tv Bloomberg Surveillance Bloomberg December 30, 2020 5:00am-6:00am EST
>> the u.k. approves the astrazeneca vaccine with the first shots coming monday. follow. is expected to the u.k. with over a billion doses to start to be just your bid. treaty being signed in boris pain -- putting pen to paper later today. and the e.u. in china -- and the e.u. and china are expected to confirm their much-anticipated treaty today which risks upsetting the incoming biden administered in. good morning, this is bloomberg surveillance. i am guy johnson in london. francine lacqua and tom keene have the day off today. let's go to ritika gupta. mcconnell is rebuffing both democrats and
president trump on covid relief checks. toreasing stimulus payments $2000. the president warned that failing to act now amounted to a death wish by republicans. a new variant and coronavirus has emerged in the u.k. has been found in the u.s. raising concerns that a more transmissible strain could move across the country. the first american known to be infected with a mutated form has no recent travel industry. in germany, the daily death toll has surpassed 1000 for the first time since the pandemic started. deathsere more than 1100 there in the european union since it started. british prime minister boris johnson plans to rush his brexit trade deal through parliament today. he's confident it will be easily approved. hard-liners in
johnson's conservative party plan to back the cord -- the accord. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i route tountries, could group to -- i'm ritika gupta. this is number. guy: let me take you to the house of commons, boris johnson, the prime minister opening the debate in the house of commons bill. brexit's the expectation is that it will clear the house fairly easily today, allowing the prime minister to sign it late this afternoon. orest johnson seeking a quick approval. it has taken a long time to get here, 4.5 years, that have already seen ursula von der leyen signing the documents in brussels. it is being flown from brussels to london for the prime minister to sign. live pictures coming to you from the house, keeping you updated
on progress there. let's show you what progress we are making with the markets and give you an idea as to what is happening here. we are watching very carefully obviously the end of the year, turning out to be quite an interesting one. european stocks, the s&p seems to be completely unbothered by the shenanigans taking place in washington, d.c., pressure building on the republicans after the democrats and the president pushed for their $2000 check. we are watching very carefully to see what is going to happen with that story ahead of georgia. bitcoin, for the record being made, 28,572. an nfl player from the panthers suggesting that he would like have his salary to be paid in bitcoin. let's get back to the main story of the morning. u.k. has authorized the use of the astrazeneca oxford
university vaccine, special approval of that therapy vaccination will begin in the new year. monday we think. britishchair of the medical association, joining us now. with her assessment of this. good morning. thank you very much for your time today. what impact is this going to have? this approval coming monday in terms of the u.k.'s rollout of vaccinations? how big an impact will it have on the speed of distribution? hoping we will have a significant number of our by the endvaccinated of january. preparations to give the vaccination during this week. we don't understand all the regulatory implications yet, but the advice that we can wait up to 12 weeks to get the second
authorityregulatory still delivering that information to gps like myself. guy: are you surprised by that? is there a firm focus on delivering the bp first round, and then we could wait 12 weeks for the second round. is there an expectation that a lower level of protection but for a wider population is more desirable at this point in terms of slowing the spread down? having significant difficulties with our staffing. with ambulances waiting outside some of our teaching hospitals overnight. it is very important that we get a significant level of protection to as many people, especially those vulnerable people and especially our health and care workers as possible because we have a significant
absenteeism through our doctors and nurses having been exposed to covid, and it was worrying times. this morning's signing could not come sooner. we are very pleased. guy: do you think people get a choice as to which shot they get? >> i'm not expecting a choice. i think that would be unhelpful. the two vaccines do have different ways in which we are going to be transporting them to care homes, to general practice surgeries like my own, and it will be very confusing. we already have a significant number of our population vaccinated with the pfizer vaccine. and we are still expecting to second doses throughout january and as we go on at three week intervals, we don't need the confusion that would be brought about by people making choices which are not really
based on any scientific evidence. what we need is something very straightforward so that if you are lucky enough to be one of the early people to be offered a vaccine, you know when to have that dose, when to come back for your second dose. it is very important that which ever vaccine you have, you do get your second dose at the time recommended by your doctor or nurse. guy: what is the bma view on how long it is going to take to achieve enough hurt immunity to be able to -- enough hurt immunity to be able to start returning to normal, and does the new variant, the more transmissible variant, mean that that day is further out? we havei do not think formulated an absolute opinion regarding how long it will be for life to return to normal. ours, likeaware that your own citizens, much like other health care, has been put
back. if you are unfortunate enough to be requiring a hip replacement at the moment, your weight -- your waiting for the hip replacement will be many months at the nhs then it was years ago. i would hope that things like education, we might look to something fairly normal at the inrt of our autumn term september. that is probably the best i can do on that question for the minute. guy: fair enough. we will wait to see what effect it is going to have and how quickly the virus is going to spread. talking of the virus spreading, matt hancock, the health secretary, speaking on radio this morning, will update the house of commons later on today on further restrictions and a tier fourllout of the restrictions in place. to far do you think he needs go in terms of locking the rest
of the country down to bring this virus under control? helena: there are significant number of doctors like myself i would welcome a much stricter national or near national lockdown whilst we continue to do what we all have to do -- we have two wear our masks, socially distance, wash our hands -- all the things we have become familiar with this year. whilst we get a significant number of the population vaccinated, and that will take many months. stricter -- we recognize the impact this has on individuals come on mental health, on loneliness, and we are concerned about our children and the differences in their educational opportunities if schools are closed for a significant number of infections occur, causing a closure of a class.
guy: helena, we appreciate your time. representing the body chair of the british medical association. boris johnson has just opened debate on the brexit trade deal. the vote is expected to come a little later on today. the expectation is that the prime minister will sign the deal a little later on this evening. this is bloomberg. >> of course we would have liked to have done this more quickly, oncet is also true that the adjustment period comes to an end, there will be no
guy: this is "bloomberg morning, i'm" good guy johnson. francine lacqua and tom keene have the day off today. look, good morning. , goodfocus -- luke morning. let's focus on the news coming out of the u.k. today, which funny enough appears to be not brexit but the leering of the astrazeneca oxford -- the clearing of the astrazeneca oxford vaccine. accelerate its vaccination program, how big an economic impact do you think that will have? how big an advantage? >> we are in a race against a mutant strain of covid, and the impact that is having on the southeast of england is immense.
the economic impact that is going to have could also big pretty big -- could also be pretty big, too. it may not help for the first couple of months enough to really avoid the economic impact of this extended lockdown that i think we are going to see. maybe we get to the spring and we get enough people vaccinated to start coming out of this kind of broad lockdown, we start moving down through the tears, maybe late february, march, and maybe back into a normal situation in april. everything we have seen from this vaccine from march last year has told us that it takes much longer than you would expect. that there will be surprises along the way that will largely not be pleasant, and i think that's what we have to prepare ourselves for. i'm afraid that race will be won by the vaccine, but it is how long it takes the race to run out.
come as an investor, look through the short-term damage from the virus. in virus, as you say will be control of the narrative for a while. do you just look through that and say, you know what, by later on this year things are going to be looking much better, and that is the pinto i want to invest more? that seems to be the narrative thus far, but investors are now grappling with this more transmittable virus. we are trying to figure out what the impact of that is going to be. i understand that a case has been discovered in colorado, so the u.s. will have to deal with it is as well. up and thisare early period that we are going to look through -- will it be longer than thought? luke: investors have been told very clearly that we have got your back with the central banks. every time you run into more problems economically, central banks have reacted. i think we will get the same
again as this mutant strain kind of really ghost like wildfire through the population. so expect the central bank, particularly the bank of england -- we could see negative rates in the first half of this year. you are right, it means investors are looking past this. if the central banks and government fiscal spending can get us over the hump, it may not matter in the long term, apart from the amount of time it takes to work through all the spare capacity that has been left in the system. so maybe 2, 3 years away from inflation, from an equity perspective, mid-caps look real attractive here. we will start to see a reaction from that now. i think the credit markets, there are still opportunities around, and we certainly are thinking longer term in the two to three year timescale for recovery to really catch hold and gather pace and take us back
to 2019 levels. that is definitely the case, investors moving past all this bad news. -- for terms of another the u.k., orest johnson carrying on-- boris johnson carrying his discussion with the house of commons. do we fully understand the drag that that is going to have on the u.k. economy? it looks like ports probably will not be a problem. we still don't know what is going to happen with financial services more broadly, largely ignored by this deal. big: it is probably not a enough impact to be noticeable in the volatility in the economy caused by covid. i thinkd no covid, then talking about the impact of brexit on the economy and the kind of deal we have got would make a lot of sense. but covid is the big number one thing that we need to get over
and get past. 000 --ial services, 450, jobs have left london. i'm less worried about that now. it will take a while to see what that impact is, and i would expect some kind of equivalence to come along next year. but for right now, it doesn't feel that london is going to suffer dramatically from a lack of financial services in the free-trade deal. let's talk about what is happening on the continents and the european markets. the government health minister is briefing right now as well, talking about ramping up the speed of vaccinations in germany. germany is suffering very heavily right now, 1000 deaths yesterday i think recorded in germany. and the rest of the continent is
suffering as well, as we continue to see the virus ripping through the population. we are now likely looking at a double-dip recession in europe. we do have this program, the next generation -- it is going to be distributed relatively slowly and will not have an impact for a while. are we heading for a double-dip? what does that mean in terms of allocation of european bonds and european equities? luke: i think it will be almost impossible to avoid double-dip recession in europe. in terms of where you put your capital in europe, that remains a difficult point. the credit markets which i operate in mostly, it is probably still the periphery and it is still a recovery trade. we have been buying italian tier one and tier two against yield and the same in spain, and a little bit and france where there is still value. in the core of europe, it is hard to find value in those
markets. from an equity sense, i get the feeling a little bit like the u.k., that mid-cap equities could do very well as we pull out the economy, the recovery starts to really gather pace. yes, we are going to get a double-dip, but let's go to the second half of the year conveniently, and those kind of normal recovery, these cyclical plays, could be interesting in europe at the end of the year, which means people will start investing now. where else you put your money -- the problem with negative rates in europe, savers have got to try to think about their long-term goals and how they achieve them, and they are going to be in equities, they are going to be in credit. there is really little other choice for those havens going forward. cash is a different issue for the e.u. investors, eurozone investors, potentially
ritika: this is "bloomberg surveillance." bitcoin just set another record high. the world's largest cryptocurrencies surged above $28,000 today. it was at 47% this month and almost quadrupled in 2020. that hasn't stopped critics. boom and bust cycles. fallen's net worth has by almost $11 billion since the end of october, when china began stepping up scrutiny on his empire and the country's other tech giant. a few months ago, the founder of alibaba was left with 61 billion dollars and was forced to regain the richest person.
that is your bloomberg business flash. guy? guy: thank you very much indeed. markets,are with the equity markets on both sides of the atlantic, we are seeing national travel and leisure good this morning. bitcoin to a fresh record high. interesting to see one of the carolina panthers players in the nfl saying he would like half his salary paid in bitcoin. we will see and whether that marks an interesting moment in time for bitcoin. coming up next, back to the brexit story. ♪
>> the british people have made a very clear decision to take a different path. >> brexit means brexit. >> their proposal, the one the prime minister has put, is dead. >> after three years and two missed deadlines, we must leave the eu. it is bigger than that, it is not legal extrication, it is potentially a moment of national renewal. >> boris johnson is heading down a path that will end. in a hard brexit. >> we need an urgent solution because the clock is ticking. >> the time for answers is running out. >> we have no more time to lose. we must have a final agreement by the end of october. next month in the you will find a solution.
> the next days are going to be decisive. >> looking at where we are, i do think it is vital that everybody gets ready for that australian option. i cannotngs stand, and tell you whether there will be a deal or not. >> we have completed the biggest trade deal yet, worth 660 billion pounds a year, a comprehensive candida style free-trade deal between the u.k. and the eu. we can finally put brexit behind us. four and a half years, four and a half compressed into 100 seconds. happening in the house of commons, we have the debate surrounding the brexit deal. we have heard from boris johnson this morning, saying the u.k. will be free of -- he sees that as significant. the leader of the labour party
on his feet now on the opposite benches, saying a hidden trade deal is better than no deal. the labor party is expected to back this deal. that could cause problems. economick about the impacts of this and the effect it is going to have within the eu. joining us now to discuss all of this. do we fully understand the impact this deal is going to have? >> short answer, no. this is a very big, complicated deal. i don't think anyone has properly read the whole thing yet. there are questions still to be resolved, there is a complicated framework the deal sets up which is going to be responsible for interpreting the text. i do not think anyone knows precisely what the steel implies. isin terms of the impact it
going to have on the bulk of the u.k. economy, the deal has nothing to say on that. the services sector largely ignored. deal, largely. what kind of deal do you think will ultimately end up being struck? we have potential weeks to wake -- wait until we get clarity. tothere are two things stress. in terms of services, there is little, if anything, for services providers. services make up 40% of our exports. those sectors are going to be badly hit. on financial services specifically, we are waiting for an equivalence decision from the european union. they have said they need more information from the british government before they can give that decision. if they give that decision, it will ease the ability for
financial services providers to access european markets, but not to the same extent as possible when we were a member state. there will be reduction in the ease of access, the question is how great the reduction is. >> what would your expectation there be? >> it is hard. what i would say is one of the things we are hearing from the british government is a state of intention to regulate financial services differently. the chancellor was talking about finding new ways to regulate london to make it the most attractive place in the world for companies. all i can say about that, if the european union are listening, they will be thinking hang on, if your plan is to diverge from regulations, we are not going to grant you equivalence to be able to enter our market with it different regulatory structure. my sense at the moment is the
rhetoric of the british government is undermining the case for equivalence. >> just adding to the point we were making, little protection for services within the eu deal. you bring up a point which is basically this is going to be an ongoing negotiation, equivalent to something that can be withdrawn and short notice. we are going to be in a permanent state of negotiation, as one side moves its regulatory structure, the other side will have to assess it and figure out whether it complies with the letter of the deal. how different will this arrangement be? as big a drag will this be uncertainty creates for british business? is going to be ongoing negotiations.
the structure of committees is empowered to alter the agreements if both sides agree. there is provision for a five-year deal to review the whole agreement in addition to financial services, we are still waiting for a data adequacy decision which will determine how easily data can flow from the u.k. to the eu. less uncertainty for business now because we have the makings of a deal. we have a treaty on paper. is one thing that is clear that all businesses will face increased costs and increased delays when it comes to trading, and that applies to manufacturers as well as service providers. our forecast estimates this will cost the british economy in the area of 6.5% of gdp. gdp as compared with the situation where we stayed within the single markets into the customs unit.
>> the european union is having a busy day. theirer expected to give seal of approval to the eu-china trade deal. i am wondering how different relations with the eu and china are going to be with the u.k. and china. divergenceeeing there, what impact is it likely to have? have an't think it will measurable impact on the treaty as signed between the u.k. and eu, but it is clear there are divergent approaches to china emerging. in the u.k., you have a vociferous grouping of conservatives in the china research group pushing the government to take a harder line on chinese human rights abuses and involvement in u.k. infrastructure. eu iss, the you -- the about to sign an ambitious
treaty with china. the germans trade a lot with china and are very reluctant to see political considerations getting in the way of that. i since we will see a divergence between the u.k. and eu, but i don't think that is focusing on the deal the two had just signed. >> i was referring to the impact on the economy, but i think your point is well made. thank you. we appreciate your time. thank you very much indeed for joining us. ok. let's get an update. let's go to first world news with ritika gupta. ritika: mitch mcconnell has made it unlikely there will be quick action on an increase in direct payments. mcconnell says the senate will consider boosting payments to $2000, but that will only take place in conjunction with other demands from president trump, such as re-examining special
protections for tech companies. vaccinating 200,000 people a day. speed isration warp distributing millions of doses, some states have been slow to get them into people. newsding to a bloomberg analysis, the u.s. won't hit the trump administration's goal of 20 million vaccinations by year's end. ' russellina panthers okun will be the first football player to collect his paycheck in bitcoin. he will receive half of his paycheck in cryptocurrency. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am a ritika gupta. >> thank you very much indeed. coming up, christina dudley.
down, 122.81. bitcoin continues to be big. 28,572, a new record. an nfl player desiring to be paid at least half his salary in bitcoin. let's step back and talk more about what is happening in the markets. luke, i want to talk about volatility. it has been a feature of 20/20. my question is, will it continue to be a feature in 2021? a real central-- banks continue to push volatility lower? what strategy will work best? i am wondering what strategy is going to work. down?he vix come if it doesn't, works -- what works well north of 20? luke: we are going to be seeing
periods where it gets to the midteens. that is a great time to be in mid cap. across europe in the u.k. in particular. credit at 81. bank credit, that works very well when volatility is falling like that. to comehe spikes through because there is always this lack of reaction functions of central banks. q1are going to have a tough as we go through the latest mutation of the virus. cause asility that can markets swing from being happy with the vaccine coming along to the impact today. i do not expect volatility to disappear at all. value still seeing great in recovery areas like heathrow in credit, offering good value. there is a future forward for
the airline industry. are times when we are going to see that spike. we will see central banks come in. , think there is a good chance the one to watch is the central bank of the u.k., where we could get negative rates sometime in q1, maybe early q2. attention --rn our stateside, that could be a source of volatility. the georgia runoff election is going to take place, it is a coin toss at this point, but it is going to have a massive impact if it goes to democrats because it would allow the biden administration to take the gloves off to deliver huge fiscal stimulus. i am hearing up to $5 trillion. how would that change your perception of the way you want to invest in 2020 if you were to see that huge fiscal wave washed
over the u.s.? in a normal situation, the first word to come to your head would be inflation. inflation taking calls, that is -- for any risk market. that is the risk we face. the market immediately jumps into inflationary mindset. i think it could take two to three years for growth to work through all of the spare capacity left in markets because of the help and support the government has put in place during 2020 that have cap companies alive -- that have kept companies alive. brilliant, the fiscal stimulus is out, and then people think about inflation and rollback again. be spiking higher at that point. the longer run, it is going to
take a lot longer for inflation to come through. once all of that goes away, we are going to be back to record high equity markets. back to tighter credit as we go through the end of the first half of this year into the second half of this year. avoid ait is hard to better market rather than the worst market when we come out the other side of the immediate impacts. a quietis going to be one, but have a happy new year. more --ks later, we are back to the medical story. dr. nash from the university of michigan. this is bloomberg. ♪
vaccinate the american people. guy: president-elect biden speaking about the pace of the vaccinations in the united states. the u.s. averaging only around 200,000 people a day. let's figure out how we speed that appeared joining us, dr. -- , university of michigan. good morning. president-elect biden thinks we could do better. how do we do better? dr. malani: good morning. becausean exciting time the vaccine is available, but the ramp up as you and president-elect biden noted is slower than expected. i was fortunate to have been vaccinated yesterday and i am hopeful that things will start moving faster. it is important to acknowledge how difficult it is to do mass vaccinations, and acknowledge
the resources that are required to do this. states are doing this on top of everything else. been moneyre has not to help fill in those gaps. you are talking about millions. it is a lot about infrastructure. the middlewe are in of the holidays also, which i think affects things too. i understand a lot of people are being required to treat patients currently suffering with covid, and talking with medical professionals, they talk about it being a zero-sum game. if you are treating people, you have to use treating people -- the united states varies a lot in terms of staffing and capacity. fortunately, where i am things have settled down.
they are still high in terms of numbers, but we are not having those kind of difficulties at the moment. a lot of it is a rand logistics. of there reports in some less populated places across the country where staff who has active infections are in fact caring for patients. one other piece of news we have woken up to this morning is the news that u.k. has clear the astrazeneca vaccine for use. it seems the regime is an interesting one. the u.k. suggesting people should focus on getting that less in the focus second -- focus less on the second shot. this vaccine can be stored in the fridge and it is easier to distribute. how big an impact could that be? j and jaiting for the
shot which potentially could have a huge impact. dr. malani: i understand the plans are to get started right away. i like that they are being nimble with their vaccine regimen, they are focusing on getting the first dose in everyone and trying to do it in a creative way. in theare moving slower united states with astrazeneca, and part of that is additional data that needs to be provided. as you know, this is a game changer. is going toide this be much more affordable. i have seen three dollars to four dollars per dose. areerature requirements important, especially places who do not have supercold freezers. that is the difference between the pfizer into the moderna vaccine.
scalability is important. i have seen numbers in the billions of doses being in -- being available in six months or so. interesting, the -- institute expected to clear the vaccine shortly. , there is nowtion a case reported of the more transmissible variants that u.k. has seen in colorado. how big a concern is that? dr. malani: this is cause for concern. i think there are unknowns right now. seen in theiant u.k. appears to be more contagious. so far, the data we have do not suggest it is -- it necessarily causes more severe illness, but contagion is important, particularly with where we are at. the colorado case won't be the only one and it probably is not
going to be the first one either because this individual did not have travel history. my concerns are around contagiousness. if this variant spreads more quickly, it could be harder to control. all of the measures we have been trying to enforce like social distancing and reducing the size of gatherings, and even vaccines, are going to have to be done with much more enthusiasm. , thank you for your time. preeti malani from the university of michigan. this is bloomberg. ♪
guy: stimulus optimism fades as mcconnell blocks $2000 checks. with days until the georgia votes, pressure mounts on republicans. the u.k. approves astrazeneca vaccine, india sets to follow. this is the first reported case of the new variant is found in colorado. the eu and china are expected to confirm their much-anticipated treaty, a move that risks upsetting the upcoming biden administration. for francineson in lacqua and tom keene. both have the day off. let's catch up with the first world news, ritika gupta. ritika: mitch mcconnell rebuffing democrats and president trump on relief checks. he is blocking attempts to force action t