the rain at the ecb. i'm going -- front in the rain at the ecb.ng, who the hell is this guy? [laughter] jonathan: this is the view of a lot of people i've spoken to. there's clearly a bit of a credibility issue here. if the ecb president comes into a news conference and talks about frontloading bond buying, and net purchases are only up 10%, is that frontloading bond buying? to what degree is it? those are the questions she will be peppered with later this morning. tom: this is transitory. lisa: he says it and then drinks. jonathan: i think he just wants an excuse. [laughter] you're the only person who plays a drinking game with himself. i've never seen anything like it before. you say the word so you can have a drink. where you want to now? tom: well -- jonathan: there ago. from new york, this is bloomberg . ♪ ritika: with the first word news, i'm ritika gupta. credit suisse is raising about $2 billion to shore up capital after warning of another financial hit from the archegos capital collapse. $654 million in the second quarter. here's credit s

ecb is on.not understand the reaction function in terms of pepp purchases and i think the market is struggling. let show you the ftse and the dax and the spanish markets to give you an idea of what is going on. there we have seen outperformance. the peripheral markets better. the ftse up, the dax up .8%. in terms of the sector breakdown, let me give you a quick look at what has happened. we are seeing utilities having a solid day. keep an eye on the sector. i think it is related to what is happening with the earth day story. there's also a bond market impact. technology backing -- technology bouncing back. the food and beverage story having a good day. energy coming back. staples, the insurance sector, financial services and basic resources down. slightly struggling to define a clear narrative from the sector point of view. we are in the middle of earnings season. it is still about the single stock story. talking about nestle, the market surprised by the numbers delivered today. solid numbers be

ecb, not sure what's going on there. alix: i think earth day because long-term, that might have more of an impact. let's take a look at where we are in the markets. the russell 2000 small caps are basically trying to eat their gains out. however, when you take a look at the number of stocks above their 50 day moving average, actually fell below 40% versus 80% for the large-cap s&p. many are watching this for any indication of a rollover in the equity market. the underperformer, materials. any kind of recovery and reopening trade is definitely weaker within the s&p. yields go 100% nowhere. does that mean they and up having a longer road to recovery? i don't really know. we will try to figure that out. guy: i think we will try to figure that out. data continuing to come through from the united states. existing home sales dipping a little bit. we are at 6.0 one million versus an estimate of 6.1 one million. these numbers -- at 6.1 million -- at 6.01 million versus an estimate of 6.11 million. positive forward momentum conti

alix: how does the ecb wait, watch, and wonder? the equity market is buying into this whole catch-up on vaccination, the european trade is on. is that the case -- if that is the case, you should see better growth and better inflation. does that pull forward the ecb tapering conversation? danny: maybe, but remember we haven't really got any history to tell us much about what you do in response to a giant shock, where the vaccines are slow to come. but i keep reiterating what long-run changes are to come, these are based on assumptions. so i think you are right that the danger is you put your toe in and you make a step, and you may repent. recall twice in the 2013 may rate rises, and then regresses, the fed made rate rises and regretted it. it is hard for me to see why you just wouldn't keep on keeping on. just keep going, wait to see the kind of whites of the eyes of inflation and recovery, and basically say we are looking. in some sense, that is what the bank of canada and the bank of japan did. at the bank of england, we have seen

jonathan: andy president of the ecb as well. the president -- and the president of the ecb.he president of the united states set to speak. we will take those comments from the president. press release from the adminstration this morning on new greenhouse gas emission targets. this is a big domestic push, not just an international one. tom: and also the reaffirmation of emissions. it seems to me this is a reaffirmation of pre-trump climate change in america. how do they do that without making it obvious? jonathan: reaffirming that and re-upping it, and trying to reclaim some credibility on an issue they lost on khamenei be a lot more than others, in the previous four years -- they lost on, maybe a lot more than others, in the previous four years. lisa: we have been talking all mornings about how there are two prongs to this. the domestic story, that this will bring investment back to the u.s. and create better jobs and competition for the u.s., and the international story. basically, the world needs help, and it will help us all. i'm wondering what kind of teeth he has behind

we have to talk about the ecb.e hour talking about competing themes in the market, one around earnings on the other around coronavirus. let's get an update on a humanitarian story, from a country hit hard by coronavirus. india reported the biggest one day gain of cases with almost 315,000 new infections in one day. give us the update, what is the situation now? >> thank you for having me. india is now the fastest growing epidemic in the world. the pandemic is slamming the country. the infection spread is higher than expected. it is proving more deadly than the first wave. the concern now is how can we keep it low? on the financial and economic side, the concern is for the market sentiment. the india stock market will get a technical correction. it is downgrading growth forecasts. there is concern among analysts that if india's growth falls, the gdp ratio rises, and therefore sovereign rating agencies might push the country into a degraded grade. that is the fear. anna: i understand social media posts are full of pe

in the big one coming up from the ecb on thursday. finally, got for initial jobless claims in the united states. some final thoughts with my colleagues. let's talk about lagarde. what is left over in europe? is that the source potentially for high yields worldwide? priya: i think europe is underperforming on the vaccine front. there growth numbers are underperforming. the big question is how much will the pcb push back against the rising rates. they have taken a step by saying they are watchful and that they can use their program, we actually expect the ecb to talk about greater facebook by because of the u.s. treasury rate are priced in another infrastructure package, we are going to start with high in interest rate. the ecb is going to allow or even encourage divergence. they need all the help they can get, given everything else going on, given the lack of fiscal support europe has. we expect a very dovish ecb. jon: what is your take on europe? greg: because the rollout of the vaccine has been slow in europe, the economy is not open

we will have an ecb rate decision. you

alix: does that mean ecb is set up for a policy mistake?ark: i don't think they are set up for a policy mistake, unless they start to tighten prematurely. there have been some in markets that have the idea that the ecb could even taper ahead of when the fed starts tapering. i think that is incredibly unlikely, though it will be the case that post the german election, expect to see a big push towards renegotiation around the eu fiscal framework. the doves in southern europe will be looking for a more relaxed fiscal agenda across the continent, and that could actually involve some of the countries in northern europe to push the ecb may be in a more hawkish direction. this is something we have to watch towards the end of the year. it is not going to play out just yet, but this is something we need to look at as a theme for the end of 2021 because we certainly would discern that where the ecb to take their foot off the gas to early, that would be a policy mistake. guy: do you think that the next generation fund is a done deal? do you think the

we also have the ecb today. manus: we do indeed, and that is going to put a bit of pressure on christine lagarde in terms of what she is going to guide. the bank of canada in some way has set that agenda for all of the central banks to begin to consider how to communicate taper. u.s. regulators are looking at enforcing tougher requirements on investment firms. the changes are largely spots of to the implosion at archegos. dani burger has been looking at some of the sec digestions. good morning. dani: good morning, manus. it is becoming clear it is a global regulatory effort. you just broke the lines that fit my -- finma is looking at archegos and confirmed they were already looking at them in response to greensill. on the sec side, these rule changes are much more broad. it is about disclosure changes. can they make sure they are able to see possible risks coming down the pipeline before they happen? they are looking at more disclosure around different derivatives. swaps, for example, what bill wong used to make

jonathan: -- tom: you have to trade off of what ecb does. you more interested in what christine lagarde says or what she does not say? alberto: we are more interested in what she does not say. at the moment there is not a lot of things the ecb can do. they are running on all cylinders. the question is when will the discussion about the end of the emergency purchase program start. tapering. also there are other long-term discussions about the strategic review of the ecb, about average inflation targeting, which are going into play during the summer. there is another important factor, which is central bank currency. a lot of central banks have talked about this, and ultimately this is something that could unleash a lot more levers for monetary policy. for example, interest rates could become more negative or central banks could inject money into firms directly. that is the ultimate fear, not for today or this meeting, but it is a lot more interesting to hear what they do not say. jonathan: alberto, we have to leave it there. good to hear from

we are seeing mixed messaging coming from the ecb.ch 2022 is when they anticipate that pandemic will end. we have others on the council suggesting that we could see tapering in q3. this is mixed messaging markets web watch. anna: speaking of central banking, focus how they dropped the mic. that was with one of your pieces. he will be leaving the boe. a little movement in sterling, but nothing substantial. we not read too much into him leaving the building? laura: it was a knee-jerk reaction we saw in the currency on the back of that news. as an avid central bank watcher it was disappointing, i enjoy his colorful commentary. he has came out warning of the risk cat coming out of the bag. he is a brilliant outlier and has warned about inflationary pressures. i think from a markets perspective, markets are wondering, now that he is leaving at the end of june, could that real in those bullish undertones? that is unlikely to be the case. we are seeing a growing chorus of optimism when it comes to these elements. i do not think it will have

we got some news from the ecb.he ecb policy makers expecting a difficult discussion at the next meeting on monetary policy in june on whether to start slowing their emergency bond buying program. this according to officials familiar with the internal deliberations. it is going to get messy over at the ecb, the hawks versus the doves. that is the difference between the ecb and the fed right now, right? at the fed, it is about how dovish are you, the scale of dovishness. at the ecb, there are still hawks that want to whine this down. tom: we had our in-depth analysis of these new celeste -- of the snooze fest, and christine lagarde said we are not the fed. you saw the headline. simple as that. lisa: that means there's a credibility issue, especially with a lack of cohesiveness. christine lagarde comes out singing from a very dovish hymn book, and people aren't buying it. i wonder how much that will undermine her ability to message to this market. jonathan: talks on june 10 will be much more complicated. officials say

is the ecb going to tighten too fast?t doesn't really feel like the doves and the hawks in the ecb are in the same page -- are on the same page when it comes to pepp. jan: i don't think they are going to be tightening quickly, but i do think that even more aggressive easing and even more accommodative policy via really delaying any rate increases i think probably would be sensible , and i do think the fed has been leading the way, and the ecb has moved in that direction as well, but probably could move further. i think that would be desirable for bringing back european activity to normal levels more quickly. alix: there's also been a lot of scrutiny on the recovery fund, and a lot of talk about let's get that out faster. there's also still talk about budget deficits and making sure they don't go too far, too fast. how do we compare the firepower of europe versus the u.s., so we understand the support we are going to see for growth? jan: i would say the same thing on fiscal policy as on monetary policy, that there is defin

let's start with the ecb.was quite a dominant theme in markets yesterday even though there wasn't a great deal of new information. that you take anything much new away from what we heard from the ecb? lucy: well i think what you have seen in that clip is how deliberate the language that christine lagarde uses. i'm going to refer to this because i don't want to alter what she said. she was very careful. the eu, the consumers remain asked really cautious. she expects headline inflation to rise in the short-term on temporary factors. longer-term expectations remain at low levels. this tells you that the economy is subdued. also, there was some talk which he referred to in that clip that the pet would be saved out. that was absolutely denied by her. there was no discussion of any meeting. she expects interest rates to remain at present low levels and could even go lower until inflation is consistent at 2%. it may well rise to that level but then i don't expect central banks to address it. i expect inflation to jus

plus, our exclusive with the ecb president christine lagarde. rishaad: and the latest on the block trade blowout. the s&p opening up a per the minari investigation -- up a preliminary investigation. deutsche bank manages to avoid a loss. we have details on that next. this is bloomberg. ♪ robert: building back better was the central theme of joe biden's presidential campaign. it's what the country needs. this is all very much on the right track. i'm particularly excited about the infrastructure investment program, i'm particularly excited about the green aspect. >> among the highest return investments in terms of spurring private investment. we know public investments in airports return several dollars in private investments. investments in r&d provide the backbone off which private investment flows. these are the investments that can spur the kind of private investment we need. rishaad: the dallas fed president said some inflation will be a likely trade-off for the biden infrastructure spend. but what about long-term gdp? robert spoke to bloombe

the bank of france governor says the ecb could end cap in less than a year. angeline on other tools to support the economy. vaccine victory. pfizer will increase its second-quarter delivery to the eu by 25%, 250 million doses, just as german infections rise. >> what we are seeing now is vaccination rollouts have been picking up, and it is important to continue. alix: and summer hope, british airways sound optimistic easyjet ready to ramp up flights for may if there is enough demand. let's follow on that. that is moving the market. guy would be very happy. he is holding out hope for his summer vacation. the cac is outperforming, euro stock up. within the european equities, you see basic materials, travel and leisure, which we will get to one second. so euro sterling is put much flat, but how that relationship develops really tells us about the reopening. bank of america in particular said they think sterling gains will be hard to come by because a lot of the vaccination good news is already priced in and a risk rhenium has been priced out. if that moves to the

jonathan: we saw that last week in the ecb tension.a that the entrenched cultural polarity and what do you do with fiscal? jonathan: the distance between the ecb and the federal reserve right now. the question for the ecb, will we ever raise interest rates at all? compare and contrast where we are now. airline traffic in america. just to bring you some of the numbers from where we are now. 1.5 one million passengers the week ending april 22 compared to 111,000 the same week a year earlier. absolutely unbelievable. that was single day traffic. tom: why is it booming? lisa, help me. if i want to go to venice this summer, do i want to risk that? they are begging me to go to venice because i am vaccinated. lisa: the key issue is that if you look at the vaccination schedule. the cases in venice, the cases in greece are going up. what is going to be open in terms of restaurants? tom: let's go down to our real experience. jonathan: are you fully vaccinated? tom: should you go to europe? jonathan: i will not offer any advice. if it is logical

what stood out to you from the ecb today? no telepathy whatsoever between central banks and markets. the ecb delivered incredibly good messages. that would really cried -- guide the market. we don't need to taper like in the u.s.. there's no fears to be had about phasing out purchases. it also said that the ecb is watching, watching all the markets, all the curves, all the countries come all the time. don't worry. lagarde even said, our approach might be to settle. i think it's quite good. that leaves a lot of room for the ecb to act. the third thing it changes, which is amazing for the central bank, [inaudible] whatever scars there are in the economy will not represent headwind growth. this is just a warm blanket in the market to flatten themselves in as they go along. mark: good morning. i love your bullishness on europe. like a positive interpretation of the ecb. i can't argue with it. one of the rebuttals for many investors would be, the longer term picture is european growth continuing to be sluggish compared to the u.s.

the ecb tells us russia will inevitably respond.of america joins rivals benefiting from a jump in trading activity, but shares slight on weak -- slide on weak loan growth. it's 8:00 in london, 9:00 in paris or berlin. this is the futures picture we have for you, seconds until the start of the trading day. we are expected to be fairly flat, perhaps upside coming through in london and frankfurt. we should point out u.s. futures point in another direction. they are flat to negative right now. we will see how that plays out as we head towards the start of the u.s. trading session. dealing with things more present, more current here in europe, we have a move of .1% to the upside in the u.k. we have very strong data out in the united states. we talked about this with mark cudmore, very strong data around the u.s., something slightly counterintuitive things in the bond market. we also had strong data out of china, not all of it strong, the quarter on quarter comparisons not looking quite as good. there are certainly positive vibes in the m

how do you think the ecb is reading it?nd: first of all, i think they were very close at the last meeting to hitting 1.6%, which was their pre-pandemic horizon forecast. i think they are really only 15 basis points or so away which is why they were explaining why they need to do this big increase in pepp purchases. they don't want to increase the envelope because they may well be there in june. there was this debate about we are really not that far away from exiting emergency mode. but the question is, how do you define tapering in europe? it is quite different from the fed. the fed has a very said he sort of treasury purchase space, whereas we have a much more flexible pepp envelope. it is just a step down in the pace in the second half of the year. that is not quite how i would define it. for me, the big tapering moment is the end of pepp at the end of march -- the end of pepp at the end of march next year. then we will see immaterial slowdown in the second half of the year in those purchases. partly, that is because they

the ecb tomorrow.isa: oil has been selling out over the last few sessions. we had seen inventories come down dramatically. cannot continue given the surge of the virus in places like japan and india, and given the fact that you are starting to see rumors of inventory building backup in the united states? as 1:00, the u.s. is selling $24 billion of one year notes. interesting to see with the demand looks like. still interesting given the drama, the rally in treasuries we have been talking about that has stalled out. interesting to see whether we get any indication of foreign demand in particular. today, apple, google, and spotify executives are appearing ahead of an antitrust committee. we thought this would pick up. it does seem like something hanging in the background for a lot of these big tech names as you start getting a more populist shift, even within the republican party. jonathan: what does the fed know that we don't know? that's one of my favorites, too. haven't heard that in a bit. netflix is

caroline: the ecb has been talking about listening more to the fx rates, concerns about where this isng. what are they thinking about sending pat, is particularly since fed chair powell? tom: there will be a meeting coming up in june. the first question for them, how is the recovery going? if things are moving in line with our forecast and the vaccinations are rolling out, that's going to embolden the hawks on the ecb board. even so, we think what we are going to see is the pace of ppp , pap purchases, coming back later in the year. we think the european central bank, if the recovery is in place, if there are new concerns about bond yields, they wie confident to pull tack little bit. joe: when you think germany, cars, we know the global situation with cars is not going to be resolved anytime soon, and that's the way semiconductors are hampering production. how big of a drag is that, the industrial disadvantage due to all the things we are seeing, particularly around semiconductors, but other bottlenecks and logjams throughout the economy? tom: that's a good question, joe. one thing we

anna: do you expect a step up in policy from the ecb?hristine lagarde saying the pet program could be smaller. what is your expectation? >> we expect the pandemic plan will be there. this instrument proves to be quite good at the moment. we believe the european central be between later central banks to talk about tapering. because of the contention situation it is required to reduce thus far. we do not think it will be a big problem to maintain the pace of the program. market entities will not create pressure on interest rates. we have to acknowledge the views within the central bank. in spite of the fact christine lagarde has been speaking about it, the future we will get with this crisis. anna: last time we talked to you you were favoring procyclical entities. given the lockdown measures, are you more skeptical? more than you were? >> is a very good point. we are working on assets and equity first moving forward because we are looking -- the deterioration of the economic surprise and at the same time the european contribution phase. th

ecb i think is a tough meeting actually.etting to the stage now where the ecb is likely to be trying to edge itself away from uber, dovish policy and language, getting into that transition. we have seen some signs of that, huge disagreement on the government counsel. there is the need for every message to be nuanced to keep hawks and doves on board. makes it a very complicated one. communication has been awful of late, awful for investors trying to work out what on earth they are doing so it is a tricky one and we could see some missteps. annmarie: one to watch out for tomorrow. thank you so much for joining us and your insight on football this morning, james athey, investment director at aberdeen standard investment. just ahead on the program, about one in six of the u.k. workforce remains for load or out of work on the pandemic. they're going to speak to the ceo of a company, next. this is bloomberg. ♪ manus: it is "daybreak europe." i am manus cranny in dubai. annmarie hordern alongside me. 1.6 of the u.k. workforce remai

the ecb is saying it is going to continue to hit the bids, but the data over the last few days almosteels like a taper. what is the outlook for the european bond market? geraldine: i think we need to distinguish two things. one is a one off from the reopening, beget a booming growth or a big spike in inflation, and one is an enduring trend. this is really the difference we need to make. i know markets tend to have a short fuse and are very impatient, but our view is that this inflation is a head fake. it is going to ramp up, but by the end of this year, it is going to be tame again. we think this will enable central banks to remain accommodative, and that is the case also in the united states. so this boom is partially a head fake in terms of inflation, and therefore, you would levels might be creeping really slowly, and it will be a while before central banks actually hike rates. in the case of the ecb, we don't even have it on our forecast horizon, and in the u.s., we say not until very late in 2023 or even 2024, so for the markets, this is light-years away. alix: if that is the cas

accounts from the latest ecb meeting highlighting concerns that the slow rollout have vaccines will hit growth. "weakness in activity might continue well into the second quarter." we were talking about tesla just a moment ago. the company slamming germany's approval process for its new factory, describing the timeline as "particularly irritating." let's take a look at where we are with equities in europe and where we are with euro-dollar as well. the dollar starting to come under a little bit of pressure. the euro stocks up by about 0.5%, and we have just retaken $1.19 in euro-dollar. alix: i love that irritating remark. it is sort of like germany is a fly that tesla is trying to swat away. three taking $1.19 on euro-dollar. it definitely feels like -- retaking $1.19 on the euro-dollar. it definitely feels like it is more of the safety trade when you don't want to take on the cyclical or value risk. the s&p tech index is up over 1.7%. yields down on the tenure by about three basis points. the vix is still very low, and it looks like implied volatility in the vix in the summer looks to b

president lagarde, as managing director of the imf, now president of the ecb, you have really led theing and innovation around these issues, the innovation of policy and capital markets. so i would like your perspective on the big question. what role can the markets play in the fight against climate change, and how do we help them along? and thank you for being here. ms. lagarde: thank you so much, mark, and good morning and afternoon to colleagues on this panel. i would like to start with something which i believe has an impact on how capital markets are going to respond and how we as policymakers, regulators and supervisors are going to help them. i think it has to do with the rules of this climate change issue, which really started with very early adopters and public opinion, sometimes with the leadership of youth, then naturally gained probably earlier the private sector than the public sector, and has actually reached a stage where there is very strong momentum in terms of global opinion, policymakers. thank goodness, i can only celebrate the fact that the united states is back a

ecb president has been criticized about her performance in these news conferences.e scenes, there is some frustration. at least in the markets community. tom: to be clear, the great distinctions they don't have a booming economy. they don't have anything like china or the united states. jonathan: also a different approach with the furlough programs and entitlement programs across europe compared to the united states as well. you might not see that same snapback in europe largely because of policy difference. the vaccination rollout has been the clear differentiating factor over the last year or so. the vaccination effort in america has been further and europe has been difficult. we are starting to go through that inflection point. clearly things improved and we want to see a whole lot more of that. away from making a market call we want to see more of that so we can get back to business. tom: we are fully vaccinated. great team support we've had here working remote. lisa abramowicz suffering the second jab yesterday. side effects? i had a little bit of fever? lisa:

understandably, central banks, the ecb has been at the forefront of the bank of england.ery much insisting on the financial stability aspects of climate change, but i think what is very interesting is the data has shifted toward monetary policy. in that aspect, we should actually not be -- not have too high expectations. during the quantitative easing you could say if you have a focus on -- that can have a difference. if you look at what difference does qe make, it does not make addict -- make a big difference. what is more important is the overall effect on the market. most importantly for central banks is that when governments are not doing enough addressing climate change, it will end up weighing on the effectiveness of monetary policy. there is a high similarity between climate change and the absence of ambitious supply -- mario draghi always insisted on it when he was president of the ecb. we should have central banks insist on that. address climate change. have the necessary rules and regulations, subsidies and what have you. otherwise it will make the life of centr

great to have you with us on the show back in the day when draghi was ecb president, he spent a lot ofime and i remember every single press conference, he would stress the need for structure reforms and eurozone economy now the prime minister of italy. one of the countries that is in most meet of restructuring he is basically handed a 200 billion euro check and announced a slew of measures to use the money on how much of a lasting impact do you think this will have on the italian economy over the medium turn >> we think it is a great opportunity for italy. the recovery fund is large in size as you said, 220 billion in total. that is 12% of gdp the plan is to spend this money on investment. it tends to have higher multiplier it tends to have sustained effects on growth. it also spread over a number of years which should make it helpful for italy support the recovery in the near term and all the subsequent years it should have a significant affect on the italian outlook. this money needs to be spent efficiently and timely and executed in the right way. that is really where the focus shou

even the ecb president le guard referred to it as transitory. what does transitory mean? how high would be too high deco -- too high? >> let me be very clear by what we mean by transitory. there's a difference between a one-time increase in prices and persistent inflation. when we say inflation, that's what we mean. persistent inflation that goes up by 2% or whatever it is year after year after year. that level of inflation tends to be dictated by underlying inflation dynamics in the economy, as opposed to things like bottlenecks. the nature of a bottleneck is that it will be resolved. that the supply side will adapt. that, therefore, whatever costs people have to bear in prices because supplies are temporarily type -- tight as the economy reopens will be repeated next year. we think supply chains will adapt and become more efficient. it might take a year. but it will happen. that is what we are seeing. remember, sarah, we have had 25 years of inflation dynamics, roughly 25 years where inflation has been low. in many advanced economies around the world they have been unab

likewise, the ecb and other central bank's around the world.o, commercial banks are making a ton of money now, and they are going to want to put that to work. i think there's a lot going in this market. vesely if you have gone up seven weeks in a row, you are probably going to have a paul's week or two, but the main trend i think is absolutely up. we are in a bull market, and for now it looks pretty good, i think. alix: does that go hand-in-hand with a stronger euro and yields over in europe? chris: absolutely. what we saw in the first quarter of this year was markets consolidating their gains from that egg november and december surge. as they have consolidated across global equity markets, they are pretty solid. as they consolidated those gains, the dollar looks very oversold, the euro overbought coming into the end of the year, now that has sort of unwound. the u.s. has gone from being overbought to being ready to go again. the primary trend in the dollar is down, and our opinion. we have a countertrend move in the dollar in the first quarter

like i said, and contracts, you look at the ecb and they are quite concerned with destabilizing pickup and european bond yields so bottom line is the rest of the bank of england introduces a new bond purchase program and when it expires in november, i think it is still low and that is another positive for the pound mostly against the euro because that means the bank of england's balance sheet will not expand at a faster pace than that of the ecb so that's another reason i'm constructive on the pound against the euro. annmarie: we have this cfo survey and concerns about inflation and asset price bubbles increase sharply. where do you see inflation going in the u.k. as we have a reopening of businesses starting today? elias: in the near term, we could see a bit of a boost to u.k. inflation, but because there is so much slack left in the u.k. economy, the level of gdp still has not even gotten back to its pre-covert levels but there's also a lot of slack in the labor markets with the unemployment rate significantly well above the natural rate of unemployment here in the u.k., so that will

the bulk of the funding is strongly supported by the ecb.b monetary policy -- italy is not alone in this struggle. to some extent the next few years the bulk of funding is covered. the problem becomes incredibly evident beyond that. all of the other countries will move forward with funding, with potential, with policies. while italy, if it does not get going next year with a plan that is more longer-term, then it will have serious problems. guy: what is at stake is the future of mutual lysed debt in europe. someone told me after they unveiled the next generation fund in brussels, a senior politician. he said to me if this works, we will do it again. if it does not work, we will not do it again. i am wondering at one point will we know whether this works or whether it has not to allow europe to move forward with more mutualized and shared debt. when will we be able to figure that out? raffaella: incredibly, you need to give it at least 24 months, maybe even 36 months. this year is all about the cycle. next year it will still be largely about

much doubt that we are going to get a collective, synchronized i all governing council members of the ecbs about the level in europe. jonathan: there was a clear slow down of the rollover of the maturity in china. what will drive that additional renminbi trend? vasileios: first of all, i think it is quite clear that the pboc is in a slow type of mode. indeed, we expect some 30 basis points toward the end of the year or the beginning of the next. secondly, the other important element is that you keep on seeing portfolio flows go into china. these are largely because of the gradual process of account liberalization, but also because chinese bonds are being included into bond indices. this has not been exhausted. a lot of the flows coming to china on the corporate and the retail sector have not actually been converted into renminbi already. over the past eight months, a large chunk of domestic names have been hoarding a lot of dollars. they have about $180 billion, which is quite unusual. we expect that these things are going to start unwinding, meaning that domestic players are going to sta

the ecb is more about the lag and fewer purchases later in the year.some of the accommodation received but it will still be attractive and that could great volatility. for the share market, over the years, we would also be looking at dividend growth and quality stocks, not just cyclical, we are in the sweet spot with the cyclical rally at the moment. haslinda: we had a guest earlier saying he is still excited about technology, asian tech. but you downgraded the sector -- why is that? prashant: we had a spectacular rally to start the year and we are still long on taiwan and semiconductors, but we did downgrade some of that. we had some hit with regulations, regulation fears and profit-taking we are looking selectively to buy that and remain neutral overall. we like semiconductors, it is the new oil. we remain long. we are looking to buy some leaders on weakness and keep a barbell approach. rishaad: of course, all of this, you mentioned the dollar briefly, again, we thought everybody was in the camp that we would see sustained dollar weakness in that did

guy: ecb thursday could be quite interesting from that central bank. are they going to be concerned again about a rising euro? i did pay a little bit of attention last week to what was going on. it did look really weird, really counterintuitive. we saw this move lower, basis points -- move lower, 50 basis points over the last 12 trading sessions. at the same time, we got upside surprises on the data. retail sales data. jan hatzius talked friday about how he expects the bid to come back as well. >> markets are now priced i think for much stronger near-term data. so it is actually harder to shock markets, to shock the bond market into a selloff, even with some extremely strong numbers. the numbers over the last couple of days really have been extremely strong. it just hasn't had that much of an impact. guy: let's carry on the conversation and figure out where we go from here. jay barry, j.p. morgan's head of dollar bond strategy, is joining us now. there's a disconnect with the data that is really quite extreme. alicia: good morning -- jay: good morning.

we're not expecting any policy change at the ecb but we'll wait to hear language from the ecb president:30 a.m. and we'll get news from the ecb in 15 minutes. the canadian central bank became the first central bank to signal its exit from emergency stimulus, the first bank to taper, scaling back bond purchases in canada. no impact in america so far. we're watching the ctral banks of the word. check asian markets overnight, japan was up better than 2%, recovering from two days of losses earlier in the week. meanwhile, this, attorney general merck garland announced an investigation into the minneapolis police department after derek chauvin's conviction. cheryl casone with those details right now. cheryl: good morning again. so the justice department is launching a sweeping probe into whether the minneapolis police department has a pattern of using excessive force. the doj's already looking into whether derek chauvin and the other officers involved in george floyd's death last year violated floyd's civil rights. the police chief says well comes the investigation and will fully cooperate wi

it seems they won't be the first mover or asset purchases as we have seen in the last week where the ecbprobably release a pepperidge program in june and bank of england rba will be fixing the emergency program runoff by the end of the year and while we while -- and while we will see the fed adjusted the idea of substantial progress around the corner. it will involve a tapering of the 420 two. it's a much more synchronous and balanced world. joe: do you think the market fully appreciates what you describe, particularly around the recovery of the european vaccination drive and the fact that it is going to catch up and converge, as you mention, with the persistent strength of the euro. is there further for that to run as it becomes clear europe is getting that together? jon: yeah, i think so. i think we have seen a bit of a turn and move where european fixed income has started to trade relatively weaker and i think one of the important narratives that will mark things as more cognizant in the second half of this year is the divergence trade really only works when the direction is divergent

the ecb is aiming to attract a wider, younger and more diverse audience, and that is going to see a fewts. for some, those words makes a perfect sense. for others, they might as well be mush. it's the language of cricket's part of its charm, or part of its problem? this summer, the hundred is promising to shake up the sport in england. they are considering upper updating the phrases too. the idea to remove cricket's language barrier. is a cricket's language barrier. is a treat cricket's language barrier. is a great opportunity _ cricket's language barrier. i3 —. great opportunity to globalise the game and also to attract the neutral fans. the neutralfans explain game and also to attract the neutral fans. the neutral fans explain the game of cricket, always use the term like out rather than wicket. if this changes a couple of words can actually help to get the game into other parts of the world, make it more global, we've achieved what we want to do. will more global, we've achieved what we want to do. ~ ., _, , want to do. will often consider conservative, _ want to do. will often consi

at the moment, the ecb are not aware of any england players planning to leave the ipl.rugby players, and a number of former professional footballers, are to participate in a study to investigate if they're more vulnerable to dementia than the rest of the population. they'lljoin an existing scheme which tracks the brain health of a0 to 59—year—olds and looks for early warning signs of the condition. former wales international shane williams is taking part. over the course of my career i certainly took knocks to my head. i played on the majority of the time and, you know, you weren't really educated about it so the test by very difficult and you didn't know what the results were going to be either. i got to mention the family, my grandmother passed away two years ago so, yes, it was quite a scary time but i was determined to get involved in these studies because, like i say, i want to educate people. i didn't want to scaremonger. you know, i love rugby and a love contact sport and my children play contacts built so, you know, ijust wanted to make sure i knew a lot more ab

anna: things have spread across the atlantic and the ecb has to pushback in the past.t has come out this earnings seasons, talk about supply chains, big tech is talking about this and health care is talking about it. certainly, the auto sector talking about supply chain and semiconductors. is this showing up in the macro at all? janet: there is a lot of discussion about it, and whether it is the auto company, a toymaker, a phone maker -- wheel learning how semiconductors and electronics are involved in all the sectors. at the macro level, we see it in some areas, and in some of the survey data, and the cpi level. seeing that mix of a sharp rebound, we have seen that in the u.s. the last couple of decades, if you had deflation, you had a sharp rebound in inflation, but service sector inflation has been weaker because we have not seem the same revival in the service sector spending. i think we are seeing it, and we will see further evidence of it. powell talked about ongoing risks regarding bottlenecks. we will see some of these bottlenecks be ironed out, but it could ta

the ecb said they're not currently aware of any england players planning to leave the ipl.n's t20 world cup, which is due to take place in india in october and november. we are constantly talking about the situation that is unfolding outside of our bubble. it is not nice to be honest watching from afar, certainly considering how lucky we are to be in a bubble and not be affected by its very much. we fight this together no matter where in the world you are. to italy's serie a and lazio kept their hopes of champions league qualification alive on monday with a 3—0 win over ac milan. joaquin correa scored two before ciro immobile scored the third with three minutes left as lazio move five points off the champions league spots with a game in hand on their rivals. napoli have moved above juventus into third place in the league, after a 2—0 win at struggling torino. victor osimhen scored napoli's second to put them back in the champions league places. to the premier league where leicester city moved closer to european champions league qualification as they came from behind to beat

the ecb will look through this. a temporary overshoot. mark: do you really believe u.s. european inflation can diverge that substantially? anna: i don't think we will see a huge divergence. we think it is temporary. we do have some divergence on the economic front that will also fuel the divergence on inflation. we have overshoot in the u.s. compared to the euro zone. the euro zone, in the next three years, we expect inflation to remain below the 1.5% mark. meanwhile in the u.s. we will be at or above a target of 2%. we will see the divergence continued that we had already before the corona virus. the coronavirus is not a game changer. anna: ok, in that regard. thank you for joining us. next we will talk about ships -- chips. ♪ ♪ >> i expect the whole chinese bonds to continue selling off with the spread widening. not the ideal environment for new bonds. some may do it. some will hold off. >> the overall appetite in credit within asia has been robust over the last year. it is really only the last month or so we have started to see that wayne somewhat -- see that wane som

i'm speaking about the fed being on hold for the time being, the ecb being on hold for the time beingd this is supporting the fiscal stimulus, just passed by u.s. president biden and the u.s. infrastructure package likely being passed by the end of this year. all of these factors continue to support risky asset classes. but let's be clear that it's a very favorable scenario and the air might get thinner as we head to the third quarter. close momentum will have peaked at some point. in the discussion will start about tech -- and then the discussion will start about tech tapering. and then i will be a bit more cautious and more selective when it comes to equity, the equity outlook. anna: ok, and one of the things you highlight in your notes, which i found interesting, you talk about the debt levels there, public and private institutions having to accumulate to fight this virus. but you also talk about the demographic challenge. clearly, demographic markets have demographic challenges before covid-19. now we see reports of low birth rates in developed markets in the short-term. is this s

ecb checking in on the euro holding around 120. the ecb with gains for the canadian dollar. some of the gains trading at 125. once of our situation improves in china, and the offshore in the staying below its level with -- earlier telling us the best days are likely behind us. haidi: let's take a look at one the stories we're tracking. relations between australia and china are -- looks set to worsen . paul allen joins us now with more. what was expected, and what has the reaction been? paul: it wasn't expected. there was a memorandum of understanding and the framework agreement that was signed between the state of victoria and china on the belt and road initiative. it was aimed at increasing chinese anticipation, there was no money attached but they were very symbolic. since then we we seen relations with china and australia get worse with the 5g buildout and australia made worse by calls for an investigation into origins over the coronavirus and it's led to trade reprisals from there. australia past -- the federal government cance

will the ecb continue to support, or will they ratchet back some policy support? alan: we have seen, unlike in the g7, we have seen some tightening in emerging markets. zilkha, notably. -- , -- brazil, notably. it is not like out of the united states where there are huge beats and tightening monetary policy. it is steady as it goes in terms of the markets. when you look at chinese equities in particular, you can find companies hard to find anywhere else in the world have reasonable valuations. and that strong earnings growth. annmarie: does it change your expectations for yearly growth out of china? alan: not really. especially with so much noise in the data. this is not just china but everywhere. it is quite useful. the revisions are the real numbers. the initial flashes are estimates. when you take into account the revisions and the encouraging news on consumption, it is steady as she goes for china. annmarie: you said it is a good place to invest. where exactly in the chinese market would be a good place to be exposed to? alan: generally, institutional investor