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aerotrainer is tested to support over 500 pounds. lose weight, look great, and be healthy. go to that's a-e-r-o ♪ anna faris good morning. welcome to the "bloomberg markets, the european open." here are your top headlines. breakthrough or breakdown. brexit talks hit investment it roadblock -- hit a last-minute roadblock. sterling hits its highest since 2018. the s&p sleeps late in the session over reports of supply-chain obstacles for virus
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vaccines. virus deaths hit a record in the u.s. and in italy. and finding a compromise, opec+ agrees to slowly add more oil year after days of tense talks. saudi arabia's energy minister called the process of excruciating. welcome to the program, everybody. welcome to the european market open. it has just gone 7:00 here in london. german factory orders rising 2.9% month on month. the estimate was for an increase of 1.5%. that was better than anticipated. factory orders arising year on year, 1.8%. the estimate was 0.2. we have seen a continuation of growth coming through. we will see what momentum is like in the further winter months. another story out of germany, potentially more interesting, perhaps. germany has agreed to extend a
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to preventr bankruptcies as the economy is hit by the second wave of the pandemic. germany is extending its 37 billion-dollar backstop for credit insurance by another six months in the month of june. the industry will surrender 60% of remittance to the government. we talked early on about this in the past, because this is above supply chain in the past. allianz'or ms. unit, concerned with this insurance says the aim is to prevent bankruptcies. that is interesting in terms of credit we will get to further details on that shortly in the program. let's look at features. we have european futures, u.s. futures on the screen. european futures looking mixed. we had a session yesterday in the u.s. and europe but looked
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mixed. nasdaq closed at an all-time high. you look. a bit of.s. futures, an upside, looking more positive. i mentioned the nasdaq closing at an all-time high. we saw a pullback late in the session on some confusion about pfizer. a report came out which the just and have been to blame for an earlier drop in production targets at pfizer. perhaps morning information. we saw a retreat in assets. let's to talk about when it comes to the vaccine story. we have asian equity markets up by 0.5%. jobs data later on, the expectation is for hundred 75,000 jobs created, compared to the prior number of 630 8000 -- 475,000 jobs created compared to 638 thousand. let's get to the market conversation with laura cooper,
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bloomberg mliv marker -- macro strategist. good to speak to you. the vaccine news seemed to throw markets offkilter. the pfizer news is maybe a bit misunderstood by some in the market. there was also brighter news for moderna saying that their vaccine shows durable immunity for at least four months in their particular study. how is this news being received investors? i suppose yesterday was an example of how they will all jump on what looks like the information even if it turns out to be a little old. >> certainly what we saw yesterday was a knee-jerk reaction, stocks coming back late in the session, and then we get clarity later on that the pfizer news about the supply-chain issues has actually telegraphed. and just the details were released yesterday so it is not really new information. what this highlights is that the markets will be in this holding
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pattern going forward with vaccine progress reports come out, and that is being contrasted with the near-term challenges. really continuing this tug-of-war as markets await the next catalyst. the risk is whether we see economic data begin to roll over. because if you have rising mortality in the u.s., we have these renewed look tones areas like california and that is yet to feed into the economic data, although we are seeing sectors come under pressure. i think the markets are waiting for the next catalyst. payrolls could potentially bring some reaction given the fact that it could disappoint to the downside, but ultimately, i think we are still in this rangebound trading. anna: we are waiting for some use we can rely on around brexit. it seemed yesterday there was optimism a deal would be done. than the u.k. said, hang on, the e.u. is asking for last-minute demands. aren't. says we so we have another day of uncertainty around brexit negotiations.
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we will see what develops in the days ahead. how are the markets positioned around u.k. assets, my colleague tells me the bearish bets are still pretty solid. the cost of hedging around a weaker sterling is at a seven-month high. laura: certainly, we are seeing ,hese risk aversion bets pointing to some degree of investors seeking protection around the downside risk to a no-deal scenario. but if you look at the sterling against the dollar, it is against that 0.35 it is optimistic and i think it reflects an evidently dollar weakness, but there is a risk of sharp knee-jerk reaction. euro against sterling has been necessarily more muted, still holding around the 55-day moving mark, butround the 90 i think markets are still position for a deal to come
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through. but even if we do potentially see a deal, any rally will be short-lived, because there will still be a number of challenges ahead. so a deal versus no deal is more different than it was perhaps a year ago, a very slimmed-down deal. will see trade disruptions regardless. the u.k. economy is struggling. so i would expect these are likely the highs for cable. the upside is quite limited. anna: yes, the difference between the deal and no deal in -- in thate allianz forecast was pretty stark. let's talk about the dollar. how will the dollar hit other assets? banks are seeing a 20% downside for the dollar in 2021. with across other assets like commodities? >>? it has happened in the past? . what do you expect from the dollar weakness?
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laura: certainly, we're seeing out.r weakness play the fact that the bloomberg dollar spot index is testing those april 2018 lows, it is feeding into several currency patterns. but i think it is going to toead beyond commodities. we are seeing vaccine hopes driving prices higher. and we are seeing this play out on pair.ollar-w that provides potentially and uplift to chinese purchasing power, given that they are such a large consumer of commodities, i expect that to be an additional tail lift. the consensus being that we will see an emerging market -- we will see emerging markets gain traction on the back of the dollar weakness, we are seeing an upswing in terms of emerging market inflows, we are seeing em currency gauges climb about 5%
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last month. and equities on the back foot as well. so i think we will see the emerging markets the the key beneficiary of the ongoing dollar weakness. anna: laura, thank you so much. laura cooper, bloomberg markets life macro strategist, thank you for spending time with us. coming up, president-elect biden says he will ask all americans to wear a mask for 100 days, as the u.s. grapples with cases ands deaths. we discuss that next. this is bloomberg. ♪ this is bloomberg. ♪
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anna: welcome back to the market open. 7:11 here in the u.k. this is what futures look like, fairly neat, actually.
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continental europe futures perhaps going in a different direction to the london market. we have seen that often, and we will keep on watching. 134.54 is where we trade on the pound. let's get the first word update from laura wright. lara: brexit talks have hit a last-minute bump. the british government says the prospects of an imminent deal have receded, blaming the european union for suddenly turning up with a new set of demands. senior figures questioned whether the remarks were intended to pile last-minute pressure on the talks. anthony fauci, the u.s. infectioustop disease specialist has rolled back on earlier criticism of the uk's rapid approval of a vaccine. he said he did not mean to imply any sloppiness, after describing the process as "really rushed." president-elect joe biden meanwhile, says he will ask all americans to wear a mask to prevent the virus spread during
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the first 100 days of his administration. the opec+ group of nations, has agreed to ease planned cuts in oil output next year, planning an extra 500,000 barrels a day january. the deal comes after almost a week of fraud negotiations that exposed risks at the heart of the cartel. producers will hold monthly consultations to decide in the next step, a much shorter time frame than usual. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thanks very much, laura. the s&p 500 slipped into the close and european futures traded lower on a report that pfizer scaled-back vaccine production targets early this year, after running into difficulties securing the material it needed. the group cut its production goal to 50 million doses after earlier aiming to make twice that by the end of the year.
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of an joined by the cio investment group this. is causing confusion, the dynamics around pfizer's production expectations. it seems as if they put a pause on a new production targets in november. but we have the backstory on it. yesterday it world markets a little. away from the specifics of this, i guess you are watching the vaccine rollout story. set your expectations for next year, big picture, how links are they?- linked are >> you are absolutely right, they are absolutely critical. next year, as we have seen this year, probably the most important factor, for markets even. that is why these small bits of news are influential on the daily move. next year it is really about, not so much whether the vaccines there, there, they are there will probably be more of
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them, but how effective are they being rolled out, how much access number will there be for the population -- anna: we seem to be having a problem with our linked to amsterdam, which is a shame. let us see if valentin is back with us. can you hear me? valentin: yes, i can hear you fine. anna: good. excellent. next question, then. you have quite high expectations for 2021. for risk assets, we have seen it really broad participation in the rally, which is great, but 90% of the s&p is in a technical up trend now, does that give you reason to pause, make you moderate your expectations for next year a little? laura: absolutely.
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i wouldn't say for the full year, this is the traditional behavioral dynamics that you may need to monitor closely to understand where markets will be moving the nest couple of weeks. i think the undercurrent for next year is good for the vaccine, the fiscal stimulus will be there. but for the short-term you see it in many metrics, there is ess, excessive optimism and positioning. so, yes, in the near term, you should be more cautious. we have been scaling back a little bit towards equities and risk assets in the past couple of days. that doesn't mean we are not constructive for next year, but for the nice couple weeks, i would expect more volatility simply on the back of investor optimism and positioning. anna: let's get to the dark days, let's get through that literally dark days, with the shortest day approaches. the tech rally, what does it tell you that the nasdaq closed
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at an all-time high yesterday, at a time when people are talking about rotating away from growth, into valley and into cyclicals. how do you square those -- into value and into cyclicals? valentin: we had the biggest rotation ever in markets in november. it has been a quite dramatic shift. tech was a big leader until then. it took a step back, but it was still close to all-time highs. now it is repairing a little bit of that quite quickly touching the high again. i don't think. the secular support for tech is gone, but there are some risks there. i think there will be a bit more normalization once the vaccine rolls out for the sectors that have been bombed out the most this year, so that would maybe cause tech to underperform northern. and, of course, there is the issue about more regulation on tech. big-tech companies, especially. we see the things being drafted in europe.
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who knows what will happen in the u.s. as well. so there are some risk factors. it will be more volatile to see how tech performs next year, but in the long-term, i think it is still the sector that is going to win. anna: thank you very much, valentin. stay with us. coming up, the hunt for yield sees junk bets hit record. but how dependent is this search on support from the fed? we talk about that next with dani burger. this is bloomberg. ♪
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anna: welcome back to the european markets open. 7:20 here in london, 8:20 in paris or berlin.
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investors are pouring money into risky debt, in a relentless hunt yields. guessed it, joining us to discuss is dani burger. how sustainable are these gains in junk bonds. dani: the environment is near as perfect as it can get to a favored junk bonds. of the one hand we have hopes of the corporate recovery, vaccine progress, really boosting growth and inflation expectations. and that really helps investors. . risky companies, from airplanes to cruises will benefit from this environment. at the same time, we have a fed willing to keep rates extremely low, so without u.s. treasury yields being able to breach 1 if yields, he will bet against that. that makes junk bonds extremely
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appealing. the fed has said it is willing to pull back up end of this year. investors we have been speaking to thus far are not too concerned. yes, they say this is a moderate risk, but the market can stand up on its own. this program was not used that much anyway. one analyst is concerned about this, they say highly leveraged companies should be a concern. if you want more yield, go to investment-grade. anna: bloomberg dani burger, behind all the graphics, telling us the trends we are seeing in the junk markets. et's get back to valentin. the u.s. jobs report is due out later. what is the most important question for you around fiscal stimulus in the u.s., given all the complicated choreography and over from one president to the other? valentin: there will be some stimulus.
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but first of all, the easy thing is to say it will be less than it was in 2020. the support for growth will be coming down in the u.s.. bigsecond question is, how will it still be? there is some shorter-term good news if you listen to what is happening on capitol hill, mitch mcconnell being more open to getting a deal. so who knows? with biden in the white house and a split congress, the likelihood of a deal is not big. the case is for moderate fiscal stimulus but still fiscal stimulus in place. however, there is maybe a positive risk in terms of the overall size of the package. if you look into these runoff elections in georgia, it seems to be very clear that, at least in the most logical base case, that republicans would win those runoff elections and thereby keep senate and report -- senate in republican-controlled.
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the latest polls do seem to be shifting towards a democratic candidates, which would be quite a surprise, and if indeed in january those seats would be flipped to the democrats, you have a completely different picture. case, but it is for the next couple weeks something to really monitor closely. anna: so something to really watch as we get into january, the way the senate does ship up. how does the job sector -- the senate played a role in the fiscal story, how does jobs data and other data out of the u.s. play into the fiscal stimulus conversation? if data is good, it can reassure, but it can also reduce the need in the short term for stimulus? valentijn: it might be. -- if i lookally at the state of the u.s. labor market, the level of unemployment still, even if these job numbers surprise a bit to the upside, i think there is
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a very firm motivation for the stimulus. that i don't have any doubt that the button administration will be pushing for it. so i don't think that jobs recovery will be strong enough in the first couple of months, especially not with further intensifying lockdowns which we will be seeing over the nice couple of weeks, to really take away the need or the perceived need in congress for further stimulus. i don't think that is a big risk factor to undermine fiscal stimulus. it is more the politics in the senate. anna: so keeping and i on the senate. home, in terms of the ecb response in europe, we have come from the u.s. and we are talking about the fiscal side of things, in europe with the recovery fund, but also the ecb and what they are planning to do. to you see the ecb boosting and extending stimulus, that seems to be the expectation? valentijn: i think they will be.
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the story for the ecb is a most boring. they will do whatever it takes. if the lagarde has been so exquisite about the ecb not only trying to revitalize inflation, which will be hard, but also specifically mentioning that they are aiming to keep government borrowing costs under the control. they will do enough to keep rates under control, and further support recovery in the economy. i think where needed, they will do more and they will do so later this month. anna: valentijn, thank you so much, have a great weekend. valentijn van nieuwenhuijzen , thank you for joining us here on the european markets open. a few lines coming through from the e.u., the french minister saying that the risk of a no-deal brexit exists. i guess that is a statement of fact. some in the e.u. 27 say that this man, michel barnier, would
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not sign something that e.u. states would veto. we will talk more about the breakthrough or the breakdown in brexit talks, as we seem to be getting toward the end of this, safe to say. this is bloomberg. ♪ it's moving day. and while her friends
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anna: welcome back to the european market open. european equity markets open in half hours time. you can see a mixed picture in terms of futures. the ftse 100 is a standup. it makes moves to the upside. fairly different dynamics happening with regards to the brexit conversation. we're still around the 134. let's talk about brexit now. brexit trade talks were on the verge of a breakthrough until negotiations hit a snag. british officials say the european union turned up with a new set of demands. they didn't say what they were. you officials denied it had done
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that. just hearing now from a french official, saying france would veto any brexit deal if unsatisfactory, this coming from a french minister. we know any country can veto any of this, and we know that the u.k. doesn't have to sign a deal if it doesn't want to. this is where we are in the last few minutes of this negotiation. maria tadeo joins us from brussels. how serious is this u.k. backlash over the last minute demands? talk us through the comings and goings over brexit. maria: so this is what's happening. yesterday, the u.k. government said they were unhappy they believed the european union is putting new elements on the table for the discussion for this potential breakthrough on a deal between the two teams was moving, slipping further away because of those new demands.
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they didn't specify what they look like, but what is interesting is we do have the french european minister who is speaking, saying the french are not going to sign on anything that is not satisfactory for the country, and that he still believes, or does believe that the risk of a no deal brexit is still on the table. those new elements from the french. the french are playing bad copier. -- cop here. this is what you would expect from emmanuel macron, repeated in those negotiations, the eu should negotiate from a position of strength and shouldn't give too much away. reported.k., we've many times not signing on something that could be perceived as too much of a concession and not a win. it's politically very toxic for the prime minister. i would say there's a lot of movement this morning. but the big take away, that
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compromise, that breakthrough on the fish for the playing field -- clearly, if you look at the comes from the french -- hasn't happened yet. anna: brexit clearly one item people want to make progress on. another is the recovery fund. poland seeks to come with the plan, where they thought they could break the impasse. hungary is pouring cold water on their. what have we heard from that -- on there. what have we heard from the hungarians? maria: it's definitely not about brexit, just when it comes to next week. you're right. the polish floated what looked like a compromise coming from the deputy prime minister, suggesting the company could drop its veto if it's clear that they don't want to use rule of law to change the political agenda. victor orman says he doesn't believe this would be enough and he doesn't want to see a link being made between the funding and some of the eu programs.
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there's also a subtle hint reminder to the polish that last week, they agree in a bilateral meeting that the two would come to a summit with a joint decision. if hungarians are not happy, the polish would not agree to it and vice versa. they are pouring cold water on that and putting out this thread that the veto is still on the table when it comes to the hungarians and there isn't anything that looks like a compromise. the flip side the more progressive countries, the liberal democracies, he would not sign on to anything that does not include rule of law in it. anna: remind us why these comments around rule of law or so important or why it's been attached to the recovery fund in the first place. when i spoke to one hungarian mp, he said there were other mechanisms if you've got problems with how hungry is dealing with its legal system --
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hungary is dealing with its legal system. that's not the way some other countries see it. maria: no, and overall, the european union will tell you these are the basic freedoms of the european union, and that's the message that needs to come out of this. i'm really very much thinking that the netherlands, this is very important. he said the prime minister of the dutch, he is not going to sign off that doesn't include the funding and doesn't make it clear in the european union, money cannot go unchecked to what he said are countries that are becoming liberal democracies and a contradiction to the eu fundamental values. this is about the politics, the ideology. perhaps there's a reason it's difficult to see a compromise emerging out of this. victor orman is also hinting that he doesn't want to see that overstepping the sovereignty of some nations and the eu should not have that big essay.
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it could be prop -- big a say. it should be -- could be problematic. it's fundamentally a national decision. anna: thanks for the briefing, maria tadeo and brussels. lots more to come as we head towards the summit next week. let's get a bloomberg business flash. here's laura wright. laura: pfizer scale back production target early this week after it ran into difficulties securing materials in needed. it had promised up to 100 million doses this year. but nasa's the target is 50 million -- now says the target is 50 million. the scale up of raw materials took longer than expected. ryanair has ordered 75 high-density versions of boeing 737 max. the transaction value at about $7 billion. it's the biggest in two years for the plain model. it comes as a vote of confidence forr the boeing was granted
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24 months following two deadly crashes. >> we have incredible faith in the recovery of the industry. if anything relative to the early product -- projections could be made, with respect to recovery, this vaccine developed, global district asian of the vaccine, if anything, accelerates our view of recovery. laura: morgan stanley is handing out a special one-time bonus for lower paid workers after the firm reported a record year. it will give around half of its 30,000 global employees a bonus of $1000. the benefit to morgan stanley's promise it will not cut its workforce despite fallout of covid-19. delta airlines is warning the current quarter could be deeper than expected as the coronavirus continues to undermine air travel. delta now expects to burn up to
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$14 million a day, up from an earlier forecast of $12 million. the airline says revenue will be 30% less than the same period last year, in line with earlier estimates. that your bloomberg business flash. anna? anna: laura wright in london. the german green party wrapped up its conference by unveiling the most liberal spending package the fiscally conservative nation has seen. why it's so controversial. >> is europe's >> as biggest economy, it wants to focus on climate change. germany's green party will be contending for the chancellery for the first time in its 40 year history. the plan? to accelerate the exit from coal power and expand the country's renewables. to pay for it? a massive green spending plan that can keep germany from returning to its pride -- prized
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balanced budget. >> they want to build an investment fund over the next 10 years. we can finance it because we want to issue new bonds from the federal public. in the good news is we don't have to pay any -- and the good news is we don't have to pay any federal interest rates. >> it might seem like a no-brainer, but financing investment would still come with a hefty price tag. the greens want to do something that's been taboo, change constitutional rules, but keep a cap on public debt. >> we don't want to abolish it, but we want to inform the death rate. and we -- debt rate. and we want to finance in the future of issuing bonds because their positive reinvestment. we can have a positive impact, also on the economy, but also on the german budget, because we will gain. >> germany is set to take on 330
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billion euros of new debt this year and next to tackle the covid-19 pandemic. question is, will germany's green be able to convince the public -- setting aside the black zero? anna: and don't miss avenue show, bloomberg green -- our new show, bloomberg green on quicktake, for everything you need to know on the changing climate. annmarie hordern takes you through bloomberg green. oil optimism, from greens to oil -- crude gets a boost after a crucial agreement on easing output cuts. we have the story next. this is bloomberg. ♪
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anna: welcome back to the
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european market open. 18 minutes to go until the start of trading. things looking mixed, but the ftse 100 is the standout here, up around 3%. the cac futures and dax futures pointing to the downside. let's get a bloomberg first word news update with laura wright. laura: brexit trade talks set to be on the verge of a breakthrough. the british government said the prospect of an imminent detail -- deal has receded, claiming the european union was turning up with a new set of demands. senior figures close to the european side will -- question whether the remarks were intended to apply last-minute pressure. hungary's prime minister said he won't and his block on the eu budget and refugee package on this brussels drops it's tied to upholding democratic values. victor corbin reiterated between his nation and poland to uphold his budget still stands. the comment sentence prospects
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at the deal next week. anthony fauci, the u.s. top u.s. -- the u.s. top financial disease expert, said he didn't mean to imply any sloppiness after describing the u.k. process as "really rushed." president-elect joe biden said he will order all americans to wear masks during the first 100 days of his administration. denmark is to stop offering new licenses in the north seat as part of a goal to become fossil fuel free. the country the european union's biggest oil producer. denmark's energy ministry says it will cost about 13 billion krona. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. anna? anna: thanks very much for that,
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laura finishing the story about oil. it gradually eased production cuts. after tensees days negotiations. the russian deputy prime minister said output would be cap under review between members after january. bothsically, considering positive and negative factors. this provides the adjustment can be in any direction. what is important about the adjustment at this point is limited to 0.5 million barrels per day. discuss,ning us now to bloomberg's will kennedy. very good morning to you. how much visibility do we have around opec-plus production for 2021? they've agreed to 500,000 barrels a day of production increase.
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but they've also scheduled all these monthly meetings. will these monthly meanings -- meetings be a sizable increase in production? or will there be questions at weather production increased at all? will: good morning. i think what's going on is opec lifted the market, which is uncertain, fragile, and difficult to understand. they're trying to balance a raging coronavirus outbreak in europe and north america, with very strong recovery in oil demand in asia. they are trying to think about how vaccines will affect demand in 2021. i think what that means is when they were talking, they realized that they needed to have more flexibility in their policymaking. so, they put a modest amount of oil into the market in january. we had expected to put none, which is interesting. but then, as you say, they will meet each month and decide what to do. it's a change in policymaking,
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but it may make sense given the unusual market we face in 2021. anna: what do we take from the drawn out nature of these negotiations? what to be understand about the way opec-plus is functioning, or perhaps the way opec is functioning, the way they're all on the same page of what needs to happen with supply? will: i think there were tensions at this meeting, clearly. saudi arabia has really led the charge, and if you think about the crash of the coronavirus and the price war, they showed their market power. they got the market back on their feet. then the saudi minister has been a driving force. they are ensuring compliance among different members. i think you're seeing some members chafe at that saudi position, particularly the uae, traditionally a close ally of saudi arabia, seems unhappy with
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its quota. it clearly needs to be desperate for money. so, it was tense, but we got there in the end and opec got the show on the road and they agreed to a compromise, which everyone, including saudi arabia, could agree to. anna: no matter how hard it was to get, the deal reached. will, thank you for joining us, will kennedy with the details. election of joe biden in the united states, green energy pushed firmly back onto the global agenda. chelsea has told us he is hopeful the new administration will bring fresh impetus to the green transition. annmarie hordern spoke to him exclusively. years,he last five plus the world has been traveling in an opposite direction. nationalism, deglobalization, global naturalism, all these things have changed for the
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worse, for that matter. so i'm quite hopeful, that with the new administration coming in, there will actually be a change of sentiment, and hopefully also effectively a change in direction. because if it doesn't happen, if we can't find a way to make multilateralism, globalization, everything else worked, i don't think we're going to succeed. annmarie: do you think joe biden is the right solution to that? ben: well, i'm not a u.s. citizen so i did not vote in the election, so that may not comment on the candidate. and is clearly to say at this point what exactly what the policy will be of a biden/harris administration. but i think rejoining paris is a pretty good start, i would suggest. sit of the ideas that behind the green deal -- in the
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end, it's all practicalities that will matter. we'll see how they play out. but the whole fundamental idea of more collaboration, more progressive policies, working hard on emissions, they are the same things that we stand for as a company. annmarie: is there something that you and your team are preparing for this administration to do, or hoping they would do, like you pretty much where front running in the u.k. about the ban on petrol in diesel cars? is there something you're planning for with a biden/harris administration? ben: not practically on the weund, but was evenly -- seemingly have good contacts with the biden administration. we have, what i believe, is world-class leadership on the energy system, and also on policy measures that can be taken. we have a very good idea of how
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the energy system in the u.s. works and how it can evolve. and we stand ready to share our thinking and our ideas with that administration the same way as we do in your. -- in europe. anna: that was the shell ceo speaking to annmarie hordern about the u.s. president to election. we're minutes away from the market open. we'll get your stocks to watch. opec members clinched a crucial agreement on easing output cuts. oil prices pushed higher a little, up .9%. might we go over $50 a barrel? this is bloomberg. ♪
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anna: welcome back to the european market open, six and have minutes to go until the start of friday's equity session. the ftse 100 is the outlier, looks like it could be set for strength.
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elsewhere, we see losses. let's talk about dani burger about stocks to watch. dani: norwegian air, the stock has had a lot of drama as of late. it's fighting for survival at this point, after not getting state aid. we have new passenger numbers fell 96% year after year. but part of the story is restructuring. they're producing their debt, trying to reduce equity. they say their attempt is to go back to the government and ask for more eight. that -- more aid. that could help them out. anna: we were talking to will kennedy about the deal clinched by opec-plus. the oil price is higher. dani: we should expect a boost from oil majors in europe. one thing to keep in mind is because they are meeting monthly, this could introduce more volatility into the picture and possibly more volatility for the stocks, as well, just devils
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advocate. many,indeed, the scope of many more opec meetings. we'll certainly watch those closely. what about energy, sticking with the energy theme? dani: that's right. this one is more structural, siemens energy getting into the index.e's force's, dax any time we get into index inclusion, that brings passive money. it gets included, kicking out greinke, which goes into the small dax index. it's up 1% while greinke is down one by 5%. -- 1.5%. anna: thank you, dani burger with the stocks to watch. we'll keep an i on oil stocks, as -- eye on oil stocks, as dani suggested. we see not much movement in the pound. 134 is where retrade.
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-- we trade. we did see a rally in yesterday's session on expectations. the open is next. this is bloomberg. ♪ it's down to the wire,
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the team's been working around the clock. we've had to rethink our whole approach. we're going to give togetherness. logistically, it's been a nightmare. i'm not sure it's going to work. it'll work. i didn't know you were listening.
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anna: welcome back to the european market open, a minute to go until the start of the european equity trading session. here are your headlines. breakthrough or breakdown? brexit talk to a roadblock, as the u.k. warns over fresh demands. eu officials deny making those demands. sterling hits its highest since 2018. late to the game, the s&p flipped late in the session on the report of the supply-chain obstacle for pfizer's virus vaccine. even though the company made the statement in early november, virus death hit a record in the united states and italy.
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in finding a compromise, opec-plus -- and fighting a opec-plus, public -- -- called the process excruciating. welcome back to the european market open then, just a few seconds until the start of the equity market, session for this friday morning. we made it to friday. your stoxx 50 futures suggest downside. ftse 100 futures look robust. could that be the oil difference? we've got oil prices moving to the upside to percent on brent -- 2% on brent, driven higher. even if there could be further uncertainty, further volatility with these meetings scheduled for the rest of the year. but there will be some certainty around production. that is what the markets seem to be reacting to. let's get to the european equity markets and how they are opening up. that is the operative word, the
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ftse 100 up by around .5%. the dax is down by around .1%. the ibex is fairly flat. pulling up the ftse 100 to see what is leading it to outperformed. this morning not surprised to see the oil named in there. shale up 1.7%. astrazeneca doing well, up 1.7%. we do see some appetite for big oil, also big pharma. european markets opening fairly mixed, actually. the u.k. outperforms other markets a little more sluggish as investors weigh recent stress and await key data from u.s. labor market. joining us is dave. -- james. james, really good to speak to you. thanks for joining us. if we come to the end of 2020, not quite there yet, but time is
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ticking, are you very focused on the better outlook for next year? you think markets will, by and large, managed to navigate what will be a gloomy and fairly traffic -- tragic whimsy in the northern hemisphere? anna. morning, markets are intending to do, and realistically in the u.s., has been attempting to do that since this most recent of crises. i've read recently equities are the most poor looking asset which iongst the more, find strange, given s&p's were priced to perfection, when there was quite a lot of evidence. it's a bit of a self-fulfilling prophecy. i think people are desperate for positivity and are biased to see positivity wherever they can, to some degree, putting aside
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intentional risks to that positive view. sentiment is unquestionably bullish with respect to the long-term outlook, and with respect to what it means for returns from risky assets. i'm a bit more circumspect, more concerned, not just because we have to get this went -- get through this winter, but the idea of returning to the status quo is not a reason to cheer. i didn't see the economy at the end of 2019 as being healthy. i saw it as being fragile and nearly struggling towards the end of what was quite a long economic cycle. at the moment, i feel quite alone in that view. i think most investors would say the vaccine and the receding virus are reasons to continue by risk assets at any price -- buy risk assets at any price. anna: i've been looking at the
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cyclically adjusted pe and the ratio of that with the s&p 500. if you look at that ratio, you get up to levels that look a bit scary, from from -- from some perspective, certainly taking it back to not levels of the .com 99,, but above levels for for example. james: i definitely do think it's more egregious. not necessarily on a broad basis. what we observe in terms of equity market valuations, really, is largely a function of distortions in the overall valuations coming from a small number of huge companies and the price of watching valuations. that said, valuations don't necessarily appear to be taking into account the balance of probabilities and risks in the
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underlying economic picture. there are a couple of coded reasons for that. one we know about is endless central-bank support and the idea there is a liquidity trade. liquidity is pumped into the market. the other really is that low interest rates drive values to be higher, i.e. the discount rate used for equities leads to a higher present value and higher share price. the evidence is more mixed. we really haven't observed that as being a factor in europe or japan, where economy interest rates are much longer and we've seen multiples languishing. the reason for that is the interest rates reflected a negative growth outlook. that should weight on earnings. the moment we've got this perfect storm, where there's a
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rapid rise in earnings, and justifying paying incredible multiples for those earnings on the basis of interest rates alone. i don't think that's a stable equilibrium. i think there's a postop justification. i would suggest that this time is different. it's a dangerous phrase to be uttering. if you buy equities when quoted,s are, or as you something approaching 32.33, if you buy equities there, we should expect a low or negative long-term and nominal return from the investment. anna: talking about the relationship between equity markets and interest rates, i know you're focused on the curve. you say the duration of the value. we have seen a bit of curve steepening. what is that telling you at this point? james: really interesting one. a gets cold, glibly,
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reflationary narrative. we have rates rising from low levels, back in march and april, when we had market shock. whether or not that is justified by the economic outlook, the underlying inflation outlook, i think is somewhat questionable. what we've seen is breakevens correlated with assets. it's a risk on trade, and it's driving dollar down commodities higher. and that gets caught in reflation trade. again, whether or not that is sustainable, both because the economy is accompanied by low rates, and there's even more debt now, and it crimps some peoples abilities to serve that debt, and is rubbing some people to pay that debt. i would say it becomes a problem more quickly in the current environment then we would have been used to historically. and central banks, and what
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we're seeing really is central banks shifting from dual mandates to more narrow mandates, which are ignoring inflation to a certain degree. what they're saying is they're promising to be a responsible, and they want interest rate policy, monetary policy, financial conditions to be easier than the economic situational outlook would justify. i don't think they would what the market to front run future economic improvement. they want the opposite. i do think the ecb's operating a de facto yield curve control policy. the federal reserve has been more cautious. they want to see what fiscal policy can reduce. i don't think the fed wants to give the market any indication they want to run higher. i think there's a fed backstop. anna: right. from what you said about inflation there and how the markets refer to moves in the
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yield as a reflation trade, and thinking about how difficult it was before the pandemic to talk about generating sustainable inflation in western economies. do you not see inflation coming as a big threat or opportunity for investors? james: it is a threat and opportunity. that's the biggest question out there. there are good arguments on both side. realistically, what we've seen is a massive negative demand and demand shock dominates. economic models will tell you that is deflationary, and i would agree with that notion. that being said, there are some other factors which are pushing on the other site, which are -- side, which are more monetary policy, relative to the financial sector, or at least there's a transmission to get to the economy more easily than the
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qe saw locked up in financial legislation. and once we get to q1 next year, we start to have base effects on oil, which will look incredibly inflationary, if the u.s. dollar continues to fall, that generally tends to rise prices. we could have this perfect storm that leads to a bit of an inflationary shop in the middle of next -- shock in the middle of next year. that could be destabilizing for markets. the big picture is unless wages go up, inflation is -- anna: thank you very much. james stays with us. further thoughts from him shortly. just to let you know, the european council president is holding a news conference. he seems to be talking about the u.s. election on the transatlantic relationship. the u.s. election opens the path to new relationship. we'll keep an eye on anything he has to say on the domestic
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european story and the recovery fund, the link between the two, and brexit key topics in brussels. we'll see if he references those at all. breakthrough or breakdown? brexit talks hit a breakdown over fresh demands. but eu officials denied having made fresh demands. more on that next. this is bloomberg. ♪
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anna: welcome back to the european market open, 30 minutes into the trading day -- 13 minutes into the trading day. the dax underperforming, the cac making decent gains. will is higher, more than 2 -- oil is higher, more than 2%. let's get a bloomberg business flash. here's laura wright. laura: thanks, anna. pfizer promised up to 100 million doses this year. a spokesperson released a statement saying the scallop of raw materials took longer than expected. morgan stanley is handing out a special one-time bonus for lower paid workers as the firm heads to a record year. the bank will give iran half of its 30,000 employees a one
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payment of a thousand dollars. the benefit adds to the promise it will not cut its workforce this year despite fallout from covid-19. that your bloomberg business flash. anna? anna: laura wright with your business flash. keeping an eye on brexit brussels, eu councile president, see if we get any lines around brexit. speaking about the latest, trade talks were on the verge of a breakthrough until negotiations had a last-minute slang -- snack. -- snag. brexit said there was a new set of demands. you denied the new set of demands. we won't dwell on these last-minute demands because we'll see where that takes us. but in terms of the investment story, your short sterling. .- you're short sterling
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are you short sterling because you think there will be no deal? or you don't think sterling matters? what is the explanation? james: yeah. , in my opinion, really haven't gone anywhere for three months. we repeatedly have heard from either side of the debating team that we are increasingly approaching a deal. we are increasingly approaching a grievance among those subjects which seem to be sticking points, only to find a day later, somebody else from within the negotiating process saying actually, those issues remain outstanding. what seems to be happening now is a disconnect between the eu negotiators and some of the member states. so, first and foremost, whatever deal we get here in the next couple days, that's where we're heading. 18 months ago, i think the markets would have been
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terrified about. sentiment has shifted. i'm not quite sure why. we're short sterling because we felt the market was a, far too sanguine about the economic impact and b, far too sanguine about a deal coming. still very difficult to apply seductive -- subjective probabilities. i feel like there isn't one by this weekend, that is it. that seems to be what the u.k. side said this morning. the short and sterling is twof er. when is the prospects of a deal, and two is the benefits of the kind of deal we're likely to see . financial problems are not in the discussion, which i find somewhat strange. anna: indeed. 7% of the u.k. economy, fish much smaller. we watch these lines coming from the eu, saying negotiations with
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the u.k. are still ongoing. member states will have to weigh in on brexit. he does confirm the chief negotiator, michel barnier. let me ask you how you position in other things away from sterling. what about gilt markets? what about ftse versus 250? how are you positioned? doesn't seem to pay too much attention to brexit. sterling is the market's favorite expression. project.od, brexit bad it's not so heavily dominated by what the bank of england is doing. they are sensitive to what's happening in brexit. they also have other issues to deal with. the u.k. economy suffered more than most as a result of the coronavirus pandemic, partly possibly because of government policy, but others argue because the economy makes it quite set,
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and consumption dominated. it's very difficult. gilts, we still like to own it. anna: thanks so much. james continues his conversation with us on bloomberg radio. boeing sends a landmark deal with ryanair. we'll bring you our interview with the ceo's of both companies next. this is bloomberg. ♪
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anna: welcome back to the european market open, 21 minutes into a positive trading session. boeing on wall street so i -- for theder from 7:37. revise the best -- 737 jets. guy johnson spoke to the ceo of both companies about why ryanair is making the commitment now. >> i'm this is the time, this is the moment, boeing going through a torrid year, not just with the max, but with covid as well. you look at the work at what dave and the team, steve dixon, patrick e and the team in europe have done, this is the most audited, most regulated, safest aircraft ever to be delivered. this aircraft has already flown for 22 months before the tragic accident that befell it. 47 million people have already
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flown in a boeing max aircraft. it's been upgraded. this comprehensive trading. ryanair hit three max simulators in our dublin bases. we put our pilots through it. they the aircraft. the aircraft performed legally. we were heartened by the strong support patrick key and their statement gave to the work dave and the team at boeing have done. it's a great aircraft, save aircraft. we can't wait to take delivery of these planes and we know our customers will enjoy flying on them as early as 2021. guy: let's pick on some of this points and discuss them further. you have got an awful lot of aircraft parked on the lot right now. the ones they are ordering are not those aircraft. they are not the ones built. there are going to be new ones, ryanair variance.
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where you going to do with the aircraft you currently have sitting on the lot? are you going to make any money, considering it's a buyers market 's?, for 737 max the forecast for depleting their inventory is a two-year timeframe. we're confident that can be done. the most important thing about the economics associated with the inventory is when you do it, how patient can you be as you live through this recovery? we have incredible faith in the recovery of the industry. if anything relative to the early projections that we made, with respect to recovery, this vaccine development, potential global distribution of that vaccine over the course of 2021, if anything accelerates our view of recovery and the faith in that recovery, relative to what we were when we begin with the covid crisis.
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so, we are actually building more and more planes, which means we will be more and more patient. it will still take us two full years. i'm confident of that. and we have enough liquidity to allow for that. so that's the way we're playing that. what i am very confident in his the value of the airplane to the airlines, and the performance that it gives them. michael's model, low-cost, low-fare, is the model that is creating the globe -- growth practice our industry has enjoyed for so long. it allows for more passengers. it introduces more passengers to the industry. his spurs tourism, all those -- it spurs tourism, all those good things. to choose that based on his performance day in and day out is a testament to that value. that's what we will have to hang our hats on. guy: michael, positive words
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from dave about the outlook in terms of demand. i've looked at your november traffic numbers. they were out yesterday. they were down 82%. isn't this purchase out of kilter with anticipated demand at the moment? why are you putting your balance sheets at risk? is there any flexibility in the terms of the deal if the markets does not come back as quickly as you anticipated? >> actually, there isn't, nor do we need that flexibly. a couple of things, our november traffic, we were down 80%, europe through october, november, december the lockdown. the vaccines are coming. they are beginning to be licensed. travel is going to snap back strongly. anna: that was ryanair's michael o'leary and boeing ceo dave speaking to guy johnson. interesting to say there's no flux ability. the deal is the deal for those -- flexibility.
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the deal is the deal. a call to the ecb to cancel. we'll speak to the eu affairs minister. that conversation next here on bloomberg. ♪
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back to thee european market open. the session looks increasingly positive for european equity markets. oil prices going higher. of theet a look at some big stories we are covering here at bloomberg this morning. here's laura wright. talks said to be on a breakthrough have hit a last-minute bump. the prime minister says the prospect of an eminent deal has receded, blaming the european union to come up with a new set of demands.
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been questioned whether the marks were intended to pile last-minute pressure on the talks. back onfauci has rode earlier criticism of the uk's rapid approval of a covid vaccine. he says he did not mean to imply any sloppiness after describing the u.k. process as "really rushed." biden,nt-elect joe meanwhile, says he will ask all americans to wear a mask to prevent the virus spread during the first 100 days of his administration. the opec-plus group of nations has agreed to ease planned cuts in oil output next year, pumping an extra 500,000 barrels a day through january. the deal comes after almost a week of front negotiations. -- fraught negotiations. day, onews 24 hours a air and at bloombergquint take, powered by more than 2700
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journalists and analysts in more than 120 countries. this is bloomberg. anna: thanks very much, laura wright in london. the ecb is expected to extend asset purchases and cheap credit for banks to support the economy until vaccines are widely available, according to economists surveyed by bloomberg . respondents expect policymakers tabs six months and 500 billion euros to their emergency bond buying program when they meet virtually on superjet -- virtually on december 10. what should happen to all the debt sitting on the ecb's balance sheet? let's go to maria tadeo, who joins us from brussels in conversation with a guest. maria: we are joined by the italian minister for european affairs, minister vincenzo amendola. thank you so much for being with us, minister. theg on the point about european central bank, a yes or no answer, are you in favor of
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opening up a debate to cancel some of italy's debt? with a treaty,rk so we are following the treaty regulations. maria: you know very well that the treaty says that is not dutiful, so you mean italy is not floating this idea, it is simply not doable. vincenzo: it is working according to the treaty and working with economic stimulus in order to to boost the growth. if we boost the growth, it goes into the next generation of fiscal policy. based on the european union, we are going to decrease the debt and we always focus on sustainability of public debt. maria: right, it is about growth and debt sustainability. to wrap up, how unanimous is this line of thought among the italian government? we have heard some actually think this is a fair debate. vincenzo: there are many
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opinions around the european union. but we work according to the signednt that we with the european commission. this is the main track we have to work in a difficult time like we are living. maria: so italy is going to follow the treaty. minister, when you look at the situation right now in europe, what worries you more, sector oprah or brexit? a. amendola: i think it is futures possibility they are responsibilitye they are taking. this is our problem on the timetable. brexit, as usual, europe is very united. full trust andur
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confidence to negotiate on the ways of european regulation. amendola, minister i'm sure you were listening to viktor orban this morning, who says he does not really see a compromise at this stage. is he going to double down, and if he does, do you see a plan b where you pull hungary aside? mr. amendola: no, there is just a plan a. we cannot negotiate on our id. maria: ok, and when it comes to brexit, there is another potential veto. french eu minister was saying france has the right to veto if they believe the deal is ultimately bad for the country. are we going to get to that point? mr. amendola: it depends on how the negotiation is going.
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if they comply with the requests that are based on market regulation -- speaking on behalf of the european union. it is very united. maria: do you have blind faith in him? is he going to come back home with a good deal? is amendola: he wonderful negotiator, and when a negotiator has the unanimous support of a european country, i think he can do his job like he has always done in the past. maria: and looking forward to when it comes to italy, there has been a lot of back and forth as to whether we could see delays to the next generation eu plan, as to whether commission is pushing you to provide this plan. when are we going to see it? mr. amendola: we are well on track. we are working with the task force of the european commission theuse we want to follow
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guidelines. .e want to invest altogether the italian government monday has a cabinet meeting to upload and update the guidelines presented to the commission. to as soon as possible install with the law we present to the parliament with the implication of the plan. all the regulation is crazy. we have no time to lose. you say you have no time to lose, but let's imagine this recovery fund is delayed and you are spending a lot of money to prop up your economy. if there is a delay, does that put you close to the afm? mr. amendola: we are working altogether with the european commission on economic and fiscal policies.
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there is a group front line between commission, the european central bank. this is the european union that is working and it is giving strength toward the different countries. we are working in each direction. is it a line we want to follow? maria: carrie briefly, is it a good idea to go skiing this winter? mr. amendola: our position as the italian government with other countries is that we have to avoid the third wave of covid-19. we have to make sacrifices. we are asking sacrifices from our people now that the second wave is decreasing. it coming back to more sacrifice. let's be clear with our citizens that we are going from the top,
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and the third wave has to be excluded from the beginning. maria: well, minister, thank you so much for your time. that was the italian european minister vincenzo amendola. thank you very much with that interview. let's focus on something else. both of the new playstation and xbox looks set to be hot sellers this season, if you can get your hands on any. up next, we will talk gaming with premium gaming ceo paul sulyok, next. ♪
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anna: welcome back. 42 minutes into a trading session that looks increasingly positive. oil majors doing well, up i more than 2% after that opec-plus deal. let's go to laura wright. itsa: pfizer scale back vaccine targets early this year after it rain into difficulty securing all the materials it needed. it had promised up to 100 million doses this year, but now the target is 50 million. a spokesman said the scale of the raw material supply chain took longer than expected. morgan stanley is hunting out a special -- handing out a special
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one-time bonus for lower pay as the fund had stored a record year. it will give its employees a one-off payment of $1000. morgan stanley promises it will not cut its workforce this year despite the fallout of covid-19. delta airlines's morning cash losses for the current quarter could be deeper than expected -- delta airlines is warning that cash losses for the current quarter could be deeper than expected. it drains up to $14 million per day. they are lined says revenue would be 37% less than the same period last year, in line with earlier estimates. that is your bloomberg business flash. anna: thanks, laura. both the new playstation and xbox looks set to be hot sellers this season. the products have been flying off the shelves. the videogame industry itself has been thriving this year with
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covid-19 lockdowns fueling unprecedented demand. where does that leave us as we head toward the end of the year? joining us is paul sulyok my green man gaming ceo. good to speak with you. you sell games and promote games. i am wondering how having two new consuls coming out at this point at the shortages we are seeing around them, -- new consoles coming out at this point and the shortages we are seeing around them, how does it impact what is on your side? paul: in a hardware perspective, it is normal that there are shortages. but we will probably see in the first quarter or second quarter of next year is the market will catch up with having these two new consuls. -- consoles. sells in gaming countries around the world, 11
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different languages. we are very much on the pulse of eddie of games coming to market and the performance of those videogames in the global market itself. you sell globally, 195 countries. tell me specifically where you have seen strong demand for this year. of course, where people have been more locked down, you would expect to see that. interestingso dynamics about where people play them, in the home or out of the home. paul: when china went into lockdown early on, we forecast that game sales would go up significantly in the chinese environment. actually, what happened was the sales plateaued. we had to take a step back and think, why on earth was that happening in the chinese environment? but the chinese and many southeast asian nations tend to cafe areacommunal lan with their friends on an ongoing basis.
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because they don't have a huge amount of personal space, what they ended up doing was playing more mobile games and less console and pc-based games. for western europe and for the u.s., we absolutely saw a huge spike in sales across the board during the first big lockdown, because fundamentally people have a great deal of more time on their hands in order to be able to play games and an order inbe able to interact -- and order to be able to interact with their friends, using the game as social media. anna: and tell me about how you charge for games now. there are subscription models or just paying for each game individually. what are the pros and cons, and which is sticking? paul: the subscription model is a great model if you happen to own your own platform. sony and microsoft both have their own type of subscription model, which works very well for
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their gamers. however, for the industry as a whole, the ability to be able to have aaa games or large budget games like call of duty come out and actually had the markets as hitemium title -- actually the markets as a premium title allows publishers to invest a great deal more in the actual games themselves on the run up to launch. anna: who is the target audience for gaming now? i could ask you at any time, but i ask you specifically this year, when we have had the year we had and the lockdowns have taken place. does that increase the definition of the target audience? also, i was on your website yesterday, looking at a host of games, many of which still have guns and weaponry on the adverts at least. tell me, who is the target audience, and is that shifting? paul: the target audience is shifting. 46% of gamers globally are now
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women. it is no longer male- dominated. play bejeweled on your phone or if you play "call of duty," it is immaterial because you are still a gamer. you are interacting with a gaming medium and interacting with other people online who are also playing the same game. anna: tell me about the brexit negotiations and how that might impact a business such as yours. you are selling software globally. some of it, i imagine, is physical, and some of it is selling a code that allows people to download the software themselves. brexit negotiations -- how do you take something quite removed from the purchases we might make, and how does it apply to a business such as yours? paul: we are a fast-moving technology company. we are very lucky and the fact that we sell our games glibly and we are a pure digital company.
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the hospitality industry has been badly hurt through the lockdowns. gaming has done very well. what i would say, however, as an entrepreneur as the ceo -- and as the ceo of a u.k.-based company is, how i see the role of government is to provide stability and certainty for entrepreneurs like myself and other business leaders in the country to be able to make decisions and be able to plan going forward. the challenges we've got right now are we don't necessarily know what the next steps are going to be. we don't even know what the next steps are going to be in the next 48 hours, let alone in the next two years, so it is very difficult task to plan ahead and understand exactly how we position ourselves in the markets and in the global arena in order to be able to be as successful as we would like. so it is uncertain as to
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the terms you will be able to trade if europe come january 1, and also uncertain are the terms of the trade with other countries that previously benefited from eu trade agreements which may not have been replaced. what scale of uncertainty are we talking about? paul: we can trade on a global basis, and we will continue to trade on a global basis. we've got a technology platform that allows us to introduce sales taxes in different regions, introduce different currencies. we have applicability. -- we have that flexibility. however, on the macro level, being able to engage with people, the ability to understand what we need to do, then there are challenges around that. everything from how much the surface is going to cost next year too, how can i get people to work for green man gaming or other technology companies like ours? anna: thanks for bringing us your perspective. paul sulyok, green man gaming's ceo.
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50 minutes into the treading session, pretty positive for european equity markets. we will talk about fx next. how will dollar assets hit the other markets? this is bloomberg. ♪
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anna: welcome back. 53 minutes into the trading session. it looks like the stoxx 600 up
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by 0.1%. back of the brent crude price you see on your screen, up more than 2% on oil prices. that does well for big oil. let's talk to our markets live currency rate strategist. today we have seen the oil price go higher, 49, 66, maybe heading toward $60 per barrel at once. that is something that is lifting energy stocks in europe. how do you see risk assets or stock market trade as we head into the winter months in europe? >> i thing we are into the final push of the melt up, if you ask me. the latest increase in crude prices is bound to fuel those energy stocks that you
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mentioned. i think we are likely to see some more upside in stocks as we go into the winter, especially with global rates being so amy -- so -- so amy make anemically low. anna: rates are low, but you put a piece out talking about treasury rates still being low. what is your argument? >> that's right. are though bund treasuries overvalued, it is less of treasuries than of bunds. if you look at where inflation swaps are, there is a better case to be made for bunds. ecb is abouty the to continue in the months ahead. however, across the atlantic is
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a different story. you have inflation rates climbing, a treasury curve which is steepening, and it looks like we may get bouts of declines in treasuries going into the first half of 2021, as we have seen in recent weeks. unds told expect b outperform treasuries over the first half. anna: briefly, your thoughts on the question of the day -- how dollar weaknesses hit other assets. >> this is bound to be a photo of emerging market assets. they are some of the less idiosyncratic markets such as south korea, taiwan, the philippines that are bound to benefit from a weaker dollar. also, the commodity currencies such as the australian and new zealand dollars. dollar is a boon for gold. ask about theto
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pound, but it is retreating a little. the18 is where retrade pound down now as we wait for further brexit news. stay tuned. surveillance is up next. this is bloomberg. ♪ in a land not so far away, people are saving hundreds
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