>> the fed is concerned that they are behind the curve, they have waited too long. >> you are seem to fit the classic trial balloons out there and say what if we did go 50. >> i think there's a significant risk of a hard landing, and since we are being blunt, let's say recession. >> we are going to get a recession in the next few years. the question is when. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from new york city, good morning. this is "bloomberg surveillance" on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. for the president, the week begins right now. tom: it is on diplomacy. while the diplomacy is going on, including the headline we got

come up to 100,000 fleeing war, it is an exceptional blast on the black sea right now. the exception will video, the ukraine navy says the ship blown up. the headline to me is the war continues. jonathan: three issues at play here. one is combat, the risk of chemical warfare i russia. two is china, their role in all of this. three, the energy dependency of europe on russia and what the u.s. can help them do. over the next couple of days, can the agree on something big? tom: those are three disparate parts. the chemical warfare issue is germane because right now, correct me if i am wrong, and the last 48 hours, there's been constructive ukraine war news. you wonder what that means for mr. putin. jonathan: keep an eye on the

headlines as they come in. vladimir putin requesting that the europeans pay for russian gas in rubles. kailey: we saw the pushback starting yesterday when italy said it is not inclined to do so. now poland saying that is simply not possible. it raises the question of what europe is going to do. maybe it just accelerates the push between them self off of russian natural gas. that is something the u.s. is going to try to firm up today. jonathan: this nato summit wraps up in about an hour, then onto the g7 and onto an eu summit. tom: they are doing the rounds. it is a shock to me how this is such a different nato than the nato you and i knew six months ago or six years ago. there is something new here. what what are we going to get from the statements? jonathan: they've had two shocks. the former president saying let's spend on defense in a massive way and don't rely on us too much. the second stock, russia opens

the europeans' eyes to the threat on the doorstep in a massive way. instead of embarrassing his allies publicly, he allowed his allies to embarrass themselves, and they have had do turn around and do a mass of 80 on some big issues. tom: to me, the imagery of the president of the united states across the atlantic, i know it is timeless, but there is something different when the united states shows up. the dialogue is different. jonathan: let's keep on top of the price action as well. equity futures with a lift on the s&p. yields higher. we are facing another 10 basis point move on the 10 year treasury, 2.3882% on tens. yields up around the world. tom: commodities up as well. nickel up this morning. copper up. i looked at lme, and the answer is not out to record highs, but

the bloomberg commodity index really buttressed up there. brent crude, $122. jonathan: wti, $114.73. kailey: as we have been talking about, a big day for geopolitics. back-to-back summits for the president in europe. the nato summit already underway. at 9:00 eastern time we will be getting the g7 leader summit, followed at noon by the european council summit later today. the question is, are we just going to see statements? what about actions? we also await data in the u.s. we get jobless claims, durable goods at 8:30. does it matter to the federal reserve that seems pretty dead set on a 50 basis point move in may? that is what we have heard from a chorus of fed speakers. have we heard enough from them? the answer is probably no because throughout the morning, neel kashkari, evans, waller,

bostick, all of them speaking by 11:00 a.m. eastern time. what else do we want to hear from them? will we get more discussion about how the balance sheet factors into all of this? jonathan: thank you. in brussels, team coverage begins with anne-marie -- with annmarie, alongside maria tadeo kailey:. -- alongside maria tadeo. how does it come together through the next 24 hours? annmarie: let's first start with the risk of chemical warfare. the president said this was a threat en route to brussels overnight, and the draft that bloomberg has seen a copy of talked about the use and the threat to president putin, and warns him if he would use chemical or biological weapons. we should remember president putin provided air cover in support of bashar al-assad in syria when he used chemical weapons. he also used it in southbury in

the united kingdom. -- in southbury in the united -- in in the united kingdom. we don't know what the consequences they have talked about would actually be. when it comes to china, but i imagine you can see here is leaders that want to implore china to first come out and condemn what is going on, and then put china on guard and warned them they cannot help russia when it comes to skirting around sanctions, also providing military support to president putin, is key right now as the president is in europe ahead of a key you-china summit area today, what is key is the messaging and the actions on china follow-up. tom: maria tadeo, please tell us the military momentum, if any, that ukraine has at this moment. maria: of course, a lot of this information is not made public.

the ukrainians are always very secretive about the equipment they have and that has been destroyed in this fight with russia. the secrecy around the military operation has had a crescendo because it really concerns the polish government. a lot of the weapons have to go through the polish border. poland at this stage is the biggest distribution hub of weapons into ukraine, and many officials i speak with say the best thing we can do for everyone's safety is to stay quiet and not reveal a lot of this. at the start of the crisis, everyone wanted to show solidarity with ukraine. they all revealed, this is what we are sending, this is how it is going to get to ukraine, but that made poland a target for the russians. if you watch russian tv every night, which we do here, they always say the polish government better watch out because they should not get involved here. otherwise they are going to have a problem with russia.

so a lot of the military operation is very secret. the one thing that is very open and the ukrainian government continues to say that they are not going to surrender their major cities, not even mariupol. there was an ultimatum put forward by russia saying you have to give up your weapons or it will be a tribunal. the ukrainians say the fight continues. kailey: on that point, greg valliere at agf investments in his note today said the question is also whether or not nato is going to push of volodymyr zelinski to accept a deal that he may not want. is either ukraine or russia looking like they are ready to accept some sort of peace deal? is either one willing to cave on anything at this point? maria: at this point, the clear answer to that is no. new look at the special military operation that vladimir putin refers to, at this point he's gone in too deep in ukraine. the donbass is not good enough for him, and crimea, everyone

already knew that this kind of belongs to russia. they are not going to give it back to ukraine. so that is not enough for vladimir putin to say we have the donbass and crimea. when it comes to ukraine, they will tell you know, we don't want to do bilateral deals with russia. we still believe we have momentum to stop them, so therefore, what you see is that the two sides are just trying to build up their leverage before the real talks begin. ukrainian officials tell me nothing is going to move until the end of april, so when you look at the ukrainian side, they still believe if they get the weapons, they can go on for longer, and the longer it goes on, it could help the ukrainian government because it will tire out the russians on the ground. jonathan: thank you. what a busy day we've got coming up. worth repeating, the president and allies in the nato meeting right now. that summit ongoing. they are having an address by president zelenskyy of ukraine. about an hour from now they were going to a g7 summit and an eu

summit meeting. tom: the markets speak for themselves. i do want to point out a wonderful essay by john micklethwait on the similarities here to world war i and the differences to world war i. what they talk about here is something that i think prime minister johnson has a unique feature of, and that is maynard keynes in 1919 talking about the permanent, and the permanent of 1914 that was shattered forever. the idea that the normal, the certain, the permanent gone. jonathan: the history this speaks to in some ways. hearing from to be true best cough of the kremlin -- from dmitry peskov of the kremlin just moments ago. kailey: continually putting the blame on ukraine for talks not making substantial progress, but it feels like we are hearing this almost every day out of the kremlin, slow progress on these talks. it speaks to what maria was

telling us about how long this could go on before either side gets to a point where they are willing to give in. jonathan: the security council speaking with the president. what do you think of the theater in the equity market? to open the market in russia today after being shut for a month, with all of the restrictions around it, just as leaders are meeting in brussels to talk about russia and sanctions. tom: global gdp, united states, 24% of gdp. russia, 2% of global gdp. that from the bloomberg quicktake this morning. you know what? it is about commodities, and they are moving higher. jonathan: crude approaching 115 dollars, unchanged on the day. yields are moving much higher, up eight basis points to 2.3784%. this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. president biden and other

members of the group of seven will issue a tough new warning to vladimir putin today in brussels. according to a draft statement, they will tell moscow not to use nuclear or chemical weapons, and plan to fully implement the sanctions countries have already imposed and are ready to impose more. the u.k. is out with its own set of 65 new sanctions on russia. according to the foreign secretary, they target strategic industries, banks, and business leads. the world's largest diamond producer among those. they say it is right that they pay the price. meanwhile, the u.s. and european union are close to a deal two/ european dependent -- on a deal to slash european dependence on russian energy. national security advisor jake sullivan says that will be a surge of u.s. supplies of liquid natural gas to europe.

north korea launched its first icbm in more than four years. it went higher and farther than its last test in 2017. south korea says the test violated u.n. resolutions and should promise to hold off on such launches. in the nickel market, the price soared by 15% for a second day in london. that puts more pressure on traders holding bearish positions following an unprecedented short squeeze earlier this month. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i ridiculed -- i'm ritika gupta. this is bloomberg. ♪

♪ >> it will absolutely confirm what jay powell has confirmed for himself, which is i have everything on the table right now. if we need to do 50, that is what we will do. but the data will determine what is necessary. jonathan: that was mary daly of the san francisco fed. futures up 0.6% on the s&p, on the nasdaq up 0.7%. we are taking a look at what is happening in russia. so the stall -- the steelmaker

unable to pay within a five day grace period. i am going to read out the story verbatim. it is keen to pay, but citigroup, acting as a correspondent bank of the unit issuing the debt, is blocking the payment. a person familiar with the matter says citi asked the company to get permission from the u.s. office of foreign assets control book for -- assets control before it could remit the cash. this is really interesting. what is going on here, here is a company who says we have the money, we want to pay, but we can't pay. is that a default if you have not received that cash, but they want to pay and are saying they can't get the money to you? tom: i would say it is a war, but the symbolism is this is something that is steal from the 1930's, the time of stalin taking out, made public by yeltsin, etc.

these are the people that bought rouge steel, which was ford motor. they were bankrupt and the russians came in and picked up rouge steel, and that is a really emotional thing for the midwest of america. jonathan: can i bring you the quote from the ceo? "this is an ordinary situation for us. we continue to do our best to ensure that bondholders receive funds in accordance with the bond issue. i hope this injustice will be resolved soon and directive bondholders will be respected. ? is this a credit event? i'm asking that question not because you can answer it, i just think that is the question to ask. tom: it is real simple. there's a whole body out there of people who think that ukraine is over there, and it is not a war of nations or war of regions and sides. there's another reality which is the war is literally ongoing as

we are on air. there's a war, and you run into credit events like that in a war. jonathan: and this could be one of them. sever stall -- severstal, the first russian firm unable to pay its debt. tom: sebastien page of t. rowe price, can it be business as usual? sebastien: no, i think the market is underestimating the impact of what is going on right now. the s&p 500 is up about 4% over the last month. you have an inflation shock on top of an inflation shock. that takes you back to the 1970's and it raises questions. even though this war does not feel like a direct hit to u.s. growth, the implications of the inflation shock can be

major. people on your show were talking about whether the fed will be forced to hike faster, higher, more aggressively, and you have consumer implications. people pay more for gas at the pump, so consumption can be hit. then you have corporate margins. right now we are underweight stocks versus bonds. we are still invested in stocks, but we are comfortable being underweight. tom: it is real simple. on a globalization basis, how do you reallocate international investment out three years? sebastien: as asset locators, we look at macro fundamentals, we look at valuation, we look at sentiment, and right now all of these frameworks are in flux because of the geopolitical risks. before this event, before this

war, you had non-us stocks where earnings were expected to accelerate more. you had a reopening that had even more possible pent-up demand outside the u.s. and a strong valuation case. i think right now it is better to be closer to the middle between non-us stocks and u.s. stocks. kailey: and the environment you are describing, what role does cash play? sebastien: we are short duration, so we are actually short treasuries in our portfolios, and we expect rates to continue to trend up. you see this this morning at over 2.3% on the 10 year. cash becomes an interesting alternative. again, we like to be invested. if tom is asking about the three year horizon, you need to be invested in stocks and bonds, but pulling back on stocks and then instead of just buying

treasuries, which you would typically due to de-risk, i think cash is an alternative. there are also parts of the credit market that are interesting to us right now. for example, bank loans have -30% correlation with treasuries. here is an asset class that tends to do well in rates rise. jonathan: got to leave it there. great thoughts, as always. sebastien page of t. rowe price. i am a bit distracted reading through the details of this story with severstal, the first russian firm to run out of time to pay its coupon. here's the detail. the firm itself does not appear on any sanctions list. the majority shareholder is on the eu and u.k. sanctions list. and in those jurisdictions, sanctions on individuals generally extend to all companies those individuals control. they did not preempt of apply for a permit from the u.s. asset of -- the u.s. office of foreign

assets control. this is going to be a long, messy process to try and figure out all of these details, and clearly, if you are the bank stuck in between, what do you do? i imagine you do nothing just in case you don't get a massive fine further down the road. tom: you are right, and the keyword there is long. i would go back to what i was reading about jp morgan senior and jr. in 1918 and how they tried to extricate jp morgan after the russian revolution, and it took years and years to figure out these relationships. they are all done in court over time. jonathan: damian sassower of bloomberg intelligence is going to run back into the studio and break down everything about what is going on here. then we will catch up with winnie cisar of creditsights. we will get into that in about five minutes. futures up 0.6% on the s&p, on the nasdaq up 0.7%. in the bond market, much higher. twos all the way out to 30's.

your 10 year, 2.37 54%. crude just short of $115 on wti, basically unchanged on the day. from new york, this is bloomberg. ♪

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jonathan: the president of the united states touching down in brussels, belgium. in europe right now, a nato summit. then onto a g-7 meeting and in eu summit after that. up 0.6% on the s&p, on the nasdaq, 0.7%. russia reopening after a shot for a month. can we call this a market? foreigners can't sell, shortselling is banned. a four hour trading session. the ruble south of 100. the conversation around that, the russian president asking for the europeans to pay for russian gas with rubles. the europeans pushing back. let's see if we can resolve that

issue later this week. that is a story in russia. we will pick up on the severstal issue in a moment, the first missed coupon payment outside of the grace period for a russian company. i want to finish on debt in america. twos-tens and 30's on the treasury curve. yields up, 2.37% on tens. we've had a move of more than 70 basis points this month alone on a two-year yield. tom: the question is when does it click in, and the answer is the equity markets so far push against it. jonathan: that is the cross asset price action. with the single names, let's get to them and say hello to kailey leinz. kailey: many movers indeed. one of them being spotify, which inked a deal with alphabet google yesterday to allow it to bill its users directly. that should make things easier for subscribe is to sign up, to benefit the company and potentially dating apps as well down the line. you are seeing spotify up 3.6%

and bumble dating app up by about 2.5 percent. i wanted to mention moderna, which announced $21 billion in advanced orders for its covid-19 vaccine for this year, up from the $19 billion it announced about a month ago. that stock is up 0.2% as a result. we will have the moderna ceo joining us in the next hour, so we will be sure to ask him about that. as for some stocks moving lower in early hours, one of them is appellate pharma. it is a -- it has a $1 million share offering. you also have darden restaurants reporting. it lowered its earnings forecast for the year, dealing with inflation that it says is about 6% for the full year. finally, a little froth coming out of gamestop, up 50% in two days, giving some of that back today, down about 5% before the bell. jonathan: thank you. tom, a headline crossing moments

ago. shall i read it again? severstal come the first russian firm to run out of time to pay a coupon. tom: it is a credit event of the moment, and we are making this up as we go. it is not original territory, but given a war, it is something new. jonathan: we've got to work through the sanctions, and the sanctions are complex. you can have a company not directly sanctioned by any nation, but if it's majority shareholder is by the eu and the u.k., than as a consequence, the company is as well. that is the difficulty we have now with severstal. let's get to damian sassower for bloomberg intelligence. the steelmaker had a coupon payment to make, if i big race period, they have missed it. can you walk us through that dynamic? what is and is not sanctioned? for the banks stuck in between, what are they meant to do? damian: severstal had a loan participation note that came do. a coupon payment was supposed to

be made to creditors with a five day grace period. that five day grace period has now especially -- has now officially expired. citigroup apparently wired the payment by severstal to pass on to its bondholders, but has not done so because it is requiring approval to make that transfer, the u.s. department of treasury. so where do we stand? we stand with unsecured foreign obligations of severstal amounting to roughly 16% of all of that debt outstanding. basically, if there was a default and foreign creditors had to seize the underlying assets, the offshore assets only amount to 16% of those bonds outstanding, so to creditors one this company to default? they work with this company to prevent a default, and severstal basically appealed to creditors yesterday, saying please go to citigroup and force them to accept the payment so you guys can get paid so we can avoid

this default. pretty unprecedented. tom: does the united states say to jane fraser, no, you can't do that? damian: we are making this up as we go along, and so on my. i really don't have an answer for that. tom: full-scale amateur hour. amateurs. saas our -- sassower, grizzled pro. does this intimate the hague -- does this end up in the hague? what does that mean, what i just said? damian: this is not about the hague. this is about the new york convention. companies like severstal are being grouped up with the sovereign, and that harkens back to venezuela in 2019. relay, what is being tested here is just how much we can create a linkage between severstal and the russian sovereign. right now, all bank are operating as if severstal is the russian sovereign. banks or not, we need you take every measure we can to protect our creditors' interest, and

that means appealing to the u.s. treasury for approval, and i guess that is where we are now. jonathan: is this just paperwork? is this about going to the u.s. office of foreign assets control and saying permission to send? is it that simple, severstal goes to them, they have missed something here? or do you start to get a little more skeptical about what is happening here and suggest that someone once a default here? damian: where you are headed there is the deep, dark place. can the u.s. government force these companies into default? i guess technically, they can. but do they want to, and do they want to be perceived as doing that? we talk about thede-dollarized -- the de-dolor -- the de- dollarization trend. if the u.s. government can force

companies into default and seize their assets, that is not a recipe for success, and my opinion. jonathan: damian sassower of bloomberg intelligence, as severstal becomes the first russian firm to run out of time to pay a coupon on its debt. tom: i'm fascinated in the relationship of the united states of america with a new national bank like citigroup. i get the russian thing, but how does western finance, how does international finance adapt to this? who's going to police the big banks? jonathan: who is going to be the bank that makes a mistake? it is all well and good that severstal pleads with the bank. can you imagine the fine they get if they do some thing wrong here? we are talking about billions potentially. tom: it is a movable feast to me, and maybe it ends up with secretary yellen. maybe it is the secretary of treasury that really starts to make tough decisions and advice to the president of the united states. jonathan: winnie cisar joins us, the global head of strategy at creditsights. help us decide if what we are

describing is a credit event. the money can't get there. damian: that to me sounds like a credit event -- whenever it -- when a freight -- winifred: that to me sounds like a credit event. in terms of end investors hitting the cash they are owed from coupon payments, that is definitely a credit event, and you have these technical defaults triggered quite quickly in the same situation. kailey: is there any ripple effect in this that pertains to russia? -- in this? is this contained to russia? winifred: i think that is whatever one is wondering. initially when we had more financial sections headlines, more ukraine headlines, things were moving rapidly, and now that tolerance for a little but of the risk associated with

these events and the potential fallout has increased a little bit, and i do think there's a lot of uncertainty around the second and third order consequences of the magnitude of financial sanctions we have seen put on the companies and people as well. tom: the first order condition is yield up, price down. are we in a bond bear market? how do you identify a bond bear market? winifred: that is a very tricky question as well. i think that given the magnitude of return losses we have seen in the corporate credit markets, we are basically on par with the great financial crisis of 2008 in terms of total return losses, or losses flowing through portfolios. for most credit investors, that feels pretty bearish overall. the silver lining is that we have seen the yields move to a point that we have not had on any sort of sustained basis since 2017, and that is making

bonds look much more attractive from a carrie perspective -- from a carry perspective. i am not sure investors are convinced we are going to see the sunrise tomorrow and all of a sudden we have this massive compression trade like we had in march 2020, but in terms of being able to earn some income on your investment, it feels like we have approached a much more constructive level. jonathan: thank you, winnie cisar of creditsights on some breaking news in the last 10 minutes. this came from citi moment sicko. nash citi moments ago -- citi once ago -- citi moments ago. wait for this. "could be around 3% at the end of june, up from 1.75% to 2%." think about that. the next sep comes out in june. it has rates at the end of this year of 1.75% to two percent. citi suggesting those could come up to 3% for year end this year.

tom: my immediate answer is where does that put that terminal value. no one is framing out a new terminal value. adam posen was way out front on this at the peterson institute about a new terminal value. they said 3% inflation, people said he was nuts. is that the new terminal value? jonathan: the nato meeting just wrapping up as well. getting word from one official that's a linsky urged native -- that zelinski urged nato readers to increase support. more headlines pouring through as well. we will put that up in a moment. from new york, this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. president biden and the group of seven nations have a warning for

vladimir putin in their meeting in brussels today. in a draft statement, the g7 tells russia not to use nuclear or chemical weapons and the war with ukraine. there is concern that putin may resort to drastic means if troops keep getting bogged down. the highly respected governor of russia's central bank wanted to resign after vladimir putin ordered the invasion of ukraine, but bloomberg has learned the president ordered him to stay. she was nominated for a new five-year term at the bank last week. a steelmaker has become the first russian company to run out of time to pay interest on a foreign currency debt since the war with ukraine began. company severstal says it is eager to pay the $12.6 million bond coupon, but citigroup, the correspondent bank of the unit issuing the debt, blocked that transaction. severstal and its controlling shareholders are not sanctioned by the u.s. the senate judiciary committee is expecting to vote april 4 on the nomination of judge ketanji brown jackson to the supreme court. on the second day of

questioning, jackson defended her record and explained how she decides cases. her confirmation is all but assured because of the democrats' control of congress. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> there are areas of our industry where we are seeing significant demand growth. i think the bigger issue is the tightness of supply across almost all of our resource commodities. i am hopeful that an agreement will be sorted around ukraine, russia, europe. the world cannot afford, for the benefit of all the people in the world, we cannot afford to keep going down this road. jonathan: the longtime anglo american ceo, hopeful about the future. fearful about what can happen in the near term. breaking news moments ago. let's get to bloomberg's and marie -- bloomberg's annmarie hordern. the latest, please. annmarie: briefed by a u.s. official on what is going on behind me in the building right now with president biden meeting his fellow nato leaders is that they are concerned and they are discussing what would happen in terms of severe consequences if president putin were to use chemical or biological weapons. the reason why this is top of mind of many leaders, because the war has drawn out much longer than the kremlin

expected. they thought this would be a swift operation, a military operation, and also the fact that president putin has been one to either turn a blind eye when his allies used chemical weapons in syria and putting himself and his military providing that air cover. also the fact that he used novichok in the united kingdom. their posture has yet to change in terms of new gear to terrence, but this is clearly top of mind of leaders today. tom: there's video on, of all things, youtube showing a mini pearl harbor. one ship destroyed, another clearly on fire, heading out to sea. a third ship maybe with some smoke. link the military action of ukraine directly over to the use of chemical weapons by mr. putin. annmarie: the war he is invoking

on ukraine is drawing out. it is not what the kremlin, not what his military advisors likely told him it would be. you know his inner circle is incredibly small and potentially he was given information that is just not correct and coming to fruition. they thought it would be days, not weeks. what it looks like potentially is now one month marking the start of this war. they are unable to capture the cities the way they wanted to. this is why there is that potential, and it is the top of mind of leaders, that is vladimir putin continues to dig his heels in, he may revert to the use of these types of weapons, nuclear, biological, or chemical weapons. kailey: to go back to the idea of deterrence, including deterrence postures, have we not learned over the course of the last month that vladimir putin has not responded, he is not actually able to be deterred? how does that thinking have to

evolve if, by definition, it is getting an actor not to do something, and yet vladimir putin time and again has done what the west would not like him to do? annmarie: i would argue vladimir putin has not been deterred for years. 2008, he went into a war with georgia and recognized south assess the. he annexed crimea. he has used weapons, nuclear, chemical, biological weapons in london. he has not been deterred by the sanctions the west has used. there is something a little different in terms of what is going on right now, in terms of posturing from nato. they are going to be bolstering the eastern flank, and it is going to become very clear as these leaders emerge from this meeting today that they will defend every inch of nato territory. jonathan: thank you. that meeting wrapping up for nato, then it is on to the g7

and the european summit. we talked about the three issues on the table here. one was the risk of chemical warfare. two was china's role in all of this. the third issue is the dependence of europe on russia for russian energy, and what the u.s. can do to help on that front. we are looking for some headlines on that through the next couple of days. tom: the triangulation here of those three ideas with what is going on on the ground, i really want to emphasize that it is very fluid militarily for the russians. i don't want to get sensational about it. i would point out that the prime minister of poland just out with an amazing set of comments. this is a gentleman steeped in finance, his work out of northwestern. he makes clear he sees a domino theory. if we don't stop them and ukraine, they will have to be stopped in warsaw. he was very clear on that. jonathan: that is why we've got a meeting between president biden and the polish leader tomorrow, an important conversation.

brent, 121 dollars, just a little softer. wti south of $115. tom: we have mentioned the lift we see in commodities and metals. pavel molchanov with us now, equity research director at raymond james. pavel: before the war, we saw global demand getting back to the pre-covid peak of 100 million barrels a day, but in the last four weeks, needless to say, the geopolitical risk premium in the oil price as a result of concerns about russian supply disruption have dramatically escalated. so to be clear, russian supply can be disrupted in multiple ways. number one, because one of the pipelines traversing ukraine or belarus were to get physically

hit by a stray missile. number two, because of sanctions. particularly if the european union were to join the united states in imposing an embargo on russian crude. number three, if russia itself chooses to use its oil exports as a proverbial weapon in retaliating against asset freezes and other economic sanctions. and number four, and this is probably the most impactful in the near term, private sector decisions by marine shipping companies to avoid picking cargoes of russian crude, so companies like maersk have said they will not touch russian oil as a matter of principle. that means at a minimum, more

costly and more time-consuming for companies like rosneft to get there crude onto the global market. jonathan: we had a connection problem earlier this morning with you. let's get you back on for a longer conversation about what is happening here. pavel with some important conversations on what is going on. tom: it is not so much the grains. they are elevated. but it is the summation. the bloomberg commodity index is very good math with very appropriate weightings. the answer is up. we are not to record highs, but i think an unspoken story of the last couple of days has been the lift in industrial metals, including nickel now trading higher. jonathan: the focus today on brussels. the nato summit just wrapping up. in about 20 minutes we are scheduled to have a news conference with the nato secondary general jens stoltenberg. from there it is onto a g7

meeting and in eu leaders summit a little bit later. the president attending those things, and tomorrow he will meet with his polish counterpart. a lot to get through. futures up 0.5% on the s&p. your 10 year, 2.368 1%. from new york, this is bloomberg. ♪

>> investors are looking to the fed and really receiving their message that above all else, the fed will rein in inflation. >> if the terminal rate becomes higher, i don't think the markets are price for that yet. >> you need to think about hedging inflation in the multi-asset fashion. >> give got to put your money somewhere, and treasuries are probably not a good place to do that. >> equities is really the only game in town. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.