>> what cause the shortages in sheer panic. >> they are griping about inflation but it doesn't seem to have that big of an impact. this is "bloomberg surveillance." jonathan: a new month, the same heartbreaking story. from new york city, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance." jonathan ferro, alongside tom keene and lisa abramowitz. futures down .5%. tom: it barely describes it. the market is moving out of the headlines out of ukraine. 10 year yield coming in, all the sudden i'm looking for the 32, under 2%. markets are reacting to the headlines out of ukraine. jonathan: i am looking at the front end of the u.s. as we fade out more rate hikes.

tom: 3:00 p.m. new york time after the surveillance nap, swiss franc stronger to 103. we have been watching the 10 year real yield it indicates world slowdown, particularly in europe. jonathan: that convoy heading towards kyiv has everyone's attention. tom: there is a video out of keefe -- kyiv, refugee maps postulated are extraordinary. the convoy with the length and steady movement, it has it at 15 miles out of kyiv. jonathan: depressing going at the pictures. lisa: how is vladimir putin going to exit the stage without

causing more damage on ukraine and that seems to be the feeling at the same time the ukraine army is putting up good resistance. jonathan: the banks pulling back, even though they don't actually have to they are choosing to. lisa: do they not really have to are -- or are they trying to avoid consequences down the line? self sanctioning, how much you will see that increasingly in the pressure to do the same. jonathan: some of the great work at -- of our colleagues. ing, banks restricting lending commodities from russia and ukraine. chinese banks also pulling back to some degree. we talked about it all yesterday. self-imposed restrictions. tom: soft sanctioning, i like

that phrase. mario draghi in italy, a central bank experience, talking about the inflation shock that you mentioned to me before we went on air and also sang the central bank and the international settlement has to step in. that surprised me. jonathan: you get the feeling it is not over on this front. tom: the biggest shock in 24 hours and it back to my childhood is to see swiss abandon neutrality, they said enough, we are not independent we are joining europe in protest and that is what you see with the mario draghi. jonathan: a shift in the market, futures -.6% on the s&p. on the nasdaq, down .6%. yields coming 1.72.

on tuesday, down. crude up by 2.7%, 98.30. as we push out rate hikes into 2020 three. lisa: the idea that the market, pricing in less than five rate hikes by year end. it feeds into the underlying economy in that is what i am watching today. at 10:00 a.m. we will get a read on the manufacturing data in the united states. how much do prices go up further as a result of the disruption? we will get a read on ongoing supply chain disruptions at a time when it is highly fluid and likely to get worse retail earnings continue with and i toward the geopolitical noise we are hearing how much can

companies pass along those costs to u.s. people who are watching? up. -- to the u.s. people who are watching russian mark at 9 -- two the u.s. people who are watching? . the state of the union to a joint congress with a mixed review backdrop, his approval rating the lowest to about 40% and it comes as people are worried about inflation and inflation rising to the highest level to 1982. we are also talking about the importance of the u.s. to remain a social presence and impose democratic order in a world where it is looking increasingly like vladimir putin is a tyrant in eastern europe.

jonathan: supply chains, inflation. supply chain, you can see this building. tom: this is a logistical shutdown. this is so important, not about shell and bp. maersk says they are not going to move it. jonathan: maria tadeo in poland. what you are seeing on the ground in hearing from everyone around you. maria: every official i have spoken with today says the nature of this war changed yesterday and that is the reality. it was a brutal and severe attack on the main cities in ukraine. there is still concern. the polish prime minister well

hedda -- we'll head to brussels -- will head to brussels. it is becoming brutal. we are seeing attacks on people and buildings that have nothing to do with military targets. there needs to be a conversation in about further sanctions and whether that includes energy is your gas. and a much bigger response on russia. ukraine shares borders with russia and belarus. the nature of this war has changed. tom: i noticed a lack of videos out of kyiv. does the refugee number at 500,000, do you have a report that it is larger than that? maria: it could be and many are expecting we will see a million

people fleeing war, especially after yesterday. the population of ukraine is terrified when you see attacks on nothing to do with military. russia said it will continue until they finish all of their goals in ukraine and that is terrifying. i do not get the impression this will be a repeat of the 2015 refugee crisis. i am here in poland and what they say even if you don't have information with you are past part or documents, you are welcome in this country. this is so important, the very deep historical and cultural connections between the people of eastern europe. they all believe this is a huge attack, not just on ukraine but eastern europe and that is what they were come next. i would be careful saying this is a repeat of 2015 but on the

ground this is the population welcoming the people of ukraine. lisa: how concerning is it to president biden to move further into including oil companies and the sanctions at a time when gas prices are the highest since 2014? >> he is stuck between a rock and hard place. he wants to put as much economic pain on putin as possible and that does include looking at the energy sector, something they have tried not to do given the fact they are currently still in the global pandemic and we are seeing height gas prices. biden knows that a lot of americans are hurting financially and that is clear for prices at the pump. he will have to balance those two things. we have reporting on the terminal about u.s. and other countries looking into tapping into strategic reserves and getting more oil out on the market to compensate for what is

happening with the russian and ukraine crisis. it drives home how americans are thinking about russia and ukraine versus domestic issues, we see over the weekend that approval for how biden is handling the ukrainian crisis went up slightly. we still don't have a majority of approval and how he is handling that crisis. at the same point, biden's overall approval went down. it shows while americans are cognizant of what is going on but still dominated by domestic issues. jonathan: there is a big bet emerge in -- emerging. we are doing with a protected stand up between russia and the west. it has reduced the risk of central banks needing to slam on the brakes. that is a big bet emerging in

this market and you see it getting priced in. tom: we will see the data out of the united states as well. i will go back to the italian data, a high inflation statistic. if chairman powell gets that for five days before the meeting, that will share it up more -- that will sure it out more. jonathan: a big difference between taking 50 basis points off and trimming the whole cycle. lisa: this only increases the inflationary aspect, how did this -- how does the fed deal with this? jonathan: yields in nine basis points, in the one 70's on tends. from new york, this is bloomberg. ♪ i'm ritika gupta with bloomberg's "first word news."

russia stepped up shelling in ukraine. it is said that residential areas are being bombed. russian ground troops slowly moving towards the ukrainian capital of kyiv. increased sanction on rush's economy -- on russia's doesn't seem to be having an event on -- having an impact on the military campaign. the u.s. and allies could do much to change the surge in prices of oil. the white house had to shift gears into president biden's first state of the union. the speech will highlight the russian invasion of ukraine.

j.p. morgan chase ceo jamie dimon warns that disconnecting russian banks may bring unintended consequences. he told bloomberg tv that so-called bad actors could find ways around the penalties. he had counseled washington against taking russia often -- off swift. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> if ukraine does -- international peace will not survive. >> if ukraine does not divide, -- survive, we cannot be surprised if democracy fails next. jonathan: and emotional address. features negative -- an emotional address. peaches negative -- futures

negative. russia sang it will continue its "operation" in ukraine until its goals are met. down on tends. the u.s. at 1.7531. tom: it is a coordinated move and nuanced. the 105 ruble is a fiction. the one i look at is the global war statistic which is gold, 1925. jonathan: we are seeing a lot of this take place in germany, down 11 basis points on twos and tends. overall, to set the stage, the

bet we are making, the ecb and the fed is that we can't do what they thought they could do. tom: also this will be a discrete collapse of an economy and will not have global ramifications. someone who has studied this is benjamin legler, -- laidler . you are too young to remember, in 1998. you say this is not 1998 for the russian financial system. it is different. ben: i am glad you think i am so young. i was an emerging markets manager and unfortunately remember it well. this is different. this is not a rerun of 1998 and the reason and make that comparison is frankly that was the last time that russia really

had a global impact on the economy and markets. you make that comparison, the economy is less than half the size relative to the rest of the world. the financial linkages are a tiny fraction of that. global economy is in much better shape. back then, we were in the middle of the asian financial crisis. russia was about had the biggest sovereign debt the world has seen. difficult as this may be, tragic as this may be, i think the impact will be predominately local rather than global. tom: the key question is a partial differential of real gdp will be weaker and clear evidence of longer, higher inflation. that larger nominal gdp, how does that changeable market assessment? -- change your bowl market

assessment? -- bull market assessment? ben: we just came up a strong q4. valuations are cheaper. earnings are higher. we priced in a lot from the fed. r contrarian indicator -- our contrarian indicator is lower than we have seen. at the 2020 pandemic and the global financial crisis, unprecedented levels. lisa: at those times, central banks came in with force and that seems what people are betting on. does that really count in the same kind of way when you have inflation at the hottest since 1982 and people talking about the possibility of stagflation? ben: i don't think we need

central banks here at all. growth is very strong, russia is a tiny economy. i don't think we need central banks at all and the other point is yes, inflation is high, but oil markets haven't done very much here. we are getting a strong message that russia will keep dumping oil in the west will keep buying it. i am not telling you we an energy crisis here. lisa: it seems like you are bullish that you think bonds are it. how high would prices have to go to change your view? ben: i think we go down a de-escalation route and what happens for full oil sanctions. if we saw something similar in russian, that would take 5 million barrels of the market and that could be dramatic and if weices over $120.

right now, we are not there but we get there but it is not what markets are telling us. jonathan: thank you, sir. we have been two things today in the markets, we have erased bets for a move on the ecb and erased that's of a 50 basis point hike next month or rather this month now at the federal reserve. lisa: why? is it because people think the market needs more support, perhaps the fed will be concerned about the uncertainty? it is not the inflation data. what is the response function in markets if data comes in hotter than expected and if people think in his geopolitical risk that will be driving central-bank action? jonathan: the inflation data in italy, the estimate was 5.5, he came in at 6.2. tom: i'm going to james bullard

and the shock that he had in real gdp. target earnings coming out and maybe that will help with the american story. can you overlay a global inflation for longer you get out to the animal spirit of nominal gdp and granted there are problems down the road, but things keep going. jonathan: i think that is what you are teeing us up for by the communication we get from the fed from later this week in chairman powell and on march 16 when they meet and decide. lisa: how much do we start to see people pile into the haven bet in bonds and see inflation surge itself back up the main threat in an economy that hasn't seen this since 1982? jonathan: futures down .5%.

in anzac -- the nasdaq is down .6%. yield down by six basis points. from new york, this is bloomberg. ♪

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™.

jonathan: two months of losses in the equity market on the s&p. -.6% on the s&p. the nasdaq down by the same. the russell up by half percent. let's take a look at the front end at twos and tends in the u.s.. down 13 basis points on a two-year in america. down 12 basis points on a two-year in germany. we have taken out the bet and the chance for a 50 basis point hike. are we acting a little too fast, too soon on what the central banks might do considering where this inflation data is set? lisa: are we responding to the

last crisis and the central bank policy book for that crisis and not this one, which is a very different profile? jonathan: the idea that this market is supported by central-bank that can step back easily and things will be ok. a lot of people have said it is different this time here we have to question it in the coming weeks and months. tom: i am going to really emphasize the politics or there is a history of the american central-bank in times of war. the war may be over there this time around but nevertheless, mr. powell will face unique pressures from mr. biden and frankly others in washington that may amend with the markets are saying. jonathan: the risk is the identity shock. what we are all interested in is

they are in theory giving us an energy copout what we see in practice is something very different. how did capital get wrapped up and that is what we are all laser focused on. tom: we are focused on the markets in europe but tonight will be the state of the union address. i looked at the aaa unleaded gallon of gas that would overwhelm the state of the union except for what is going on in your, 70%. jonathan: inflation, how many times do you think the president has to mention that word? tom: let's bring these two stories together with libby cantrell at pimco. continental europe investment, your relationship, etc., what

have you learned with europe to pimco channels? libby: this is an incredibly dynamic situation. as of last week, what has happened over the last few days in terms of the solidarity between europe and the united states has been extraordinary. as investors and fiduciaries, another level of uncertainty. this could exacerbate inflation and supply chain woes and dampen growth particularly in europe. clearly an uncertain environment. there has been an incredible coordination between countries in the west, that we haven't seen since september 11. tom: greg valieva, says joe

biden a wartime president. what do you expect to hear tonight from the wartime president? libby: he will have to thread the needle at the address. there are things he is going to want to brag about, the bipartisan infrastructure framework, nominating the first african-american female to the supreme court, some of the things congress and his administration has done in regard to china. he is also going to have to acknowledge the fact that the are fears among voters about inflation and with the backdrop of all the geopolitical uncertainty. this is his wheelhouse. this is where he excels, cold war politics in the 1980's and early 1990's were his forte on capitol hill. it is just a question of what

americans question -- care about and according to the polling this is not the number one thing in americans' minds. lisa: this goes back to the gas prices to the highest level since 2014. and how may times will you find inflation in this speech. how will he talk about the inflationary pressures and combating them and talking about the sacrifices and the u.s.. how much can they move the needle? libby: it underscores the bigger issue that the president himself actually has very little to do with inflation. it is federal reserve which he does have a part in terms of nominating folks but in terms of actions they can take releasing oil from reserves, they could potentially lift tariffs and

that could be helpful incrementally and you could try to address the supply chain. i think he will talk about that is partly china competition bill and there is funding for the supply chain and things they could do to deploy national reserves and the ports. all of these are incremental, all very marginal, around the edges. in terms of the dramatic things voters want, the point is that he doesn't have that lever he could pull. he will have a rhetorical lever but in terms of policy actions, they are limited. lisa: we heard a couple months ago he pointed the finger at the federal reserve and it is because of them that the inflation is so high. do you expect a similar tone from president biden or will he pull back and try to the nuance that says not that much?

libby: this whole situation in ukraine is putting the president into an awkward position and also chairman powell that the market has taken out the 50 basis point hike in march. we always remain skeptical they would move forward with that and they didn't want to do that before the ukrainian situation regardless. this is putting powell into a tricky spot. i think that biden is an institutionalist and he will yet again delineate the independence of the federal bank and the fact that powell will make his own decisions. he will underscore the fact that inflation is an issue and he expects the fed to act. in terms of the market backdrop for the federal reserve, this is a dicey situation. tom: we talked to tony credenza

and we are uncertain of the future but you are in washington. what is the tone on refugees? is there any discussion the president can mention of the tens of thousands of ukrainian refugees that america will accept? libby: it is a great point. obviously europe is going to have to navigate that much more than the united states. this is a tricky issue for biden in terms of the politics. immigration has become a loaded issue. it is a good point that biden will try to appeal to the humanity of the american voters and americans in terms of polling. they think america should increase the refugee cap. you could have a mention of that

but i think his focus will be abroad but for the most part tonight we should expect a focus on the domestic situation and how his administration plans to tackle it. jonathan: you are one of the very best. come back soon. the energy ceo had this to say on energy in this administration. i am a little mystified there hasn't been some dialogue, implying the administration had they reached out they could pump more crude he said this, if they reach out and be more collaborative it might provide some cover, talking about covert from investors here. that story has changed but just that line, i am a little mystified there hasn't been some dialogue how much outreach has there been? has there been any more? tom: it is moving at such fast

speed everyone is making it up as we go. maybe there is some back story and we will hear it in a couple days. switch in germany, switzerland giving up neutrality. jonathan: that story is months and months old. tom: 30,000 people in 1957, 1958, operation safe haven from hungary is seared into my memory. i was affected by that with kids no money and helping out. jonathan: a big push in europe and you see the surrounding countries taking ukrainians in. tom: i think it will be light speed and i don't buy the number of 500000 and maria tadeo mentioned it could be higher and

the president has to address that. jonathan: a couple headlines. russia saying they will continue the ukraine "operation" until their goals are met. their goals week ago were to change the leadership and demilitarized the country. are those still the goals now? lisa: that will speak to how violent this will be. that is the big thing -- what is the offramp for putin as the goals will not be met until the president is taken down. jonathan: futures down on the s&p and on the nasdaq. corporate yields down by eight basis points on tens. now back into 1.74. this is bloomberg. ♪ >> the european union is

discussing more sanctions against russia today, announcing seven banks facilitating international payments between institutions according to a list of the proposal. one bank is russia's largest that will impose sanctions. the mayor of ukraine' second city house at a war to destroy the ukrainian people. russia stepped up shelling of key cities in ukraine overnight or the mayor says the residential areas are being hit even though moscow said it is only going after military target . a large convoy of russian troops slowly closing in on the capital of key have. -- of kyiv. joe manchin said it is ridiculous the u.s. buys oil from russia and he is planning weeks of hearings on energy independence. it is said the war on ukraine is

making bitcoin rise. some say bitcoin could trait -- traded more as a hedge to inflation. the pressure to drop payroll taxes. one of the biggest groups in u.k. said it should be flat. how the tax hike will may -- make the crisis worse. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> we cannot exclude that russia

will take steps that will impact --. jonathan: what is the retaliation from russia to the sanctions introduced? that was the eu energy commissioner. teachers down 33. on the nasdaq, we look like this, down .8%. tens, what a turnaround. 1.73 on a 10 year, down nine basis points. on fridays session, 2.0 1% was the high, moved 30 basis points. tom: you mentioned german to hear lower. the shock of that getting under 2%. jonathan: looking at the front end. in europe it might make sense. if the federal reserve does it, does it make sense? tom: i noticed two standard

deviations on vix, a global wall street statistic, just under 33. we are not there yet. this is the conversation of the day on oil and we have the pleasure of speaking with kevin book. they write the note every morning on hydrocarbons. thank you so much for joining us. i want to go to the 3000 mile distance between moscow and riyadh. what will break there? kevin: there is talk from all of the capitals in the west that there will be a strategic reserve drop. there is negotiation in vienna about the iran deal. opec saying they will stick with

the gradual pace they are going to show me a disruption and i will show you producers stepping into the breach. tom: do the gulf producers influence riyadh including abu dhabi? kevin: this deal was hard to make. opec-plus was a tough bargain. you saw the oil war in march 2020 and that is what happens when the bargain breaks. no one wants to disrupt the delicate balance. lisa: opec said they will release an updated statement on production what are you expecting to hear from them? kevin: i think my colleagues and i as tom mention have been looking at this from different sides. they expect to see the continued pace and the expectation we will have potentially an emergency meeting and an option to come back at whatever they decide. sticking with the plan but keeping an option open.

lisa: how vulnerable are they to political backlash from the united states is saudi arabia and others do not increase reduction more and do not act in response to this as something that can perhaps buffer in terms of how much prices rise? kevin: historically the no producing bill is something they wielded to persuade production from the producers group. it is not something you are hearing about but tough to go on bended knee with a knife behind your back so there is more caution from washington right now. high prices bring out the worst in lawmakers. a spike could bring that back. lisa: how concerned are you that the u.s. is not looking inward particularly and the energy secretary said we haven't had any conversation from this

administration. are you surprised by that? kevin: in a way yes, because if you think this will be over in a week or a month and don't worry about the investment for a protracted conflict, but it looks like this will last for years. if we don't normalize relations with russia, where are we going to get? tom: we have video. this is zelensky exhausted from kyiv and speaking to parliament. it is a stark white wall with a flag behind and a clearly exhausted zelensky. you have images of the parliament in europe. jonathan: he has shown incredible leadership. the please continue to help them more. -- the pleas to help him more. a report and a quote, you are

coming to poland, you're not coming to kyiv because you are scared and the reporter was begging the prime minister for a no-fly zone over ukraine. the prime minister rejected that and ultimately saying it will mean u.k. has to shoot down russian planes and this is something we saw take place yesterday in the united states, the same conversation. tom: you wonder if mr. biden will touch upon that tonight. lisa: and what the exit strategy is for vladimir putin and if they do destroy more of ukraine and what the response will be from the west. kevin book, how are you looking at how high oil prices could go if this continues, escalates and if russia only wants to see its goals accomplished including something unpalatable to western alliances? kevin: we are already seeing buyers worried about sanctions

and sticking back from russian oil. brent goes up. probably seen the first tip of the embargo wave when we look at canada and the u.k. saying they will not buy russian oil. the u.s. is probably on deck to stop buying russian oil. russia could go after flows. if petroleum exports stop or some portion of it, we are talking about a leap upward. we are well past 150 if russia stops, headed to 200. jonathan: just massive kevin book, thank you. wti crude 99.39, up by 3.8%. zelensky, leader of ukraine, continues to say without europe

ukraine will be alone. the agenda for the session today on macro financial assistance to ukraine taking place now in the european parliament. tom: they will have to move and move fast. for those on radio, moving at a new speed in europe. it is all new for them and i me that was great camaraderie. they are not used to moving at this speed and things have changed. you wonder where we will be by wednesday or thursday. jonathan: he doesn't want to round of applause, he wants more help. lisa: there he is leaving the briefing and we heard that when we offered him amnesty. he said i am not looking for a ride, i need more ammunition and that really speaks to ukraine right now. jonathan: futures down 1% on the s&p.

1.73 on a 10 year yield. wti close to triple digits, 99.45. the stoxx 600 down 2%. from new york city on radio and tv, this is bloomberg. ♪

at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met.

supersonic wifi only from us... xfinity.

>> it is not a bold statement to say the world has changed fairly dramatically over the last couple of weeks. >> there is a potential for growth in inflation. >> when you look at the consumer, it is healthy going into this. >> they are griping about inflation but it doesn't seem to be having a big impact. announcer: this is "bloomberg surveillance." jonathan: from new york city, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance." i'm jonathan ferro, alongside tom keene and lisa abramowitz. tom: it is not that they are down it is the way they are down as the flow of information out of russia and ukraine. i will suggest there is