>> the united states along with our allies will defend every inch of nato territory. >> what is at stake is the existence of the world order as we know it. >> president putin, stop your troops from attacking ukraine. give peace a chance. >> this is bloomberg surveillance with tom keene, jonathan ferro, and jonathan abramowitz -- and lisa abramowicz. jonathan: good morning. alongside tom keene and lisa abramowicz. i'm jonathan ferro. a dark day for europe. tom: a dark day italy coverage from our coverage including in moscow. what is extraordinary to me is the reporting that the markets continued to deteriorate at this moment. what we did not see is shocked down and recovery. jonathan: let's start with president biden's words, the

allies and partners will respond to the union -- in the united and decisive way. this how will they respond? tom: sanctions but also there will be needing discussions about what the military response will be and that will be delicate. the baltic states as you mentioned yesterday to the north and down to odessa, attacked today on the black sea by russians. it is why geography of an eastern or western front. jonathan: we can work through the equity markets. crude is down triple digits. lisa: this is the big concern. people were expecting to maybe avoid an oil shock. today it is about how bad the oil shock is going to be given russia's dominance with exports. i do wonder how european regions respond and how much the u.s. lays the groundwork for help supporting them during possible end's -- ends that weeks like to see. jonathan: it's important when we look at the future, the next

month or so, we have to work through three central-bank decisions for this market. march 13, march 16, march 17. how much to the events of today and the next several weeks, months, and years change the next central-bank move? tom: i'm glad you bring this up. this is the challenge this morning across all of our conversations, linking this war, this moment as you say, into what we see in economics. i would suggest there will be messaging, perhaps led by christine lagarde over how central banks will adapt. what they will really add that to his core economics which is slowing real gdp estimates across all of europe and indeed perhaps america. jonathan: the banks are adjusting as well. deutsche bank down boy eight point 5%. deutsche bank, headlines on the wire, the deutsche bank says it's russia risks are "well contained." lisa: how do you measure those

risks tied directly to russian assets? then there's the risk of oil prices surging young what a lot of people were expecting. and how do you expect that fallout to play out? especially the economic slowdown that could ensue when it comes to banking in london. jonathan: direct exposure, indirect exposure, direct exposure slowing consumer and higher prices. places like germany are the issues. we have to try to get our heads around it. tom: first thing i looked at was dutch natural gas and that brings us to a natural high. many of these moves are five standard deviations and for the math people, that shows how highly unusual this is. another headline, and we will be buried with headlines through the morning, turkey says russia's military operation is unacceptable. the lire is weaker this morning, well over 14. jonathan: team coverage coming up. let's start with futures down more than 2% on the s&p.

the s&p in correction -- the nasdaq heading for a bear market, down by 2.82%. yields are lower in the bond market by 14 basis points on tends. we are back to 1.85 and lower on twos as well. the question, does it change the fed's next move march 16? lisa: before a lot of corruption in the latest wave of conflict, a lot were saying it might make the ecb more hawkish because of oil prices. has that shifted because markets are responding in the exact opposite way today. here's what i'm watching, g7 leaders scheduled to meet to discuss how to respond to the russian invasion of ukraine. they are serving the meeting virtually around 9:00 a.m. we expect to hear from the german chancellor around 10:30 a.m.. later on at 2:00 p.m., european union leaders will be holding an emergency summit in brussels. i'm curious to here when they talk about the swift security system how much they

actually start to think about that versus steering away from things that could potentially cut off oil supplies. at 11:00 a.m., the latest oil inventory data in the united states takes on new meaning when we take on the price of oil -- when we see the price of oil rising well above one honey dollars per barrel, both in the u.s. and the brent crude in london. i am curious to see how tight this market is. can we get a sense of that, what the iranian agreement, whether that could buffer this or is off the table at this point as we see things escalate. to your point earlier, how will the fed respond to the latest direction in the tensions here? how do we get a sense of higher oil prices and inflationary input on fed policy echo we hear from basically the whole host of fed speakers other than jerome powell. we heard from rafael bostick, mary daly, and chris wallace are the federal reserve governor, -- chris waller, the federal

reserve governor. you see a flattening in the yield curve not driven by two year yields going higher but tenure leaves -- 10 year yields going lower and bringing down growth expectations and inflation. jonathan: thank you very much. here top story, russia has invaded ukraine. it is a dark day for europe. we have already had a dark address from president putin. tom: the address is real upset here in that the translation by the russian team of the kremlin was maybe a bit off of the mark erie the washington post went out with a "parcel translation" picked up by the sydney morning herald. to conduct a special military operation, the words of mr. putin, it's goal is to protect people who have been abused by the genocide of kyiv for years. we will strive for the demilitarization and denounce vacation of ukraine. in the next, we will strive for the result of the second world

war as well as the sacrifices made of our people on the altar of the victory of nazi-ism. axel blue lee -- absolutely strong language linking world war ii to this modern-day war. jonathan: maria tadeo in brussels. allow us to come to you first, the reaction in europe. >> the reaction is do not believe a word vladimir putin says. from now on, this is not a special operation into ukraine, it is a full invasion of ukraine. it is surrounded by russia and outnumbered when it comes to weapons. the europeans, vladimir putin will pay dearly for this invasion. how much is the question. we got indication from the european union that they will also target european banks and exports. the goal is to weaken the

russian economy so they cannot pay for a full war efforts. that is on paper but we need to see the details. the other big conversation will be about weapons. what do you do with a country like ukraine? this is a war ukrainians will have to fight for themselves. they know this. this is a war they have to fight but they are outnumbered and do not have the weapons they need. once again, they repeated today, zelensky, we need facilitation of weapons top of the agenda. tom: away from economics and diplomacy of the coming days and weeks, what is your knowledge and reporting of what is actually happening in ukraine now and what day two of this war, this invasion will look like? >> i would say today the recognition from europeans for starters, the american intelligence was spot on that it was correct and right that this was a full invasion and there was no rationality behind it. this goes to principles vladimir putin has written about but no one took seriously about in the past two years, this idea

ukraine as a nationstate separate to russia is an abomination of history, that it should not exist. the second follow-up question is we will see a big refugee crisis in this continent. the people of ukraine, they are fleeing the country terrified. tom: how will president biden support as allies? >> this morning, he will be meeting when he wakes up with his g7 counterparts and will address the american people and likely outline what the next steps in terms of penalties and sanctions on russia are going to be. we are of course waiting to hear if these will be the "mother of all sanctions." will they go as far as what ukrainian foreign ministers said yesterday as he boarded a plane yesterday saying we should go as far and swift? because a war will be much more politically and financially destabilizing. what we did here so far from the president last night was he says his prayers are with the people

of ukraine but did say president putin has chosen a premeditated war. like maria said, the u.s. intelligence was correct. he said this will bring a catastrophic loss of life and human suffering. russia alone is responsible. the world will hold russia accountable. tom: as you know with the development of bloomberg news and in the real global sense, it is about a city and building a new [indiscernible] we have done that in moscow with henry meyer of the associated press, leading all of our coverage in moscow. jonathan: we have henry with us now. from where you are, as you look across the russian public, how much support is therefore the actions of the russian president? >> i think a lot will depend on how the war is prosecuted. if it is quick and there are not substantial so billion --

substantial civilian casualties, follow my not be that bad. and the risk is if you get into a conflict where you have high levels of civilians dying in ukraine, i think that could have a severe repercussion for putin's standing inside of the country. lisa: as we talk about sanctions, we discuss what i could mean for the population of russia, perhaps vladimir putin is not paying as much attention to it. how concerned are people, citizens of russia about the possible big cut off from financial aid flows internationally? >> i think there's huge concern at the moment. you have lines at the banks, people desperately trying to change from the foreign currency which is practically impossible now. there is information circulating european countries could stop doing visas for russian citizens. a real fear we are entering into a period of isolation and of

course that the economy will suffer terribly. jonathan: show your perspective on what you are looking at through the rest of today? -- today. >> what i expect to see today is the ground invasions continue. at the moment, we know that a three-pronged assault has started from crimea and belarus from russia. we will see more classes on the ground and russians will try and reseed as fast as i can. jonathan: thank you very much for the hard work you have been putting in over the last few weeks and months. i know a very difficult time for everyone working on the story. i think we should reflect on this. in one day this week, and these numbers came from javier, and one day this week, the eu, u.k., and u.s. likely spent 700 million dollars on commodities from russia. we hundred $50 million of oil

and refined products and another 350 -- every step of the way, u.s. intelligence has been transparent on everything that would take place, but he much everything has taken place. nato has been unified. now is the difficult part, the hard part, the next step, what do these sanctions look like? tom: the shot for me was to see adesso -- odessa under attack. this goes back to 1792 when it was first attacked by the russians. the span of history at this moment is extraordinary. jonathan: a shocking morning for the whole wardrobe. from new york city with futures negative, this is bloomberg. ♪

>> at the exact time that we are

gathered in the council, [indiscernible] jonathan: thomas greenfield, the united states ambassador to the united nations. china's ambassador to the u.n., the only speaker at the emergency council meeting late wednesday who did not criticize russia's actions. tom: the language on our reporting off of the pacific rim, china refused to refute moscow but called for restraint. as told the other day, how is this a distraction from china looking across the strait of taiwan? jonathan: good morning to you all, this is your price action, down hard by more than 2%, on the nasdaq by more than 3%. 99.70 seven on wti, up more than 8%. in europe, that's gets your percent.

bond yields are much lower, banks are too. the euro stoxx 50 bank segment, that industry down by 8.5%, a brutal morning for european financials. tom: let's bring up that haven board, a board of what the pros are looking at. we start as john mentioned with oil. i want to frame $105 barrel brent crude and inflation-adjusted over the last decade, maybe 15 years, is $118 average so we are getting up to the pain we knew years ago. to move quickly, i would also note euro swish showing significant swiss strength. a 102 print would be original. jonathan: and with the end move stick as well. as we go through this and this is something picked up on, it starts global and becomes regional and then it is local. the bank of japan unlikely to raise interest rates anytime soon. as we step away from this and the next few weeks of central banks, the fed is still making

-- is the fed still making a move and does that money come back out again because of what we will see was central bank policy? tom: we begin with the regional move, the geographic move in economics. christian joining with ultra bank. there is a theme out there in research this morning that this is a global shock that will become a regional shock. how does deutsche bank adapt and adjust something that will be regional? christian: i think first of all you need to think from a perspective, it is [indiscernible] i think where the most important adjustment needs to take place is first the energy crisis. so what would be the energy functions from sanctions and from russia based on sanctions? that has consequences on inflation and also consequences on roads. regionally, is not surprised that --

to give you a maybe number, of course it is not only oil, i think we need to also look at europe for gas and you see a much larger reaction in gas than oil at this point in time. so if you say cut off 10%, i know it is tough for some of us, but it is .7 of gdp growth. if russia is delivering 40% of gas -- then you go a little bit to stagflationary and reflationary. tom: because of time, i want you to tell me how you will adjust to a david folk are landau in your e -- what david and your research team says about ecb. how and when should ecb adapt and adjust to this moment? christian: i think we are discussing that but it is not a scenario we have completely ruled out. it does not come as a complete

surprise. i have to say, the impact to ukraine is not the base scenario , but you need to take this into account. i think what we see is somehow, and toca me wrong, markets are somehow doing the job of the central bank. i talked about prices on growth so for this perspective, going too fast, [indiscernible] on the other hand, it is a dilemma because higher energy prices means higher inflation. i would say the single bet -- central banks agenda leads to technology decision. do i work on financial conditions first and let inflation be higher? then take inflation with more hikes? i think it is more they look at financial conditions first. lisa: how have you changed your view going forward? how have you changed your allocation and response to this escalation and invasion of ukraine? christian: we were a bit concerned it was going on not

only because of the geopolitical side but also before, if you look at the rise here. we have been neutral in equities and the immediate reaction could be, that could be a day that's rather fine but honestly because there are sanctions, it will impact the growth as well and it puts the central bank in a kind of dilemma. so we know this is a buying opportunity today because it will take some time and we saw a little more on the equity side. jonathan: we got to run. thank you for your time. christian nolting of deutsche's private bank. the secretary-general nato saying the attack from russia on ukraine is calling -- called a brutal active -- act of war. they say they understand russia's reasonable security concern. -- reasonable security concern.

tom: the interdependencies here of diplomacy, we will follow this through the morning but the headlines stream this morning will be extreme airy. jonathan: that is where the split is, international relations i mentioned at the top of the segment. china's ambassador to the u.n., the only speaker at an emergency security council late wednesday who do not criticize russia's actions. lisa: there were a number of articles over the past couple days talking about this hope that china would withhold support from russia because of their concern about a broader war. the fact they have been not necessarily coming out against it has people really concerned about this russia/china nexus and how much of a connection there is there as china really depends on the region for natural resources. lisa: futures down -- jonathan: futures down 2.3% on the nasdaq. we have seen the move into treasuries, treasuries up and yields lower.

down by 13 basis points on tends to 1.86. take you to the front end of the yield curve and this is where the conversation will be for you and i, what happens to the fed? we broke through to 147 on tuesday. tom: the dynamic of the vanilla curve on the 210 spread is there. we are under 40 basis points but i would go much to the speakers lisa mentioned in her brief this morning. we see all of those speakers must adapt and adjust now to the events now as they look at unemployment and then inflation onto a march 16 meeting which is going to be different than what we expected. jonathan: before we get there, this from an ecb speaker in an interview, it's entirely possible that in march we could make decisions as to what happens to the asset purchase program. it is not the fed, that is the ecb. lisa: at a time where inflation is surging on the back of high or -- higher oil prices, how

does that, and markets and look at potential slower growth? jonathan: bloomberg surveillance continues. with equities down, on the nasdaq down by three percentage points, a bit into the bond market and crude is very close to triple digits. ♪

jonathan: looking at live pictures again of the nato secretary-general, taking questions in a news conference. tom keene, that's tone of this conversation has changed away from the separatists towards questions. i stress questions, not conclusions, about regime change in the country. tom keene this morning, that is where the conversations and. tom: a shocking headline -- end. tom: a shocking headline, russia's forces entering onto ukraine territory, and it is simple, the experts on this, an expert on this said that to him was a distinctive feature of what to follow in this news. jonathan: let's look at the

price action. equities down by more than 2%. on the nasdaq, down by 3%. coming into today, already have the s&p 500 correction territory and the nasdaq staring down a bear market. down in the u.s., europe, and worldwide as well. switch up the board, twos, tens, and 30, a bid right there. yields lower by 14 basis points. if the federal reserve has to adjust its pattern, will things change at all? on tends, the haven play, 1.85. crude is the story as well, triple digits on brent. close to triple digits on wti. brent up 104 and look at the moves on europe. that is an intraday move at 33%. for the first time, i think we can have a very serious conversation about stagflation in europe. tom: oh yes. jonathan: i think it's the first time we could have the potential

-- conversation about the potential for that. what is developing now into ukraine is the tail risk, the base case. something shifts from becoming a tail risk to the base case, the conversation has to change. germany contracted in q4 and one my contract in q1. the pmi's look at the bounce back, with the moves in energy and europe, you do wonder what the economy looks like and whether the ecb's hands are tied behind their back for the rest of the year. tom: we will look on german headlines for that, mr. schultz to have any active afternoon. i want to give you the math because i think it is timely at this time. we have a headline of russian troops from belarus into russia, some only 55 to 60 miles down the river from belarus. so this is very close to kyiv. part of this is things we quote every day like brent crude and part of it is commodities. when you are russia and you have the weak complex they have, it

is dominance and market moving. the head of research joins us now. we know chicago board of trade. we do not know a specific spot. how critical is the weak dynamic for russia right now? >> it is huge. russia together with ukraine account for 29% of global wheat exports. at a time when the global eat -- wheat market is tight fundamentally, we cannot afford to see a big player, out of action. so supplies are tight and the world does heavily rely on this region. experts are critical for word supplies -- world supplies. tom: can you believe soft commodities led by russian wheat will be part of sanction announcements today and in the coming days? >> this is where i have my doubts because unfortunately, food inflation is a growing story around the world.

the middle east, north africa and particular rely heavily on russia and ukraine for their wheat imports. we already see wheat as one of the best-performing commodities, if that were to lead to further hikes and prices, i think food inflation could be a political, critically -- situation. i feel like that is one area where sanctions might might not take place. if you look into thousand 14 when russia annexed crimea, the exports of wheat continued to take place. i am hoping this will be the same this time around. lisa: a lot of nations have been preparing for this. we even heard from germany talking about how they will be able to be independent of russian oil and gas. have you seen anything on the ground, any diversions and terms of import and export pathways in response and preparation for this invasion? kona: no.

certainly on energy i know that for example germany has diversified quite a bit away from russian oil. there was quite a pit -- there is quite a bit of wind power. luckily europe is a big agricultural country themselves so they will not be relying on russia for any of their imports, though they rely a little bit on ukraine for their son file oils. vegetable oils, cooking oils if you like it, are extremely tight. so there is no room for slack there. i think energy wise, natural gas obviously in the european zone is 40% dependent on the region. it will be extremely costly to divert it into lng and other resources. lisa: how much have you revisited your expectations for oil and gas prices?

what is the base case as the tail risk has become the base case in europe? kona: i think $100 barrel crude oil was given, based on fundamentals. now, there is this potential geopolitical risk premium which is having to be actually price in now. the worst-case case scenario has come to fruit. maybe we started at $120. i thing 120 is a given now. similar to what i see in the food exports and wheat exports, i'm not entirely convinced there will be embargo on u.s. energy -- sorry, russian energy because biden and the usa are trying to control prices. europe needs fuel cells. i think it would be political suicide if they would put sanctions on russian oil. it will cause them a massive spiral and more inflation. tom: you are a pro at this and a

joy across economies, always come back to the discussion of oil. an amateur like me, when we say to you can the u.s. come to the rescue? can we move ships across the a lansing to bring hydrocarbons to europe? how do you respond to such foolishness? kona: no. just on a freight it basically would not work. the u.s. had been enjoying almost self-sufficient when it came to imports, but production is plateauing. if anything, they have to tap into their own oil reserves and strategic reserves. so the u.s. cannot come to the rescue. for gas, you have the likes of qatar that might help them but for crude, opec themselves are sitting on not too much spare capacity. so what $120 oil will look like -- we'll tell you is we need to ration demand. you will see some kind of

economic growth stalling and ultimately demand will come off because there is not so much slack unless we get a deal with iran. iran may, with the nuclear deal, may lead to more bouts coming out. jonathan: julie norman -- kona haque, thank you. we see brent averaging $110 and the second quarter of 2022. that was out yesterday, and base case changed and here we are. lisa: people are looking to iran to stave off this crisis period. however without that, how much do we get what she was talking about? how much does $120 crimped demand? how much do we get that stagflationary spiral? i hate to use that but it does look more realistic at a time where you look at oil prices the highest going back to 2014.

jonathan: a couple headlines in the las -- last few minutes, nato to bolster forces. russian forces enter kyiv near the valerie's border. -- near the belarus border. if we can verify that that would be an escalation. tom: this seems like ancient history here. and kyiv is much further west than we perceive from the regions we have been talking about the last couple days. then what? i think the huge mystery here, besides my study of the black seas themselves, it is when and how they move across the west of kyiv evergrande --kyiv. that's a massive threat to poland. jonathan: lucky to have maria tadeo on standby. the headline from ukraine, russians forces entering the

kyiv region. your take? >> this is very serious. it is an incredible serious headline. you know the capital and any war is the ultimate price. it is huge. that was the start of the revolution. this was the first time when the ukrainian people gave a clear signal to russia that they wanted to break away from the russian sphere of influence and wanted to move west. it also shows us, in an amount -- a short amount of time, seven hours, they are already there. it also does show this could get tricky for the ukrainian population. the head of the ukrainian government saying they will give weapons to people, but they have to fight for every street and corner but there will be a very rural question -- real question if that is confirmed and we see russian troops enter the capital. as to what happens to zelensky and the ukrainian government, russia has made it clear that they want a new government in

the country. jonathan: while that is the objective change over the last few days. we have gone away from separatist claiming independence . are we talking about regime change now? >> absolutely. that is the goal vladimir putin has made clear at this point, that they want to see a government that is aligned with russia and moves away from the goals the zelensky administration has and that means nato, potentially a partnership with the european union, and going west. it is also interesting, at times i feel silly saying this out loud, but vladimir putin says i want to remove a government full of nazis. so lasky is jewish and i feel silly talking about people's faith and religion, but on tv today he said how can you look me to my face and tell me i'm a nazi? lisa: how much are you hearing from allies as they are starting to build more troops, much to gertrude presence, on the border

to counteract the russian invasion? maria: there are two things happening here. everyone is looking at this potential entry from the russian troops into the capital of ukraine. that would mark a serious escalation and there will be a real question as to what happens with the zelensky government and who do talk to and speak with an ukraine at this point? the other one is the baltics. all of them, we know how russia operates. we need more weapons and more troops on the ground. i think we will probably see nato quickly accelerate with troops on the ground so they have countries like lithuania, -- lithuania and others. tom: i look 200 miles west of kyiv through belarus, and there is a small matter of all of the russian occupation of war, centuries ago. no one is talking about poland. brief us now, should we be talking about poland? maria: we should.

i have been speaking with polish officials who say, once again, we were proven right, there is no deterrence when it comes to russia. the west does not get how russia operates. they do not get how vladimir putin operates. everyone should have been paying close attention to the essay published a year ago in which he said the collapse of the soviet union is the worst tragedy that ever happened to russia and ukraine as a nation state is separate to russia is an abomination. the polish were paying close attention to belarus and are also expecting a wave of ukrainian santa the country, trying to flee work. jonathan: thank you. maria tadeo, the latest out of brussels. with lisa abramowicz, tom keene, and jonathan ferro. the nasdaq down three percentage points. ♪

>> condemn this barbaric attack and the cynical arguments to

justify it. it is president putin who is bringing war back to europe, and in these dark hours, the european union and its people stand by ukraine and its people. jonathan: bringing war back to europe, the words of the european commission president. from new york, good morning. futures down by more than 2% on the s&p. on the nasdaq, down by 2.7%. it is brutal. those are lower, the haven been taking treasuries higher, yields down by 12 basis points to 1.87. crude has a brief break into 100 handle. triple digit crude on brent, $99 38 cents, almost of a percentage points. the headline of the last 30 minutes came from ukraine's border guard service. in the statement, "russian military vehicles breached into the kyiv region." tom: 55 miles up the river, and

this is belarus north of kyiv and there they are. as you mentioned in the break, and greater london, it is not kyiv but it is the region. jonathan: that is the statement verbatim. tom: from the bloomberg world looking from 11:00 p.m. wall street time last night, we are out there again but make another leg down here stronger. julie norman with us and recently on this conflict, codirector of ucl in london, the center of u.s. politics. indeed one of the hardest thinkers in the world on this strange word, conflict. julie, with all of your abilities, your mastership of the middle east, but take it to ukraine, how do we prosecute war and a modern, digital age? julie: what we are seeing unfolding ukraine will escalate quickly so there will be numerous tactics to try and respond to what we see.

digital will be part of it but we will see the more traditional tactics used as well, sanctions as we know as well as increased military aid to ukraine as well as shoring up the areas around ukraine and nato states. digitally, you're right, one of the concerns around sanctions as russia will be able to evade some of those by going through crypto's. that will i think be an area of renewed focus and spending attention on preventing cyber attacks. tom: in your world and all that sadat did, and i don't think he could work in the modern age, how do you see putin adapting to information? julie: putin himself has been such a master of using information or more specifically misinformation for his various campaigns, military and political. if anything, russia has written

a playbook on how to do that. you now see the u.s. and nato trying to be intentional about sharing information that they have, about making intelligence reports more available, so we see them trying to use digital media in that way. again this is unprecedented conflict at this point. the extent to which russia continues to use misinformation at this point when stocks are on the ground, that is where there will be a lot of focus. lisa: there are no plans to destroy -- to ploy nato troops to ukraine. can nato, this invasion without getting more troops on the ground in that nation in addition to the sanctions? julie: it will be tricky, but you are right that we do not excite nato troops going directly to ukraine. what we will probably see is a bouldering -- bolstering of the

nato presence in the baltic state and poland. so eastern european states that might also be under threat and a future date. -- in future day. we don't see that but to have the troops readily available. in terms of sanctions, you are right, that is where we see the most emphasis right now from nato and the u.s. and u.k.. we expect a further announcement of stronger sanctions today. it is important to note a lot of sanctions are strictly -- tricky. they will be very hard-hitting. the most hard-hitting sanctions are also the ones that are then felt outside the country in question as well, so outside of russia. these are sanctions that will have repercussions not only through europe but to the global economy. that is a reality many countries will need to face. lisa: based on how quickly things have escalated, what is your base case for how this evolves? julie: again, no one knows what putin -- what his end game is in

all of this. obviously things have escalated quickly. there is a sense that his large focus is on the breakaway regions and there is talk that there will be an attempt to annex the regions. what we saw today is the invasion is going well beyond those regions, touching all parts of ukraine to the extent to which putin sees this as a short-term effort as opposed to a long, drawnout operation that could -- that occupation is more what we don't know. in that case, i think you will be faced with a serious insurgency from ukraine, something that could be very drawnout. putin knows all of this so his logic behind it is questionable at this time. jonathan: if we can address the elephant in the room talking about sanctions, europe independents on russian commodities. it is one thing sanctioning a pipeline -- pipeline fully operational and it is another thing doing it now.

they have all been on the same page, incredibly united, the words really powerful, but as europe's dependencies on russia gets in the way, it is proportional to words they use this morning. julie: it is certainly a factor and i think what we will see is a heavy head first in terms of financial sanctions with china cutting off access to the dollar, the pound, and more of those types of actions. in terms of oil exports, i think it is something that we will be moving towards. the u.s. in particular has been trying to work with european allies to ensure natural gas in particular can be provided from other sources. this is going to affect europe nonetheless in terms of the price of gas and oil. we see that happening today and that will impact the rest of the world. i think people are clear eyed on the effect that those kinds of sanctions would have a significant increase on energy costs that are already high. jonathan: julie norman, thank

you. if we could return to the graphic, the breakdown of dependence on russia gas from european country to european country. the numbers are huge, finland is 94%, italy is 46, the eu averages 32%. is this the elephant in the room that stops europe from acting in the way that perhaps the u.s. and other nato members would like them to? tom: i have yet to hear a pro explained to me how we substitute for the loss of the selected hydrocarbons. i have not heard a clear answer of how we substitute into march and april and may. i want to explain the twitter feed, which much of it is uncorroborated. we need to be careful of that. it is a little grimmer and the official newsfeed now including helicopters much closer to key have -- kyiv. jonathan: we can speak to the price right now and that is

higher. crewed up, natural gas up 32%. from new york city with tom keene, lisa abramowicz, i'm jonathan ferro, war in europe. the words you never want to wake up to. this is bloomberg. ♪ this is bloomberg. ♪

♪ >> early this morning, russian troops invaded ukraine, a free and sovereign country. pres. biden: united states, together with our allies, will defend every inch of nato territory. >> what is at stake is the existence of the world order as we know it. >> president putin, stop your troops from attacking ukraine. give peace a chance. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city this morning, good morning. russia invading ukraine. we will bring you the headlines and the sources of those headlines. the headline of the last 30 minutes from ukraine's border guard service, the russian military vehicles have breached into the give region -- the kiev region. tom: the story is changing

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