>> one wants to have new assets be liquid and agile in this environment. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: good morning everyone. on radio and television, headlines coming in across all the bloomberg world.

russia bans airlines from 36 countries from using its airspace. jonathan: they react if many countries did the same to them. the central bank of russia reacting as well. we have a news conference starting with the government of the russian central bank, here's a line from dow jones. u.s. and major oil consumers releasing 17 million barrels of oil, this is a reserve release on the table. >> all of our audience, readjusting this morning. >> what he suggested his research over the weekend, i think is fascinating. the only thing they can select is demand destruction. now to supply story but demand

destruction and that's the fear a lot of people have. >> this is the woman of the head of the bank of russia. she is speaking in russia. to link this into the collapse of russian society, she was a leader of star bank for a long time. >> we talked a lot about this through this morning. what does it mean for their central bank and what does it mean for the economy. >> all you need to know is they describe this. it's one tea leaf of the collapse of russia capitalism. >> will for all intents and purposes the market is pretty much closed whether in actuality

because people don't know where to trade them. how do they support an economy getting increasingly isolated and what does that mean to john's point about the transmission of gas and oil at the time when they can be necessarily receiving the payment necessary to compensate them. >> erickson to suspend deliveries to russia. >> this starts to build. i think it's so important. we talked a lot about energy and i'm thinking about self sanctioning, dealing with anything to do with russia. we saw bps effort, that's really important to bp, what they get for it i have no idea. one headline mentioned, new sanctions lifted what we know. going on to say compensating for higher inflation risk and they have moved already. >> dollar ruble, there's no

other way to put it. u.s. dollar versus ruble at 108, that's a substantial move here as we hear from the head of the bank of russia. let's go through the data, so important to have a conversation. it's turned around here. >> futures down about one .2% on the s&p 500. a reserve release was some major commodity producers. what's that going to achieve? this is central bank speak for really tough conversation. the financial system is facing a nonstandard situation. i think that perhaps understates the situation. tom: we will monitor that throughout this. a perfect time to talk to the global director of fixed income research at morgan stanley. what was your warning call like

-- like? >> it's a tough call. these developments have a substantial human cost we should not forget that the top of my mind is the -- at the top of my mind is the human cost. we have substantial tension here between growth and inflation. on the one hand a lot of these are going to higher prices and at the same time they are negative on the growth front. they are particularly challenging for central bankers to manage the concept. >> do we just assume inflation hurts growth? is of the base case assumption that we have to move up the

forecast and move down growth outlook? >> broadly speaking yes, it's not uniformly across the board. but certain ones have a bigger exposure in europe does and we are waiting to be the net effect , 25% increase in energy prices and effect on the consumer and business conscience. maybe 1% of growth in the euro area for 2022 or 23. on the other hand in asia the effects are much more muted. i think for the near term economic growth in the u.s., but we will really be watching how financial conditions develop over the next few weeks and months. >> goldman came out and updated

their forecast from 3.1% previously. they kept seven hikes at 22. the should've an extra height for 23. did it change anything? >> what it does not change and change. it does not delay the removal of the accommodation altogether. it removes the chances of particularly aggressive policy accommodations from the central banks including the fed. we expect the next couple of meetings, we had been expecting to see this. six sites were 2022, i think what we will be looking to see is how financial conditions,

particularly the access to credit markets will be over the course of the next few months. in the mean parent -- veneers are very much on track. how it is in the future depends on how financial conditions are. >> how constructive are you on credit and the corporate default rate given the fact we have a double whammy of the faster inflation and slower growth because of what's going on? >> the two factors you mentioned , if you compare where we are on the credit fundamentals, the onset of the policy tightening, fundamentals are in a better shape. significantly better coverage and cash on deck are all significantly better today than they were before covid or before

the onset of any of the previous hikes. the challenge has been more on valuation. fundamentals are fine. we will engender a spike, but valuations have adjusted quite a bit of the last week. we see more adjustments in valuations -- there are more valuations still required. jonathan: we are all trying to work out what this means. dollar ruble with a 30% move. right now 107. this is with the central bank governor of russia has to say about the situation calling it a nonstandard situation. that understates the difficulties of russia right now saying banks will serve liabilities. recommending the banks

restructure loans. this is fairly intuitive to people in the business to understand this. the central bank has been sanctioned, basically today you don't have access to a lot of those reserves. they did conduct -- on thursday and friday. they suggested no interventions today because of sanctions and that's the visibility -- that's the situation you have and by the efforts on rates to take it from 9.5 to 20%. tom: talked about two or three days ago, the reality of margin calls and the commercial space with economic and central-bank spaces as well. the u.s. 10 year real yield, it's right down to pretty much the support we've seen over the last five days were --

i think it shows the tension we have with the bank of russia has mixed up. jonathan: by the time we went through all of this, i have no idea where it ends and i hope it ends soon for everyone's sake in ukraine. by the time we are done, this pandemic looks like it over, be exclusive focus on the news coverage is this in the background, the governor of new york saying it's time for school districts to make mass decisions , slowly more of these restrictions getting peeled away as our focus is elsewhere. lisa: it would be the top news if it weren't for ukraine russia. jonathan: futures down a little more than 1% on the s&p. focus on sanctions with a sanctions expert next. this is bloomberg.

>> keeping you up to date with news from around the world. ukraine began talks with moscow and a longshot bid to end the invasion. president zelensky questioned where much will come from the meeting. the russian army has offered to let civilians in kyiv leave the capital by a single highway which raises fears it's planning a full-scale --. the biden administration's band u.s. nationals and companies from doing business with russia central-bank. some of the bands are placed on the national wealth fund and the ministry of finance. effectively immobilizing any rushing central-bank asset -- asset held in the u.s.. a $500 million in military aid to ukraine for lethal weapons. the first on the block has provided arms to a country at

war. it aims to provide fighter jets to the ukrainian air force. bp has moved to sell its shares in a russian oil giant. it may take a financial hit by joining the campaign to isolate russia's economy. bp has been in russia for three decades and just weeks ago was staunchly defending its presence there. td bank is expanding in the u.s. southeast agreeing to buy front horizon. representing a 37% premium. first horizon operates 412 branches in 12 states. td bank says it has a large presence. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ ries. this is bloomberg. ♪

>> it was clear from the west energy was off-limits. energy now is an industry that is being reconsidered as being off-limits. jonathan: cannot overstate the sheer importance of the weekend. i can tell you we've had understatement of the year from russia central bank governors, of the financial system is facing a nonstandard situation. for sure. futures down on the s&p. the crude market looks like this.

up by four percentage points. the call out of jeff currie and the team at goldman, with the scene on brent is there one month brent forecast, the number on the screen right now with wti at 95. just north of 100. jonathan: the markets -- tom: i do want to state we saw the biggest move of the comments from the bank of russia and we get a little bit of recovery. we don't want to overstate that. when i woke up this morning and i did not know what i would see, i really underestimated what you and lisa lead on this morning which i guess will call non-sanctioned sanctions. we start with oliver. >> the head of america's anti-financial drive. we had the sanctions and we are trying to work out how it works in practice.

even if companies don't have to abide by the sanctions choose to pull back any way. >> obviously if you see oil companies walk out of the market i think that's a good indication and i do like that self sanctions point beginning to walk out. i'm hearing that beginning to drop which they had. those exit plans, we want to remain in this market is it viable for a business, you have to remember russia hasn't really responded with their version of whatever sanctions may be. if you're a non-russian business operator depending on what you make, this might be an untenable position look to see more companies announce their exits from russia. jonathan: that's what they are choosing to do, what are you suggesting they do? >> the advice i'm giving right now there still a lot of it on the table, this is a squeeze on the russian economy that's for

certain. it keeps coming true, russia is well on its way to being treated like iran, like cuba in terms of being a truly isolated economy from humanity. as i look to what businesses need to do, it's getting simpler the more significant the sanctions get because there's less of a needle to thread. the business is too untenable to take on the risk more broadly. >> going further, is the risk for a lot of these companies the u.s. will remove the carveouts for oil companies. or is it just that it will be too complicated financially in order to execute some of these transactions with all the sanctioned players. >> i think that is the question to watch. as you look at some of the sanctions in the treasury department put out the sanctions i was walking -- and we still have not seen which banks are

being hit. only some banks will be taken off of swift. that's largely to facilitate that continued legal transactions. energy was talked in central-bank is the nuclear option. energy restrictions of the nuclear option with respect to russia and i would be surprised if you didn't see programs leaking out but begin to shrink the amount of russian energy. certain countries that are 100% reliant on russian oil. >> there's a whole set of statistics, yet every statistic says it's the 11th largest economy in the world. what is the power of saudi arabia right now to make russia the 15th largest economy in the world? >> russia may fall out of the g20 by this week with the numbers going the way they are. what few allies remain holding their line is -- it's a really

important point to see. this economy is in crisis. it's essentially being cut off from most of the west through the sanctions that have been imposed which creates a broader opportunity for some other nature -- other nations to increase. >> i don't see how someone is advantaged by this war and the economics of capitalism of this war. you suggesting someone could be advantaged? >> possibly. this is the global response to the situation, we didn't see this much of a rallying around globally with respect to covid than we've seen with how ukraine is being handled. i don't think anybody is looking for this as an opportunity to leapfrog others from an economic standpoint. i think right now there's a uniform focus on how to diffuse the situation and get russia to pull back the troops. jonathan: some headlines from boris johnson pushing for russia

to be excluded fully from swift. do you get the feeling this is not over? >> the swift comment, and this has been used as some sort of silver bullet. if you take everyone off of swift, any western business performing any legal trade would have a very difficult time facilitating. i think the complete swift band is an overblown comment. it's definitely not over, there are more companies that can be restricted. sanctions can be levied. even over the weekend it was announced the u.s. will begin intentionally seizing physical assets. who doesn't love to see a yacht seizure coming up. jonathan: thank you. we are hearing from the spokesperson for the prime minister and the u.k. right now. some of the headlines boris johnson is pushing for russia to be fully excluded from swift. boris johnson telling the cabinet more russian sanctions are coming shortly and some

effort, the tv channels banned in the eu, sports -- there's been an effort over the weekend as well. tom: a remarkable set of headlines. the prime minister of the united kingdom will "go to poland and estonia on tuesday." jonathan: after speaking to the polish president and g-7 leaders later today. the prime minister has been criticized tom for using such strong words and not allowing many ukrainians to come into the country. the headline here that jumps out to me, the u.k. estimates 100,000 ukrainians are able to enter with family reunions. tom: i will let you translate that as we move forward. brent crude $101 a barrel. jonathan: tom: futures downham

-- jonathan: futures down on the s&p. big moves on dollar ruble so far. 106.76. from new york, this is bloomberg. ♪

jonathan: one hour away from the opening bell in new york. on the nasdaq, down by 1.17. crude up by more than 4%, 95 .59. still haven't had any headlines from them. we've heard from the central bank and we've seen the move. 20% is the rate and a move of 25% on dollar-ruble. let's get more from mike. quick's we are not watching the

economic data so much at this point is the treasury department from the federal reserve in terms of what they're are doing with the russians. at this point, they are banned from any kind of transactions with u.s. persons in the eu is banning them from the euro. that means russia is cut off from the rest of the world. tom: what does this have to do with banking facilities to assist in liquidity. do we expect the fed to step in and not so much inflammatory and it just balance sheet, but have the tools to step in? >> they can provide all the liquidity the banks need. this was the issue over the weekend because russians are involved in a lot of financial transactions. they are on one side of the trade and if they cannot make

good because they can't access euros, dollars, yen, pounds, there are probably some defaults coming. and that is what they think we could see the fed and btv responding to. looking at the forward rate agreements, it has spiked today. tom: we call that libor. do we not say libor anymore? >> shh. tom: to me, it could be a margin call for an individual. an institution or a nation. jonathan: i think that has been a thing for us for all of this morning. the difference between how something works in theory and how it works in practice. and what happens when you disrupt capital flows. how does a carveout actually

work in the real world? tom: a horrific war in ukraine. does that matter this week? >> people would be paying a lot more attention. what will matter the most is fed chairman jerome powell going before congress on wednesday. the so-called humphrey hawkins testimony will get a lot of attention. they may be moving interest rates next month. but how much and what do they say about the future given the uncertainties we have right now? tom: thank you for the political perspective. daniel juergen is known for oil and we have lots of questions on oil.

he is vice-chairman of ihs market. he also writes books including my book of the year a few years ago, "the new map." daniel joins us today as we consider the crushing commanding heights of the united states and a new europe and the collapse above the russian federation in some form. in your commanding heights, you talk about the shift of russia in the 90's. the marriage of the hedgehog and onto the new gorbachev era. are we seeing a shift with putin? daniel: what we are seeing is the process that began in the 1990's of russia connecting with the world economy and being integrated in the world economy is rapidly going in reverse as these crushing sanctions are being put on. tom: what does the new map for

vladimir putin looks like? >> he grossly miscalculated and he thought this would be quick. he also overestimated europe's contingents on russian energy. it turned out among other things , there was extraordinary growth in u.s. lng which was nowhere in 2016, and this year, would be the largest lng exporter in the world and has offset russian gas in europe. it may be tough, depending what happens, but it is manageable. jonathan: let's talk about the word manageable. i will take it to one extreme and you can may back in. are we thinking about europe without russian energy in our future? >> no, i don't think that happens for a long time. a big number. that means 70% came from other sources.

when this crisis is over, whatever form that takes, russia will be a supplier, but no longer will it be seen as russia is a reliable supplier. and we heard from the germans that they will build receiving terminals so that they can depend on the world market and not be held to russian gas. and nord stream, the pipeline, it's going to lie in suspended animation in the baltic sea. jonathan: you mentioned the germans. the legacy of angela merkel. i wonder what happens when you clear from here down. and take a moment to walk through what a monster change we have just seen from the german chancellor in just a couple of days.

>> i think chancellor merkel, it was a different circumstance. she had no illusions about putin. i remember being in st. petersburg the circumstances were different. and putin appeared to be a more rational, if tough actor. but now i think if she were in power, she would probably have said the same thing. to break nato and we can nato, he has done the opposite. he has brought it together and germany will go to 2% of gdp for spending. >> we talked about the consequences for russia to get locked out of the financial system, but can you game out consequences for germany and the rest of europe as we do get some

sort of uncertainty, not just carveouts for the energy sector, but how feasible the payment for any of this might be. quick's it has been said initially that the goal was to carveout energy. risk officers are not going to be very cautious. they are going to over-comply. people are not doing letters of credit. so the energy trade is going to be disrupted. how bad it gets depends on how that goes. i think it will bank on russian energy by market actors, and everybody today is calling their lawyer saying we understand what sanctions are but we don't want to make a mistake.

>> there are a number of oil consuming nations. do you think this will move the dial at all? >> i think it will. there could be more oil out of the gulf. if sanctions are taken off iran, you get one million barrels a day. and i think it is inevitable. this is what strategic stocks were billed for. i know the administration certainly wants to go in that direction. tom: your wonderful book was my book of the year. dan juergen, i'm reading putin's world by angela stead and in february, i made it my book of the year because of this war and

this folds right into commanding heights, 2008 when nato and bucharest said we are going to push east. and robert gates and condoleezza rice said, no. and they were overruled. yank this forward to now. given the new capitalism. what do you expect nato to do in 2023? >> i'm very pleased to see that book of the year. i will pass that on. in terms of what nato does, i thinks it's a -- i think it is a strengthening of it. it will be much more coordinated. it was kind of fraying at the

edges and it isn't anymore. you might see sweden being interested or finland interested in joining nato. it has quietly achieve the opposite of what vladimir putin wanted. jonathan: fantastic to catch up with you on geopolitics. >> i have a book of the summer. it is february and i have a book a year. you nailed it on merkel. you absolutely nailed it. after what you lived in london. let's call it 20 years. in decades can happen in days.

this is a country whose foreign policy is shaped and crippled for a long time. these are the kind of unintended consequences that vladimir putin and the russian president is looking at. tom: i can't remember if it was on air or off air but we are waiting on exxon and other american corporations. >> how do they justify risking a $6 billion fine. inadvertently, we don't have clarity of which banks are getting the sanction or getting removed from the swift transaction system. how this plays out, we don't necessarily have the full market reaction. jonathan: let me get some questions. tom, and fantastic guest and hedge fund manager coming up in

the next hour. up 36 percent last year. what will the energy look like in 2022? tom: i will say what is the macro call? not so much a george soros leverage call, but how do you make a macro call, john, in this moment? jonathan: i think you can say as an assumption that people are getting behind right now, you lift up the outlook for inflation and bring down the outlook. that seems to be the consensus view. >> at what price does oil become self-limiting? good to be with you from new york city. this is bloomberg. ♪

>> that scenario going to stagflation is not our

responsibility. we don't need to adjust our policies. tom: the gentleman from the bank of portugal talking about one of the phrases of the day. stagflation. i was suggesting it was more the inflation part where we see the 10 year real yield come down substantially. it that is a big move on inflation. >> and the uncertainty around the federal reserve and how they respond, i do want to say this. the u.s. and allies considering an oil reserve release of about 60 million barrels in line with what the dow jones was reporting earlier this morning. tom: our conversation with daniel earlier, ian bremmer publishes a lengthy note. what is so important here, the europeans were stunned. and i think that explains what we witness it this weekend and into this absolutely unique monday. we'll wait headlines out of

ukraine and russia. the futures -70, the vix 32.55. right now and very importantly, with jp morgan global high yield , kevin foley joins. this is an important conversation with someone with the dynamics of the debt market. >> kevin, wonderful to be here with you. obviously, markets are extremely strong at the moment. there are events unfolding in the world around us and whether it is generating the prospects of the war, that is how much it is driving the conversation. >> think you for joining us. >> first and foremost for everyone, their concern about the health and well-being of everyone, they are hoping that it comes to a peaceful and quick

conclusion. as you look at the ramifications on the markets, it's about energy. is this going to put up with pressure and energy prices? will disease the inflationary pressures we are seeing? central banks can't -- can try to curb inflation. that has been an expectation that they will be raising rates for the for seeable future. does this for something faster or more severe? more safe? that's how it will impact growth going forward. the other part is that there is an element that people are comfortable because we look at the consumer and it is healthy going into this. you look at all the financing that is happened over the last few years. >> how does anyone get deals done in a market like this.

there are pressure to execute. >> the market will be headline driven. but deals are getting done. so we've got to be checking the weather each day. this is the way you want to go. it's just a matter of if there will be more price-sensitive. and there would be variability that you would see in better conditions. >> are they going to get their needs done and move to the end of the year? or is this something where people will take a pause and see how it all plays out. and if we have the need, we will

go into the market? >> you get a little bit of everything. you may pause and say let's see how it goes. there are others that will take the news. the rates are going higher. it will only get choppy or. i might as well get this done today. we will continue to advise clients. there is always the unknown. you are better off getting something done because you look at inflationary pressure, central banks have made it there where rates are going. >> as it comes to that credit, we have a couple of them coming around then. where is this demand coming from? >> where we are seeing most of the demand, and there is

technology and health care. that was a driver last year as well in the back half of the year. because we are getting driven by m&a issuance, it's related to those sectors. you have seen the travel leisure stuff. they fortify their balance sheets and it's about executing and turning the corner on covid. >> all of the things they discussed. >> we signed up a deal last night. we are continuing to sign up deals. it may cause a little bit of a slow down. you also have an impact in valuations, but it is also functioning. we have been busy. the start of the years probably

a little quieter than we expected. we are expecting to see a pickup here. it will see how this plays out, but deals are still getting done. we still feel confident about doing that. >> kevin foley from jp morgan. we will send it back to you. tom: headlines continue to come out and there are many more to come as well. lisa, i'm still not used to aberdeen. they have been left unable to sell 5 billion sterling stake. and that's according to sky tv. that's exactly what you've been talking about, lots of realities. >> how do you liquidate assets? how do you move at a time when credit default traders are pricing in a 6% chance that russia will default in the very

near term. how do you sell government bonds and begin to value them? if we don't have a sense of what the sanctions will pass. >> it will be difficult and heart wrenching. and lisa, there is a headline. u.s. issues do not travel advisory for russia. >> and how do u.s. nationals and european nationals get out of russia, an idea where things are clamping down. tom: you will have that conversation on radio and television for you this morning. markets are very much with nuances in the morning. the bank of russia speaking removal. slightly elevated over where it was a number of hours ago. on oil, brent crude, $101 a

barrel. moving the conversation forward, the 12 noon hour. this is bloomberg. ♪

jonathan: the count down to the openness right now. >> ever the need for the start of u.s. trading, this is bloomberg, the open with jonathan ferro. jonathan: live from your city, we begin with the big issue, a lot has changed. ukraine officials arriving for a high stakes meeting. resident zelensky is skeptical, saying i don't believe that much in the meeting. let them try. i will use every chance to stop the war. western allies are sanctioning moscow's central bank. the u.s. could go further. >> we want to take every step to maximize themp