manus: this is bloomberg "daybreak: europe." your top stories this morning, russia attacks across ukraine after president prudence ordered strike. president biden says he will impose further sanctions and consequences on russia. nato calling the attack a threat

to international security. stocks down, dollar and gold and treasuries surge, brent tops $100 a barrel. biden says this is premeditated war. the words of the united states president on ukraine that will result in a catastrophic loss of life and human suffering. in response -- responses are starting to come in from boris johnson. let's -- the chief justice said putin has countered that saying nato crossed a redline. they do not plan to occupy ukraine. let show you what the president of the united states said. this is a readout on one of the calls we had from earlier. the risk is a catastrophic loss of life. the united states and allies and partners will respond in a

united and decisive way. how is that playing out at the moment? if you are just waking up, you're looking at this escalating tension between ukraine, russia and the eastern provinces. the s&p 500 deep into correction , we are exiting risk at a sharp pace across these risk assets. you're going to have a huge discussion on whether the fed can go ahead and raised by even 25 basis points in march. warner -- warning their we need to be an exceptional reason for them not to go ahead with that move. gold flies higher, let me show you where it strengthening since the highest level since 2015.

off the highs and swiss lows in europe. you must define whether it's a regional conflict with a global consequence inflation and risk. you see an implosion in the aussie yield there, falling by 10 basis points. money goes into dollar-yen and indeed the ruble. the question is this, a record low on the ruble and more severe sanctions are to come. will russia bring its arsenal to bear on the ruble? while ukraine foreign minister has called it a full-scale invasion. equity markets have moved. oil over $100 a barrel.

let's bring in the team and get to the points. we've got our russian political and international affairs reporter, john in d.c. alongside me covering the reaction of the u.s. government in hong kong. an international reaction to discussions at the you in and across the market. henry, to you first of all. what is putin saying? he is justifying that he's protecting donbas and that it is nato that has crossed the line. good day. henry: president putin in a televised address said that he was starting a military operation in ukraine as he said to demilitarized ukraine. he also said as you mentioned earlier that russia does not plan to occupy ukraine. so on the ground, we are seeing

a lot of different reports now coming from ukrainian side, which you think about missile attacks on various cities, so for what is not clear is how far the russians intend to go. manus: and to what extent they go, the mission we understand from putin is to demilitarized. let's bring it to the united states. i called out the language of the president, but what is the international reaction so far to the position? bruce: there was an emergency meeting of the security council in new york and the secretary-general made an unusual directly to president putin, saying from the bottom of my heart, please stop your troops from attacking ukraine, give peace a chance. there are five permanent members

of the security council. russia is a permanent member and china has a seat on the security counsel as well. china didn't mention russia by name, just called for restraints and dialogue to address legitimate can -- security concerns. since then, with the news that russian troops are on the move, we've heard from boris johnson via twitter saying he's spoken with president zelensky and said the u.k. and its allies will respond decisively. we've heard from the estonian prime minister right there on the border with russia saying that estonia stands with ukraine. manus: john, we are showing some of the language and responses that we have. the president has spoken to

ukraine's president zelensky. what has transpired on that? we've heard from antony blinken in the past hour on twitter in terms of anonymity with nato. john: president biden, the second segment he made in a couple of hours, said that -- offering support for ukraine from the united states and its allies and that russia could expect severe sanctions from this. manus: and the question is, what is the severity of the sanctions? we know that they have not sanctioned nord stream one but it has sanctioned nord stream 2. what is the escalation that will be displayed to the markets? let's get to juliette saly who has some pretty monumental moves. the exodus of risk, the entrance into havens that we haven't seen

for many years. juliette: we can start there, you've got yields on the 10 year down 11 basis points, similar mood coming through in australia . it has suspended trading across all markets. you mentioned the ruble and interbank trading hitting that record low, dropping down to 8% there. were setting up for a bad session across global markets. a drop of about 3.8% on the weakness we've been seen across the asian markets. you can see singapore as a black box around it. huge falls in the likes of singapore and hong kong, down by over 3%. of course you mentioned the big move in brent, $100 a barrel for the first time since 2014. and if there is an escalation

between russia and ukraine, what does it mean for the likes of soybean and wheat. all of this coming on the day of another hawkish tilt coming through from another central bank, bank of korea leaving rates on hold at one point when he 5%. they did indicate continuing escalation will have a massive impact on inflation. among all of these geopolitical concerns. manus: thank you very much. the uae down over 2%. bruce einhorn in hong kong and juliette saly in singapore. stocks tumble, brent breaks $100

as j.p. morgan falls $110 this quarter. this is bloomberg. we take you to a live shot of kyiv, where course the question is is this escalation of risk, will it go further? this is bloomberg. ♪

manus: a live shot of kyiv, the capital of ukraine, which is approximately 380 kilometers from the border with russia. we focus on the capital because to a certain extent, the conversation is this is where you begin to consider what is the escalation and what is the

in sight for president putin with the special terry option -- operation into ukraine, blaming nato for the threat. the question is would putin make a move toward kyiv? that is the dark hole of major escalation that no one is calling. he says he does not plan to occupy ukraine, those are the words from the president of russia. nobody is waiting to see whether they are to be honored in terms of those words or whether there will be escalation terms of sanctions and retaliatory action. the implosion of the russian ruble, at a record low. today it would not appear that the substantial reserves of russia are being recognized toward their currency. you're looking at the dollar rising, the euro rolling down. let's reflect back, oil ratcheting higher by 5.5%.

so what you have here is obviously calling oil of $150 on the escalation. putin -- biden is closely monitoring the situation. what you have here is what is the global implication of over $100 oil market inflation on growth and on that narrative. the moves you are seeing across these oil markets, brent, the biggest one-day since february 2015. wti, the biggest one-day move since september 2014. i take you back to the annexation of crimea as a reference point in terms of risk. i want to turn to the global market map where you see the global implication across equity markets from australia to china. let me show you what's happening

with australian equities, down 3% at this juncture. the s&p futures also trading down deeper into correction territory. you have a monumental move in risk off, below 1.9% in 10 year yields. let's get to my guest who joins me now. monica, thank you for being with me. your assessment of where we are as we see in exodus of risk. are you taking any action and would you advise clients to move in any way? the day. monica: thank you, and good morning. the situation is revolving -- evolving. this is something we were putting in place already last week.

today we will make a decision whether to continue a risk off move. i think we are going to debate this later today. manus: with higher sanctions, what is the risk? monica: the risk is that in economic terms, this is not really going to hurt russia too much when it comes to gas. what is really key here is to understand china, on one side they are partnering with russia and on the others they continue to be against risk escalation. so geithner will be key. international sanctions, in terms of the strategy, we think

it could be -- the real loser in economic terms will be europe just because inflation is going to rise on the back of higher energy prices, and risk, the circle around effect is on the rise as well. manus: the u.s. treasury market -- zero swiss is ramping higher pushing to the highest level since 2015. in this vortex of uncertainty, we know very little about where we are in the process, whether we are at the end or near an escalation. with that in mind, with the fx

swiss portion take the greater portion of defensiveness, or is it treasury? where is the curve where i defend myself? monica: it depends on how the fed will respond with forward guidance but in general i think safe havens -- gold, swiss franc, and there is uncertainty related to the fed. we were expecting a flattening of the curve. manus: do you think that structurally in periods of great uncertainty, and we don't know how long this uncertainty will last, but coming off the highest level since 2015 the flow of money into havens. in great periods of uncertainty, geopolitical risk, to quote mary

daly it would have to be a pretty big event to get the fed to shift. the market is still pricing 25 basis points. does this moment of existential threat wipe out the risk of probability of 50 basis points in your mind in march? monica: the situation is just so fluid that it's a possibility we cannot rule out, that the fed will slow down its path. the market is expecting four hikes, just because we were fearing that -- i would not rule out depending on how the

situation on the geopolitical front evolves. manus: boris johnson has been talking about the potential ramifications of conflict. at 7:30 he will discuss the ukraine situation. in moments like this, i've always struggled with liquidity, as liquidity flushes away from smaller caps in moments like this. there are air pockets. tell our viewers this morning what you think the most liquid hedges will be. monica: we remain on the safe haven, last week there was a move toward equity optionality and this is where we have been concentrating our hedges, having in mind that in any case, our

exposure was neutral. the size of hedging was required -- required was proportional. in particular -- as well as gold. manus: monica, thank you for rolling with the punches. my guest this morning reacting to the news flow. president biden calls this mood and -- movement by putin a special military operation that's having global ramifications. we are still tracking the headlines and kyiv is 380 kilometers from russia's border.

this is bloomberg. ♪

manus: this is "daybreak: europe." the biggest news for the conflict will be in europe. you're looking at a pre-defining of risk, into havens. the ruble implodes at a record level. let's dive into the commodity complex. brent crude up by 5.3%. were seeing calls for $110, $115, and wheat exploding in the futures market. a real risk off move into

treasuries. more liquidity coming in, let's take the conversation to my guest, we are in shock territory in excess of $100. monica: the ramifications obviously will be on inflation, this will inflate through europe , wiurther pressure on the ecb that's got to face this dilemma with the risk off second round effect. we could see oil prices stay above 100.

energy prices and gas even more so than oil will remain high. we're entering spring when usually demand goes down by one third. but it's going to come at a higher cost for sure. manus: europe bought 3.5 million barrels of rational oil and refined -- russian oil and refined products and 250 moon dollars worth of russian natural gas, titanium, gold, and other commodities. the bill topped more than seven hundred million dollars. vladimir putin literally has europe and the world by the scruff of the neck. what do they need to do in terms

of a reaction, monica? in terms of going after vladimir putin. what is it that really would stop this escalation? monica: i'm not a geopolitical analyst, obviously, but i've tried look at the economics, really the export of gas is a major source of capital for russia. so obviously what they're doing with nord stream 2 is going to have an effect, and then provided that it is really difficult to prove -- to find a diplomatic solution, it is hard to say how long it will last. manus: well done in terms of

being on the front lines with us. a live shot of kyiv if you're a small business, there are lots of choices when it comes to your internet and technology needs. but when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose fiber solutions with speeds up to 10 gigs to the most small businesses. that's virtually everywhere we serve. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™.

♪ manus: this is bloomberg daybreak europe. your top stories this morning with me manus cranny. russia attacked ukraine after president putin orders strikes. ukraine calls at a full-scale invasion. president biden says putin has chosen premeditated war. nato calls the attack a serious attack to security. stocks plunge, the ruble sinks.

brent goes through $100 a barrel. in the words of the president of the united states of america, in a readout, "president putin has chosen a premeditated war that will bring catastrophic life and -- loss of life and human suffering." this is the readout from the white house this morning. biden says the world will hold russia accountable. putin says he is protecting donbass, having ordered a special operation into ukraine. that is the latest line from biden. we have a system at the moment of deep distress and it is evolving. you are looking at everything under pressure. money going into bonds at pretty substantial moves in the

treasury market by over 10 basis points in the u.s. s&p 500 goes deeper into correction territory. the nasdaq has been in its bear market. you are seeing money pile into oil. get ready for $115 oil. at the highest level since 2014. breaking $100 for the first time since 2014. so, these markets are in distress mode. do we have it? fx, let's have a look at that. we will give you a little bit of a perspective. those are the markets. you can see money flood into the yen. the ruble off its record lows. this is a global story of global risk, slow down, geopolitical risk and inflation. that manifests in the aussie dollar. for the very latest geopolitical

response, we go to our reporter. putin has ordered exactly what? what is happening on the ground? there's a whole host of reports. good day. >> good day. president putin in a televised address says he was ordering in operation to demilitarized ukraine. also, worryingly in this rather long and rambling speech, he said his aim was to denazify ukraine. what we have on the ground are reports of missile attacks on various cities. there are no credible reports so far of russian ground troops being deployed. clearly, what everyone is wondering is how far this russian incursion/invasion is going to go. given the tenor of the speech he made, the possibility that we

are only in the initial phase. manus: indeed. and ukraine imposing martial law. the international response is to gather a cobra meeting. what has the international response been? henry: it has been very robust. we've had warnings from western leaders, from president biden to prime minister johnson and others, warning of very severe consequences for russia. there is a whole barrage of sanctions that will be deployed now. the aim is to try and get russia to stop the operation. it's just not clear whether that will be sufficient. to what degree president putin has taken all this into account. manus: thank you very much, henry meyer in moscow. let's get more analysis from ukraine.

the lecturer in international relations at the university of melbourne. sarah, we have this escalation, we have martial law in ukraine. you just heard henry talk about what has happened overnight. putin is saying he is protecting donbas. your assessment of this level of escalation and do you expect it to go further? sarah: the escalation has been astronomical today and far beyond what would be required to secure the separatist held territories in the regions in eastern ukraine. from what i have been seeing on social media reporting, from reporters on the ground, cruise missiles have been striking all across the country. there were unconfirmed reports that some images showing tanks

rolling in from belarus and crimea. if this was really just about securing the contact line and preventing ukrainian bombardment on donbas, this is absolutely disproportionate. i think what we are seeing is a full-scale attack and invasion, even if occupation is not their ultimate end goal here. manus: what do you think the end goal is for putin? sara: i did not anticipate that it would go this far because strategically, it does not actually make sense to have to bombard the entire country just to prevent ukraine from integrating further with europe or entering nato. while he uses these claims of de-nazificationnd ukrainians and russians being one people, i don't think it is a ideological objective either.

i'm coming to the belief that ego has a big role to play in putin's decision-making here. i think biden telling him over the weekend that they could have the sit-down, the diplomatic meeting between the two heads of states that i thought putin was after, but putting the condition he would only do it if putin did not initiate invasion on ukraine, i think that might have been a catalyst. putin saying you don't tell me what to do. manus: and in terms of the escalation of sanctions that we understand, biden will discuss those today. what is the next step in sanctions that could come as you say, de-escalate this astronomical move you have seen? sara: i am not so confident that sanctions will have a massive effect here if what is at stake

is more driven by ego and a draw for power. i think what moscow is attempting to do is to show to the west that despite the international norms that we have, international law, means of trying to resolve things diplomatically, in the end, might is right. while the u.s. has a stronger suite of sanctions they are prepared to implement against russia, they will be buffered somewhat by their ongoing -- manus: we have to interrupt you. we will take our viewers to the australian prime minister speaking live now calling on the russian government to withdraw from ukraine. let's listen in. >> i want to thank the diplomatic staff in the region to do that. australia had already imposed autonomous sanctions against

russia targeting both individuals and entities around the sovereignty and in territorial. we go further acting with our close partners, the united states, the united kingdom, japan, canada, those in europe and nato in condemning russia's actions. i announced sanctions and travel bans on eight members of russia security council. they will come into effect midnight this evening. this council bears responsibility for the current phase of the invasion, including president putin's declaration regarding the two regions. i've announced financial sanctions which entities cannot do business with five russian banks, in addition to restrictions on australians investing in bnb. we are now progressing the second phase of those financial sanctions. the acting minister of foreign affairs has completed the

process of applying sanctions to an additional 25 persons. this include army commanders, deputy defense ministers and russian mercenaries who have been responsible for the unprovoked and unacceptable aggression, and four entities involved in the development and sale of military technology and weapons. we are not moving to place restrictions on australians investing into further four financial institutions. there will be a further wave of sanctions as we identify those responsible for these egregious acts, including, as i discussed this afternoon with the department of foreign defense and trade, moving around 300 members of the russian parliament. we must ensure there is a cost for this violent, unacceptable, and egregious behavior. there must be a cost. i said today, we firmly believed that because of the actions of

russia over many months, it was unlikely they would change course but there always must be a cost for such a reprehensible violence and the way this is being done in ukraine as we speak. the government is engaging with our partners and businesses to make sure we are mitigating risks to critical supply chains and we will continue to work closely with australian business to manage those risks. in briefings received this afternoon, we still have no evidence of any sanctions of cyberattacks on australians. i thank the corporate community for the preparations they have been undertaking and working with the australian cybersecurity center to prepare themselves. i want to ensure you that australian stands ready to support internationally coordinated action to reply to any supply shocks. right now, our thoughts are very much with those in ukraine. those who are enduring a

terrible invasion, as the bombs fall and the shelling continues and the bullets are fired, as special forces from russia are moving towards kyiv and tanks are rolling in all around their borders. this is a chilling reminder of the world that we live in and where the threats and aggression of bullies and those who seek to intimidate others, to seek their own advantage. this is a reality. it is a reality of this world, which means that like-minded countries, those that believe in a world that favors freedom need to stand together and need to ensure we have the proper defenses and security arrangements to keep our own people safe. this is why australian has taken such a strong stance. we are very concerned about all the people of ukraine. we pray for their safety. we also know they are suffering a terrible ordeal at the hands

of a terrible aggressive. happy to take some questions. >> will there be extra sanctions -- manus: prime minister morrison making statements on the sanctions may be australia. the prime minister talking about adding 25 new names from the army, deputy ministers, along with members of parliament. this is about the next steps. sara is my guest, a lecturer in international relations at the university of melbourne. your prime minister responding. we wait to hear of biden's response. much have been talked about going for the jugular. we saw in the first rounds of sanctions, it was the primary bond market. it does need swift. it has 7 million barrels of oil. it needs russian energy.

how weak at the moment do you think that the u.s., europe and u.k. are relative to putin? sara: well, it depends on what measure you are using. militarily, not weak at all, but we are not prepared in the west to deploy troops -- manus: the west has repeatedly said there will not be boots on the ground. i should have qualified that, my apologies. in absent ship of obvious -- absentia of obvious military might -- metals, oils, gas, the lifeblood of economies. sara: precisely. we are closely economically tied and the history of sanctions, or a mitigation strategy against aggression is not great.

i don't have a lot of optimism that even these measures will be enough to halt putin's strategy here. manus: sara, let's see where the escalations and sanctions are. sara meger from the university of melbourne. thank you for being with me this morning. moving past the covid related woes as profit recovered from the 2020 slump goes to a new record. thomas is the ceo. i assure you we will talk about your numbers in just a second, but we must start with the global story. your first reaction to the escalation overnight as these global markets convulse and there is an exodus from risk. your reaction this morning. thomas: good morning. it is obviously a very tragic day. tragedy happening in ukraine in the context of geopolitics that

has become more and more difficult over the last month and years. as an enterprise dealing in such an environment, it is not something that only happened or started this morning. it is something we have been seeing and experiencing for quite some time. we all need to make sure that we are dealing and continuing to trade an environment that gets more and more difficult. manus: i know that you -- your ukraine operations in 2020. who have a small minority stake in the number five player in russia. from a risk perspective to the business, do you have any concerns? that this risk could manifest in a certain way across my business? if it escalates, where could this bear on your business? thomas: it is tremendous that are direct exposure in ukraine

and in russia to ensure operations and/or investments is marginal at a total level. however, there is an indirect effect. obviously, you have seen energy prices jumping up this morning which also means it will hamper growth. you have seen volatility will be increasing as of today and those are certainly signs that will weigh heavily on the economy, on the financial markets. as a large investor in the world's markets, everybody will be hit by it which means we have to manage volatility in an environment in which inflation will probably be driven higher due to energy price increases, and in which the situation in the markets will get even more uncertain. manus: will you gather the team this morning together to reassess, evaluate risk,

reassess your exposure to markets? will you gather the heads of the various businesses and trim risk or seek to mitigate risk? thomas: this morning, i have together the team to present the excellent results that axa has shown in 2021, so we are otherwise occupied. as you can imagine, this is something we've been looking at for weeks now. as an insurer, you have to look at the key risks and look at the downsides. the teams are already in place, already briefed, what needs to happen in case the invasion of ukraine will happen, which has started this morning. everybody on deck and know what they need to do. manus: i do want to lean into your numbers. a buyback. your earnings of 7.3 billion,

beating comfortably what the market had anticipated. where is the strength in a post-pandemic world for you to deliver these numbers? can i expect this buyback to grow a little more materially? thomas: so, when you look at these results, i will not only look at today's announcements because these results also show the end of the first phase. we have gone on a journey over the last excuse of making sure we are shifting away from financial risk and we are getting closer to our customers. these very good, excellent numbers that are historic numbers show this. a very strong growth, now reaching 100 billion of premium volume driven by all countries, all of the segments. when you look at the bottom line, 9%, all of the engines are

contributing to it. what is particularly important for me, the company we bought in the u.s. has reached its target of 1.2 billion. all of this happening on a balance sheet that is extremely solid. 217%. we come out of this crisis very reinforced. axa is working well and we are very positive when it comes to look forward to the end of 2023, which is the end of our plan. we are more on the upper end of the targets we have set ourselves. it is a good position to be in. manus: it is. that was a critically important part of the numbers. before i let you go, we are all trying to work out what we think the federal reserve will do in terms of rate hikes. that is a consequence for your

business. do you think you can get the jp morgan nine rate hikes or where do you sit at the moment? thomas: our view is there will be rate hikes, which is one important thing. the second important thing is that the fed and other central banks at some point will reduce their balance sheets, which means liquidity to taken out of the market. we have to prepare for a scenario in which a -- interest rates are higher and inflation remains high. on the operational side, when it comes to costs, when it comes to claims, we have that well under control. we have the ability to also reprice our contracts. on the investment side, since we are a very strong fixed income investor, higher interest rates are a positive message for us in the medium-term. manus: thomas, we wish you well.

well done on the numbers and the buyback. that is the ceo at axa, my guest this morning. kyiv is a city under pressure this morning. martial law has been declared. this is a country which is grappling with president putin's military operation in the east of ukraine. we will have more on the market implications on this escalation of this incursion. this is bloomberg. ♪

manus: it is daybreak european i am manus cranny. the russian markets have reopened. the bank of russia says they will provide liquidity. i want to take you straight to

the molex with the 11%. russia stock market is quite literally tanking. sberbank, one of the main banks that has not been sanctioned yet, down 52% on the peak. sberbank has not been sanctioned. it is alpha contributor to the commodity financing of russia. 10 year yields a spike higher and the ruble comes off its record levels. let's get the crypto. christina is here with the fx and rates and oil coverage. joanna, let me get to you. bitcoin did not do well in this situation. your first take. >> hey, manus. it is something that for years, bitcoin proponents have said this is a geopolitical -- geopolitical hedge, it can work of governments are not quite functioning well. that is not happening right now. it is about the lowest in a month, so it is not its lowest

and forever, but it is still around those mid-$30,000 levels. some people are talking about the potential of $30,000 and even down to $20,000. over the crypto complex over elsewhere ether is down about 12% and other top tokens have taken it on the chin. across the crypto complex, it is definitely asking -- acting like a risk asset right now. manus: absolutely. time is running out. a quick line on oil as the bank of russia will conduct fx intervention, hence the reason you are seeing immediate response in the ruble. oil, above $100, does it endure? >> there will be a lot more upward momentum until we get clarity on what the russian situation will look like from here. whether we get additional sanctions from the u.s., europe and the rest of the governments across the globe.

and the opec-plus meeting next week that will be worth watching. manus: kristine, you came in below the 30 mark. joanna and kristine, as the central bank of russia intervenes in the fx market. ♪

♪ >> good morning. welcome to bloomberg markets europe. i'm anna edwards. the cash trade is less than an hour a way. here are your top headlines. [speaking foreign language] >> circumstances require firm and immediate actions from us. the people's republic asked for help from russia. i decided to conduct a special military operation. >> russia attacks targets after president