resiliency of the consumer -- an eye on the resiliency of the consumer. >> ultimately, you will see higher rates and it will be higher inflation pressures. >> this is bloomberg surveillance. jonathan: from new york city, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance, live on tv and radio." big price action this morning. the government response brewing in europe and the proper response has been something else. tom: it is deceptive. huge news flow. secretary of state speaking may be a number of times. the headline flow and how it wraps into the markets, it is not a flighty market, it is a

market worldwide in shock. jonathan: a statement from the royal dutch. the ceo apologizing for buying russian crude and coming out with a range of responses including immediately respond seeing -- immediately stopping buying russian crude. tom: this goes back in time. this is a company with two geographies battling for years with mediocrity but always a great respect for their ability to produce. i look at them somewhat like chevron and here they are pulling out and doing it after the fact. they are a week late and apologizing. jonathan: congress coming up with framework to ban russian crude. the market is already there, isn't it? lisa: has priced in full sanctions by the u.s. on russian

oil or is there more to go? that has been what of the debates. we are looking at a market that a lot of people perceive seeing europe possibly retaliated against by russia. jonathan: will worship respond? we will talk about the talks with xi jinping, emmanuel macron, and shulz. tom: it will be interesting to see how the chinese address what is going on in the west. there is the fallback for the west for what xi jinping is learning about taiwan and what we are learning about the russian army. what is important here is the response of mr. putin this tuesday. jonathan: yesterday down 3% on

the s&p, the biggest one-day drop since october 2020. futures up .3% on the nasdaq 100. into the bond market, yield climbing by seven basis points. one point 8439 -- 1.8439. lisa: a $2 trillion plan to combat the pandemic, and now this period see how much political support and how much potentially this could boost growth in the region for the euro. it is the first in percent conference down in houston in the united states. here is a massive flu of incredibly important names.

all coming together to talk about the view. yesterday interesting statements and the scathing remarks about this administrations growth -- approach to domestic production. and trying to get price stability. you have seen prices continue to climb to new highs in the crude market. secretary of state antony blinken continuing his tour of europe. he is in estonia heading to franch and will meet with emmanuel macron. how much will they talk about to sell debt by the euro region and alternative methods to get gas at a time when frankly germany has said they cannot not rely on russian gas and how are they going to support themselves while they try to transition to a new energy future. the u.s. treasury department selling three-year notes at a

time when people are still pricing in six rate hikes. how much do we get pushback's or less demand as people look to a stagflationary environment? jonathan: team coverage starts right now. maria, the plan that is brewing in the eu, how big is this? maria: it is in the works and we don't know the details but a good comparison would be the pandemic response, billions of euros plan with the european institutions with aaa rated debt would go to the markets and payout to the different countries that make up the european union. what i hear is it could be something in that region the number is floating. if i give you a pacific number, it is a repeat -- a specific number, it is a repeat that was put together for the pandemic.

they want to use this for defense spending and energy. i hear by the end of the week when european leaders meet in paris they want to give the political ok to this. they are working of the technical details and trying to create a market for this. tom: secretary of state is going to eight cities in eight days, maybe only four days. if he is telling them we are going to limit oil from russia, how will the europeans respond? maria: it is hard to say. europeans are divided on this, especially because energy policy is very much split by different countries. some are good at renewables and others with coal and germany with gas dependent on russia and the french dataset we will triple down on nuclear. there isn't a single response. if you look at the countries

that blinken has visited, he has probably heard a positive response. the polish and lithuanians are for this. they need to unplug from russia and this is blood money. whether he gets that response from germany is a different scenario. and when he sees emmanuel macron today, he will probably see a positive response. they don't want to depend on russian gas or oil. this is the area of strategic autonomy, they say. lisa: a bipartisan approach to sanction and ban russian oil, are they working together on this? joe: the president is concerned about the perception of a crack in the alliance after he spoke yesterday with the leaders of france, britain, and germany. they feel like they have to do something after not reaching an agreement. it is a similar approach to

banning oil but added a couple of other things. the russian crude band and trying to get russia out of the wto empower the president to add tariffs and -- on russian and belarusian imports. if the president imposes a band, he wants to be able to undo one at some point if that time present itself. tom: let me ask the bipartisan question -- what are we waiting for? how did the white house respond? joe: this is a delicate situation. you have refiners asking the administration to give them some transition period. tom: that is paragraph 42, page three. there are children on the shores of the black sea dying of dehydration here what are we waiting for? joe: you don't have to convince me this white house is concerned

as well about gas prices making the midterm election season worse. this is also instructing the conversation about funding the white house is working on. the number has gone from $6.5 billion a week ago to now $12 billion and it is not just refugee management. this would pay for fighter jets replacing the mid-29's poland is considering giving. there is an op-ed in the washington post that went up from the foreign minister of ukraine has spoken to us on bloomberg and he says we need aircraft, effective air and missile defense systems. that could be argued to be the number one need right now for the way we will help ukraine as opposed to deal with this political situation here at home. jonathan: thank you. always good to catch up. one of the moves of today has been on the london metal

exchange, nickel, through $100,000 a ton before pulling back again and suspending trading. we have a mash of squeeze, margins, all over the place. tom: i put this out on social and i will do it again when i get time. a classic short squeeze will come in. can you explain why they shut down? jonathan: i don't know either. tom: on the other cited the trade and they have made -- on the others of the trade and they have made a profit. jonathan: they need to explain themselves. one bank missed a payment but do we now understand they made it? lisa: we understand they got alone and an extension. how much is lme credit beyond

that? you talked about things breaking and margin calls and short squeeze in, it is not just in nickel but further beyond, even in coal. i was struck by peabody actually losing money and having to take out a because they were trying to hedge their exposure to coal. it is kind of amazing. jonathan: something tom has been hyper focused on. features up .3% on the s&p. nasdaq up on most .1%. crude up 2.5%, shall bought -- shell bought russian crude and then apologized and said they wouldn't do it again. this is bloomberg. ♪ ritika: the pentagon says u.s.

and allies and you caning forces using eight effectively. the u.s. facing supply and fuel problems. key lawmakers have introduced the outline of a bipartisan bill to bar russian oil into the u.s. russian oil makes up 3% of u.s. crude imports. american refiners have been lobbying to make sure they do not apply to deliveries already in the works. shell said it will stop buying russian crude oil and will not renew contracts. the ceo said the decision last week to buy russian crude was not the right one. halting traded in the nickel market after an unprecedented rise by 250% in the past two

days alone and hit record highs above $100,000 a ton. u.k. facing the biggest drop in living standards in a half-century. inflation could exceed 8% this spring. that would cause incomes to fall for percent. -- to fall 4%. 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. ♪

>> making russia the pariah, destroying in the space of a week 30 years of international openness and opportunity. jonathan: secretary blinken speaking in estonia. he will go to france later this morning. from new york city, good morning. features higher by .2% on the s&p. the nasdaq down.1%. a time to talk about the commodity market. up almost 3%.

the american government, congress, talking about pulling back from russian crude. shell apologizing for buying russian crude at a discount. tom: we can look at any number of statistics. maybe i am stasis with euro swiss, the politics is front and center. the secretary of state speaks 130 miles from the russian border. i don't think for americans that is understood. from finland, helsinki, he is next or putin as he speaks. jonathan: estonia, latvia, lithuania go up against the eastern side of nato ownership in they will feel vulnerable at the moment. tom: there is no question. when he was in charge of the

european command, 400,000 troops and now we have 100,000 and he is looking for a rebuild, including estonia. jonathan: the executive branch pushing say shins -- pushing sanctions. you get the idea that it is congress pushing them. tom: i bet today we could see something, but what do i know? we will continue to follow the headlines. margaret patel joins us, all spring global investments. how is your day today change in this crisis versus the 42 you and i have enjoyed over the years? margaret: this is very much like covid, where suddenly the russian invasion came out of the blue and has shaken the whole world. with the correction in the markets and volatility, i am

looking for opportunities to invest for when the market recovers from this. i expect this invasion crisis to be relatively short-term so i am looking ahead to a favorable financial backdrop. tom: you are singular in choosing equities with income characteristics over fixed income assets. are you finding those opportunities in the quasi-fixed income market or do you have to buy coupon? margaret: a lot of equities have gotten hit. equities that went up got hit, equities that lagged got hit so there are a lot of opportunities across the board, especially if you think, which i do, any rate rise initiated by the fed will be very slow and disappointing market participants. high yield is attractive. defaults are under 1%, historic low. they offer 3% to five percentage

points more than treasuries. that is more than enough cushion that if we have an increase in default or volatility, for fixed income only investor that is a goodbye. lisa: it is possible to handicap the vladimir putin's mood swings ? is it possible to say when there will be an and to this conflict -- there will be an end to this conflict? margaret: we have seen the beginning of the end already quite frankly. if you look at the army losing three generals in less than two weeks paid what do you need to know about their strategy as far as i am concerned? -- weeks. what do you need to know about their strategy as far as i am concerned? what will that cause the fed to do, very little i think. lisa: even if the disruptions you see in the commodity market continue and we do not get a retracement of the wild moves.

margaret: historically commodities have been volatile. we have been in a period where they have been relatively smooth and i think that is just the way commodities are paired you have to look for the long-term opportunities. jonathan: thanks for being with us. margaret patel of all spring there. the call on the lme yesterday on nickel. he went through some of the substance. we cannot confirm they paid the outstanding margin call to the nickel positions on the london metal exchange. lisa: they have gotten an exchange from the london metals exchange which is unusual, as a lot of houses trying to shore up balance sheet and a buffer against similar moves. it raises questions about the london metal exchange's ability to handle this because we are

seeing swings we have never seen. tom: a book had a definitive article and it was mentioned, i need to be careful here that it has been previously reported that a chinese entrepreneur, known as big shot, had a large short position. this is a bank holding a margin spots ability for -- margin responsibility for when other companies. i don't want to tar and feather the bank here of china versus their customer relationships. jonathan: the lme facing a squeeze. move overnight has been phenomenal. at one point going to $100,000 before coming back. over monday and tuesday, huge. lisa: unprecedented, 250% surge in two days fielded by margin calls and short squeezes.

the moves we saw in oil yesterday was also on dated. nickel is more esoteric than oil but seeing similar masses -- massive moves. they are going to be called out if you see violence in the price action. jonathan: unprecedented has been used a lot over the last few years. to see the statement from shell in this statement, we are acutely aware that our decision to purchase russian crude was not the right one, and we are sorry. tom: i saw the list two days ago but got a list of companies that have reacted quickly versus those taking their time. the lights are bright for a lot of c class officers. jonathan: and energy carve out.

tom: it is like sanctions. it is a reality and something new. jonathan: brent up by 3%. from new york, heard on radio, seen on tv, this is bloomberg. ♪

jonathan: the biggest one-day drop on the s&p going back to 2020. up .4% on the s&p. the russell, small caps of .7%. antony blinken repeating there isn't active discussion within the administration to implement an oil embargo on russia. let's see where that goes. the market is heading in that direction. brent crude, wti klein higher, just short of 1.27. shell buying russian crude at a steep decrease and then apologizing and saying we won't do it again.

we are talking about sanctions they are imposing on themselves. energy equities up 37%. for the airlines, reopening getting more and more expensive. the airlines in america down 21% year to date. tom: this is a really important point. they have a fixed cost for petroleum. it is pretty grim. jonathan: yesterday was grim for some of those names. twos, tense, 30's, twos the highest -- twos, tens, 30's, twos at the highest. going into cpi on thursday and the fed next week. tom: the inflation statistic is

something to talk to claudia sahm jain family institute at -- claudia sahm at jain family institute . you put out your shingle in dresden, germany far ago and long away. you have lived east germany. tell me how you will perceive how the germans will respond if mr. biden reduces russian oil into america? claudia: i hope he steps in as the freighter -- leader of the free world and where we needed europe will go. we have a war, crimes against humanity. germany knows what that means more than anyone. people will step up to the plate and we need policymakers to find ways come even after we cut

russia off, to help get gas prices down. there are many ways we can do this. this is going to be a shared hardship but we don't have to make it harder than it has to be. i think we will rally but i don't know what people are waiting for. there are ukrainians being slaughtered. tom: on the inflation front, you are out of the michigan combine, where there is a huge study of inflation going back decades. what can a president do about inflation? claudia: we need to get creative . one thing that has not been talked about but certainly hinted at already in your opening is we need to get corporations, big oil and opec, lean hard on them to get supply going and stop gouging customers

on the prices. we saw in the united states, the five biggest companies own almost one third of gas stations in the united states. shell leads the way and they reported $7 billion in adjusted earnings in 2021. i know they got hit in 2020 but enough is enough, you got it back. there is a bully pulpit that needs to be used, cut the gas tax and make those five companies come into hold margins where they were before the russian invasion. let's get them back to pre-covid. lisa: let's talk about the economic ramifications. putting aside the politics of how to proceed, what is the point at which gas prices, currently at a record high across the united states on average, and what point does that her pito growth in the u.s. and send it backwards?

claudia: we have an economy moving in the right direction. on friday, we saw 3.8% employment, 700,000 payroll, there is not a labor shortage. we are moving in a good direction. have to get inflation down. a dollar 50 more at the pump is what we have seen is a hardship, particularly for lower income and wage workers that we are demanding go back to crappy jobs. but not having a paycheck is a disaster for families paired we have seen a lot of people get paychecks back that we have to get inflation under control. they need gas. lisa: i am listening to what you are saying and trying to parse out what this means for fed policy. the way you are framing it, and i know you believe it is the

labor market, but we are dealing with inflation running at the hottest pace since 1981, 1982 and dealing with a multifaceted number of inputs into that broad inflation reading. are you arguing that the fed should not raise rates even though they are facing the biggest inflationary surge in decades? claudia: jay powell and the federal reserve officials have been absolutely clear they are going to raise rates. i am completely on board with starting with 25 basis points. we will get that next week, and steadily bring them up. there are interests sensitive sectors. housing industries are low, durable goods are low. they can move the needle and cooling the red-hot demand but we are deeply mistaken if we think they can get gas prices

and food prices down. they would have to tank the economy to get them to buy less gas and they will not do it unless they absolutely have to and they don't have to get. it is going to be a rough ride. we need covid to remain and become more and more contained. that will be a big piece of getting inflation back down, but there will be another wave. we better pray it will not be as less bad as the -- as bad as the last two. jonathan: this is a quote, u.s. and allies consider ramping up sanctions, american say they would support ban on russian oil even if it meant higher gasoline prices. what did you make of that? claudia: we are americans and protecting democracy and have made sacrifices before to fight

the people for democratic countries under attack. i don't the query should run with that. -- i don't think we should run with that paired we need to stop funding putin's war and do the hard work of getting prices down. we can do both. i was not surprised one bit when i saw the polls. tom: my email is lighting up. last -- let's revisit this. the right's concern is those saying be calm about inflation and do the right social policy are going to bring back the 1960's of walter keller with paul volcker. respond to that what is the fear we have about the wall -- of the time of the 1960's that we should not fear today?

claudia: in the 1960's you would not have been calm about covid. putin is going for the leaderboard here, but that is why we have high inflation because we told lies to the american people and that a million americans die. we are fighting for the people here. this is ninth 19 -- this is not the 1960's, 1970's. i am not being optimistic but i believe we are being pointed in the right direction and we might actually rally together from red to blue and fight back. i can't give up hope here. jonathan: repeat that again, we have inflation because we lied to americans and let a million people die. what with europeans doing? claudia: we were gripped by a pandemic. there is higher inflation in the united states than in europe and frankly europe has more price

controls and there is more going on under the hood for price pressures in europe but the united states created the vaccine. we could've vaccinated our country and the world. europeans did not have that lever but we did not pull it. we have to keep moving forward and be prepared for the next wave. we have to stop preparing for the worst and open for the best. now that we have an actual war happening, i think we are going to get serious, i hope. we are seeing those signs and we have to embrace the good. jonathan: claudia sahm , thank yo. tom: there is a view on the left of everybody calm down on

inflation and we will solve it. the key foundation is productivity with american technology and wealth we can work our way out of this inflation. another school of thought that says we are not so sure. jonathan: that is not just a view on the left but some were off the charts in the last couple of minutes. lisa: putting politics aside, what we are seeing in interview after interview is that people do not agree on the reasons for the inflation we are seeing but know it being turbocharged in price action and that is what we can say putting politics to the back burner. jonathan: the s&p up .3%. from new york this morning, good morning. this is bloomberg. ♪ ritika: u.s. drivers hang offer gasoline -- drivers are paying

higher for gasoline than in history. gas averages $5.44 a gallon and demand has been surging. threatening to cut off natural gas supplies to europe, that is part of moscow's response to sanctions imposed over the invasion in ukraine and could heighten turmoil in the energy market and drive consumer prices higher. the european union will unveil a plan for a massive bond sale to finance energy. the eu is coping with the fallout from russia's invasion of ukraine. no word on how much money will be raised. australia is well-placed to recover the cost of fuel if it stays where it is for now. we spoke to the financial officer. >> if they say as high as they are heading into the --, the way

to manage feel crisis is to recover that through higher fares. ritika: they say demand for travel is up high enough for that. 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. ♪

>> it seems like they are headed toward banning russian oil. >> if there is strong bipartisan

and what we have heard is the white house is considering, the obvious is to do the oil. >> why should any russian products get special treatment in the united states. jonathan: from new york, good morning. futures up .3%. looking at doing something about russian crude, banning russian energy is the discussion in congress. yields higher by six basis points. crude is pushing and that. 127 almost. an apology from the shell ceo. tom: a reset this morning is the vix at 35. i would suggest it is as fragile as yesterday. jonathan: think about the range

of outcomes. you could be equally disrupted about a de-escalation as an escalation. tom: let's move on. we are going to do something we haven't talked much about, which is the refugees. i believe the number was 600,000 and then one million, and i believe i see numbers in excess of 2 million. this is something julie norman has studied for years. she is the codirector on the university college london and she joins us today. what is the number one thing we got wrong about refugees? julia: many things we get wrong, but first and foremost is why people are fleeing and where they are fleeing. this is a different refugee flow than in the past, much faster.

what is unclear is the long-term implications. we know people are going across the borders and will need long-term shelter. this is what we need to step up with this. the eu has been first and foremost trying to get temper a status and visas here the u.k. has been much slower -- visas. the u.k. has been much slower. tom: it seems so much larger than the hungarian revolution of the 1950's. which institution do you look to to provide leadership or is a refugee done nation to nation? julia: there is one reason why it is different as each has their own. some organizations can provide umbrella support with refugee

camps. there are long-term challenges of providing some sense of stability and long-term security but it is state specific paid the eu as a block has had a different mechanism than the u.s. and the u.k., and so for many just getting to the eu has different opportunities. the u.k. has a different immigration policy. the home office is trying to work on that but it has been slower than the eu. lisa: in the here and now of this conflict and trying to end it, what did you make as what people viewed as a softening of vladimir putin's stance for ending the crisis. mainly, he did not call for a regime change and the current administration to be eliminated from office? julie: i think we heard

consistent messaging and his demands regarding nato. this was before and up until now where the demands darted that ukraine not joining nato at any time in the future and calling for ukraine to be neutral and to recognize annexation of crimea. working within that framework rather than regime change is something that will be up to ukraine if they are willing to negotiate on any of those points . it brings back to a more tangible negotiating level and talking about very importantly contained negotiation's for what is going on in ukraine and not something broader guarding other nato states. lisa: can you lump in how we should read the assertion from russian officials they were thinking of cutting off gas to europe, potentially closing nord stream 12 germany, at a time --

nord stream one to germany? julie: this is in response in what we are seeing with discussions in the you up but also in europe about expanding sanctions to the energy sector. we saw some movement on that in capitol hill yesterday. the white house has not firmly decided and one of the reasons is because there is pushback in europe to those moves. as those are happening, putin is trying to have his own deterrence by essentially threatening to cut off russian gas and oil which provides one third of the resources to europe. this is something more of where the focus will be in the next two days about how the international community engages with this with invocations for europe and the u.s. on that. jonathan: wonderful to hear from you, the brilliant julie norman. getting an update, commodities

up in the last 24 hours. bloomberg leading the way on this. this chinese tycoon who built a massive position in nickel controls one of the most largest producers and is known as big shot in commodity circles. he is now facing billions of dollars in market losses after the metal surged more than 170% in two days, according to people familiar with the matter. you are familiar with one of the stories of his broker, the sisi b.i. -- ccbi, paying out on the lme. this slowly unraveling itself in the past few hours. tom: the fundamentals are simple. there are two kinds of nickel mining, the fancy stuff which russia is dominant in, they have one third of the nickel sulfide.

russia is in the fancy stuff. this guy is in the less fancy stuff and taking nickel and extracting it in southeast asia. it is a completely different world from russia and he was hedging of his belief and that on what electric vehicles would do, because they use the nickel in their processes. jonathan: when things move quickly, things break and overnight things broke on the lme on the nickel market and then trading was suspended. lisa: bloomberg reported commodity trading preparing for more things to break by trying to get some sort of credit line going and boosting credit lines they already have. we saw all of these wagers in the financial market transfer over to commodities. it is very different market when there is a physical good that needs to be delivered. jonathan: that is a goldman

story. compared to the global fixed income market, a shift into somewhere smaller and big things happen. which is up .5%. from new york, this is bloomberg. ♪

>> we had full exacerbation over the past couple of weeks. >> we are in a commodity squeeze already for all of this happened. >> ultimately you will be higher -- you will see higher rates and it will be a result of higher inflation pressures. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures up 0.6% on the s&p. on the commodity market, monster moves again. tom: i don't buy the stock market bounce. in the commodity markets, there it is, nickel. i