shocks. >> i think it is going to be quality value. >> the situation is fluid and the narrative can change quickly. >> this is bloomberg surveillance. >> things are moving so quickly. good morning. this is bloomberg surveillance live alongside tom and lisa abramowicz i'm jonathan ferro -- tom keene and lisa abramowicz i'm jonathan ferro. tom: this volatility harkens back to 19 45 and we will have that coverage all throughout the morning. the talks are there. i know marie is better briefed on that than i am that i would say the real talk of will

belarus to the north of ukraine, will they enter this war in support of mr. putin? jonathan: step-by-step, the west is cutting banks from swift. any other day bp dumping rosneft would be the top story. >> how much the world has changed as the western allies gave the sign they are willing to incur some wrath on their own people in order to go hard financially. jonathan: what we have seen -- tom: what surprises me and we

will do a data check and all, what surprises me is what has not moved. there are so many things that have not moved. jonathan: the central bank of russia has moved 20% from 9.5. lisa: they have prohibited people from trying to transfer foreign currency to rubles. all of these things, that they are trying to intervene gives the feeling of an issue of liquidity. jonathan: futures are negative by more than 1% on the sep. banks are getting absolutely hammered. they are just south of 192. crude is up a little more than

4%. lisa: why isn't it up more? a lot of analysts have said this guy is the limit here if some of these sanctions do go into effect. we have an emergency council meeting. olaf scholz will meet with ursula von der leyen and emmanuel macron. i am curious to hear how olaf scholz talks about his pivot that he outlined over the weekend. he will talk about 100 billion euros he is dedicating to the military. this is in line with what nato has wanted and it is what germany has underplayed for a long time. he has agreed to supply kyiv with weapons.

it is a pivot. meanwhile, we will be watching raphael bostic take part in a conversation about the economy. how much will we talk about fed intervention? we heard credit suisse talking about the intervention there. more negative real yields for all the wrong reasons. president biden is hosting a call on the russian-ukrainian invasion. crude is above 100 dollars a barrel. in the u.s. gasoline prices at the highest levels going back to 2014. how much does president biden talk about a crude reserve release? jonathan: 115 is the target

price up from 105. tom: so many things are within range with huge exceptions like the ruble. we do not need to do fancy charts on the ruble but i take your point that i wonder what is going to happen when we actually get liquidity. jonathan: coverage starts with annmarie hordern. over the weekend, something changed. what changed? >> everything changed. we saw a mega sanctions package from the european union, which will now supply weapons to ukraine. we have had big restrictions on russian banks. 50% of their assets are defect oh frozen in g7 jurisdictions.

the europeans say this is a propaganda machine and they want it out. there was a big change of heart in germany. when the germans get going everyone else in europe follows. zelensky has shown he can rally his people and his army can resist. once that decision gets made, the europeans change course and decide it is our duty to help ukraine in this fight. tom: i am fascinated about your reporting on if belarus enters this more. i feel like i am talking out of the history books of 1945. what happens if belarus attacks? >> this is the key country to

look out for. vladimir putin lied through his teeth when he said i have no intention of a full invasion from belarus. if you look at the map, this is a country that is connected to poland. for the polish this means it could be surrounded by a country that is in a war with russia and a country that would become a puppet state for vladimir putin. we are talking about potentially nuclear weapons. for the europeans, that would be a real escalation moving away from ukraine and into poland. lisa: talking about the escalation we have seen on both sides, we are looking for additional sanctions from the white house. maria: first --

>> what we had was they were going to try to protect the oil sector but we heard from jen psaki on abc this weekend saying energy is on the table and she said it twice. what the administration was trying to do was have enough impact on president putin and the russian economy and mitigate american consumers. i spoke to a senior european official over the weekend. we were working on finding out what they were going to do in terms of swift and he says right now it is about giving a strong message to the kremlin and almost suffocating the kremlin. it looks like the west is going to come out with a plan where you do not know what to expect

the next day. it does not look like there is anything in terms of the russian economy that is not being hit right now. everyone over the weekend said to me find a vessel that will go pick up russian goods right now. maria: this is the question they do not want to get into. the reason why it was not a full blank ban on swift -- we do not know what banks are going to be included in there, but how do you prep for this? it is the peak of winter. it is the time of year when

europeans are the most concerned. germany made a big u-turn over the weekend. it they said they were shutting down three nuclear plants. maybe they want to think about that again. jonathan: anne-marie said something important -- what if banks decide to self sanction? we spent the weekend talking about how these sanctions work in theory. how they work and reality could be quite different. how would that actually work in practice? -- actually work in practice? tom: i would suggest that what is really important here is saudi arabia. they have been silent. turkey has not been silent over the weekend. jonathan: you mentioned zoltan.

" everyone jumped over lehman in 2020 but we are dealing with pipelines here financial and real. they are two sides of the same coin. inability to receive may mean unwillingness to send." lisa: we are talking about the plumbing of the energy system in europe. jonathan: what a lineup we have got over the next couple of hours. tom: daniel juergen, and hans carstensen and the nuclear threat. jonathan: futures down 1.2%. from new york, this is bloomberg. ♪

>> keeping you up-to-date, i'm ritika gupta. ukraine in holding talks with russia today aimed at stopping the fighting. volodymyr zelensky questioned whether much will come from the meeting but he vowed to make an attempt if it meant a chance at peace. russia retains overwhelming advantages. western nations have agreed to impose more sanctions august on isolating russia's economy, including measures to prevent russia's national bank from deploying emergency measures. the european union has agreed to send $500 million in aid to ukraine for a lethal military

weapons. the package may include supplying fighter jet to the ukrainian airport. russia is the world's third largest oil producer. global news 24 hours a day, powered by more than 2700 journalists, i'm ritika gupta. this is bloomberg. ♪

>> president putin is continuing to escalate this war in a manner that is totally unacceptable and we have to continue to condemn his actions in the most -- the strongest possible way. jonathan: linda thomas green vault the u.s. ambassador to the yuan -- linda thomas-greenfield, the u.s. and ambassador to the

u.n. that is the cross asset pitch. the banks -- socgen down almost 11%. take a look at bnp. socgen, deutsche bank, bnp, take your pick, they are down. tom: here is the tweet of the morning dad richard haass with his wonderful book -- here is the tweet of the morning, richard haass with his wonderful book " the world in disarray." " in this war, ukraine is winning if it is not losing and

russia losing if it is not winning. question is how long this remains the case as most likely the next development is not diplomatic breakthrough but conventional military escalation by russia -- more troops." jonathan: what are the indirect consequences rolling over in europe? these banks get absolutely pummeled in the first two rounds of trading. tom: good morning. russ, what did you do over the weekend? russ: we are all trying to figure out what is going on now and it is very hard to predict what vladimir putin is going to do but you have to position the

portfolio. we have been bringing down risk, looking at some of the early growth vanes that are really exposed and thinking about the long-term implications for europe, energy infrastructure, macro volatility. it is not a bold statement to say the world has changed dramatically. lisa: have you changed your allocation? russ: we have been bringing down risk for several months ahead of this. i will not pretend we had the foresight to say we saw what was going to happen in russia. the events of the last week only support that. lisa: there is an idea that the

fed will have to come in and to market liquidity. as some sanctions market through the financial markets, what is your view of the fed moving away from balance sheet reduction and rate hikes in response to this conflict? russ: the fed has to take this into consideration. we are now in a world where there is significant two-sided risk. the effect on higher oil prices -- having said that, it is not obvious that the fed can completely rip up their game plan. you still have a world in which domestic inflation is broad and sticky, which means the fed will still have to hike. where this has impact is how high do they go in march? but the direction of travel still has to be toward the removal of accommodation. jonathan: what are you focused

on in this market today? russ: you are talking about the european banks -- that is a big deal as well as the impact on the overall european economy, given the geographic proximity and given the spike not only in oil but in gas prices. third, do we see any change in the behavior of u.s. consumers? so far the answer is no. there is still a strength to the u.s. economy, but does that change given higher oil prices? jonathan: where would you look for stress and do you see any of that now? russ: stress will come for the names that are most exposed to russia.

outside of energy and particular commodities this is not a country with tremendous links to other parts of the world. we keep coming back to energy -- the reason for that is if this would have happened five or six years ago when oil was lower it would have created less stress economically. in the moment we have high inflation in the u.s. and europe and elevated oil prices. jonathan: thomas, stay on energy. they up their forecast from -- uped t -- upped their forecast from 95. " demand destruction is the only significant remaining balancing

mechanism." tom: i did a moving average study. wheat up 70%. we need to remember that oil back a number of years when it was above $100 a barrel is in today's dollars about 118 dollars a barrel. we are going to get back to that normality we knew a number of years ago. jonathan: the only thing left on his mind is demand destruction. lisa: it is either a slow down in the economy or oil prices will eventually slow the economy down. jonathan: we are down and down hard. in russia, lisa, no trading. lisa: they close to the stock

market today. they do not want to see it. jonathan: crude, 95. the euro-dollar down to 12.15 -- down to 1.1215.

jonathan: after the weekend we have just had we are moving in the direction you would expect us to be moving. the nasdaq down by 1.4. the banks over there down by 10 %, 11%. dollar-ruble, crude -- the bank of russia goes from 9.5% to 20%. a move we have not seen since the late 90's.

it could be a whole lot worse. right now the people who hold russian assets -- tom: i have been looking at correlated assets under they have not moved. i get the sense that a lot of currency pairs are waiting to see how the ruble pans out over the coming hours. jonathan: for crude and energy flows, if you jacked a bank from swift do banks still want to deal with the other bank? -- if you eject a bank from swift, do banks still want to deal with the other bank? do they self sanction? we will try to do that with you

over the coming weeks and months. the federal reserve tried to get an extra hike for next year, sticking to seven this year, then for heigh -- four hikes next year. tom: it is early march and we are distracted by what we see. daniel your guinness schedule to be with us later. we will -- daniel juergen is scheduled to be with us later. we will recap you late on the economic data. you are in an unenviable position. what will you do with the onset of march data on friday?

how will you use that, given war? >> this is a stagflationary event. there is still a lot of uncertainty. we see the u.s. coming into this period with strength. we are starting from a position of strength but ultimately the developments are negative for the u.s. economy and for the inflation outlook. what -- tom: what do you propose is the adjustment we will have to make? sarah: raising the price of oil

shaves off 3/10 of a percent for gdp growth. that gives you an idea of the magnitude of these changes but you have to consider where we are starting out from an inflation perspective, already at a 40 year high. this piles onto the pain consumers are feeling. there is a lot more paint, and we could see an acceleration in the slow down in growth we are expecting this year. lisa: when do stagflationary events turn into recessionary fears? sarah: there is a good bit of tolerance for the u.s. economy. in terms of the fear of recession that can come about

more quickly and it is not uncommon for markets another watchers to basically extrapolate the direction of change, but you have to keep in mind where our starting point is. lisa: the idea of faster inflation and slower growth puts the fed in a bind. do you foresee more hikes or fewer hikes in response? sarah: this could be a position of fewer hikes. financial institutions are doing the job for them. we are looking for five rate hikes from the fed this year. given what we know about the current waiver market, that shocking starting point for gdp growth, tightening in march remains the best case scenario. that wedge be an easier call now

given recent events but we are still on track for the fed to go through a series of rate hikes given the position of the labor market in the u.s. today. jonathan: micro data suggests that the consumer is still buoyant -- tom: micro data suggests that the consumer is still buoyant. you agree? sarah: i do. we saw income stagnate but you saw a real consumer spending up 1.5%. we are seeing consumers still wanting to go out there and spend. they are griping about inflation but ultimately -- tom: i'm going to go john silvia on you -- the jobs report on

friday, what do you look for? sarah: it all comes down to hourly earnings. tom: thank you! this is really important -- we almost forgot about it and we cannot with all the news of this war, we have a responsibility to continue to look at economics, finance and investment and that is what we are going to do this week. jonathan: tom, you want to focus on getting to business -- td making a move. tom: tennessee bank is a franchise. there is a canadian td parachute that picks up more american retail. given the turmoil we are in, is this a future where people say "

let's go. first two arrive at 25-ish get back to the early days of the 2000s." jonathan: the price head 25 in the premarket. -- hit 25 in the premarket. lisa: i wonder how much people are going to try to get ahead of the turmoil and execute these mergers before things get more complicated. jonathan: this is the major news if we did not have what was going on right now. bp is down.

they have to dump rosneft. are they going to get for it? according to reuters, those numbers are incredible. lisa: what about shell? what about exxon? how much does that get discounted at a time when it is politically toxic to hold onto these stakes? how much do they meet with absolutely no buyers? who is on the other have that? -- the other side of that?

before we saw these sanctions imposed, we saw gas imports from russia increased dramatically in the euro zone. how much do they have to stop because of political pressure and how do you deal with countries were trying to shore up their own domestic production to keep some sort of oil independence while penalizing russia? jonathan: we learned from norway that the sovereign fund will be dropping russia. tom: the other thing this weekend that i think is beyond the americans like christ and -- the american zeitgeist is what turkey said. stalin was dead set against it

as far back as 1939 but there are a laud of little stories that dovetail together. jonathan: equities down lower. there is a meeting between ukraine's defense minister and russian officials on the border with belarus. ukraine is demanding immediate cease-fire and complete troop removal. tom: footage of a helicopter transporting them to the border as belarus contemplates an attack from the north. jonathan: this is bloomberg. ♪ annmarie: --

ritika: officials from ukraine and russia are immediate -- meeting on the fifth day of the invasion. more sanctions have been imposed , targeting the russian central bank. the bank of russia more than doubled its key interest rate and imposed some controls to shield the economy from the impact of sweeping western sanctions. bb has -- bp has agreed to sell its shares in rosneft. bp husband in russia for three decades.

short-term housing for refugees in san francisco. they rode poland and germany -- wrote to poland ended germany with the offer. run a virus restrictions in new york -- wrote to poland and germany with the offer. coronavirus restrictions in new york will be lifted this week. this is bloomberg. ♪

>> this is dangerous rhetoric.

this is behavior, which is irresponsible. if you combine this rhetoric with what they are doing on the ground in ukraine -- jonathan: the u.n. secretary general on cnn over the weekend. on the nasdaq we are down by a similar amount. yields are down by five basis points. crude up to about 96. dollar-ruble it is a 20% move. it was 40% at one point but we are off session highs. tom: jane foley is here with us on the ruble. working with dr. bremmer, alex bremmer of the -- alex of the

eurasia group. how does europe adjust to a new belarus far more attached to russia than we thought? >> we will see decisions made by nato going forward about how to deploy troops more substantially in countries on europe's western -- on russia's western border. i think for the u.s. and for other nato members, they want to show poland they are supported there, that they will continue to help them in what will be a more tense environment. >> boots on the ground -- does russia have enough boots on the ground? alexander: i think they do.

i think they have a significant amount of force not yet committed. i think what we have seen so far is strategy or tactics by the russian military that may not have been as aggressive as was expected. the concern in the coming days is that the russian military may start to attack urban centers in ukraine more directly, leading to higher civilian loss of life and leading to increased anchors among western countries. jonathan: the base case has not changed. even after the events of the weekend, your base case has not changed. run us through it. alexander: we think one of the main russian objectives is

regime change. we think that the intent is political control over the entire ready of the country. certainly we have seen that the russian military has not made the successes that they anticipated at this point. i think they are surprised by the resistance they are seeing. to a certain degree what we would want to see happen on the ground in the negotiations and belarus, i am not confident this would lead to the end of hostilities. i think the russian military operation is going to continue. i think there is a risk that the russians say they have done all they can on the diplomatic side and they push ahead.

lisa: what do you have to say about the unpreparedness of russian troops? alexander: some of this has been surprising in terms of how the russian military is operating on the ground. to a certain degree i think that there was a sense in moscow that this would be easier than it actually has been and to a certain degree the ukrainian public would be more receptive to a russian intervention than they are not only in kyiv, but in the south and the west. they are seeing more resistance than was expected. that may explain some of the execution we are seeing. lisa: there have been some reports of oligarchs and how worried they are about the

measures put in this taking -- measures putin is taking. alexander: there has been pushed back but very limited pushback. they face the risk of crackdown if they do speak out. last week we saw president putin trying to show the public he is the one in control of the situation and he is the one that knows best. there is not much we are going to see that will change things in terms of russian positioning. jonathan: what do you make of the protests happening in russia by the public? alexander: that potentially has more weight to the extent that

the kremlin's attention to what the public is thinking. putin in the past has dismissed to protests as being fomented by western governments as a way to delegitimize what is taking place. if we continue to see lines at a tms at banks, concerns about the economy, putin -- at atms, at banks, concerns about the economy, those are things putin has tried to protect against. jonathan: economic waking up to see the bank rate hikes to 20%.

that is going to hurt. tom: they have a foreign calculation, a huge body of 160 million do not have a foreign calculation. there is a lot of micro data that matters. baloney -- bologna, the price of wheat is up 160% from 2016. these are micro data that matter. jonathan: the russian subsidiary has strong liquidity, has a strong capital position. those are things you never want to have to say at a time like

this. tom: liquidity is worth watching. some of those statistics are elevated. jonathan: futures down 1.5%. i will give that a miss. from new york, this is bloomberg. ♪

>> things can turn fast and when they turn fast -- >> i think you're trying to hedge broader market risk. >> one wants to have portfolios that are liquid, a resilient and agile in this environment. >> the narrative can change quickly on this. >> this is "bloomberg surveillance." jonathan: a lot changed this weekend. for our audience worldwide, good morning. this is "bloomberg surveillance" live on tv and radio. equities down 1.4% on the s&p. tom: we had a 33 level on the vix moments ago. the bloomberg shows a lot of data and the correlations across of it. i would suggest all in all it's better managed