach an agreement on that starting point. it may be true that the counterpart is not interested in negotiation, but you cannot find that out by talking to yourself. you have to talk with the other side. lisa: we are talking tactics and how to avoid some sort of altercation. longer-term strategy, you specialize in sustainability. i wonder what type of investment would be necessary to immunize

the u.s. and the european economies from the vulnerability of dependency on russia for oil and gas? jeffery: the truth is we ought to be dependent overwhelmingly on our sunshine, that is the idea of the de-carbonization agenda which is a massive increase in solar and wind power to replace fossil fuels. why are we in another fossil fuel crisis? this is where i entered economics, i will not tell you have any decades ago, writing about the oil shocks of the 1970's. we can get away from that. if we are relying on her own sunshine with solar fields or on our offshore wind or our wind in the u.s. midwest, we are not going to be suffering what we are going to be suffering right now. that is a pretty straightforward approach and what we ought to be taking. tom: and the time we have left,

you make the assumption that the west is talking to itself instead of talking in a more formal diplomacy to the kremlin. the democratic party and the liberals of the democratic party and progressives all agree are going down in flames at the next election -- whether that is true or not we will find out in november. are the progressives in this nation guilty of talking to themselves and not reaching out for compromise with the biden moderates are the gop moderates? jeffery: i think there is a lot of bad strategy going on. i am unimpressed with the diplomacy of this administration . let's just say i am unimpressed. i am unimpressed with the strategy on the domestic policy. senator joe manchin, with whom i often do not agree, put forward a very reasonable proposition. raise taxes, you some of it to

reduce the debt, you some a bit for the social programs. that is a point of reaching an agreement. tom: why can't the left meet the gentleman from west virginia? it broke for the left. how did it break for the left? jeffery: it has to start with the white house. that is the job of the president and the white house to coordinate. how you could have this situation cannot reach an agreement is disappointing, frankly. there is an agreement to be had, even senator manchin sketched it out in the last couple of weeks. i said here we go. it is not so understandable. it is a good question. i do not have a good answer. jonathan: professor, thanks for being with us. jeffrey sachs of columbia university. the argument that will get a lot

of attention is that somehow made a has antagonized russia -- that somehow nato has antagonized russia. we are not talk about russia threatening estonia or latvia or lithuania, because they're all named nato members. want everyone to go to the site as we start to think about vladimir putin. with this be happening if ukraine was a nato member? would this be happening if there were nuclear weapons still in ukraine? what would be going through this? there are two sleeps across the russian border. to the north there is estonia, latvia, and lithuania. right now we consider that to be quite peaceful. they are nato members. then you have belarus and ukraine. belarus is an extension of russia in the minds of many people that tension is in ukraine. when i hear the argument vladimir putin keeps making echoed by people in the united states of america, that we have

to go through the forward exercise ourselves. there is a peaceful sleeve against the russian border, there are nato members. ukraine is not a nato member. we have to go through the thought exercise and not jump on this vladimir putin bandwagon that they have been aggravated by nato membership pushing up against their border. tom: this is well in excess of a decade debate. the future of nato and the long border with russia. to me the distinction between the band up north and down south is a warm water port, which is an ancient russian fixation going back to peter the great and catherine the great. the answer is the geography of the moment is the great distinction. jonathan: tom keene, lisa abramowicz come in jonathan

ferro. we do have a bounce in this equity market. the nasdaq up 1%. a bounce back in the epley market with a flatter curve gets your attention. it gets my attention. tom: the five-year option this afternoon will get my attention. it will be huge. jonathan: you mentioned the belly of the curve with winnie cesar. that gets interesting because that is where the rate hike dance takes place. how far can they put it and how long can they push it? lisa: this is the reason i thought the flattening in that denomination was interesting highlighting the prospects in the near term. jonathan: coming up, erin browne of pimco, looking forward to that conversation. after a 10% correction on the s&p. is it a correction you want to buy? from new york, this is bloomberg. ritika: keeping you up-to-date with news from around the world. vladimir putin says he is ready

to pursue diplomatic solutions to the ukraine crisis, but only of russia's interests and security are guaranteed. vladimir putin spoke after the u.s. and its allies agreed on a first set of economic sanctions against moscow for its action's in ukraine. in canada banks froze the six point $1 million in just over 200 accounts under emergency powers meant to end the trucker protest. prime minister justin trudeau evoked the powers to cut off funding to protest leaders. the u.s. transportation department is awarding $450 million in grants to ease port traffic jams. major ports such as los angeles and savannah, georgia are eligible. the money will be allocated to smaller ports. congestion and inefficiencies at the larger port have strained supply chains during the pandemic. an auto parts supplier is going private. affiliates worldwide the company

-- that represents about 100% premium to yesterday's closing price. the deal has a price value of $7.1 billion. the stock price has plunged 85% over last five years. the european union has unveiled new rules that will allow users to transfer data from products like amazon celexa or a tesla car. -- like amazon alexa or a tesla car. companies say the tools good complicate international data flows -- companies say the tools could complicate international datacompanies say flows. ritika: with the first word news, i'm ritika gupta. ♪

>> the only question is how much will investors panic and liquidate?

we have seen redemptions the last few days. tragically, that is normal. as much as i'm saying it is a buying opportunity, people hit the panic button. i suppose after today we will see inflows. tom: andrew slimmon, terrific 2021 for him. not a surprise. his statistics show an ability to move higher. dow futures up 202. fix now up to 27.98. with us is barry ritholtz on what is required when pros speak on market pullbacks. barry, it is pros in search of catharsis. a number of our experts say they have not seen blood on the streets. do you buy the idea we need

catharsis to move higher? barry: you need catharsis to move higher when you're in the midst of a generational selloff. idea we need catharsis to move higher? october 2002 or march 2009, catharsis technically translates as surrender. when holders cannot take the pain anymore, throughout the baby with the bathwater and surrender to the pain. this, 10% pullback? last year was aberrational. on average we should see a 10% pullback every 18 months or so. this is what markets are supposed to do. they go up. tom: and they correct as well. andrew slimmon of morgan stanley , who has a phenomenal track record, makes clear that this is a buying opportunity.

how do you find and identify buying opportunities? barry: i think the better approach for the average investor than relying on their instinct or their got or what they read in the sell side research or see on tv or hear on radio is to have a plan? if you like the concept of buying a dip, you should have the plan to dollar cost average of every paycheck or every month or however you want to do it, so as markets are going up you are adding to winning positions and as markets are coming down you are buying things when they are cheaper. every academic study says that is much more effective than trying to go with your instinct or some sort of methodology you think will outperform the market. very few people have been successful doing that. 1% or 2% of fund managers and traders. the average person, debt and

forget is a much better strategy. lisa: let say people are coming up with a strategy. i understand are people with long-term capacities. at this point there is a short-term opportunity that some people say you have seen massive drawdowns of specific names and specific sectors, it has been so idiosyncratic in terms of which areas have been targeted. howdy determine if something is cheap or expensive. how much you go to the specific sectors that have gotten beaten up the most? barry: if you want to be a stock picker, and very few people are especially talented at that, we all know the boldfaced names because they are so rare. you have to really understand not only why things are selling off but what you may not know or what may be random or unforeseeable when you are picking stocks. stocks like peloton got cut in

half. they run up so much because of the lack of access to jim's and the work from home pant -- access to gyms in the work from home pandemic era? are you making the bet we will have another virus that will send us into lockdowns and people will be buying peloton? or has their heyday commandant. i think tesla -- or has their heyday come and gone. are you buying the dip and expecting a return to what was an aberration issue? that is a difficult question to answer. someone has to be on the wrong side of the trade. there two sides to every trade. half the people we get it right and the other half will get it wrong. i cannot answer you about certain companies because there are so many variables. tell me when the next contagious

variant comes out and i will tell you whether or not to buy peloton. lisa: what are you doing? barry: the same thing we always do. lisa: are you holding more cash? barry: absolutely not. we manage money for 1600 families, nearly $3 billion in assets. most of it is taxable but about 40% is our qualified account and this is for requirement, for generational wealth transfer, for philanthropy. our clients think in terms of decades, not the next month or the next quarter. jonathan: thank you soap -- tom: thank you so much. barry ritholtz writing for bloomberg opinion, a hugely successful podcast as well. i see a lift in the market and i will say it is sustained. given the mix of headlines on all of these governments, to me the dollar ruble is still the litmus paper of the moment come into be above 80 show some form

of vote on the combined sanction announcements. lisa: i am glad you're pointing that out. you are seeing a weaker ruble which suggests there is a successful isolation of russia by western allies. you also see ongoing resilience in equities, which a lot of people have pointed to as an indication that these sanctions were not anywhere close to how bad people thought they were. if we get these headlines from the leaders of ukraine and poland saying they're expecting more sanctions, will there be something to tip the boat and tip us back into being more concerned about a more dire situation, or have people moved on? tom: i'm not even seeing one tranche of sanctions. tranche is the keyword as stated by the prime minister. i'm not assuming one or two tranches of sanctions, it may be a wide set given the actions of the vladimir putin. lisa: if you take a look at the

issues and add to the conundrum for the federal reserve, i go back to the central bank because people are counting on them to stave off some of the inflationary input, including oil prices that would be the main note of contagion should things escalate further between russia and ukraine. if you look at the inflation in wages, if you look at the inflation and some of these underlying components, they keep going down. i much for that tip the hand regardless of what happens between ukraine and russia? tom: lisa with the five-year option this afternoon will be very important. futures up 32, and the vix down to 27.87, far more constructive number than the 31 we saw a number of days ago. the yield curve, you have a flattening. no other way to put it. not like it was two hours ago. the two year yield dynamic versus the 10 year, oil at $96.86 on brent crude.

the ruble, 80.04. above 80. we drive forward the conversation with the former ambassador of the united kingdom to the united states at 12:00 noon. ♪

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jonathan: we have a bounce. yields higher. equities up .7%.

"the countdown to the open " starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: we begin with the big issue. the s&p entering correction. >> equities have always had a 10% correction. >> we have two risk drivers. >> we have the geopolitical environment. >> also what was going on before that. >> the angst around the first rate hike. >> it will break -- it will remain volatile. >> there is lots of potentially negative news flows. >> we are being very cautious. >> the