from london, i'm guy johnson. -- isteel is a new york in new york. we are counting you down to the european close on "bloomberg markets." the eu is looking for an extra 300 million doses of the vaccine. we will have the latest in just a moment. berlin under pressure to accelerate its vaccine rollout. this afternoon, the german government extending the national lockdown to january 31. in the u.k., after announcing a third national lockdown last night, boris johnson will again speak at 5:00 p.m. london time today. chancellor rishi sunak announcing four point 6 billion pounds of emergency business support. that is the narrative coming out of europe. it is with licked it in the markets under pressure. european markets are down. they stoxx 600 down by about 0.5%. the s&p in the states flat as we

georgia.ults out of the oil narrative is the story we are focusing on this afternoon. you've got a big move-in brent crude, a big move at wti to $50, and that is being reflected in the energy stocks as well. the energy sector up by 3.2% on that opec story. alix: we do have some bricking news from world bank. they see the global rebound dampened by the virus cases. they raise china's 2021 growth estimates, but cut u.s. as well as europe. this is all part of their global economic prospects report. they see trade volume this year up by about 5%, a little less than what i thought back in june, but nonetheless, a bifurcated recovery when it comes to china versus the developed markets. let's get back to that breaking news. wti above $50 for the first time since february, despite the fact that you have lockdowns all over europe, maybe in the u.s.

joining us with more is javier blas. they would take unilateral action, i would have thought that was very surprising. what has happened in the last 24 hours? javier: saudi arabia is really determined to make sure that the oil market is rebalanced, no matter what. at the impact of further lockdowns in europe in particular, and they are determined to avoid making the mistakes of last year, when opec was increasing production as the coronavirus was shutting down the global economy. so now they appear to be on the break of not only convincing that includes russia, to stop increasing production. the conversation was about increasing production by 5000 .uros per day not only that, the saudi's are now saying to the rest of opec that they are prepared to

voluntarily and unilaterally produce their own production, also for february. we do not know if saudi arabia will make good on this proposal, and how much they will cut, but certainly that is what is moving the oil market right now. picture, opec and opec+ don't look very unified anymore. got the russians and the saudi's on different pages. recently we had riyadh and abu dhabi on different pages. how fractured is this group? how long can it stay coalesced around a single idea of getting oil prices higher? javier: i think as long as the coronavirus is with us, opec is going to stay together and opec+ is going to stay together because it is in the best interests to avoid any new price war. they all know it would bring , so none of prices

them really want to go down that route. when the coronavirus ends and we go back to our normal situation, if we can call it that, i think breakup, butg a until then, saudi arabia and russia are going to stick together because they need each other. alix: they have to know that this is incentivizing shale in some way. theer: yes, particularly in most prolific areas of the permian, but let's not forget it is not only oil prices dampening the rebound in shale. equity investors don't like the sector. they don't like the returns that the sector has been offering for the last few years, so shale is going to need better prices than in the past to see a big rebound. guy: great reporting.

thank you very much, indeed. i really enjoyed the blog you have been part of this afternoon as we build ourselves up to this announcement. javier blas, and some great work from the whole bloomberg team. let's turn to the latest on the lockdowns and europe. going us in brussels, bloomberg's maria tadeo. germany announcing further restrictions this afternoon. the focus remains on europe's inability to get its vaccine program really moving. the french say they are making progress. how much progress are we talking? when you look at the european level, the european commission, there is criticism from countries like germany that they need to buy more so they are able to speeded up. when you look at particularly problematic countries, there has been in underperformance. if you look at the number of vaccines purchased and the number of vaccines projected,

clearly they are lagging. it is not good enough, not fast enough. the health minister's also saying that they are going to modify vaccination centers, and by the end of the week there's going to be 100 vaccination centers, big numbers that can carry out thousands of vaccinations to get it moving, to they are also opening up the general population perhaps over the age of 50, so they are trying to get a hold of this. when you look in comparison with the u.k., it is not good. alix: sure, but still. maria tadeo, appreciate it a lot. is the us now from paris director at public health expertise. what has been the problem, the main problem with the vaccine rollout? are the goals that france has now laid out actually attainable? >> there's two major problems

here. the first problem was the communication of the government, because instead of reassuring people by making some information about the vaccine, saw a veryent prudential point of view about the vaccine, and everyone makes some doubts about the vaccine because the government wants to go very slow. now they understand that having so much caution about the vaccine, they make everyone worried. now they want to go faster, to make it clear they believe in the vaccine, and change everything because now they understand they have to lead the people to the vaccine instead of just saying that we are very we don'tbecause maybe have enough good safeties. the other problem is a problem of logistics. case with a previous

the vaccine plan, they want to vaccinate people directly by the gp, and now they understand that is totally impossible because of the logistic issue, because of conservation of the biotech -- of the biontech and pfizer vaccine. so they just decided yesterday, announced today, and the strategy is totally changing. now we are more optimist about the ability to vaccinate more people than before. guy: is this about -- you brought up two issues there. one of which is logistics which of which is the french people's desire to take the vaccine. how much of this is down to this being the pfizer/biontech vaccine? it is a messenger rna vaccine,

relatively new technology. we have heard health care officials around the world having concern about this. there just isn't the history with it. as you say, it is also one that is not stable at anything other than super low temperatures. has france and europe just put its eggs in the wrong basket in terms of the vaccine that was being delivered? is reallye problem about the start of communication therethe vaccine because is reserve about the vaccine, -- they compare this vaccine and it makes everyone confused. they don't make an information campaign to make a more informed about this vaccine, so it makes some kind of confusion. because they will he people will not go to the vaccine, they don't prepare anything. afterward we are very surprised

because the mindset of people changed from one day to the other. a lot of physicians say it is a bubble to see so many people vaccinated -- say it is impossible to see 70 people vaccinated -- to see so many people vaccinated. it is just from one day to another. it is very strange. alix: to combat this, what needs to happen? does it need to come from emmanuel macron? doesn't need to come from local doctors talking to patients? is it more of a publicity campaign? what is going to help that problem? the -- guy: we may have a problem. alix: it looks like we are having some connection problems. thank you very much for joining us. apologize that there may

have been some inappropriate land which used during that interview. theng up, we will look at impacts with chris watling, longview economics. this is bloomberg. ♪

♪ >> the next few weeks are going to be difficult, but the end is in sight. we are vaccinating more and more people every day, so that is why we are redoubling our efforts to protect businesses, jobs and income. alix: that was u.k. chancellor of the exchequer rishi sunak

announcing a support package to help the u.k. economy in the nation's third lockdown. joining us is chris watling, longview economics ceo and chief strategist. cardshe recession and the -- long term recession in the cards? martin: to be honest, i don't think it really matters -- chris: to be honest, i don't get really matters. coming out of that bear market from 2000 to 2002, germany had a double-dip recession think in q3 2003, and the market just isn't interested. we know it is coming. we know is artificial -- we know it is artificial. we know there's in a norma's amount of support behind this economy -- we know there is in a norma's amount -- there is an enormous amount of support behind this economy.

double-dip, sure, but i think it is largely technical, and i don't think the market will be that bothered, frankly. guy: a rate cut from the bank of england, do you think? chris: there's not much left to cut. they will probably do something. guy: i guess the question is, are we going negative? the market has brought forward it's of quebec tatian from i think september into august yesterday. there was a move at the front end. a relevantt is maybe thing to think about, but i am curious if your view is the correct one, that the u.k. economy will get through this relatively quickly, whether or not the bank actually delivers.

chris: i hope they are not 10 to do because i don't think we need it. about 7% of gdp extra cash in people's bank accounts. that is households holding a ton of cash. this is pent up demand. they are just waiting to be released. of course, as we said earlier, , if itcination program is anything like it should be, by easter, they will be able to spend what they want. so consumer services, consumer spending will pick up. you don't need a rate cut in that environment. i thing it is a very short-term couple of months, and i hope the bank of inland won't go negative. i think that is a dire mistake, and we have seen that doesn't really help end to big away -- way. in too big a alix: back in spring, it was basically the case counts, and

what you are going to be buying or selling. if the case count rises, you did to be selling stock. if the vaccine goes up, do you want to buy the equity market? chris: i personally think the vaccine numbers going up reinforce the switch from growth into value on a global basis. what it does is starts generating more nominal gdp growth. i think over time, we get a little bit more inflation or a bit of inflation, and we get plenty of real gdp growth. that will allow the old economy i think to start generating some decent returns. i think housing will do well within the u.k., u.s., and globally. i think with a good housing upswing and every thing that goes with that, which often helps the value stocks, yes, valuations help on the and facing stocks and that sort of stuff. i think therefore, growth is less scarce, and you to pay out for secular growth so they get a

relative rewriting value versus growth, if i am right about the way that plays out. guy: how bumpy will that ride be? how bumpy will that rotation be? do you by any dips -- do you buy any dips that you see coming forward? i am judging by your demeanor yes, but how do you make that switch from the growth stocks to the more cyclical? ? is it a straight line? is it a bumpy ride? chris: i think you take advantage of setbacks in value versus growth to up your waiting over time. i think this is a secular switch, not a sort of five-minute switch. ormay be secular for two three years. it may be longer than that. lasts five or 10 years, so you don't need to jump on the bandwagon too quickly. the other thing i would say is i

also think there's a good chance in the second half of this year we do what we call a phase ii two of a cyclical bull market. this is basically the phase where the economy really gets going, and the yield curve starts to into the bait the fed moving towards a less loose mode, or a tighter mode. as you come out of the bear market, it is strong to start with. then you get phase two consolidation. i think you should actually switch into defensive in that phase. so yes, keep buying value, but actually there is a defensive play out there. coming.is i suspect the second half of this year, but we will find out. is there a risk that central banks are a more hawkish than we think, whether it is the pboc, dialing back some as the economic recovery in china takes hold? loretta mester today was talking

about how maybe you could raise rates in the back half of next year if things work out -- sorry, you should taper asset purchases, not raise rates. if that something we need to consider for 2021? chris: i think that is probably a theme for the second half of the year. if economies really get going and all of this cash on balance sheets gets spent, they are going to look very punchy, and the lenders will start changing. i am surprised that loretta mester has done it quite early, but clearly jerome powell is not in that mindset. if you get more than changing the language, we get into the phase two, and phase two is really the bond yield curve anticipating some sort of tightening some way out there, and that leads to the consolidation in equity markets. to me, that is the big focus. i think wall street is far too bullish across the board. it is going to be much bumpier this year than people think, but having said that, the best thing

for equity markets is lockdowns and covid cases because it means more stimulus, more monetary, more fiscal. so for now, i would be pretty positive, but as we ghost the year, more concerned. guy: always a pleasure. thank for your time, chris watling of longview economics. this is bloomberg. ♪

ritika: it is time for the bloomberg business flash, i look at some of the biggest business stories in the news right now. ibm has named former goldman sachs president gary cohn to be vice chairman. he will work with the leadership team and a number of areas, including leadership services

and public advocacy. he was later director of president trump's economic council. jeffrey financial group reported record revenue -- jeffries financial group reported record revenue for last year, giving employees more flux ability to work from home -- more flexibility to work from home. in volatility has turned into growth for goldman sachs. ceo david solomon spoke with bloomberg today about the firm's investment bank. >> we obviously have our big corporate investment bank, with government served institutions, corporate clients, investment sales and trading. there are clients given the uncertainty in the world that has been very active, and we expect that to continue. ritika: that is your business flash. guy: thank you very much, indeed. we went for a very long time in

which client activity was incredibly muted, and now completely turning that on its head, accelerating, and that volatility becoming a profit driver for many banks. you do wonder whether or not that continues into next year, and whether we are going to see that being such a big driver. there are some that suggest that elevated volatility is with us for a while. others starting to make that short vol trade again. alix: it is also interesting as you have seen a bank like goldman sachs move towards borrowing and lending because that is where they think it is really going to be, and all of a sudden, the investment bank trading just comes roaring back when you have kind of written off the commodity business in some ways. what is interesting is mike mayo, the analyst we all follow for the big names here, sees an all-time high for jeffries. , revenuesd results increasing 67%.

huge numbers. some analysts think that is going to continue. guy: it has been amazing that the investment banks have really of these, and the banks that haven't have suffered. you bring up commodities, alix. as you have indicated, some strange things happening within opec/opec+. opec+ discovering -- opec+ discussing a hike for russia and kazakhstan. the saudis are going to take a cut. the saudiss are basically keeping this holding together, it seems. wti north go higher, of $50 at one point. brent crude, $53.11. this is bloomberg. ♪

we are wrapping up the

european session this tuesday. the virus story is dominating the agenda here in europe as lockdowns become the narrative. reporting 61,000 new cases on a daily basis. that is a new pandemic high as the new variant sweeps across the u.k. and is being discovered elsewhere across europe. the individual markets around europe, there is some differentiation. we are seeing a little bit of outperformance from the ftse 100. it is up. the dax is down. in terms of the currency markets, a heads up. we are seeing euro strength and pound strength against the dollar.

theoptimism is still within pound at this point. brushing off the narrative surrounding the virus and brexit. a positive tone is being taken with sterling. the real narrative this afternoon, we will talk more about this. wti stateside got just above 50. let me start off with the sectors. outperformance from the energy stocks. they are up. the biggest percentage gain story we are seeing. the second most important area we are watching is the retail space. next is trading up. that's a british retailer.

be tough,is going to but right now it is out trading expectations -- spec tatian's. -- expectations. again, i want to finish with oil. royal dutch shell is up. the latest headline we have is that saudi arabia will be cutting output. other countries will be increasing their output. the chief analyst is joining us now. we know how much the cut or increase will be? >> we don't know the cuts yet. what i know is it's not going to be a large one. increase yes, russian --

russia and kazakhstan combined will be increasing by 75,000 barrels per day. they need more oil for domestic consumption. rather than for exports. that this isdvised saudi arabia making space for russia and kazakhstan. to halfhad agreed million barrels of increase per day this month, a combined increase between the two countries would have been about 150,000 barrels per day. say --ril, let's all they are trying to do is they are giving russia and kazakhstan in early increase, but it doesn't mean they can increase more than the others eventually.

it just means they have been given it a little bit earlier than the others. guy: there were questions earlier about whether or not opec is on the same page. how cohesive is this group? >> the group is very cohesive. [indiscernible] nobody's disagreeing on the fact that demand is weak. that the new variant of the the u.k.ld spread and type lockdown could be everywhere in europe. it is just a slight difference in terms of how your positioning. russia's point is that at two dollars for oil, if we don't increase now, what is the downside? the saudi's are being more cautious. they tend to be more

conservative and their point of view is that did we forget what happened in march or april? we underestimated the virus, what's the rush. nobody's disagreeing on the bigger picture. it's purely about wind we start raising production. this is going to be an issue throughout the year. this is going to be the biggest challenge for the group about timing these increases. especially remember iran is going to come back sometime this year as well. that is very much the expectation. the group is absolutely cohesive, it's about figuring out when do they need to bring barrels back without crashing the market but equally not giving up market share. alix: there is a headline crossing the terminal that says a saudi foreign minister says that saudi states will fully restore ties to qatar. they need to have a united states on iran. how does that geopolitical

picture play into the nitty-gritty of the oil market dynamic? qatar,n't think that obviously there is normalization of relationships there it impacts the oil market directly because qatar left opec as a small oil producer. ua aligned itself a little bit more with israel as well. the uae were the first to send an envoy to iran and say let's talk about it. iran is going to feature heavily in the region. you have seen them enriching uranium as well. that is a precursor, because they want to talk. want to bring exports back to the market. that is their objective. at that is where they are ratcheting up certain things in the region to get joe biden's attention.

it's going to be interesting for the next few months, because joe biden has a lot of his place -- on his plate. covid being the biggest one. iran wants to make sure that they are forgotten if that makes sense. notre expecting iranian oil coming back to the market until the second half. >> a conversation we have been having today is if the united states is 3, 6 weeks behind europe. we feel the lockdown here in london with your many doing the same thing. if that were to be the case, how much do you think we need to take out of the current oil price? we are about $50 per barrel on wti. how much lower could that number be? >> that is the million-dollar question. there is a lot of speculative money in the market because everybody is expecting the vaccine. that will absolutely make it a brighter future, but that is for

the second half of the year. maybe q2 at the earliest. q1 looks grim. if you are talking about u.k. style lockdowns across europe, germany and italy are already in lockdowns. for europe versus where demand was in december, how much lower can it go? not very much. we were in some form of lockdown everywhere. the big question is will a similar type of lockdown happened u.s.? i don't think there is appetite for that at all. again, the narrative gets confusing. everybody has been cooped up. with the vaccines coming up, it's difficult for governments to enforce lockdowns. if it were to happen, the downside is enormous. i don't think it's going to be as drastic like we have seen. what time spread or

differential is not actual -- accurately priced for the environment we are in right now? the timeonally think spread for brent, they are a little bit too strong in the sense that we have to absorb a lot of the oil that has been likecked, fundamentals european markets. expect brent -- it is still holding around flat. there is a little bit of downside there. i also think flat price is too high right now because it is being driven by sentiment again fundamentals here. i don't think we are going to correct lower unless there is bad news on the vaccine. this is being driven by the expectation. people almost want to discount the q1 is going to look very

ugly. that's the problem we have to represent that reality that q1 fundamentals are going to be poor. guy: thank you. let's talk about where we are here in europe. the ftse is pushing up over the last couple of minutes. the reason for that, the discussion we have just been having. the stocks have been benefiting from what we have seen from opec. don't forget, we will be covering the press conference at the top of the hour. forrest johnson taking to the airwaves to answer questions on the lockdown he announced last night at 8 p.m..

this is bloomberg.

achievementng up, -- achieve investment officer. this is bloomberg. ♪ >> this election at the moment is still very uncertain, too close to call. likely, we will watch and see the outcome and we will listen to policy responses. they will have an impact on markets at that time. ceo speaking a earlier this morning talking about the georgia runoff election. the results will determine the balance of the u.s. senate. committee chairmanships, spending, a whole lot of things

being held captive by this -- these votes. joining us from atlanta, emily. what is going to be happening today? >> right now, the polls are open. plan georgia are voting. at the polls will close at 7 p.m. tonight. at that point, the vote will begin to be counted. them totech 10 days for call for the general election. we expected to be several days before we can definitively say who one. alix: is each side prepping for recounts etc.? been payings have attention to the atmosphere in georgia and larger nationally. a lot of it depends on what the votes are, what the final turnout is as far as what's going to happen next. there has been a lot of legislation throughout the 2020 process and i don't think anyone expected to stop now we have a 2021.

guy: did the appearance of the incoming and outgoing presidents have meaningful impact on how people are going to go there? >> the name of the game is turnout. bringing down the big guns, the leaders of both respective parties. that is meant to motivate people in terms of making sure they get out and so do their friends, families, neighbors. candidates came to georgia with different messages. joe biden talking about his agenda, he would like to accomplish. donald trump rally the crowd talking about the unsubstantiated voter fraud. that is something that we have no evidence of, but a lot of republicans in georgia believe was the case. thanks so much. we appreciate it.

commerce bank had a note out today that said whoever wins georgia, it's not about whether the dollar depreciates or appreciates, it the rate at which the dollar depreciates. what do you think? >> that is one spin and that has been the mood of the market for months now. what is thevent, dollar negative spin for this event? in the run-up to the election, if you had said were going to have a really close election outcome and president is going to contested, you would have said will that would be dollar positive. the market has found another spin on that outcome. i have some sympathy for that view. it is a tragic position to be in. the market does seem to want to find the dollar negative spin in most events. guy: what is the risk to the upside in the dollar?

what are the chances of our rally? if the biden team were to be able to spend freely, you wonder whether or not that would boost the u.s. economy. it would bring the other side, the dollar into focus because the u.s. would have the potential to significantly outperform economically. the difficulty is one of timing. that day will come. it is clearly not today. we just rented a good ism in manufacturing for december the reaction would suggest that we are dollar stronger. the dollar wants to spend in this risk on risk off framework. it doesn't want to think about relative growth dynamics, who are the growth leaders.

we had a debate about how to interpret economic stimulus. is it a negative thing in a way for the u.s. dollar? that is the difficulty. if we look at the numbers and where they are going come at the u.s. economy is faring quite well. it fits with the theme, the risk on theme. we are not finding that. we changed our perspective on some l are views in mid-december. we are also cautious about saying this is a big long-term trend. what is the trigger for a change? it might just be a lost momentum and a deeper lesson looking at the dollar. what the view means for emerging markets when you ask any portfolio manager and they are all in on em.

what is the repercussion of that? emhave you ever asked and fund manager who hasn't answered that way? i had some sympathy for the perspective. we are looking beyond these lockdowns. we are looking toward the vaccine. alongside that, not one can straight -- one can straight. should be wonderfully conducive toward risk on attitude. it still requires a very selective approach to where you're going to place your em risk. the -- have a week dollar, accommodative policy and a growth rebound and a trade rebound.

that has not been in play in the way they are today in previous years where perhaps the same fund managers were touting the upside. stories we the focused on this program has been europe's slow rollout of the vaccine. point, doesat some that show up in euro-dollar? if europe continues not to get its act together, if it is behind other regions, it is behind the u.k. and the u.s. at the moment. does that show up in the currency markets? >> not so far. if we are trying to be granular about relative performance, you would have thought a currency like sterling would have been struggling. why are we training here? outlook in terms of what we would describe is economic

scarring. where is the economy going to be this year relative to 2019? we are saying the eurozone will themong those to get greatest economic scarring. on top of that, delays in vaccine or problems getting the vaccine outcome at that should be able to bite on the relative growth story. to your first question, it is really when is the mindset change and we start thinking in relative growth terms and that seems to be triller to be the case right now. alix: in georgia, the equity markets are paring for a lot of volatility if you take a look at price versus volatility. it will kind of volatility is

there in the currency market. it is that a place where these narratives come out? >> it should echo kind of volatility we are seeing in equity markets. you can see some occasional disconnects. that's unusual if you look at that little microcosm. where does volatility play out and fx? i think women get to that tipping point on momentum of the dollar. the idea that all paths lead to dollar weakness is only a question of how much to get your opening question. when that begins to get challenged a bit more actively, then that's will make it greater volatility coming into effect. i expect that will be the end of the second quarter where the relative growth story will dominate rather than all ships rising at once being a risk on event. guy: thank you for your time.

this ibloomberg. ♪

the european close on europe -- bloomberg markets. in a few minutes time, we get more boris johnson. last night, he announced the lockdown. there is the live shot from 10 downing street. he will appear shortly to basically explain himself. i'm paying attention to is later on today, you have the fed presidents speaking on monetary policy. over the last 12 hours, we had one talking to bob -- reuters sounding more hawkish.

pervak the bond buying in the back half of this year. it's a shift in town, but i think what the markets are expecting. >> the data today was really strong. it was a really strong number. you get more of that data and the fed is going to have to sit up and pay attention. alix: i feel like we saw that in germany as well. that wraps it up for us. coming up, and executive chairman joining balance of power with david westin. this is bloomberg. ♪

welcome to this special two hour addition of balance of power. iners are at the polls today georgia choosing both of the states senators in runoff elections. i will be joined by our bloomberg political reporter. great to have you with me. there's a lot we don't know going into today. what do we know? >> this has been a record-breaking election in terms of the vote. it is also been record-breaking in terms of the amount of money spent and raised. these are the two most expensive senate races in american history. you have $450 million raised by one race. overon the other side, $300 million. these are expensive races. lots of re