live from london, i'm guy johnson. alix, of course, is in new york. what you need to know this hour? brexit on a knife edge. borisfour years of talks, johnson will have a meeting in the next few minutes that could be -- could be -- make a break poland will decide whether or not they will package.to veto the eu and germany is eyeballing tighter restrictions as france's unlikely to hit its target of 5000 daily cases in december. there is evidence that the virus may have peaked here. at friday. a lot of optimism. this is where we are monday. cable -- thisith

is come down really sharply on the brexit news. walk johnson prepared to away. the pound is plummeting on the back of that. we recovered a little bit, but still down .9%. 1.12.e sterling is at in europe, the equities are rolling over, the euro stoxx -- the euro stoxx down. we have money moving back into of bonds, in the same in the united states. let's talk about brexit. prime minister boris johnson and the european commission prime minister, set to start a crucial phone call starting about now. could it be make or break? pound falling sharply? the -- counseling sharply. walk away.pared to

the real deadline appears to be eu summitahead of the on thursday. joining us now, we have our bloomberg governments and brexit reporter. what are we expecting from the phone call with boris johnson? reporter: one of two things, either we get them saying we will keep talking. think we could get an agreement here -- or this is the moment where they say, we should notkeep talking, so why into this now? we do not know which of those we will get, but this could be the make or break moment. alix: i feel like we have heard this many, many, many, many times. time bed this different? why not a rolling deal conversation? e: this time they seem to have

come to a head on what the real issues are. you get to a point in the argument where you see both sides are not willing, and so you say, were clearly not getting anywhere, let's just stop now and give people time to prepare. there is the eu summit on thursday. i think it is looking increasingly like the moment where it is decided -- you're right, deadlines have come in the past and they could be going on, but i don't think this time. fixable and is the real problem the level playing field? joe: i think fish does feel they are finding ways to resolve it. the level playing field -- that is where the eu is more stock

and the u.k. realizes it does not want to compete with the eu, and that may mean powers proposed by the eu. the u.k. has to make the decision, does it want the freedoms of brexit at that cost? this is the decision johnson is having to make here. he may come down on the side of, no, i don't want to. joe mays, thank you very much. , thank you very much. this is the setup. let's get to the market reaction. jeff, how much downside to you need to present to sterling if there is no deal and how much upside do we need to price and for bonds? >> is actually asymmetric. there is -- it is actually asymmetric.

we get a deal, we retrace some of the losses that have occurred over the last trading day or so. you mentioned bonds. brexit deal or no brexit deal, the response has been more consistent. ande's a lot more upside, that money may come under review. let's talk about that in more detail, geoff. my understanding was if there's no deal, that's inflationary, at least short-term inflationary. geoff: short-term inflationary under normal circumstances. is when you have demand operation, perhaps the greatest since the great recession.

even if it is price reflation, you've got the market drag that is not going to offset that. that could be a done deal given where the boe is. are we going to see steepening? u.k. security profile in 10 years? where is the potential for growth? boltsso, on the nuts and ,evel, we've got the phone call what is the conversation that has to happen, what do they have to say to get headlines that will be positive for the deal? the surprise is the eu has not been involved, but it is going up to the highest level now. germany wants a deal and ursula

von der leyen is german. they don't want a messy deal. they want some flexibility and compromise. the fact that she is open to johnson now -- this is the rig second round of -- the big second round of talks, it is going down to the wire. it's boris johnson in a position to compromise? is the european commission in a position to compromise? all of the member states have been stuck together and absolutely forced that brexit should not set a precedent for other countries. guy: friends seems to have decided over the last few days they want to take a tougher line. there was a meeting where emmanuel macron was involved and he said, i got to go now because i got to speak to angela merkel.

how united are they and is the risk that france could veto a deal if it does not like what it sees in front of it? judy: it's very difficult to say. hasresent, president macron taken a hard line because the negotiations have dragged on. i think france has lost in off a lot of patience on this. also it does not seem that clear-cut. you think, is it good cop and bad cop being played out with these member states? perhaps berlin is slightly hiding behind paris to do the mayh rhetoric, while berlin be wanting to give a little bit of edge. you want to be careful. think moment, i don't anyone is in a position to veto for either side. actually, the ball is in boris

johnson's court in some ways. alix: hmm. if the ball is in boris is negativeurt, rates in the cards? think negative rates is in the cards. if you look at the last em statement, it was not mentioned. in sweden, we saw it in new zealand. there are three tests for the boe on buying and i don't think any have been satisfied yet. qey will just wrote to the root for now. guy: judy, your sense of talking to people in berlin, is europe prepared to pay the short-term

price? all indications are they do not want the single market underlined. they would rather deal with britain. but is there a sense now that the pain is coming towards germany in particular and there's an awful lot going to the united kingdom. is germany prepared to pay that now? : angela merkel certainly has a lot on her plate. berlin,it is paris or they do not know where they stand with boris johnson. back and forth. it is such a tiny percentage of the gdp -- it's a minnow, frankly, fishing.

-- i go back to my position the level playing field element -- i think the pandemic has jolted germany. you have to depend on britain and the brexit negotiations for this to happen is, i think, shortsighted. guy: ok, we will leave it there. judy.yu, are hungary and poland? going to continue with their budget talks? ? this is bloomberg. ♪

alix: this is "bloomberg markets: european close." angary and poland staring at ultimatum with the eu. they could risk losing billions in aid. joining us from brussels, maria -- what are poland and hungary andly to do -- act to do what is the workaround the eu is looking at? is key is the european union is flexing its muscles and we heard from diplomats who is thisd the plan b is something they are really going to look into? this really increases the urbanre on irvine and --

and they could be seen as powerless. your veto does not change much -- that could dea real could be a real shot for someone like viktor orban. you're not going to get the money, but isn't going to matter if you veto or not because we can come up with a workaround thiscould change or flip when the european leaders meet and brussels. look for to your coverage. maria tadeo. still with us, judy jim -- judy dempsey. have you see this being resolved or not resolved? new, what nothing poland and hungary have been doing.

suffered and they did not take any action. neither did germany. is allegedly using the eu funds for his own football staggering, the systematic erosion of the judiciary. members. eu if they try to set some values, those values are being threatened by hungary and poland . aboutwhat does it say moving forward? cold water onhrow all of that conversation? i don't think so. if you look at the eu as it is, it's a home of many different

rooms. there's the eurozone, the defendants area. many speeds of europe. we have to get this into our minds, the first thing. has allowed the corporation of leaders. the kind of a coalition of willing. .t's not damaging the eu i think actually the eu is beginning to take itself really put its money where its mouth is on this very issue. guy: judy, it europe usually together with the

crisis in front of it. it takes a web to get there. the problem is, over the last few crises, europe has not really done everything that is necessary. it has not gone far enough, and i wonder if this is another case where we find ourselves with a similar problem, that europe has to figure out a plan b and is figure out -- do we -- quite figure out what it needs. a good question. what does europe need. what does it wants? -- what does europe need? what does it what? you have one side and then the other, represented by brussels, they want more sovereignty. you see the sovereignty to the eu when you joined up.

in some ways, this is being played out. there's one other point you make them people do say come out when there's a crisis, the eu overcomes it and emerges stronger. it has not, actually. this pandemic package is so important for getting europe's economy off the ground. at a fundamental crossroads. it seizes the moment and moves ahead with the determination -- this is about the future direction of europe. it is so fundamental, what takes place. if europepoint, ties, other countries

are already hiding behind poland. there's huge corruption in poland, hungary, romania. if europe gives in now, it's a green light for other countries. alix: judy, where does this leave the climate initiative? the climate initiative, the real push? oh the climate initiative, -- oh, the climate initiative. it will be there. the point about planning -- plan b, they do not want to climateze the initiative especially if biden and the incoming administration in washington gets itself sorted out in january. they really have to see this through. you, judy.

it was a pleasure talking to you. judy dempsey. thank you very much. this is bloomberg. ♪

ritika: it is time for the bloomberg business flash. i'm ritika gupta. apple is looking to outperform the intel chip, looking at a series of new mac processors for early next year. they are looking for successors to the m1 chip. ,f they live up to expectations they may outperform machines running intel chips. facebook will be facing state and federal antitrust lawsuits, being accused of sorting competition. this is being brought by the attorneys led ftc and

general led by letitia james, a new york state democrat. two domestic banks talk about mergers, but they are very, very hard. this is a very unusual time. this is very high uncertainty. suchch an environment, also be much more difficult, so i do not expect these things to happen. ritika: over the weekend, the ubs chair said the merger would not be unreasonable. guy: it does seem that the dance has started though, hasn't it? both talking about it so quickly as insist -- in such proximity. the banking merger story is fascinating because in some ways it is the center of what is happening in europe at the story debating.

about the single market. the banking union, that is miles away. ,ingle banks, domestic banks that feels like a long, long way away. europe has so much ground to cover. alix: i wonder in the middle of covid, what will the stomach the for these mergers, because they value. include that is where you have to bring out the value. how are you going to make money? you are going to fire people when you wind up merging. i don't know how that works. guy: in spain, they are happening. in germany, to an extent they are happening as well and the retail left over -- layoffs. i think that there is a recognition the deals need to happen. they are happening domestically,

putting the big cross-border deals together remains elusive because we do not have the backing. for theve been changes , but they are still miles away on some of this other stuff, and coming back to weber, that is why he is saying the city of london will be able to maintain its dominance. he said that a few days back. talking of the financial markets -- we will talk about those. the european close is coming up. this is bloomberg. ♪ are you frustrated with your weight and health?

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the pound down sharply through asian trading. boris johnson prepared to walk away from talks -- the sun newspaper. massive moves to the downside. were off our lows by point evan percent. we have rallied -- .7%. we have rallied, i'm doing a little bit of that. i will stay with the u.k.. this dominant story with ursula von der leyen and boris johnson. the euro stoxx 100 does not really have anything to do with the u.k. or half of it does not have a thing to do with the u.k. -- half of it is made up with big multinational mining companies, and we have the translation back into the house, the pound is down, the value of the revenue goes up, and aggregate you would raise and at seven pounds, so largely stable today. the markets have gone down in

europe. the more useful reflection of they go to the 50 and that has significantly underperformed. that's a reflection of what is happening in the u.k.. just by way of comparison, the dax is down by .2%. in the euro stoxx 100 -- initially we rallied lower -- there really big issues here in europe. what is happening in hungary in parliament, what is when to happen on thursday with the ecb, what is happening with rights that -- a really big risk with europe, stocks broadly going sideways. we will come back to the issue of the u.k. stocks -- to wrap up id preview that conversation, want to show you what is happening with the domestic stocks.

the house is under pressure. banks are down by 4%. down.dia companies are the ftse basically has gone into different direct shins, driven -- directions, driven by the story. alix: let's stay with us story. we have more on the importance of reaching a deal. >> 80% of our economy is in tech,sional services, in creative industries, and currently the bill being negotiated by the government consider the issues they have and it appears even may not go over

the line, so we are very concerned about the possibility .f a no zeal for exit the irony, of course, is the usa has a president that is putting usa back on the world stage and we, the u.k., may become a very lonely country. what is the future for the brexit talks? >> at the moment, it appears that a hope for a good deal for the eu is not included. professionals for services, the legal, tech industries, they will have less favorable access to the single market than they had as members of the eu or during this transition. that is weight is so important

that the u.k. government understands the importance of issues like equivalents. system relies on people as well as the european union. down andhave a locked no deal brexit, would that be the perfect storm? what would job losses look like? we have suffered is usually because of the reduction in footfall caused by the pandemic. those sectors, retail, hospitality, leisure. they have really struggled and of concern, the combination

the continuation of this theemic, the combination of no deal or the poor deal would be really severe for london, and as he said, it's the perfect storm, i double whammy. that is white is so important that our government wakes up and realizes that we are heading toward a deep recession. sadiq khan speaking to bloomberg's francine lacqua. let's get deeper into the conversation we were having a moment ago. christine leads the market side blog. let's talk about the divergence we can see an u.k. equities were we to get you no deal. today is kind of a classic example. in the ftse 100, domestic stocks

being battered. and there's the international revenue stream -- from an equity point of view -- benefiting from the cheaper pound. >> absolutely, guy. this is more of a dichotomy we should expect if we do get a no deal brexit. the story has not been about brexit. pandemicen about the and its impact on the economy and we have seen that flow through the economy earlier this year with the jobless rate spiking and the utility indicators and pmi trending low and now there is the added layer of exit, and really hammering this picture in the u.k. and it has already been battered by the pandemic and now that we have brexit, it's just another reason for these stocks to be weighed

down. so having the retail, absolutely, the domestic -- these are companies that rely on the domestic consumer. and now because of the pandemic and brexit, it's difficult to make a case for their progress moving forward. if i am a ceo of a business, what am i doing right now? i hear that boris johnson is ready to walk away. what am i doing. doing?e: yeah -- what my -- what am i doing? alix, that is the question. what can they do to prepare? they can only do so much. -- earlier on, we

were trying to sell the stockpile, of course. we were so -- staring down the deal brexit.no and at we have the u.k. this point it's still a question on the table. , a lot of these decisions, they are not really able to make , untilhe law is in place the detail is in place and that is what they are looking for now and they are not getting. super cheape 100 is from a value point of view, from a multiple point of view. does that get undermined by a no

deal brexit, or does the case change the margins -- the u.k. will still be cheap and you could argue that the biggest story will not be what happens ?ith brexit, but covid once the vaccines come into force, that could mean a significant uptick. kristine: yeah, it's a very good question, guide. this is supposed to be the year for value, right? we could see traction in the u.s. and in the u.k., which value.y is the bigger for investors who can think longer-term and more tactically, the u.k. is massively underweight and one of the most

favored underweight's globally. if you are an investor who can stay in the market for decades and your time rising can account for the eventual recovery of the u.k. economy, then it sounds like a good deal, but it sounds less like a good deal when you don't have time on your side and you do not have this to spend to begin with. in terms of longer-term trends you can make the

you are thinking, it may not be betrayed for you. alix: what sectors would benefit from the continued government stimulus? the u.k. was going to be the prime example of working together. in the u.s., you have the small caps, for example. kristine: we have the domestically focused stocks that are likely to benefit from anything for the domestic economy. your home builders. theya valuation standpoint remain underweight's in investment portfolios, so look for these two have a balance. after we get over the initiative -- the initial shock, these would be the sectors that would be sensitive to that recovery , we have to get through to the immediate risk and front of us, which is a no deal brexit, right?

what to dofigure out with ourselves, and where are investors afterward? guy: we appreciate your time. .loomberg's kristine aquino these of the final numbers. during thewer auction. the ftse lower. , a little bitnt more weakness -- banks, retail, and the cars that were -- sector. our conversation on the cable this evening, jon ferro and i will walk you through that our on radio. we have these headlines in boris johnson. and i will be on digital radio at the top of the hour. this is bloomberg. ♪ .

ritika: this is "bloomberg markets:. the european close" i'm ritika gupta. ♪

we are going to focus on those most vulnerable and those on the front lines and we will progressively keep adding more and more people. be thinking in the february, march timeframe you will see more general timeframe and by the second quarter net year we will have enough vaccine for every american that wants it. that was health and human services secretary alex azar on the morning shows. in the meantime, cases are worsening across the country and dr. anthony fauci joined new york governor's andrew cuomo illustrious briefing. he expects the middle of january to get really bad before the vaccines are full throttle. joining us now, we have the air they have beend

tracking the pandemic response. thank you for joining us. are we ready to handle vaccine distributions. where are the weekly -- weak links and where is the strain? time youk for a long will see a discrepancy between the availability of vaccines and the need for vaccines, so demand and supply will not add up for a long, long time. ,f you look at what is needed 67% is the consensus needed to have immunity to achieve herd immunity and a country. even at 90% efficacy, this is very high. these vaccines have a high efficacy rate. that means you need some effect percent of the population to have a shot. if you look globally, 6 billion

these shotsmost of are two shots, and to put that the world ise, currently producing 203 vaccines in total, and that is measles, flu, everything. we need an all-time mobilization to get the 12 billion shots of vaccines that the world needs. guy: let's talk about timing, who is going to get it first. there betweenis the united states fully vaccinating everyone who wants it and the u.k. delivering the same thing and europe delivering the same thing? >> yes, that's a great question. the interesting thing is we see very different trajectories from country to country. looks fairly close to being able to vaccine -- to vaccinate a large proportion of the population.

we are looking at something like the end of q2. we have the u.k. coming after will achieve herd immunity according to our forecast in september, and the rest of the world, it's much more uncertain -- latin america, africa, even china. there's a huge discrepancy, when you look at the timelines. that's one of the most startling things when you look at the forecast. alix: what do we learn from that? that you get the vaccine and things look normal. that would suggest that normal will look very different. the u.s. has said we believe very much in the moderna and pfizer vaccine. the other thing to look at is

domestic production. i think really how this will play out is if a country is theycing lots of vaccines, are unlikely to start to export before it has started to vaccinate a large proportion of its own population. dr. fauci has said many times we need to have a protective layer across the u.s. before we start. a millionas more than doses -- they look to be produced in the u.s., and why the u.s.t is looks to be in a very good position. -- j&j,00 million doses all of these vaccines like that, we actually do not know. they are designed to be effective, but we don't know. that is one way we will see this play out differently. the in terms of achieving

herd immunity you're talking about, does it matter how countries, who they vaccinate first question mark your in the u.k., it will be care homes and health care workers. other countries may do things differently. have a going to meaningful impact in the effectiveness of the way the vaccine is used to achieve a reopening of society and economy? >> there are many different theories around the different approaches. i think most countries are taking the similar approach of first, the most vulnerable, then the frontline workers. if you want to get to 75% of the backs nathan population -- of the publishing drive the vaccination, it does not matter so much of you go about it. you just need a big, big mobilization to get it. it differs from country to country. lot thathere's quite a

is not likely to take the vaccine. russia has big anti-vaccine sentiment. you pretty much need everyone who wants to take it to take it, and the sequence does not matter hugely in my view. we believet note, it. thank you very much. we really appreciate your time. this is bloomberg. ♪

guy: blast from london, i am guy ihnson -- live from london, am guy johnson. alix steel, of course, in new york. -- it will be interesting to see whether or not they are prepared to keep talking. wednesday is being seen as the deadline on the eve of the eu summit, so we will watch

carefully to see what happens over the next several minutes to see if there is a readout and whether or not that's it or there's progress to be made or talks. alix: i feel like hour-by-hour that's when to change. that's your neck of the woods, over here, according to an email , health and human services spokesperson says some states are using outdated figures for the vaccines. every state is looking for a certain amount of vaccines, and maybe that number is too low or too high if they're using outdated figures. as to whatnfusion the rules are and what they are going to get and when they're going to get it. that does not really help planning. guy: you have the biden administration, the admin -- the incoming administration -- they will be tasked with an amazing logistical challenge.

you put inhat probably influences what comes out. to make theg challenges massively more difficult for the people coming in. alix: more news from this email correspondents. the state figures assumed more pfizer shots are be available. there was news that talked about how they would need supply issues, how they would cut the amount they would manufacture. for me andaps it up guy in new york and london. power"up, "balance of with david westin on bloomberg television radio. happy monday, guys. this is bloomberg. ♪ every year, we set out to do one thing:

help the world believe in holiday magic. and this year was harder than ever. and yet, somehow, you all found a way to pull it off. it's not about the toys or the ornaments but about coming together.

santa, santa, you're on mute! just wanted to say thanks. thanks for believing. wannit's timeight and for aerotrainer. a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time. it allows for over 20 exercises. do the aerotrainer super crunch, push ups, aero squat. it inflates in 30 seconds. aerotrainer is tested to support over 500 pounds. lose weight, look great, and be healthy. go to aerotrainer.com. that's a-e-r-o trainer.com. david: from bloomberg world

headquarters in new york, i am david westin and welcome to "balance of power." we will check on the markets as we do every day and be joined by abigail doolittle. you said there is a little bit of movement but not a lot of dramatic movement. abigail: we see a little bit of pullback developing in this fourth quarter but on small moves. of 1%p 500 is down 2/10 and the nasdaq is sharply higher step dragging on the s&p 500 is the energy sector, helping the nasdaq is apple among the other tech names so this is more of what we've seen over all this tech, microsoft and facebook, those are this year's defensive stocks. investors are going that way which is interesting because the vaccine will be distributed in the u.k. this week.