♪ annmarie: good morning bloomberg's european headquarters. i'm annmarie hordern.his is daybreak europe and here's what you need to know. covid cases surge in the united kingdom. the most infections since february. 80% of adults have had the first vaccine dose. investors unwind reflation bets. the treasury curve sees its biggest flattening since march of 2020. futures are higher. iran heads to the polls. voters to replace the president with a hard-line conservative, come looking efforts for return to the nuclear deal. very good morning to you. the 6:00 in the city of london. it's my final show in the city of london. let's check on where we trade. yesterday, all the action in the u.s. treasury market. we are seeing the lowest level since february. you heard the treasury curve, the selloff's biggest we've seen since march of 2020. it begs the question, if the reflation trade over? the nasdaq futures this morning up 2/10 of 1%. the dollar is a little bit softer. relatively flat. it is stopping its five days of gains. we are seeing a narrative of a stronger dollar. we

annmarie: annmarie: good morning from london. it's 6:30 a.m. here in the city of london. alongside manus cranny into by. this is "bloomberg daybreak: europe." china's factory inflation jumped to the highest since 2008 amid surging commodity prices. all eyes turn to the u.s. cpi trend for tomorrow. the senate has passed a sweeping bill to help the u.s. compete with china. but talks and without a bipartisan deal. bitcoin pointing toward it continue downward spiral for the world's largest digital currency. today it's really all about what we got out of china in terms of that inflation figure on producing prices. 9%, still beating estimates and as you pointed out this morning, what we have to focus on is the widening gap between ppi and cpi. that begs the question, when will we see these prices be passed on to the consumer? manus: we will talk about ppi to cpi. this has consequences in a number of directions. while market volatility, what does the pboc do? they came in and said we will control prices on dairy private it's hawkish without any kind of tightening hike. one blog

annmarie: what do you -- manus: let's turn this -- go ahead, annmarie. annmarie: i just wanted to get bill's take on what this all means for what expectations were after he heard from janet yelling -- yellen talking about a rise in rates could be a plus. do you think she made jerome powell's job easier? >> yeah, in some respects. you know, yellen is sort of transferring accounts over the last year or. so she may not be able to extract her central bank habits. this is what's going to be happening. they're going to be talking the market through expectations. i think maybe talking about slight tightening helps the fed in that. but realistically, you know, what is the small tightening going to do compared to the huge amount of stimulus in the system? the central banks are going to show extreme fortitude in the face of the short-term spikes and be very, very tolerant. minor tweaks in policy are not going to touch the side if you're in the camp where there is building and enduring inflation. manus: i was looking at a cross app of inflation, the three fx rates

i some but ties with annmarie. the other thing i would keep an eye on, the commodity trends you are mentioning, not just for lumber but for all the materials we have seen spike over the past couple of months and fuel this debate, as well. fiscal stimulus will remain a hot button issue. we will have to chase whether or not this is going to have an impact, as well, and perhaps change the debate for everyone. manus: those fiscal plans are going to be what could upend that. -- that bond market. michelle jamrisko, thank you very much. simone foxton has your first word news p she is in doha. >> thanks, manus. boris johnson announced a month-long delay in lifting england's virus curve. as concerns over a rapid rise in covid-19 cases persist. a particular concern is the increase in cases across the country of a highly contagious delta variant. the government also said it will not extend financial support for businesses further. even despite the delay. china's rising military ambition prevent nato -- present nato with chall

annmarie. annmarie: thanks so much. u.s.r prices the most in 13 years, we get into the inflation debate next. this is bloomberg. anna: this is bloomberg day break, i'm anna edwards live in london with annmarie hordern. a month's long buildup in inflation that risks becoming more established as the economy strengthens, the figures are disstorlted by the pandemic given some credence to the theory that the rise to be transitory. samy, what surprised you most about the inflation numbers. most pointing that this is just transitory, the fact that was used cars, one of the big opponents are the optic, a substantial number. even if you were expecting weaker years or stable, you might expect them not to drop as far as they did. what surprised you? samy: a bit of a surprise when it comes to the fixed income markets. i would say this was not a report to settle between transitory and persistence. what we are looking for is confirmation, low in the inflation report, a limited number of subcomponents that is driving the headline number hi

annmarie: good morning from london. i am annmarie hordern alongside manus cranny from dubai.s is "daybreak europe," and here is what you need to know today. president biden arrives for the g7 leaders summit as the world's richest countries vowed to deliver one billion extra vaccine doses over the next year. all eyes turn to cornwall. the ecb is set to review the pace of its pandemic bond buying program. asian stocks climb ahead of a crucial cpi printed this afternoon. the u.s. and china agree to push ahead with trade. the white house revokes the ban on tiktok and wechat. manus, very good morning to you. 90 minutes away from the start of european equity trading. another fresh record high and it is super thursday as you claimed at the top of the show so we have the european central bank meeting and just before that, we are going to get the print on the u.s. cpi, a key data point to show inflation has accelerated given what we saw last month and we have all this politics at play. manus: that is going to be about vaccines and multilateralism. a coalescing of the g7 europe's stron

annmarie: if you talk to u.s.ials, they will tell you there hasn't been china mentioned in a communique the last few years, three years ago there was no mention. there was this year, so that is a win, but didn't go far enough that the u.s. wants to? what level can other nations fight against china given the fact that their economy, especially germany, is entrenched in the economics of what is going on in china? it will be interesting also what happens at nato, because russia and china will also be a discussion there. manus: justin trudeau also added , he talked about contest and consistency. it was interesting, the use of these phrases. to the markets, because the fed will drive the agenda. the g-7 will drive the political along with nato, but the bond market, it would be a dereliction of duty if they did not begin a discussion on tapering, that was martin malone. it was the treasury that caused the plunge below 1.5 percent, because of the supply shock. a delayed reopening will not stop the sterling bulls. stocks

annmarie: oh my god. manus: there you go. annmarie: manus. manus: this is last year's bonus.se are beautiful. it has been a fantastic ride. to you, mentoring me along the way. an absolutely amazing mentor. the team, this is why we can do what we do, they are in our ears, interfaces, cutting us off when something is wrong. and the audience, thank you for waking up with manus and myself. i am going to miss this. manus: the scrums at opec will not be the same. bring on capitol hill and the white house scrums. your country men and women should be fearful because you are coming for them in the white house. i will miss you. annmarie: thank you, manus. this is bloomberg. ♪ (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stre

annmarie. guy that wrote the report after a year of anti- climatic fomc's, it is a -- annmarie: the risk is what if we have a 2013 taper tantrum? isn't that the biggest risk to the market now? you were a bond trader. manny: yes. back in the 1990's. they didn't flag everything and tell you. there is a rate hike. the bond market implodes and then you get rates hikes through that era. they couldn't conscious the unfolding of a bond market like that. two meltdowns i never recovered from that margin call. annmarie: good luck. good luck to you and your colleagues. 10-year notes, i think we're hovering around at 1.5%. the other big thing of course is the fed. are they going to maintain the transitory inflation narrative and putin and biden. have you heard? they are meeting in geneva. more on that coming up. this is bloomberg. ♪ in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business

annmarie: today? will root for england, not just because i spent nearly eight years in london, but because of the team i want to win the whole thing. jonathan: who is the team? annmarie: italy. me and jonathan support the same team. jonathan: that is all i wanted to hear. for those who wish to follow the president later, he will leave the white house at about 10:00 eastern. remarks at 2:00 eastern time. tom: wisconsin is an important state. there is a lot of communities. we think of madison as the people's republic of madison and everything else pretty conservative. as we saw in the election, it is the kind of state he has to "campaign in" 24/7. which bill gets pushed the hardest? lisa: is he lobbying his own constituents? is he lobbying the populist? tom: are two bills really in place? jonathan: very much so in terms they're trying to pass them in tandem. in that sense, yes. are there ready to go now? the answer is no. lisa: we have not seen the details or any specifics of the larger reconciliation b

so i certainly hope -- annmarie: but iran continues to abide by the safeguard agreement, and yet yourecently that you're inspectors are flying blind. how are they flying blind if iran will continue to cooperate under this pact you secured? rafael: this has to do with the dimension, the sophistication, and the degree of activity you have in iran. if you are enriching uranium at 60%, having a traditional, minimalistic, comprehensive safeguard agreement which allows inspectors to go, but not everywhere and not in the kind of frequency and intensity that would be required, then you have a gap. you have a credibility gap. alix: what is the capacity going forward? iran's economy has gotten so hit by covid and the sanctions. what is their capacity that you think that they can handle, even if you don't have the visibility? what is the financial capacity to continue to enrich uranium at the same kind of pace that they were since 2018? rafael: their capacity is there. it has been proven in the past. alix: at the same pace that we are used to seeing? rafael: the abilities, capacities, skills an

bloomberg's annmarie hordern joining us from washington, d.c., eurasia group president and founder, joining us now. what do you hear? are they going to meet? are they not going to meet? ian: i think the most significant question is whether the chinese president decides to show up in person in the upcoming g20 this fall. a decision to only attend virtually would be very significant and consequential. the big news on the global stage this week is the 100th anniversary of the chinese communist party. that is what all of the chinese officials are focusing on. trump didn't like going to the g7 and the g20 because he felt, even with allies around him, he was ganged up on. they didn't really like him. increasingly, that is kind of the way xi jinping feels in an international context. he may have more power than he used to, but a lot of the countries around the world really like him, and they seem to be willing to display that publicly, so a decision of xi jinping cannot actually show in person would be quite consequential as we think about things like

annmarie hordern joining us from washington. that was victory, but he is trying just to another bill as well. walk us through the mechanics of what is about to happen. annmarie: good afternoon, guy. he wants his cake and eat it, too. they were able to nail down this bipartisan deal for infrastructure -- pipes, bridges, those lights. but what the president said yesterday, he will not sign the bipartisan deal unless it is also alongside the more democratic-focused bill which is via reconciliation to the reconciliation budget, and these are all the bells and whistles, nod to the progressives, that the democrats want. social spending, health care, a little more infrastructure when it comes to things regarding climate change. this is very gets really tough in washington, d.c., because that is something the republicans just do not want to spend a lot of money on, but the democrats do. ansi plus he put the line in the sand, a redline cup -- nancy pelosi put the line in the sand, a red line, saying that unless the reconciliation bill ge

annmarie hordern joins us. ignatius talks about a hugely difficult thing to do, and we have seen this way back, i would say back into the early 19th century, this shift from a senatorial tone, the happy, the backslapping, the smiling, over to a presidential tone, what that might be. how is president biden doing in making the shift from senatorial over to presidential? >> if you read the opinion piece by david ignatius, it sounds like, at least from his perspective, a little more needs to be done by the president. he talked about the fact that he was so giddy to announce his infrastructure bipartisan deal with senators, but he says he needs to take that backslapping, that giddiness and really hone his skills in the senate but to achieve it and become presidential. that's the only way he will be able to get is legislation through. right now, they are able to have his bipartisan infrastructure bill but the president and this adventist ration wants to work in tandem -- this administration wants to work in tandem to

annmarie: you mentioned technology. i would also say agriculture and the pharmaceutical space. that is where we could see brought in legations if we were to see this executive order. what this would really do is try to enhance competition. the administration would require the federal agencies that they have control over to address competition on the industries they oversee. very reminiscent of an executive order we saw from the obama administration in 2016 that did a similar thing. some of that was rolled back during the trump era. this was first reported by reuters, saying we could see this as soon as next week. to something we want to keep and i out for. here in washington, it is hard to get bipartisan support for many things. but when it comes to potential antitrust measures when it comes to the tech space, this is something digitally congress can get on board with, and this would be welcomed because just last week, they sent through six antitrust bills, and that was widely targeted for big tech companies. guy: great stuff. thanks very much, indeed. a bit of breaking news. s

yousef: annmarie: dani: good morning, this is "bloomberg daybreak: europe." concerns grow as europe risks another lost summer. stocks lift as the reflation trade sizzles, but treasuries held onto yesterday's gains. more payouts from wall street, cash returns to investors after tanks pass the fed stress test. but citi bucks the trend with no planned increase. plus, demand concerns, will slips over concerns opec-plus might increase output despite the threat of a slowing recovery. good morning, here we are a day after the carnage in the cyclical trade. it was remarkable to see yesterday that industrials, financials, energy all getting decimated, screaming late psychodynamics as we have the yield curve flattening as well. is it a head fake? we have over at j.p. morgan, they are saying that financial conditions are too tight, tight credit spreads, real rates that are too low to be positioning for in psychodynamics. maybe this is the environment where we want -- four end psychodynamics. this might be the varmint where we want to sell bonds. yousef: the steepening y

tom: no, we heard that from annmarie hordern. the democratic party has to sort this out. after the quiet of the clinton years, the quiet of the obama years, the democratic party many would say is reverting to what it has always been, which is fractious. jonathan: we welcome now become balloon advisors cio st cumberland advisors cio -- the cumberland advisors cio. >> it looks like we will have some type of infrastructure plan. they have to deliver a plan. it won't be as big as anticipated. biden wants to complete something. the republicans don't want to be the obstacle. so it looks as if something happened, and whether it is $1 billion or $900 billion or $1 trillion, whatever number it will be, we will find out. tom: everybody follows your allocations at cumberland advisors. you are sitting on cash. what are you going to do with it? what does your research on sectors tell you right now? david: the largest sector is the health care sector. we have maintained that as a strategic is a sure and. -- as a strategic position. we believe the covid shock is a strategic shock that w

i thought anne-marie horton -- i thought annmarie hordern captured the color down there. it is obviously a fractured, credit already. do we know what this is going to look like? i don't think so. jonathan: it's going to be big, the other bill. it could be, what, $6 trillion? lisa: yes, bernie sanders crafting that one. jonathan: joining us now is mona mahajan, allianz global investors senior investment strategist. the cyclical trade has seen some cracks. do you want to stick with it? mona: generally, obviously we've had a phenomenal run in the value trade. we have talked about in's november. -- we have talked about it since november. people were anticipating some of the recovery that we are now seeing in the economy. but as we are sitting here today with the 10 year again under 1.50%, when you think about the upside, downside on the yield profile, if you think yields have much more downside to go, then perhaps you step back from the value trade. but if you think yields may start to either stabilize or grind higher given both technical and fundamental factors, then i is on

that is what annmarie hordern was telling me yesterday afternoon.s surprised by how swamp like it is. tom: president trump called it a swamp. jonathan: i think anne-marie was talking about the weather, not so much the people down there, tom. lisa: i do wonder how much president biden is going to use that to sell infrastructure. tom: oh, come on. it is summer. lisa: it is not to summer. it was 118 in the northwest. this is unheard of. tom: i put a chart out of the weather in seattle. the mathematics of getting to the last three days in seattle is truly unimaginable. it is a mathematical framework that you say that can't happen. jonathan: just one final line on new york, politico going with this line, "not so in new york," after 130,000 dummy ballots were counted. tom: your grandmother was on the board of elections, right? lisa: for the record, my grandmother was not on the board of elections. but i will say, this has really created a problem for ranked voting. if this is the protocol going forward, how confusing it is, and if eric adams is not the wi

annmarie hordern joining the team in d.c. that is a big dose of new york and washington.be ok. josh wingrove looking a little bit worried about how much new york has just gone down to d.c. lisa: oh come on. we are not that bad. jonathan: using they can take that? -- do you think they can take that? lisa: of course they can. do you think they are lightweights in washington, d.c. ? jonathan: compare to up here, don't you? lisa: i mean, i think it is a different kind of gloves coming off in washington, d.c. than here. jonathan: looking up at 8:30 compared to getting up at 6:00. it is a different world. taylor: i am still trying to recall the governor replaced with a movie star, you guys. lisa: i think new york is tough, but there's a soft underneath that. jonathan: we will take your word for it. we will catch up with peter tchir on what it means for new york in the markets on wall street. we need to catch up with bill dudley, the former new york fed president. looking forward to that. equity futures up 21 on the s&p, 4252, up 0.5%. yields unchanged, 1.4868%. i'm with new yor

. ♪ annmarie: welcome back to "bloomberg markets: european open." mixed, pretty flat for european equity markets right now. i usually ask at this point of the day what is on your mind, but i know what is on your mind because you have been very animated on the subject of treasury markets and the flattening we have seen. let's linger there, because we have seen substantial moves. seemed like the market was not rethinking its view of what was going on. we spent the last 24 hours rethinking our views of what is going on post the fed. what are you now taking away from what we heard from the fed and what that does to treasury markets? mark: i think that the yield curve flattening here has been really extraordinary and i want to talk about it. people hear those words like flattening and steepening. if you are not a bond or fx trader, you don't pay too much attention to it. these moves are never that dramatic. this has been dramatic. we have seen the 5-30's spread of drop by 20 basis points in just two sessions. it almost looks like a broken chart, but it's

anna: that was annmarie hordern on what to expect from the g7.cial meeting in the southwest of england throughout the show. let's get back to the markets. u.s. futures are a little more negative than they were. nasdaq futures down a couple of tenths of a percent. let's get to the individual movers in europe, where european equity markets are flat this morning. bt group up by just over 1%. stella and to's -- stellantis down by 1.9%. they are facing charges over diesels, joining vw and renault in the probe led by french authorities. juliette: the u.s. plans to buy 500 million doses of pfizer's coronavirus vaccine to share internationally. the word came as president biden plans to join other g7 leaders in a campaign to end the pandemic by distributive shots worldwide. the leaders have gathered for their summit in the u.k. president biden and british prime minister boris johnson will commit today to resume travel between the two countries as soon as possible. it is not clear how soon that will be. the leaders are meeting ahead of the g7 summit and wi