>> it is a very tricky environment. obviously market reaction is about russia-ukraine. >> commodity prices have been exploding. >> we think once we get through the volatility, things will tone down. >> the consensus view in the equity markets is that this too shall pass. >> there's a significant cushion of momentum to of zoar this stock -- to absorb this shock. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. thrilled you are with us on an eventful monday to the inflation report on wednesday and

thursday. guess what? it doesn't matter. this is markets in turmoil. this hour, we go to damian sassower on the derivatives space with these massive moves we are seeing. tom: working through -- jonathan: working through our top story, an active discussion about banning imports of russian crude. we get a headline from germany's finance minister that they are against the push to ban russian energy. the story we wrote this morning here at bloomberg implied that the u.s. was also considering, at least in the beginning, going it alone. will they fly solo? tom: for global wall street, you've got to stay with us for paul sankey coming up at the bottom of the hour. you saw that 1.40% print -- that $140 print, that $123 now is distance from where we were. jonathan: what does this do for global growth? we might keep buying crude. what do we stop buying? tom: lisa abramowicz, bring you

get over to the united states, moments ago aaa published, and we jump out to $4.07. lisa: this is something we have been talking about all morning, talking about demand destruction, not necessarily for gas, but for other things. there are signs that you are seeing billions of dollars and an essential gas tax as prices go up every increment. at what point does this hamper the recovery versus just slow things down and give the fed an easier job of perhaps not raising as quickly? tom: with your coverage of the continent of europe, you have been way out front on the eu banks. that story continues this morning. jonathan: there's two issues at play here. the obvious one, the direct relationship with the russian economy. the one that a second, people bid up european banks because they thought the ecb would be a little more active relative to the previous cycle on the back of higher inflation. that story has got strict out in

a massive way. the index, the industry group overall is down 3%. take a look at commerce bank, down 5.5%. the overall index over the last 30 days has lost 1/4 of its value in a short amount of time. tom: the president to speak with mr. micron, missed -- mr. macron, mr. scholz, and mr. johnson iphone today. we have not heard from putin. jonathan: we have heard from the spokesperson speaking to reuters, and the word the demands. there will be talks, we understand, later this morning between russia and ukraine. russia is demanding that ukraine cease military action, change its constitution to enshrined neutrality, acknowledge crimea as russian territory, and then recognize the separatist republics. what you did not hear was force

a change of leadership and remove president zelensky. that was not in the paragraph we heard from the kremlin spokesperson this morning. are those demands, how will they be stomach by ukrainians in those talks? most people suspect not very well. tom: i think the demands where their days and weeks ago, and from what i know, they are not going to be accepted. on the data friend i am just going to go to the initial search this morning, freeport formed -- three poor .50 -- 34.56 on vix. jonathan: inflation comes out thursday morning, expecting it to be close to 8%. tens are at 1.77%. what do you do with cpi on thursday? it's got to be a big question. it is just a few days away. tom: jacob franco, former governor of the bank of israel. paul sankey will be with us on oil. we start strong with fixed

income and from nuveen, tony rodriguez joins us this morning. the knee-jerk thing under crisis is yields lower. you and i know that there is the end yen. when do yields start to move higher, pricing and this new embedded inflation? tony: good morning. good to be with you. i do think ultimately you will see higher rates as a result of the higher inflation pressures we are seeing. therefore, the response we are going to get from the fed starting next week. but in the mere term -- in the near term, all of the focus is on the russia-ukraine situation, which clearly leads to a flight to quality, flight to liquidity and almost all markets you are in. so in the near term, we don't expect any higher rates. tom: for our audience that aren't sophisticates, for people looking for coupon, price up, yield down, is that a gift were

you readjust? tony: we do think it is an opportunity to readjust from a duration perspective. we think rates will be higher in a pretty dramatic repricing of the last 10 days. you see dramatic repricing in risk assets. in the near term it is very difficult. everyone's crystal ball is pretty foggy. but ultimately i think this plays out into higher rates and risk assets and should perform much better in the second half of the year, so it is an opportunity to reposition. you need to basically scale into your trade and do some solid analytical work to make sure you can withstand this period of volatility. jonathan: where are you on growth, with crude at $120? i'm looking at consensus on the bloomberg, 3.6 percent for u.s. gdp in 2022. are you anywhere close to that?

tony: michael: we would be around -- tony: we would be around 3.5% to 4%. to the extent that it stays with us well into the summer, clearly we have to mark down growth expectations closer to 3%. when you start getting closer to that, you start getting closer to that risk of stagflation, risk of central bank policy error, and then you start to pull forward recession risks into early 2023. that is not our base case, but that is showing what companies are starting to do. tom: building on -- lisa: building on the growth scare that people expect if this does continue, how much of that is being priced into riskier credit when you see spreads widening to the most going back to december 2020, but still not anywhere close to some of the peaks we have seen in recent years? tony: you make a good point, we have certainly repriced. we see a stronger repricing in emerging markets than we have in high-yield, and we are seeing

less in investment grade markets, but we are not pricing and -- but we are not pricing in recession. recession is probably a 2024 question depending on how growth rolls out, but if we see tensions that do not start to ease by may or june and this conflict extends such that prices have found a new equilibrium level which think they will receive from here, but if they don't, you will have to see wider spreads to price and the greater risk of a recession coming in 2023. lisa: historically, people looked at markets as an early signal of distress. have they lost that moniker with the influence of the fed? tony: i don't think they have lost it. isaac may be the treasury market has because there you have such dramatic involvement with the fed with the size of the balance sheet. but if we start looking into risk markets, emerging markets,

high-yield yield, investment grade credit, they are still a reasonable signal. jonathan: always good to catch up with you. tony rodriguez of nuveen. all looking ahead to thursday, followed by an ecb news conference with president lagarde and a decision 45 minutes before that. thursday, as you said a couple of hours ago, feels like a long way away at the moment. tom: forever away, and whether it is christine lagarde and the way she handles the pressure to get through the march meeting, it is just so far away. i am looking for the cogent response of mr. putin, and we saw that with a formula come the formulaic statement this morning, but we need to see more about what he plans to do after this war in ukraine continues forward. jonathan: what do you make of these talks, the president speaking to macron, scholz, and johnson this morning. tom: i think it is one more

round before everyone saves face. one important thing this morning has been johnson, speaking a different tone than the continent. jonathan: i think it is important to suggest that the sanctions already announced have had massive consequences already, much bassoon event -- much bigger than i anticipated, you anticipated. every morning, another company pulling back. tom: the bloomberg this morning is exceptionally strong. just a tour de force on the history and scope and scale of this, and moment's ago, jane street is published. i'm trying to get that out on social media. under his command of the european u.s. army, we have gone from 400,000 troops down to 100,000 troops. he writes a blistering essay to rebuild the military force in europe. jonathan: we are seeing that come aren't we? the defense spend in germany, u.k.? tom: landau lead with that in terms of fiscal stimulus in

europe. jonathan: we have inflicted a 10 of damage on president putin's economy. what has changed to me in the last couple of days, it is less about inflicting pain on the economy. we start to introduce this moral question which is really, kidding things in the u.s. and for europeans alike. let's insulate our economies. let's not do anything about energy. now this moral question is being introduced. is there a moral obligation to pull back from it all? lisa: it is hard to avoid when you see some of the images coming out of crane and the humanitarian disaster in these areas. jonathan:jonathan: absolutely heartbreaking for everybody. good morning to our audience worldwide. heard on radio, seen on tv, this is "bloomberg surveillance." ♪ ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. an adviser to ukraine's president says the next round of talks with russia will begin

later today. russian forces have stepped up their nighttime shelling of cities at the center, north, and south of ukraine. that comes as an evacuation from a southern city has been stopped for a second day. the u.s. house of representatives looking at a bill that would ban the import of russian oil and energy products. that could add economic pressure on russia following its invasion of ukraine. the biden administration is said to be making views of its own known. china bows its worst outbreak of covid-19 infections. more than 16 million people, almost 30% of the electric come are said to have already cast their ballots, 11% higher than the last election. the death toll from covid-19 has crossed the 6 million mark as

dependent ends its third year. that grim milestone was reached despite the snow vaccines. the latest one million recorded deaths came from -- hong kong's covid-19 death rate is the highest in the world after fatalities amongst the city's vaccinated elderly surge. there are air concerns that the elderly concern -- there are concerns that this will continue. i'm ritika gupta. this is bloomberg. ♪

>> we are now talking to our european partners and allies to look in a coordinated way at the

prospect of banning the import of russian oil while making sure there is still an appropriate supply of oil on world markets. that is a very active discussion as we speak. jonathan: sick of terry blinken speaking on seat -- secretary blinken speaking on cnn. it is an active conversation with our european partners. germany has this to say this morning. germany is against the push to stop russian oil, gas imports. crude backing away from session highs, now a break of $120. tom: this is the first time i have mentioned this this morning. twos-tens spread under 24 basis points. i'm sorry, that is indicative of the slower economy that some are modeling and. -- modeling in. jonathan: i'm going through the commodity screen with you. energy, metals, ag, everything that is trading is in positive

territory. that is the story this morning. tom: i'm watching nickel off of london metal exchange with a huge explosion. now with us, damian sassower, chief emerged -- chief emerging-market strategist for bloomberg. he joins us this morning. i'm going to cut to the chase. 1998, intangible financials. the hardest thing to grasp for global wall street is this is an intangible crisis. these are things. how is this different from you? damian: in 1998, the reason we thought russian default was they could have paid on their bonds. they just chose not to. we are seeing the same thing over the weekend. a 15 year battle against argentina. these bonds are worthless. you have to compare russia to that of venezuela, who the u.s. is meeting with right now to try to restore relations so they could produce more oil.

you have been spot on focusing on the oily equation, but this is really where we are, and the west has to give putin a way out of this. tom: what is so important to me is that with the credit suisse note out this weekend, people don't want to be in the bed on a given item, and people don't want to be on the offer on a certain item, and that comes down to trust of a transaction, which comes down to collateral. explain what collateral is to mere mortals. damian: the fact that european banks need more dollars because they have $110 billion of exposure to russia. they need more dollars because those rubles aren't worth anything anymore. you are seeing the mechanism. we talked to mark mccormick the other day, stressing this. dollar-denominated assets, russia has very few right now, so see a pivot to the focus on

the russia-china relationship and why isn't china doing anything. they are on the global stage here. they aren't doing anything because it doesn't behoove them to do anything. they are going to be able to buy these commodities. i think the only three commodities i can track, canola, sunflower's, and i forgot what the third one was come are the only commodities that are not in backwardation right now. everything is skewed to the upside. lisa: you did mention china. they talk about their rocksolid relationship with russia. but what does that indicate going forward in terms of the chinese currency? they are easing and talking about stockpiling certain grains and other assets. how does this affect china? damian: it is a marriage of convenience. it is a marriage that is going to work well for the economy in the near term. we saw the congress over the weekend. we saw the rocksolid

relationship between china and russia reaffirmed. but beneath the surface, there's definitely some seeds being sewn, and there's a bit of a move on the west to try to extend some of, i don't want to say sanctions, but they are looking at what is next. is the yuan going to be at risk? you are seeing investors coming out of chinese assets. jonathan: if i own dollar debt from the sovereign or corporate in russia right now and they tried to pay me and rubles, what is that? can you help me understand all of this? what does a credit event look like in russia? damian: now we are getting into the bond mechanics. there are six bonds in russian debt outstanding where there is a covenant that allows them to make payments not just in dollars, but other hard currencies, and they slip the ruble in, so i hope no one is holding those bonds because you're going to get paid and rubles. but the fact that putin is now out there saying he is going to repay all bonds, all dollar done nominated debt -- pay cash to

repay all bonds, all dollar-denominated debt, that is akin to a default. that is how it is going to be interpreted by, in my opinion, the courts. common law which governs a lot of these denominated bonds which have been issued, it is not even clear whether or not the u.k. is the jurisdiction of choice here. so who is going to enforce, in the event of a default, creditor rights? there's just no clarity. these bonds are worthless, and i can't disagree. jonathan: if we get the headline that that is what takes place, i don't even know if it tears the pipes. i don't know what happens on the other end even if you do receive the money. i am just trying to figure out the consequence of the spillover and whether we have fully realized in the of the stuff you and i are discussing. lisa: clear stream -- damian: clear stream and euro clear have already said they will not accept ruble payment on anything. what is the clearing price for these assets? there is no clearing price yet.

jonathan: what do you call it when the issuer tries to pay you in a different currency, but than the pipes don't clear the transaction? is that a credit event or not? lisa: it is a mess. tom: real quick, we are going to run out of time, we will get you back in an hour, real simple. how do you construct a hedge on $130 rent crude? how does a commercial vendor construct a hedge or re-hedge at $130? that is not in my cfa exams. damian: the volatility we see in that contract is second to none. we can talk about the nasdaq all we want, but it is crude oil. if you are a hedge or and you have frontage month -- and you have front month, you can head to the back month, so it is a

very good time to be holding that because you're getting embedded carry, what you have not had before in most of these commodities. tom: you're like bill gross on the mexican peso. lisa: you are embedding carry -- damian: you are embedding carry into hard assets where there are none. jonathan: damian, thank you. moments ago we had some headlines on chancellor scholz. the u.k. energy needs cannot be secured without russian imports. this coming from an emailed statement from the chancellor. diversified eu energy can happen in the near term. tom: i am making light comments, but this is serious diplomacy going on is the president will speak to to allies -- will speak to allies this morning. lisa: they have different outlooks that rely on russian oil, but russian gas puts it in

a different situation. jonathan: speaking of different perspectives, speak to a commodities analyst and then a commodity producers analyst, and you might hear a different message. paul sankey, a conversation you do not want to miss, coming up next. ♪

jonathan: the united states would like a conversation about banning rushing -- banning russian crude imports. germany out with a simple answer, no. germany seemingly does not want to participate. $118.30 on wti. brent crude very close to $140 yesterday evening. now down just south of $122. tom: what is important in this anticipated interview is it is 8004 miles from texas to saudi arabia. that is a big part of oil economics and getting the barrel out of the ground to be marginally refined.

we will speak with paul sankey. jonathan: often these conversations, sometimes it is our fault, sometimes it is the fault of the people we speak to, we speak as if there is a special tap in texas you can just turn in all of the site and all of a sudden crude output is up. talk to us about how difficult that effort is. paul: if you get into engineers, is the ability to add capacity is being mildly exaggerated -- being wildly exaggerated. midland is in the middle of a desert. there is to mend his competition from austin for labor and engineers. in people terms, for commentators to turn around and say the industry should add capacity and volume is completely misguided. i was in midland in late december talking to diamondback,

and the fact is things have grown type crisis to crisis, and they can add on a one-year view. there's nothing to do this week. jonathan: they are blamed if they pump and seemingly blazed if -- and seemingly blamed if they do not. what you make of the energy industry in america? paul: appallingly badly managed. they came in with almost no oil expertise on the basis they could change the energy system. now you are in a situation where you're talking to venezuela and iran and not talking to texas. they came in with almost no oil expertise on theit does not mak. lisa: how much could they influence the output in texas quickly given the fact there has been a lack of investment, given the fact a lot of this has been driven not by washington but by a lot of the shareholders that have looked for fiscal discipline?

paul: the point john highlighted from my research yesterday was if they try to progressively increase capacity now, they are simply going to eat -- going to compete with each other. you're just going to inflate things more because all you will do is take the guys from the next oil rig and put them on your own rake. -- on your own rig. is not just about people, it is about sand, it is about cement, there's all sorts of tightness. we were in a commodity squeeze already before all this happened. the answer is if you started to reorganize capacity, you would begin to see an impact towards the end of this year. lisa: what would you like to see the administration do in order to support mode domestic production as opposed to going to venezuela? paul: the grand scheme is nuclear with the new grid. if we do that -- the utilities

do not really want it. the utilities have a vested interest in do not get the criticism it should. nor does amazon get the men of it should for the amount of oil to return a package. all of this is not really examined. what the industry want is consistency. suddenly they are saying they will reduce the federal gasoline tax. totally idiotic. not encouraging efficiency. what they are saying is we will suddenly they are saying they will reduce the federal gasoline take off the mandate for ethanol. just as the industry is moving towards major investment in renewable diesel the administration says we might have to change this because of the crisis. it is crisis management and that is what i call the energy regression. we are in energy regression. we are going backwards. tom: let me go to the third rail.

the third rail of the keystone pipeline. is it a valid economic project and can it actually enhance united states energy independence? paul: yes. it could. more canadian oil is an obvious outlet to the long-term solution. obviously we have a tremendous ally right there with the available oil that is doing a tremendous job of emissions reductions. that should not have been delayed in 2015, which is when the obama administration first threw a wrench in the works. the biden administration is just bad messaging. by then the project was free much in 2015, which is when the obama debt as far as the bin administration canceled it, it was literally the first thing they did. you could easily resuscitate it if you could get around the environmental opposition. the environmental opposition is local.

it is a matter of negotiating specific issues. the latest has been the mountain valley pipeline which would reduce -- which would release more gas into the general u.s. economy and that is 96% complete with $6 billion sunk in a federal judge blocked it for crossing the appalachian trail. stuff like that makes no sense. tom: gasoline, aaa out to the $4.07 in seven days. in your head, where is the tipping point on aaa unleaded where it really begins to affect ? paul: $4.50. then you have to add a dollar in new york and the dollar in california and the higher tax states. you get to $5.50. that will happen because the

gasoline prices trailing the crude price. tom: what happens when we get to $5.50? paul: people will change behavior quite radically. there will be discretion over how much you drive your car, whether you drive like a crazy idiot or very conservatively. whether you pump up your tires. there is a significant ability to change behavior. what is interesting now as we have low unemployment and therefore people do need to drive. the elasticity will be sticky to say the least and i think we will get to significantly higher gasoline prices. lisa: -- jonathan: in the treasury market, when yields go higher, we talk about how self-limiting a selloff would be because it starts to bite the u.s. economy and yields come back in. does this say dynamic -- does the same dynamic exist in a commodity market for crude?

at what point energy prices go too high for energy equities to continue rallying with it? paul: you get to the points of demand destruction. we now know warren buffett was building a significant stake. generally speaking if the market begins to believe -- then these things move higher and it is the back end of the price per that matters, which is aggressively higher. i think a total question of what russia will look like in the future, there are two things. good news, russia has softened its stance and i think you see markets coming back given russia is softening its stance may be to the point of admitting defeat. that is the good news. the bad news is we may see

russia permanently out of the market for multiple years, long enough to make a difference, at which point futures will be at 100 and these things are hugely undervalued. once he gets $140 on a spot basis, we worry about demand destruction, debate question is what will the recession look like. it is not a question of whether we would get a recession, it is what kind of recession we will get. jonathan: awesome as always. paul sankey. when we talk about the strip, the contract table come april, may, june, july, all the way out to august. it is the whole curve that shifted up in the front end. tom: that is where the pros look. the media is always focused on the spot price but there future prices out. that goes into the inflation report this week.

it is absolutely incredible to try to figure out the new duration of higher inflation. that is a huge mystery. jonathan: cpi is 7.9%. the low estimate is 7.5. it will be a big number, whatever happens thursday. lisa: this is not even including gas, this is talking about rent, about wages, about the cost of health care. you at the $4.50 breakpoint and what does that do to the rest of the inflationary input? does it dampen them? and then we lead to a slower growth? jonathan: i know you enjoyed catching up with jay pelosky. we will do that in about 20 minutes. how the story has changed in a few weeks. tom: you get beyond this war. we talked too little about the agony of ukraine. you get beyond it and you have

to learn to pick up the pieces. jay pelosky is an optimist on that. jonathan: did not talk about julian emanuel. i will talk to him later. pricing the vice target to 4800. still wealth -- moving the price target to 4800. lisa: we start to see the downgrades come in. even though he did bring in his estimate, he still sees gains on the s&p. jonathan: we have not seen the gdp cards yet. the forecast. tom: i agree. in their defense the uncertainty is so great i am sure there waiting to make those calls. jonathan: will recover more going into the opening. fruit 1.1 and one dollars and agree. in their defense the uncertainty is so great i am sure there waiting to makebrent -- crude $. wti $117. ritika: an advisor to ukraine's president says the next round of

talks with russia will begin later today. u.n. says more than 1.5 billion people have fled ukraine since the war started, mostly to poland and moldova. vladimir putin has repeated the war willbrent -- continue untile accepts his demands and halts resistance. the european union is calling for fast action to ensure the safety of ukraine's nuclear power plant, two of which have been seized by invading russian forces. in a letter to the international atomic energy exchange, they urged moscow to return control to ukraine. a decree signed by russian president vladimir putin will allow russia and russian companies to pay for an creditor in rubles. it establishes temporary roles for sovereign and corporate debt making payments to creditors from countries who engage in "hostile to bees against russia." russian currencies have pledged

to deeply discussion levels. china is warning the u.s. against trying to build a pacific version of nato in says security is disputes over taiwan and ukraine should not be compared. china's minister says the goal of the u.s. indo-european strategy was to -- warned against calls to expand ties to taiwan. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> it is important to recognize the likelihood of removing putin

from power is extremely low until the moment it happens. it is not useful to speculate on when it could happen. it is important to understand the pressure is there. tom: ian bremmer with an interview this morning. he is with the eurasia group. lisa abramowicz and tom keene. brent crude, $122 a barrel. get the russian ruble, my eyes are failing me. there it is. 137, weaker from a 76 level a month ago. still immense tensions of this war in ukraine. it is our great pleasure to introduce the former governor of the bank of israel and the rockefeller professor at the university of chicago just a few years ago. jacob frenkel, it has been far too long since we've seen you working with mr. diamond at j.p.

morgan. he comes to us from tel aviv. joe stiglitz talked about globalization and its discontent. we have globalization and vladimir putin's discontent. what will come after? >> since the collapse of the soviet globalization and vladimir putin's union in the ey 1990's, the entire world was excited to embrace russia, embrace china, to bring china, m into the group of nations the g8, the g20, the wto all brought them in and both china and union in therussia have benefiy from being integrated into the world. this has been a great period

which during the past few years was immersed in a trade war, and now with the invasion of the ukraine has turned kennett all back. russia will end up being much for. they are day in and day out. they are isolated and secluded financially and politically. the question now is how will the world look after? unfortunately globalization will be part of the legacy of the past and we will now move to a new world order in which democracies of the type of u.s. and europe will be on one side, and other countries, autocratic countries like china and russia will be on the other. lisa: how do we get to that place considering the

intertwining of the supply chains as we have seen, that we have still not moved away from. even with the pandemic a lot of companies have kept their factories in china. jacob: indeed. they've kept them in china because it was economically warranted and i believe they will continue working with china. china sees what happens with russia, so it does not take clear sides does not join the world in condemning what is happening in russia. by the same token, it takes the it'll ground. russia and china will continue to be a partner, but it will be of a different nature, not of camaraderie but self interest. tom: as a former governor of the bank of israel, delicate question but i will ask it. what is the place of israel to negotiate some form of better place in this war in ukraine?

jacob: i believe the place of israel is to be wherever it is found to be useful. in this regard, when both the u.s. and russia and the ukraine have approached the prime minister of israel in a request to see if he can bring some common sense even though the chancellor -- -- even though the chances are not very high, like most negotiations, naftali bennett decided to jump to see if he could bring cohesion. it is not -- it is a big issue. even progress of one inch is progress. lisa: we are getting a sense the u.s. is working on striking some sort of iranian deal in order to unleash some of the oil supply there. i know this is a delicate issue

for israel. is there more willingness in the nation to allow that type of deal and support it given where we are in the commodity space? jacob: there is so much in the mix. we get into the kitchen where there are important chefs is never a wise move to take. given the situation that the u.s. is planning to ban imports of oil, it will be extremely important to find other sources. other sources can from from saudi arabia, can come from other places that have it. i would put it in this context. what is important is not to forget, this is been the position of israel all along, that the iranian deal, the keyword is not deal but security

and safety for all concerned. if it compromises that come is not a good deal, and if it does not it is a good deal. tom: jacob frenkel, thank you so much for joining us. former international chairman of j.p. morgan chase and former governor of the bank of israel. an extraordinary monday and i lose grip because i guess we are doing better now with the ruble at 142. i do not know what to make. i'm supposed to say the tape is better. from what? lisa: and that is very true in the commodity space. you are seeing a lesser high in crude, wti at 100 1882. -- at 118. what we are looking at is a doubling in just the span of a couple of months. how do we say a better tape? tom: let's go to the one thing i've not talked about.

how credit is doing. what is the gap between corporate paper and full faith and credit paper? lisa: you're stunned to see more concern. for a long time there was -- you are starting to see more concern. now you're starting to see spreads widened out. it is at the widest level since december 2020. not at catastrophic levels but definitely starting to get concerned if this would bleed over into a growth scare and create a credit issue down the line. tom: one research note out of ubs, the team looking at europe. what a different story in europe. futures -17. the vix at a 35 a level earlier this morning is at a solid, two big figures, 33.17 but still perched above the 30 level shows

the angst in the market. we will drive to the conversation through the morning on bloomberg radio and uber television. much more -- and bloomberg television. much more as we continue to monitor the war in ukraine. this is bloomberg. ♪

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jonathan: a new week, the same tragic story. futures recover, down just .4%.

"the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: live from new york city, we begin with the big issue. the war in ukraine intensifies. the devastation in the country pushing secretary blinken to prepare for the next step up in sanctions. sec. blinken: we are talking to our european partners and allies to talk about the prospect of banning the import of russian oil, while making sure there are still in appropriate supply of russian oil on the world market. jonathan: germany says no, leaving the white house under mounting pressure.

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