>> 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 no bid

coming in here they're just trying to find where we are. jonathan: the ukrainian leader pleading for more help and assistance from the european union and a standing ovation after his address. tom: the other is a convoy that is 250 miles long or whatever it is. the news says it is 15 miles out of kyiv. everyone is shocked about a bomb hitting the regional building. it is a combination of military headlines is what we see in the bloomberg world of economics. jonathan: that is the situation on the ground, the convoy headed toward the ukrainian capital and reports that russia said it will continue its ukraine "operation" until its goals are met. lisa: we spoke to maria and she spoke about how there are

widespread attacks in ukrainian cities. how does this end and at what point do we see a further increase in flows. jonathan: the 10 year yield in germany down 16 basis points. in the u.s., twos down 13. tens down by nine. lisa: if you look at real yields on 10 year treasury, they have declined in the last two days. a very different nature given the fact that inflation is running hot. a lot of people are saying the u.s. economy does not need more accommodation. jonathan: futures down .8% on the s&p. on the nasdaq, down .8%. in the bond market, 2% on tens on friday now one put 73, down nine buzz -- basis points on the

day. crude at 99.80. lisa: i was struggling looking at the day ahead and it wasn't meetings going on with the russian invasion of ukraine, how do you look at the nuts and all of the data coming in, people going to the store and buying things, how do you look at that versus massive humanitarian risk in europe and that is what markets are trying to do. at 10:00 a.m. the manufacturing data for the united states. people looking at prices paid by manufacturers and how much are they increasing. you continue to see supply chain disruptions and how much the invasion in ukraine will affect things. we also get retail earnings. people are parsing through this for the economic momentum to stand some shock like oil prices

going to 150 or $200 a barrel like kevin book was putting out there is a possibility. we are going to speak with micheal giddelke later on. we will get a number of earnings throughout the week. at 9:00 p.m., president biden is going to try to dovetail all of this, the economic pain felt in places around the world and the mental that has given -- the momentum that has given way. his approval rating is about the lowest and his presidency and again the inflation rate, how many times will it be there? inflation at the fastest pace when back to 1982. how much will he encourage the federal reserve to react when markets are saying it is unlikely they will have to act as actively as in the past. jonathan: i imagine if you don't hear it in the address you will hear in the coverage.

maria tadeo joins us in poland. the british prime minister may visit poland walk me through what he said and what you expect for the next 24 hours. maria: he just reflected what is now the concern in europe that the nature of this war in ukraine changed. you see a russia that was going into a very quick 48 hour invasion and the ukraine government would be over and done with and now it is day six and there is desperation and a russian government running out of patience. not just military but residential and local government facilities and all of this is now showing a very brutal phase of this war and the nature change yesterday.

i don't want to speculate but there is a real concern the next 48 hours could be incredible and what we see is russia running out of patience and they want it done quickly. they say we are not leaving until we meet all of our goals, and that means complete surrender of ukraine and the zelensky government out. for those -- tom: for those on radio, a very bundled up maria tadeo in poland and behind her is one of the symbols and it is the palace in warsaw that stalin built for a flattened warsaw years and years ago. it is a huge symbol in poland. tell us about poland and russia. is poland like ukraine are like germany, the fire abroad? maria: what i would say is they have a very distinct history.

it is potentially much closer if ukraine, remainder, they have an incredibly different relationship with russia. there is a shared history but also a lot of i would say remorse and history they view that was detrimental to poland. right now, you speak to them and the government they view russia as the number one threat and they are concerned and worried we are seeing a repetition of the street and stress, listen to us, we have seen it firsthand. this in to us, we need more sanctions on the table and ukraine needs more weapons. the other thing i would point out, what you see behind me is a gift from stalin and every night has a ukrainian flag over it. you see the blue and yellow and this tells you the tension this

has between russia, ukraine and a lot of concern about the border. we see troops going into ukraine. the concern is this is a puppet state of vladimir putin and surrounded by a wartime ukraine and they are not independent but in the hands of vladimir putin. lisa: hear the urgency as she talks about the escalation infighting and death. is there a change in the rhetoric in washington dc around the steps willing to be taken? emily: president biden is aware that many americans feel he has not been aggressive enough when it comes to the u.s. giving assistance to ukraine and pushing back against russia. that will be something he addresses in his speech tonight. you are seeing a rare moment of bipartisanship in washington around this issue.

former president trump aside, you are seeing republicans criticizing putin saying more aid needs to be given to ukraine. a lot of it is a question of tone of what we will hear biden say tonight, if he will touch on potential sanctions on the energy sector and something the white house does not want to do. a lot for biden to do tonight. the white house press secretary said no one wants a two to three hours speech, but at the same point there is a lot to touch on because he can't just touch on the international but has to also touch on the domestic. jonathan: the russian headlines on freezing funds. many places we don't have a market to express this. yesterday j.p. morgan close the gates on its emergent market european funds and russian funds as well. tom: this has been something

with huge losses, while under a billion dollars of assets for schroeder's. it is a microcosm, micro data we are seeing. it is not about swift, bank of russia, all of the decisions we are covering. jonathan: you sell the depositary receipts in london trading, some like spare bank down 74% on london trading on the depositary receipt. lisa:, which is this is that it is one of the only areas of liquidity and a market that is otherwise nonexistent. there is almost no trading in russian assets. you are going to freeze it because if people withdraw money, how will you sell it to give redemptions. jonathan: the ruble at 102. lisa: people are basically

saying this market has been frozen and there closing the exchange and the bank is taking all actions necessary. the question is, what with the ruble look like in a free market right now? jonathan: futures down .7% on the s&p. the nasdaq down by three quarters of 1%. from new york city, good morning to you all. the yield lower by 11 basis points to 1.72. we were 30 basis points just a few trading days ago. as we price out more rate hikes with the and ecb. crude close to 100, 99 point 94, up by 4%. from new york city, this is bloomberg. ♪

i'm ritika gupta with bloomberg's "first word news." russia vowing to continue with their attack until their goals are met. a convoy of troops moving to the ukrainian capital. residential areas are being bound and the united states is saying there could be more deaths. the european union upping sanctions against russia. it is blocking seven banks from swift. this facilitates payments between institutions. one of the banks is one of russia's largest. the white house is shifting gears with president biden's state of the union address tonight. originally he was going to highlight the improving coronavirus outlook and rebrand his domestic policy but it will

also now highlight the rush and ukraine situation. shares of target soaring today. the retail report, and results will continue to improve on the pandemic related boom that has led to strong gains. 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. ♪

>> swift says i can't use communications to do business with you. they are different tools and used for different reasons. jonathan: that was jamie dimon on the situation with banking sanctions that we have seen in some places. so much nuance. futures down by .8% on the s&p. on the nasdaq, downplay .9% -- down by .9%. a 10 year, 1.71.

-- speaking right now. you can see the rhetoric is punchy out of europe. look to european banks. deutsche bank is down by 5.8%. it is the first of march and rife eisen is down 50%. tom: this a wired up with all of the aggregation, a truly developing story. this from reuters and from the express in london where diplomats in geneva at the u.n. human rights council meeting, remote from lavrov of russia and

they stood up and walked out. it was dozens, maybe more than dozens, but a movable protest we are seeing. jonathan: and how these multilateral institutions will function. we talked about the u.n. meeting chaired by russia discussing russia. tom: do we agree that it has deteriorated? jonathan: down 1% on the nasdaq now. tom: euro smith's -- euro swiss and gold now. what have you done with your allocation? what have you done with your enthusiasm for stocks given this war? >> we are looking at stocks within the equity market, safe haven? has that already moved.

for those who missed it, where we are looking is no more -- is a more offensive play. with a bit of a stalling, that will help with the oversold sector have a short-term rebound. tom: we can talk about nominal gdp and what we will see at the revenue line but do we continue the earning surprises we are seeing with this target today? anna: we are seeing some good news but i think overall at the s&p 500 companies, you are seeing margin decrease. that is what we expected as you get later in the cycle and now with the war going on in russia and ukraine, we have larger market cap companies more international with more exposure to that situation. it will continue to come down and that is the move that happened as we get later in the cycle and that will change how we look at things in six to 12

months if you tack on how the fed will move. lisa: the german chancellor is speaking in berlin about how he would like to seep putin immediately remove troops from ukraine. a lot of the allied nations would like to see that. there is a feeling that this will be a temporary blip and there is a feeling in political circles this could be something vastly more and it has a different tone to it. how does that move into your sense of optimism that you expect this to be like other geopolitical shot -- shock? anna: is a big factor in how we are looking at things and how we are paying attention to the headlines coming out the big factor is how this feeds into inflation. it is a unique situation because of russia and ukraine and their ties oil and gas here and then

how the fed reacts and overall how that controls consumer demand. you have to realize that the fed hiking over demand but some of the big drivers of inflation are things that are addressed by rate hikes. it is something we will need more supply in energy or easing in bottleneck in supply chains. when you put all these things together, it is one big hairball. lisa: if you look at brent north of $103 a barrel, what is the trigger to get more bearish, withdraw some optimism? anna: for us to really go towards that would be that we see an escalation, extreme escalation of prolongation of the situation with russia and ukraine. on top of that, you see potential signs that inflation is getting away from us and away from the fed and that would really tamp confidence.

your sin confidence deteriorate despite current -- you are seeing confidence deteriorate. that would indicate the fed no longer has a handle on inflation and that is what you would look at. jonathan: i wonder how close we are to that scenario given how much we are pricing out. lisa: basically saying if the inflationary players -- saying the inflationary is going to stay. yields have come down because they think the ecb will be more dovish but will not bring down inflation and will not be able to engage with that. at what point does that become problematic for markers -- markets. jonathan: the u.s. has suggested energy is still on the table when it comes to sanctions.

we have already seen the energy company -- energy company start to make a move, bt, shell. shell said the census act -- the senseless act -- total will not have any more new investment. that move is very different from what we have seen from shell and bp. i wonder how much pressure builds to do more. tom: what i see, markets on the move. a nice lift in brent, 103.35. tension in the tape. the u.s. real yield speaks volumes about this inflation. jonathan: nominal yield, one 60's on twos -- 160s on twos.

down 16 basis points going in later this week. a ton of fed speak and a march 16 fed decision. it is going to be very interesting. from new york, this is bloomberg. ♪

jonathan: two months of losses on the s&p. futures are negative down 1.5% on the s&p. nasdaq down by .6%. the move in this bond market, huge. let's take a look at u.s. 2s and 10s. the two-year in america was through. the 10-year was through 2% on friday, the high of the session. here we are at 1.74 on 10s, 1.30s on 2s. in germany, the 10 year negative territory.

the event of the last week, the events of the weekend me and the ecb have to push out their rate hiking plans and the federal reserve has to trim theirs. tom: we have to wait for the economic data and for these events in europe. it is march 1, and the path to march 16 will be extraordinary. jonathan: payrolls, march 16. i get it, maybe you can push that one and put it to bed. rate hikes for the year, can you put that away for the fed? lisa: is that saying that inflation, given where expectations are, have not come down and the fed doesn't have control? inflation is controlled by something totally other and that has consequences. jonathan: the consensus comes from seven, down to five.

let's talk about crude. brent, triple digits. 103. wti back into triple digits, 100, up 4.6%. gasoline prices, inflation, inflation. tom: we saw the surprise from italy this morning. jonathan: that is where our focus is the last couple of days. i imagine it would be that for the next couple of weeks. let's get some price action with romaine. romaine: the volatility that we ended february with continues in march. a lot of names moving higher on the back of the war in ukraine. american airlines down on .5%. any sort of travel company with

big international exposure: back. the banks also lower by the day. most of these banks dropped yesterday. people rethinking the rate environment, which had been priced in one direction a couple of weeks ago, now people moving in the opposite direction. we had an interesting interview with the ceo from devon energy, saying they stand ready to boost output if they are given the political cover. we did get earnings out of target, shares higher by 12%. those investors gravitating to the company's guidance for the full year which was better than consensus. chevron shares higher. that company is doubling its buyback plan. the ceo of good rx will be with us in the 2:00 hour. they just reported. not good.

tom: diplomacy in action. this is going on worldwide right now. the european parliament listening to mr. lavrov by remote, walking up, and -- standing up, and walking out. let's move on to our interview of the day on foreign exchange with kamakshya trivedi. very simple, where is the true evaluation of the ruble? kamakshya: thank you for having me. this is the kind of situation where fundamental valuations are very hard to do. you can think about things like russia's loyalty and gas exports, current account surplus, let of these things matter when a large quantity of the reserves are sanctioned.

essentially the sanctions are making russian assets on investable foremost western investors, making fundamental valuation calculations impossible, as well. tom: can you use adjacent ratios to come up with some form of estimate on where dollar ruble is right now? can we dare say 1.15, 1.20? kamakshya: it all depends on how things evolve. if you look back to 2014, 2015, when you had the annexation of crimea, hostilities in the donbass, you saw a huge selloff in the ruble, 50% or so, and that came along with a drain central bank reserves of $100

billion. that kind of cumulation to support the ruble is not possible today. one can come up with maximum undervaluation numbers or things like that, and we are well through those points. i just think at this point you need to see some crystallization of the risk, some sense of the end point before you can put on a firm value, this is as far as it goes. lisa: we are seeing liquidity in a sea of illiquidity in the russian market. where are you seeing the most dramatic moves simply because it is the only place that people are using to offset some of their other bets that could potentially be an overshoot if things come to a resolution in the near term? kamakshya: interesting question. that is one that investors

should be asking themselves. russian assets, sanctions are making it hard for them to touch. but there are a host of other assets that may be affected by what is going on and russia and ukraine. at some point there may be a more interesting opportunity. the most significant risk premium is being put in the assets closest to the conflict, poland, czech republic, hungary, the equities, currencies in those regions. if you saw some cease fire, i think you would see some of the biggest recoveries, fastest moves. and then there are assets that are pretty far away from that. you think about it we countries like colombia, the middle east, some of those things have already been pretty resilient

but could see more outperformance in a world where oil prices are still meaningfully higher. lisa: you were an economist at the bank of england, you understand the interplay of oil prices, growth, how markets can transpire. do you think they have gotten ahead of themselves in pricing out in the heels of this conflict? kamakshya: i was an economist with the bank of england many years ago, now a strategist at goldman sachs. i think the markets are trying to price a very uncertain situation. markets are implicitly making the assumption that the tightening of financial conditions that is needed to bring inflation down, some of that tightening is already being delivered by the move higher in commodity and oil prices. that is sort of what the market is pricing, why you see the

interest rates, yields move down. my view is that you will still need to see some tightening especially in places where, as i said, the growth impact from this conflict may be limited, but the negative shots from oil prices to inflation may be meaningful. it is understandable why markets are doing what they are doing but i think it may be a bit too fast. i think you will see central banks in the near future continue to be on a tightening trajectory. jonathan: great to get your perspective. thank you, sir. a headline coming out in terfax. tom: this is very important, to the north of crimea.

that area is extremely important. the city by the sea. mario paul. very clearly, within the zeitgeist that is out there, i need to be careful about attribution. they have lost power and are under some form of attack. that would be in the closing of russia from crimea to the northeast, from donetsk and down south, closing on the shores of azov. jonathan: 104 on brent, up 6.6%. lisa: what is the western response should this report bear out, if russia is making further incursions into ukraine, trying to take over kyiv. at what point can oil not remain out of the crosshairs?

some sort of cessation of the flows which leads to substantially higher prices. jonathan: the eu to give 500 million euros in humanitarian aid to ukraine. that headline just crossing. 500 million euros inch meghan tierney aid to ukraine. futures are lower on the s&p. the nasdaq down .9%. in europe, the banks getting hammered again. the dax getting hammered. that move in the bond market, 1.73 on 10s. 2s at 1.30 going into chairman powell later this week. this is bloomberg. ♪ this is bloomberg. ♪

ritika: with the first word, i am ritika grouped. the mayor of kharkiv calls it a war to destroy the ukrainian people. the mayor says that residential areas are being hit even though muska says it is only going after military targets. meanwhile, a large convoy of russian troops is closing in on the capital of kyiv. senator joe manchin month the biden administration to encourage more domestic energy production. he says it is ridiculous that the u.s. buys oil from russia. in the u.k., chancellor of the exchequer rishi sunak is being pressure to drop they plan to increase in payroll taxes. one group says it will cost of and should be scrapped. other business lobbies have warned it will make the cost of living crisis even worse. hong kong will impose a lockdown

to ensure a mandatory coronavirus testing drive this month is effective. reports say officials will test the whole city three times over nine days. in the last few weeks, the number of cases has ballooned from a few hundred a day to more than 3400 on monday. an international boycott of russian vodka is spreading from the u.s. to australia. the steps may be largely symbolic. russia from vodka accounts for about 1% of total exports. i'm ritika gupta. this is bloomberg.

>> consumers are still spending, they are griping about inflation

but it is not having a big impact on their spending. ultimately they barely touched those excess savings. jonathan: from new york city, good morning. futures are negative. the move in the bond market, yields lower by eight basis points on 10s. 1.7420. potentially kicking out any action from 2022 back into 2023. crude north on 100. what a move we are seeing in the commodity market this year. tom: i want to make clear, we are seeing correlations falling apart. 10 year real yield. we have mentioned brent crude, 104. euro swissie, these are markets

that are correlated. jonathan: a quiet morning, down 10 basis points on the day. i keep saying it is quite a move for this week. chairman powell this week, cpi. for all the banks lined up for a 50 basis point move in march, i have not seen them throwing the towel in on that. goldman still thinks seven hikes this year, than they grew in an extra hike next year, too. tom: we will see. right now we have to do is look at russia. on company that has done that over the decades in north america is target. let's get your attention. target has beat walmart by over 600 basis points per year in the last 10 years.

their chief financial officer, michael fiddelke, joins us this morning. the president will speak tonight on $105 brent crude. you spoke today about $24 per hour on your wage. how are you going to do this for line employees? michael: the investments we make in our routine are the best investments we make. that has been a path of investments over years. we had a $15 starting wage back in 2015. we have invested in additional benefits, invested in tuition free education assistance. we see those investments paying off. you can see it in the results that our team delivered, growth over 9%. tom: this is so important because you lead on this, and

you and amazon and the rest are in the crosshairs on this. are we in an arms race right now for line employees? michael: it is a tight labor market but we track our ability to attract and retain. those metrics are stronger for us now than they were pre-pandemic. we see the results of those investments paying off, with a team that wants to come to work at target. lisa: this is one side of the equation that you have a birds eye view on, the employment side. the other side is consumers willingness to keep spending, even when they seem gasoline rising to the highest levels since 2014, we'd rises the highest since 2008. how do you game this out when you talk about passing this on to consumers and your ability to do so? his time running out to pass it

all on directly? michael: we see inflationary costs pressure in the environment but we tackle that through the lens of our guests. we have a lot of leverage to pull within our business to make sure we are protecting valley for our guests. price is a lever that we pull last, not first. that i percent growth came almost entirely from traffic. that means guests picking target more often, whether in-store or at the website. those investments in protecting valley are paying off. lisa: you where the cross-section of what we talked about every day, russia invading ukraine, possible disruption of supply chains, ramifications on growth, oil prices. have you been scouring through your supply chains, looking for possible disruptions from this or other possible conflicts? how does this factor into your day-to-day decision-making? michael: as you might expect,

it's a situation that we monitor closely. our hearts go out to everyone impacted in ukraine. it weighs heavily on our mind. we are fortunate to have a really sophisticated supply chain that has navigated a lot of complications really well. our inventory position is up 30% from last year, a testament to us working through those supply chain challenges. lisa: have you found have gone market share from smaller businesses simply because you have the ability to rejigger supply chains, certain costs so that you can pass it along? michael: we look at our market share gains over the last few years and they come from a variety of places. some of that goes to the market share by category. we have strength from a strong apparel business to a strong food and beverage business.

each of those categories grew double digits over the last year. it is a wide set of sources. jonathan: big move in the premarket by almost 11%. thank you, michael. the target move, quite sizable in early trading. year to date down 13%, so erasing much of that today. a headline crossing that may be of interest. russia demanding that youtube and tiktok on block rt and sputnik. those broadcasters have been banned and removed from networks across europe. russia demanding youtube and tiktok to unblock them. tom: coming in this morning, i thought about this, when do we hear from tech in a big way? i get the banning of rt and all of that, but apple, microsoft, meta. the big tech companies of

america, can we agree, have been pretty much silent in this moment? jonathan: i think they are following what they had been instructed to do. lisa: this is really an information more. i have been tracking some of the cyber concerns around the world, how much it has been heating up. that may be one of the takeaways from this conflict, how much of this is an information battle as well as cyber predominance, how that plays out going forward as the new frontline. jonathan: rt and sputnik and subsidiaries will no longer baby spread their lives to spread putin's lies and divide our union. the eu is pretty strong on this. tom: where will they be tomorrow and the next day? this continues. the khaki bombing last night, and now closing the gap.

jonathan: similar story coming out of the united states in president biden. estate of the union later this evening. from new york city this is bloomberg.

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>> this is really about stopping market panic. >> challenging for central bankers to manage this conflict. >> we are all trying to figure out what is going on. >> if you look at the ramifications of the market, it is energy. >> the energy treat will be disrupted. this will not be a smooth thing. tom: good morning, everyone. on radio, television, we welcome all of you across the station and worldwide to an

ex