-- russia faces the threat of further sanctions. ukrainian officials would be allowed to form restrictions on movement and media. bloomberg has learned that president biden is expected to expand sanctions against russia with a new round of u.s. penalties hitting additional elites close to vladimir putin. the sanctions are expected to hit the builder of the nord stream 2 bank pipeline. the natural gas pipeline connecting russia and germany. china meanwhile expressed opposition to the initial package of sanctions against russia. a foreign ministry spokesperson criticizing the u.s. for inflaming the crisis suggesting that support for nato expansion left putin with few options. several ukrainian and nato backed websites suffered cyberattacks today, websites of

cabinet ministers, foreign ministry, and parliament do not open. the press office acknowledged problems with the site didn't give a reason. global news 24 hours per day -- global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta, this is bloomberg. >> it is 1 p.m. in new york, six in london, 2 a.m. in hong kong, i matt miller. here are the top stories we are following for you from around the world. stocks down as oil rises. ukraine hit by a cyberattack. we bring you the latest headlines on the crisis as eu leaders plan for an emergency meeting and president biden readies new sanctions against russia. we bring you the results from the five-year treasury auction

and a moments time. we give you a read on where investors see inflation heading. the five-year is moving up just a bit now. plus, we cover wall street bonuses in the big take, focusing on goldman deterring departures by clawing them back, as well as giving out some big ones. all of that and more. first a quick check on what's going on in markets. the s&p 500 is down just a bit, half of 1% right now. remember, we are in correction territory. we closed the low. at 10% loss. the market high. the 10-year treasury yield coming up a bit. investors are actually selling the bond that pushes the yield up. sometimes this confuses me. having an up arrow in red, it doesn't make any sense. i guessed bond traders don't know that they are losing money in any case.

the bond index coming down a bit. it's a bit of a haven asset. it has been. these two were risk off indicators, risk on indicators even though we have the s&p down a little bit. nymex crude doing nothing right now. 9194 at a high level. president biden is expected to expand sanctions against russia as soon as today with new u.s. penalties hitting additional elites close to putin as well as the builder of the nord stream 2 pipeline. joining us now is the senior politics lecturer from the university of manchester. olga, first let me ask you what you think about the sanctions we know about. how much teeth do they really have? olga: they show two things. that the west is united and coordinated. there is almost a bit of a copy paste happening.

but they aren't actually very significant in terms of deterring putin from further invasion at this point. this is exactly why biden sees this and sees the escalation ongoing and we are waiting with positive breath to see what biden has to say about the sanctions coming up. we have done -- matt: we have done stories in the past about the de-dollarizaion of the russian economy. he's been preparing for this for years. does that mean that the sanctions are not as effective as they could have been? olga: i think it's very clear that nato, the eu, the u.s., western allies are calling it a step-by-step approach and at least showing that they are united, coordinated, and we know what's coming already. it's not too much of a secret

the types of sanctions that are coming. the current imposed sanctions certainly don't have enough bite or punch to get the kremlin. on the orders of vladimir putin the kremlin has been stocking up dollars, gold, and reserves since 2018 pretty much consistently over the last few years. so, i think they believe they are in quite a good addition to wait out any sanctions, should they escalate. but of course, even two years of a buffer is two years of a buffer. at some point this will directly affect the russians and directly affect those in the kremlin and beyond. matt: what exactly is putin after? we ask this all the time and certainly it's difficult to get inside his head, but what do you think his aim is, here? olga: you are asking that billion dollar question that we

all keep asking ourselves over and over in the last month. i don't mean to smile here, i think we know very well what he wants. it is to completely destabilize if not occupy ukraine. he couldn't have made it -- well, he could have said it more clearly, certainly, but he made it clear in that very long, odd, and awkward speech that he doesn't believe that ukraine should exist as a state, let alone that they should have the right to choose their own foreign policy and a foreign policy and a foreign policy that russia disagrees with. this is where i think we are at. we are looking at him straight in the face and he's telling us exactly what he thinks of ukraine and it is shocking to us in the west that he is so clearly stating it. matt: i wonder what the next moves can be terms of european gas purchases. what that, is it even a possibility for germany to stop

by and gas from russia and would it have a bigger effect on the sanctions we have seen? olga: certainly. so, energy sector sanctions are on the list of approved sanctions going forward along with a variety of other things, including the banning of high tech, high tech, the raw hardware needed to make microchips. certainly there are a variety of possible sanctions to come. in terms of the energy sector we will certainly not see the germans diversifying their gas supply anytime soon. this is not a week to week situation. the germans have been warned for decades now. they have been told that this is an unstable equilibrium to source gas and under energy sources from russia. i think now germany is coming to realize that this is the position they are in and that

all of europe is in a very precarious situation when it comes to gas and oil sourcing from russia. so, i think it's on the table. we are far away from that sanction. it certainly would be a possibility that we get there. i certainly hope that doesn't do what it would take for europe, canada, and the u.s. to impose energy sanctions on russia because it would mean something extremely disastrous for the people of ukraine and no one wants to see that. matt: paint a picture for us of the resistance you are seeing in the ukraine and what life is like for the people on the ground there. olga: i think the ukrainians are preparing across cities, towns, and villages. they are doing what they can. they are not in a position like many of the people in western

europe or north america where they can go by out everything in the grocery store including extra toilet paper and so on. this is not in their disposable income capacity of the average ukrainian, even the average middle-class ukrainian. foreign observers are looking at ukrainians and thinking they are not panicking. they don't have some of the panic options we might be looking for in the west. they are, in fact, doing trainings at their workplaces. everything from first-aid to possible attack engagement training. these are people like you and me who have no business engaging in any sort of conflict, let alone providing medical care. but they are learning and training themselves to do what they can. we are hearing certainly very concerning stories, mothers and a facebook group talking about whether or not they should place a sticker on their children going to kindergarten with their

loved ones listed. this is what they are dealing with their now on an hour to hour, day to day basis. matt: i was talking to someone in romania who said that the refugee flow is concerning -- is escalating. is this a big concern they are facing? olga: absolutely and it's not just eastern europe. immediate neighbors to the west like romania, poland, this will spill over. i don't want to say that this will spill over because i do in fact home that putin does not go for a full out invasion of the entire territory, but if that is the case we will see millions of people seeking shelter from war immediately. this will have an extreme long-term repercussion not only for those desperate people for fleeing violence -- desperate people fleeing violence but also for those in the united kingdom, the european union, canada, the

u.s., and elsewhere. matt: olga, really appreciate you helping us understand. i don't think enough has been talked about in terms of the human tragedy and the crisis on the ground there. i think we are grateful for the hope that you put out there. this can be somewhat resolved. university of manchester, thank you very much. at 3:40 p.m. eastern we will speak with the foreign minister of ukraine in an interview you don't want to miss, especially now. accused by bond traders it hits an all-time high, inflation. what it says about consumer prices. we also give you the latest on the five-year treasury auction. next. this is bloomberg. ♪

matt:matt: this is "bloomberg markets." i'm matt miller. we just had the treasury auction where we saw a record low interest for i mary dealers. joining us now is ira jersey. ira, really interesting. rare that i say that about the five-year treasury auction. what does this mean? ira: one of the reasons why dealers took as little as they could is that non-dealers, investors, indirect bidders, took a pretty high share and apparently did pretty aggressively.

the market, the auction cleared right where the market was thinking. it just, we keep on having relatively strong demand at these auctions. even though the federal reserve is about to hike. this just suggests we are close to maybe fair value in a lot of these places on the curve, at least in that belly and long end of the curve. the seven year tomorrow will certainly test that. are we no longer -- matt: are we no longer worried about inversion? ritika: we have already flattened -- ira: we have already flattened so much but keep in mind that just because of the calendar affects, two year treasury yields will creep upwards towards 2%. if you look at what is being priced right now at what interest rates will be a year from now, we will be around 1.9% on the two year yield. below 2% here, you're talking

about a flat yield curve and we are already pricing for a recession in the end of 23 and into 24 if you go and look at what the market is currently pricing for where the yield curve will be a year from now. i think that the federal reserve is kind of getting what it wants, right? slowing down the economy, it's pretty clear that the market is thinking that the fed is going to hike and hike aggressively. 8 welcome -- matt: well, i'm sure not to slowed -- i'm sure they would prefer not to slow down the economy but rather stopping inflation in its tracks . how effective could they be at that? ira: they won't be. it's to slow down demand, that's the reason you hike. the reduction in demand is how you get prices to not go up as quickly as they have been. this has always been the problem . a lot of the inflation we have seen in the beginning of this up nick were things that weren't

really demand driven. the only thing that the federal reserve can affect in a direct way by using the blunt instrument of raising interest rates or reducing the assets on their balance sheet is too, is to reduce demand. will that have the effect of reducing inflation? probably. i mean over time, certainly. but it is something they have to be aware of, if they do hike eight or nine times priced into the market, they will cause a recession. the question is how shallow and detrimental it will be to an economy that over the last couple of years has been pretty fragile. matt: what's the possibility of them slowing down too much and the fed reversing course before the year is out? ira: probably, probably not. what will probably happen is we will wind up not hitting all the hikes that are priced in. we will probably get more like five or six at this point rather than the seven being priced.

two reasons. one, i think real growth will ultimately slow down towards the second half of this year. on top of that, i think that the federal reserve thinks balance sheet reductions. quantitative easing and tightening. running off the balance sheet can replace some of those interest rate hikes. even though that would be of the primary tool, the running off of the balance sheet could be viewed as a form of monetary tightening this year. matt: ira, thank you very much for joining us there. ira jersey, our chief rate strategist. speaking of rates, something that caught my eye, u.s. mortgage applications fell last week to the lowest level since the end of 2019. pre-pandemic levels. here you can see the application on the top half of this chart

with rising mortgage rates at the bottom are now at 4.06%. it tends to go in, tends to be contrary to each other in a kind of reverse inverse correlation that would be what you would expect, right? it gets more expensive to buy a house. fewer people apply for the mortgage. i had been thinking that you might see, as rates rise, the top line, higher because it could have the effect of spurring people in to the market. but it looks like as far as the chart is concerned, i was wrong about that. still ahead, the price of departing after escalated turnover at goldman sachs pulls out the big guns to keep top talent from leaving the building. that is next in the big take. this is bloomberg. ♪

matt: this is "bloomberg markets ," i'm matt miller. wall street struggling to retain talent and goldman sachs is going to great lengths to stop the escalating takeover, forcing executives to think twice before handing in letters of resignation. insult part -- it's all part of today's big tank. today we have our banking reporter. thanks for coming on the program. we know that goldman sachs has been offering outsized bonuses to persuade people to stay. now we hear that they are clawing back nonvested stock if people leave. >> and let's take everyone back to what's been happening the last three years. we have all been talking about the escalating battle for talent and one way that ranks have been responding is to hand out bigger bonuses. lifting compensations to levels not seen since the financial crisis. there is the other side to it.

goldman sachs and the ceo have realized that the way to send the message is that those who are considering jumping ship, leaving can prove to be costly. that's what we show in today's story. some measures of the firm having taken over in the last year going after the deferred pay of senior executives who left for firms that in the past would have just been considered clients and more importantly gone after vested hey, pay that has been delivered and taxed, they are trying to confiscate that. that's where it gets unprecedented and what has got everyone buzzing. matt: and some big names, right? greg lim cow is when i'm thinking of the couple of bankers that went to run the walmart retail business. i know from your story that david salamone called the ceo angry about that one. are the bankers fighting back? what can they do? >> one thing we have to

appreciate, these banks with their employment contracts, it gives them a broad remit. they said that anyone who signed these contracts knew what they were signing for and they should have read the fine print. the bank clearly believes it's right and fair. it's all happened in the last few weeks with respect to the confiscation of the vested stocks. it's unclear if those bankers have any real recourse but i'm sure that they might explore it in the cases of the people whose unvested pay were taken away, they must have been unhappy on the way out i don't think that they can go back cousin someone else would have to ill in their ticket. that must be what happened with the head of asset management that left. we also pointed out that michael dell himself, iconic funder of dell computers was not thrilled with how oldman treated their long loyal employees. matt: more importantly, these

are big clients of goldman sachs and if they are unhappy with this they can say we don't want to do business with you anymore. or is that just not an option because of the size and foot of goldman? >> the goldman sachs brand was built over 150 years. a few upset clients won't shake the foundation. however, it is a client business and you want all your clients to be happy. goldman over the years has built a reputation of building one of the most powerful alumni networks in the corporate world. vies that the case question mark executives who leave for a lucrative second career, they come back for a lifetime of shared riches. now some of these departures are calling into question the motive. matt: on the other hand, it's got to be the top spot, right? goldman sachs is the big prize for most people looking to work

on wall street. >> there will be no empty seats. it's not an issue of worrying that they could find replacements, but this firm famously coined long-term greedy 50, 60 years ago. you have to question, are some of these moves maintaining that teeth oh so long-term greedy? matt: i'm sure that this is something that is always wrote -- always growing. thank you so much. coming up, commodities on the volatility space continuing. we get the latest from rebecca babb in. that's next. this is bloomberg. ♪

ritika: the mayor of new york, eric adams, once the city to

move towards phasing out the proof of vaccination requirements for restaurants, bars, and other indoor spaces. he says he will continue to follow the science to decide when the so-called vaccine passport would be eliminated. philadelphia, washington, d.c., and other spaces have already eliminated proof of vaccination in indoor spaces. china will be expanding mass requirements as their outbreak worsens and in london people will no longer be required to wear face coverings even on public transport. in a sign of how the pandemic is received -- reshaping business travel, employees at 100 -- at hsbc racked up over 2000 less -- to hunt -- over 2000 less miles per employee than the year before any canada banks froze just about 200 accounts under emergency powers to cut off

funding to the protesters in the trucker protest. dozens remain gathered at encampments outside the city. with the president biden admired mental legislation stalled, democrats and activists came to the white house to declare a climate emergency, allowing the president to shut down crude oil exports and redirect funding for clean energy projects. former president's -- president trump used a similar step to build a southern quarter -- southern border wall after congress refused to appropriate the fan -- the funds. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪

greg: welcome to "bloomberg markets." matt: here are the top stories we are following for you from around the world. it has been a wild ride for oil, with ongoing russian ukraine tensions and a conclusion to nuclear talks with iran. in just a moment he will discuss the moves with rebecca babin. plus, retailers are struggling with increasing wages and rising prices for raw materials. we discuss the impact it has on corporate earnings. canadian banks are expected to report their smallest earnings increases in a year, but profit growth is likely to come back with rising rates. that and more, coming up. greg: checking in on the major markets right now, investors and the global community are still trying to make sense of what's happening. it has been a choppy trade where

we dipped briefly into positive territory before following again. the broader read of the american market and s&p 500 is down one full percent and right now in toronto the materials trade can be to our benefit. not down as much, about one third. of course the big question is what happens next. i know that bloomberg news is reporting we might get more from the white house in the next will of hours in terms of sanctions. today ukraine said they were the victim of several institutions, tense times. natural gas is on the move as well, as perhaps nord stream 2 to might be one of the targets as we get some color around the sanctions. let's bring in rebecca now from cibc. in terms of the commodities trade, this is a hard situation to get our arms around and investors are trying to take a

moment to think about what's next. what do you think is next for commodities? rebecca i think you really nailed it -- rebecca: i think you really nailed it. we have seen commodities and crude oil in a holding pattern. no one is willing to make a big death either way because there is so much uncertainty. you know that there will be another round of sanctions coming if they include the three major banks that energy players in russia use to conduct their daily transactions, we will probably see a move higher in crude as it will limit the amount of activity and exports that russia can produce and export out to the european client base. however what is more likely is we see another round of sanctions that doesn't include those energy specific banks and

companies and make them target oligarchs. meaning that crude drifts around these levels and dips attached below 90. we have had a long time to set up for this over the last weeks. this is not new information for the commodities market and there is a lot of the machine that has taken place in advance for just this event. matt: how does iran play into the conflict? rebecca: they are tricky to guess on but i'm guessing we are closer than many people think i'm getting that done. the reason i say this is because we have seen these micro developments. whether it is iran leasing the prisoners who have been redlined for us. as well as some softening in the language from some of the senior

negotiators on the iranian side that tells me he might inching a bit closer. we are on the kind of draw did timeline. -- dropdead timeline. one concerning factor that made it hedging is getting a deal done by the end of the week. we did just get a u.s. sanction with four thinkers supposedly carrying barrels of crude and that is a red flag. it is definitely not clear-cut, but i, if i had to make a guess either way, i would say we are more likely than not get the deal done in the coming days. matt: i'm curious what you think the white house can do about this. when we heard from president biden he is live to the fact that american households are spending more to heat their homes. fill out their cars.

they have taken these actions. do americans really have a role to play and trying to keep these prices under control? rebecca: yeah, it's a lot of talk with unfortunately limited actions that can take place. one thing they have discussed is another release. that has been pretty ineffective over the past couple of releases. they can change the way they structure them to make them more effective. instead of making them exchanges, they can make them direct sales. another way it can be more effective is it it is a coordinated release as opposed to a u.s. driven release. that's one thing that can offer a short-term cushion that the white house is actively engaged in.

production from shale is not a near term solution. frankly there is not the political will to do so. >> is it environmentally a problem or too expensive? >> it's environmentally a problem for the biden administration to walk back some of the regulatory and permitting restrictions they put in place. there is not the political will to do that. it was one of their campaign promises. last, we must touch base with opec and get saudi arabia to maybe fill in that gap and that's a tough one, too, because as we negotiate with the raw, who isn't exact friendly to saudi arabia, as we have seen recent attacks -- it gets really

tricky. matt: as mickelson can tell you, reaching out to the saudi's isn't always helpful. rebecca babin, thank you for joining us to talk to us about crude. coming up, retailers grappling with higher costs and supply chain issues. we discuss it more with a jefferies equity analyst and for what it is worth, importers looking to avoid supply chain bottlenecks on the west coast are encountering growing congestion and alternative ports. here you can see the number of ships waiting at the port of houston. closing at a record last year, we will deal into how this is affecting companies, next. this is bloomberg. ♪

>> moving forward i would say that the situation in 2022 is going to be somewhere more of the same. we are looking at costs inflation and having some semi conductor supply shortage, even though i think the trend is going to be a very slow improvement. matt: this is "one bird." that was the ceo of still antennas saying that he sees higher prices into 2022 and lord knows they are high enough already. 11.8% operating margins.

they used to be the thing of dreams. another year of double-digit margins getting behest of the snarls and labor shortages with more. kriti gupta this year with a look. ritika: we knew that -- kriti we : we knew that this was going to be there strategy. check out what they did here. not only did their revenue skyrocket 14%, they announced a dividend of 3.3 billion euros, $3.37 billion for american viewers. on top of that they are expecting another year of double-digit gains as you heard the ceo speak about that.

speaking on profitability it comes down to the margins, you are not just hearing this from them, it's the preferred part of profitability. greg: long-term contracts may be an area where they are, with other industries and contracts, it may persist for a while and they don't have to worry about it at some point. kriti: that can be tricky. if you look at what happens, let me give you the numbers. they lost 1.7 million vehicles in 2021 because of the chip shortage. it tells you that there may be labor issues with supply change. at the moment they are not going to be able to make cars and it is connected to what's going on

in the chip industry right now along with strong numbers. greg: thank you for that. shares in the session for tjx have been volatile. beatingectations, let's discuss the broader picture with headwinds discussing the industry. our equity analyst joins us now and it is interesting as we have these retailers coming up with earnings reports, very live to the issue. >> it's a good observation. this is one of the strangest earning cycles we have seen. sales, it seems that things are robust -- robust across the map.

it's that observation about supply chain that is the biggest one dictating meaning and expectation. clearly the bigger companies have more heft given the supply model leveraging the scale to break out from there peer group. they are not necessarily immune. we are seeing it broadly from walmart down to specialty retailers with supply chains being called out. as happened earlier in the segment around wage inflation, we are seeing wage inflation coming through. fourth quarter a step up here in the first half of the year, it's what we would call minimum wage inflation but it is the new normal inflation and wage where 15 is the new 11. matt: is that the kind of inflation retailers are afraid of most? or is it a good kind of

inflation? i always think about henry ford raising the prices of his staff to five dollars a day when he first starting produce -- first started producing the model a and the model t. the reason that was good was they could then go afford to purchase their cars. rebecca: there's a big attempt to now among the low-end consumer wrote we have seen the highest weight of rage inflation and we are seeing the single largest increase in goods inflation and the weekly core category center of the wallet. while the consumer has more money to spend on paper, they may not be feeling all that richer. the psychological factor in consumerism is important which is why you see shakiness in the confidence numbers. on paper i have more to spend but i don't feel richer. the costs of what i'm it's on

the low-end in terms of the debate. the high-end and more intriguing to observe, it's been a segment that has been goods intensive. it's more balanced between goods and services. we might be seeing pressure on the consumer but we are also seeing a pivot factoring into the retail reports on the guidance and outlook. it could be playing into the psychology of the executives putting together guidance frameworks for 2022. greg: excellent point about certain segments of the population where you really feel the effects of inflation. central banks are adamant that we will get higher borrowing costs and markets think they might get pretty aggressive on it. layering that into higher borrowing costs, does the

consumer at some point just capitulate? stephanie: it's entirely possible but that's so hard to do with what's out there right now. the clearly marked will be a real test in the stimulus. there was a lot of excess capital supporting the government last year. uncertainties around the next couple of months. the margin april stimulus will be the real test of just how constructive the consumer is in the under punning. we will have better information but right now it seems we are trying to pin together different data points. there is the component of inflation that is more temporary and we can expect that as the

year progresses. deflation over the next couple of years, it's the numeral -- new normal. greg: stephanie wissink, equities analyst, thank you. smallest earnings increases any year and a half, coming up, we talk about the dynamics coming out of the crisis and what rising rates could mean going forward. this is bloomberg. ♪

greg: this is "bloomberg markets ," on the eve of another canadian bank earnings season they are poised to deliver their

smallest increase any year-and-a-half. kevin, obviously we are in and in between phase coming out of a crisis. how does it play out for the banks? kevin: it's a lowell in the post crisis boom. while it happens, capital markets are booming. those trends seem to be plateauing. the next phase is when central banks start raising rates. it's been anemic for quite some time. we are caught in an in between phase with this particular quarter.

matt: u.s. mortgage applications were coming down as rates were rising. i know you were having a hotter housing market than the u.s. how are they poised, how are the banks poised for profits on net interest? kevin: the canadian mortgage market has been red-hot for 20 years now. so far we see things being hot. the trick will be seeing if the banks can show growth beyond that category. we are expecting to see some of that beyond that category. canada is behind the u.s. in terms of reopening.

the loan growth is lagging a bit. we should start to see more of them this order. that is where they are hoping to see it for the banks. if those rates start to rise, it bodes well for the banks in canada. matt: canadian bank profit growth looks like it is slowing. looking at sanctions headlines coming out from the president of the united states, joe biden, expanding russian sanctions. as bloomberg to -- as bloomberg news had written his, additional sink and -- written, shall sanctions. this is bloomberg. ♪

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caroline: news from the around

the world. european union leaders will hold

an emergency summit tomorrow to discuss ukraine. president biden expected to target more relief to prudent and nord stream 2. putin said he may be open but russian interests must be guaranteed following his recognition of two breakaway regions in ukraine. kiev is seeking to declare a nationwide state of emergency. the cdc says some patients can take more time between overage shots. they revised recommendations for healthy people under 65. they should consider waiting as long as 8 weeks between doses. this could heighten effectiveness and reduce potential for a