tv Bloomberg Daybreak Europe Bloomberg December 21, 2020 1:00am-2:00am EST
the country suspending travel from the united kingdom. congress working on a $900 billion stimulus bill. very good morning to you. monday morning. what a chaotic weekend it was. the latest u-turn from the british government setting some chaos in london and a swift response from the european nations including germany cutting off and curbing travel from the united kingdom. financial markets are digesting all of this with fresh fear regarding the mutation of the virus that the prime minister is saying it is 70% more transmissible. that is what is sowing some of the fear. pull up the markets. pressure on the major indices. that is the benchmark down more than 0.1%.
you can see the underperformance when you look at the european sector. as of the 500 futures are flat. we have seen some fluctuation within the u.s. equity markets. good news in the united states. d.c. finally able to clinch a stimulus bill. number two.l screen look at the british pound. we saw it last night. weaker by more than 1%. it is not just the new pressure from the lockdown but also the impasse when it comes to the brexit deal. of $50 a barrel for brent crude. we have seen a selloff in oil prices as well as the commodity linked currencies like the norwegian krone. topping $1900. we are now up more than 1%.
it is a risk off day and money is flowing into some of these havens. mutation ofs this the virus, we will be speaking .o dr. soumya swaminathan she is a chief scientist at the world health organization. we have been talking about the u.k. going into christmas chaos with police blocking people from boarding trains. holidays scrapped and travel band after london went into a new lockdown as a new strain of the virus rages. is out of variant control and we have to bring it into control. incredibles an difficult and to an awful year. >> joining us is our managing editor. the government took people by
surprise on saturday. earlier, they said christmas would be able to happen and you could travel but now there is a serious lock down in london. the prime minister will be holding an emergency meeting today. >> it is a very fluid situation as you correctly said. said he wasnister clear that he wanted to save christmas but he had to cancel it which set to a degree of from visible everywhere the port of dover which is closed. chaos wehe kind of anticipated from a no deal brexit. this is a preview of it. people are rushing to get out. there were scenes of people boarding trains defying social distancing rules. people have been caught out by surprise. there is no degree of accountability. and as we all know, after so
many lockdowns and now this will be the third one, people are frankly fed up. and it is unclear where this is going to next. we will find out more after the cabinet meeting today. >> any signals on how long this latest tier four could last? >> they don't want to say. there is a creeping sense of dread that this will last well into january. given the language being used, out of control, you didn't virus -- mutant virus, you get the sense that this will be a very long winter. governingomberg manager, thank you for your time. this new strain is causing concern in europe. tadeo.et to maria how disruptive can this get?
maria: this is a huge disruption. seeing european countries moving to try to restrict access of u.k. travelers to the rest of continental. the -- to the rest of the continent. spain is the only country that is not banning u.k. travelers. you have to factor in what is happening right now -- this is the busiest time of the year. a lot of people going back home for christmas. this is always going to be is the this is a big disruption. for the airlines, this has been another horrible year for aviation. you're looking at the politics of all of this, this is not a good look for the prime minister who is coming under scrutiny. when you look at this from a european perspective, i can tell
you that the european press is saying this is chaos in the u.k. of britainimage looking very isolated. >> you talk about chaos at the border, what about chaos when it comes to brexit talks? sunday came and went. how does this impact the negotiations? maria: you cannot ignore it and let us not be naïve because this is happening to weeks before the brexit deadline. whether or not there is a deal, the trade relationship is going to change. we will always see disruption at the border. this could make it harder. senthe deadline that was out yesterday by the european parliament was yesterday. that seems to now be a very serious threat.
there have been a number of influential officials tweeting that what they see is a technical no deal brexit by january 1. there will be a wto trade. or get leaders to agree to an emergency extension to avoid the travel chaos at the border. but ultimately, we will not see ratification happen this month. >> bloomberg's maria tadeo in brussels covering brexit and the swift reaction from european countries. let's get to the first word news from hong kong. u.s. officials say a lengthy effort lies ahead to identify the extent of a suspected russian hack on federal agencies and private companies. mitt romney says russia acted with impunity calling for a response. he says president trump is playing it down suggesting china
is to blame. japan has approved a budget. fightuntry struggles to the coronavirus and support the economy. earlier this month, it announced a rescue plan. biggests -- the sixth backbanks are set to buy their shares in the first quarter. it follows a second round of 2020 stress tests with the central bank saying they have the capital to whether a global downturn. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. >> coming up on the program, christmas chaos as a more contagious version of the virus emerges. we have more on what that looks like or u.k. assets.
annmarie: good morning. this is daybreak europe. a quick check on where we trade this monday morning. pressure across global equity markets as the u.k. and forunces a new tier four london. we are seeing most of the asian indices to the downside. ftse 100 futures down. they are crawling back a little bit. under some pressure. futures fluctuating a little bit. sticking with our top story, london and the southeast of
england are under new restrictions as a more contagious version of the virus has emerged. the pound slumped on that news as well as the brexit impasse. let's turn to our guest host, fabiana fedeli, global head of fundamental equities at robeco. every time you come on the show as you rightly noted during the commercial break, there is some new news regarding covid. does this new news coming out of the u.k. make you want to shift your focus which has been moving towards the rotation of cyclical? fabiana: good morning. no, not at this point. what we know about the virus in the u.k. that is highly contagious but the vaccine still works against it and it is not more deadly than the strain that we know about. for now, we still think that as
long as the vaccine can be distributed, the economic lockdowns can be diminished and therefore the economic momentum can return. we need to monitor the situation and see how it continues to develop but for now, there is no change to that. the other thing we are seeing in the market is that not all stocks at the moment are cheap bargains. when we talked about the rotation into cyclical stocks, you still have to be selective. the service sector -- there are that manyery likely countries will not be able to survive the lockdown. it is a matter of being very selective. into 2021, weg have equities at all-time highs. you see what is going on on the msci all country index.
will we see some profit taking? or could there be a another catalyst for a meltdown? thatna: i actually think the high valuations that you see are more the result of a polarization in the market. what you see is extremely expensive stocks and some stocks that are not discounting or the solid fundamentals. covid outbreak but still very solid. i believe the markets will continue to be positive, especially equity markets and the asset classes. we will continue to see a rotation. the u.s. market is the most expensive but there is also a polarization. a huge headline effect. some stocks have big rands and brandse being bi -- big
and they are being bid while others have a reasonable valuation. those are the stocks that will still do well in 2021. annmarie: amid all of the drama lockdown, do you see a 50-50 chance of a deal being done before the end of the year? does this change the way you weigh the pendulum? the u.k. has been so important for us but positioning there has been very difficult the brexit andof its consequences and not having
visibility because of deal or no deal. there will be little chance for the boris johnson government to the discussions. we are positioned on the u.k. on stocks that are externally exposed rather than those that are domestically exposed. the market has been underperforming year to date and the pound as well. , we that point of view still like those externally driven names but we are still very conscious of the domestic market. annmarie: what are some of the names or the sectors? fabiana: they are all big companies that you know that are demands.o an external they are companies in the health care industry. that is a sector that we like worldwide very much. , ather sector that we like
lot of it is outside the u.k., the theme of sustainability and the carbon neutrality chain which remains one of our strongest investment areas. fabiana fedeli from rebecca will stay with us. what about the stimulus breakthrough? congress reaches a deal on a relief package. that story is next. this is bloomberg. ♪ wanna lose weight and be healthier?
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package for the american people. as our citizens continue battling this coronavirus this holiday season, they will not be fighting alone. annmarie: senate majority leader mitch mcconnell announcing the u.s. has reached a deal on a roughly $900 billion relief package. this will bolster the economy as the pandemic continues to rage across the country. lawmakers are expected to vote on the deal today. fabiana fedeli is still with us from rebecca oh. you say in your notes that the timing is badly needed for this and for now, the amount is good enough but will more be needed in 2021? fabiana: it depends on what happens with the lockdowns and the u.s. economy. earlier in the year, you asked me how much would be needed and we answered about $1.5 trillion.
now, we have more visibility. we believe this will be a good stopgap measure but it depends continues to develop and how the vaccine distribution will be managed. we are seeing a few setbacks and delays there so we need to monitor the situation. annmarie: market sentiment seems to flip-flop every day on market news and stimulus. the u.s. finally able to clinch the deal. how do you play the competition between the two? fabiana: just keep your eye on the ball and the ball here is covid, how we are dealing with the potential exit from the lockdown. your eyeso have peeled on that because of the volatility.
there are a lot of headline affects and markets get spooked in the other direction. of theo taking advantage markets. annmarie: you believe in the rotations, very selective. what are you selecting in terms of u.s. assets? likena: look, we still i.t. and communication services in the u.s. in i.t., we have moved to positions outside the u.s. another sector we like in the u.s. has been health care. a lot of the health care stocks if you want to in the run-up to the u.s. elections. we don't believe a biden
administration will be as negative as the market expected. there is a lot of interest in companies that have good valuations. we have a preference particularly for the u.s. and health care. we continue to like specialty , some of, industrials the industrial names are being heavily bid. and also in the u.s., the whole sustainability theme has a lot of interesting names but again, you have to go out of the headline names. those that are incredibly popular. with an incoming biden administration, that will potentially get more crowded. the stimulus deal done as dusted , what is the next positive
catalyst we could see for the market? fabiana: nothing is done and dusted in this market. lastve learned that this year. how the vaccines will be distributed. we have another couple of vaccines that are expected to be approved early in january. they are in phase three. vaccines being distributed. vaccines being approved. ad also, if there is significant number of the population willing to be vaccinated, if it looks like that is the case right now, but we also have to look at the acceptance across the population of the vaccines. fiscal stimulus in conjunction with the vaccine forecast suggests 10 year yield will end in 2021 at 0.5%. the end of 2021. do you see that happening?
fabiana: that is the level come up to 1.2 that our fixed income team is looking at. it is all going to be dependent on how thef economic -- on how goes.onomic thrust for now, we are arranging around that 1.2 level. fedeli able tona give us a little insight in the 10 year yield and where it is going in 2021. this you for joining us busy monday morning. a chaotic weekend here in london with the british government making a u-turn. let's pull up the boards. equity markets a little under pressure in asia. most of the indices moving to the downside. this is a historically a quiet week as we lead into christmas
but not so in europe. ftse futures down 0.7%. dax down 0.9%. the story is that the u.k. is entering an emergency lockdown. seemsvariant of the virus to be passed along more easily, up to 70% more transmissible. swift reactions from european countries including italy and belgium. curbing travel from the u.k. down more than 1% this morning. this is the pressure from the new lockdown in london but also the fact that there is still no brexit deal as we inch ever so closely to the december 31 deadline. brent crude also getting slammed this morning down more than two point 5%. money moving into safe havens including light treasuries and gold.
countries suspend travel from the u.k.. congress reaches a $900 billion stimulus deal. a vote is expected later today. good morning to you. 6:30 a.m. in london, which has overentered a new tier 4 the weekend. , curbing travel from the united kingdom. we do have most of the indices and asia in the red. asia-pacific benchmark down more than 1/10 of 1%. you see the weakness in the european equity futures. dax futures more than 0.9%. crawling back a little bit -- klein back a little bit these gains. setting up the week of christmas to be risk off.
they have been fluctuating. the bad news coming from europe. still some good news coming out of d.c. pound trading this morning lower. 1%, freshthan lockdown in london company financial capital of the united kingdom. also, the fact that there is impact when it comes to brexit. risk off definitely happening in the -- definitely happening in the commodity market and it comes to metals and oil. this all has to do with demand. to be a bit more precarious. money moving into the treasury market. safe havens like gold. up 1.3% this morning. much more fear in the market about this we tatian.
boris johnson says it is more easily transmissible, potentially up to 70%. that is the dot -- that is the question we're going to be speaking about with dr. soumya swaminathan. we look at her thoughts about this mutation, what the who knows about it. into.k. has been plunged christmas chaos. police blocking people from boarding packed trains. london went into emergency lockdown as a new strain of the virus emerges. >> the new variant is out of control and we need to bring it under control. this news about the new variant has been an incredibly difficult end to an awful year. annmarie: joining us is senior executive editor david maritz. it is a mixed picture in london, many people angry thinking that
they could have had christmas. you see a max -- see a mass exodus over the weekend. this is just a different mutation of the virus. they are having a meeting today. what are they going to discuss? david: that is right. really the government going into full known crisis mode. they are going to meet today to try and chart the way forward. the disease.ant of theicularly in london and southeast of england. clearly, ministers and government scientists are alarmed. at least 10 countries over the weekend banning travel from andain into mainland europe their look of ireland. that itself is causing huge concerns at ports.
putting in anver operation where they parked trucks all the way up the motorway leading to the port of dover. that leads to fears of things just twoly shortages days away from christmas. of course, we note that all the shopping is restricted in london as well. huge amounts of problems appearing. the government had to make this dramatic u-turn just a couple of days ago to effectively cancel christmas for huge swaths of the country. people are angry, confused. the government needs to make some firm decisions about how to chart the way forward. whatever they do, it is clear, we heard matt hancock company health secretary. it will be difficult getting this new variant under control. these restrictions are sent to
last for weeks to come. annmarie: that is the question on everyone's mind, how long are the restrictions. it is just days until christmas but already we were seeing issues due to the fact that we are also days before the brexit deadline. the emergency meeting dealing with covid. at the same time, still trying to hammer out a deal. david: the negotiating teams are trying to inch forward for a deal. another deadline saying that if no accord was reached on sunday, there is no time to ratify this agreement, so less than two weeks to go. if you think about the scenes of , what coulder happen next week if britain crashes out of the single market without an agreement.
these negotiating teams also have to navigate the fact that travel has been banned. meeting face-to-face will be very difficult. to get this deal over the line, there are still huge gaps remaining. is this going to go right to next week? seemsll the chaos, it even harder, the pressure is even more intense to reach an agreement. meanrie: what does this for boris johnson politically? david: the headlines are pretty awful reading if you look at the newspapers over the weekend and this morning here. he does not like delivering bad news. he has already had to cancel christmas for many people. and to have yet more bad news to that is the thing, i
think people may be could forgive the prime minister for the handling of the coronavirus because it has been obviously an impossible situation for many countries. but of course brexit was is doing in large part. -- additional chaos that was the question is, will the rest of his party blame him as well? bitee economic starts to over the coming weeks even more than it has been in the coming year convey will not be a good start to the next year for boris johnson. new strain is causing concern across europe. germany and france becoming the latest nations on the continent to suspend flights to the united
kingdom. disruptive can this get? to we expect other countries join this? >> in 24 hours, you have seen a restricting travelers. but ay, france, italy, growing number of countries. there is a meeting that will happen at 11:00 a.m. brussels time today. country, travelers between spain and the u.k.. deciding not to restrict travel for the time being. they say that testing at entry points, meaning airports, will be sufficient for the time being. clearly, there will be disruptions.
this is one of the busiest time of the year. people haveot of been isolated, can't really see their families. the impact on the aviation industries, on the airlines. if you can't make it onto a ofght, you will see a wave cancellations. of course, you have a political angle from this. the european perspective, the u.k. is one big mess. if i look at the european press, that is the headline coming out of the country. that is not a good thing given that the prime minister was all about global britain after brexit. not really the image from brussels. annmarie: thank you for the update from brussels on their swift reaction of what is going on in the united kingdom. let's get a recap of some of the
other news with annabelle droulers and hong kong. >> congress has reached a deal on roughly $900 billion pandemic relief plan. democrat and republican leaders announced the deal yesterday. the house is expected to vote on it today, followed by the senate. it leaves the two most contentious issues, state aid and liability protection for business come out. social activities are being curbed until at least the 23rd of december, household gatherings are limited to 10 people, and at least three states are issuing travel restrictions ahead of the christmas holidays. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. annmarie: coming up, we talked to -- we speak to dr. soumya swaminathan, the chief scientist
annmarie: this is "daybreak europe." into.k. has been plunged christmas chaos with police blocking people from boarding trains, travel with europe band. this comes after europe went into emergency lockdown. prime minister boris johnson said the new measures were necessary to save lives. >> the brief night had yesterday about this mutation of the virus, particularly the speed of transmission, was not possible to ignore. to changeuntry have our method of defense. that is what we are doing.
annmarie: some european countries have banned travel from the u.k.. some other countries -- the u.s. has no such plan. >> i don't believe we need to do that yet. seen different mutations among this virus. there is no indication that the mutation right now they are talking about is overcoming england. annmarie: joining us right now it's soumya swaminathan, chief scientist at the world health organization. a lot ofe have seen mutations with covid-19 but this one in particular is causing a great deal of consternation in the that he can demand the european union. what do we know about it -- in the u.k. and the european union.
what do we know about it? dr. swaminathan: a large number of mutations, about 22 or so, and the spike protein region of the virus, which is important because that is the protein part of the virus that binds to the receptor on the human cell. because itimportant is the target for antibody production, immune response and also the target for a lot of the vaccines that are currently being developed. recognized over the several weeks in the u.k. scientists in the u.k. are working closely with the who and the working group. ofhave observed a number mutations over the last year or so and we expect this to continue. it is important that we study
the impact of these mutations. we have seen this happen before with other strains when they take over and become the dominant strain. ishink the bottom line here really that the interventions that are needed to prevent the spread, regardless of which variant it is. i think that is where we should be focusing one scientists are doing the lab experiments. does it really enhance transmissibility? does it prevent antibodies from binding to the virus? will have any implications for vaccine efficacy? these are questions that scientists will hopefully answer in the coming days and weeks. it take: how long will
before we know the response to the vaccine? >> i would say it would take a couple of days, if not a week or more. this is such an important question. it has to be addressed properly. the needs to be done, ,xperiment in the laboratory people who either had natural infection, the vaccine, antibodies that are vaccine induced. neutralized any other strain of the virus. annmarie: is this new variant unique to the united kingdom?
dr. swaminathan: there have been some reports from other countries like denmark, the netherlands, i believe australia. we have to keep in mind that the u.k. -- much more than many countries. south africa, within the african continent, there are huge disparities. south africa does most of the genome sequencing on the continent, so they are describing a variant as well that has become more prominent. the public databases that we , the bank, and so on, so that scientists can compare, look across countries, and also look at the timeline.
at the moment, most of these strains have been described from the u.k. but i think we have to remember the caveat i just mentioned. if we look harder, we may find it in other countries as well. annmarie: there is also one arose as tohat this immunocompromised individuals. is there any science right now that? dr. swaminathan: i don't think we can definitely say how this arose. viruses mutate naturally. there could have been some particular incident like an immunocompromised host where the infection could have lasted longer, so when the virus is able to replicate longer in the opportunityis more to mutate. i think we have to look and see
at what the specific conditions. annmarie: does this hinder some of these features like human lonallescence, monoc antibodies that are under emergency use authorization? what does it mean for those kind of responses if this hypothesis was true? dr. swaminathan: yes, i think this is exactly why we need to study to be done. it is so important for treatment and for prevention, for vaccines, monoclonal antibodies and so on. .t is very normal mutates much virus more rapidly.
the strain selection for a flu vaccine for that particular year. these are all possibilities in the future that we have to consider for this virus as well. they come under pressure, as we start using drugs and vaccines, viruses evolve to try to avoid those. at this point in time, i don't think we have any evidence to suggest that the vaccines under development or the monoclonal will not work for the majority of patients who are currently infected. onmarie: there been claims social media about the vaccine contains homogenous placenta protein that might give way to infertility. some people are saying this is not true. have there been any signals that
this could be the case? all vaccinesan: have to go through animal reproductive studies before they can move to any human trials. so i don't think there is any basis for the claim that they cause infertility. no-noould be an absolute for any vaccine approved. researchers would have to look at the data for any male and female before they allow the vaccine to advance. i have heard of the rumors as well about the vaccine causing infertility in men. i don't think there is any scientific fact that all behind any of these rumors. dr. swaminathan: today, the united states is going to be rolling out moderna. we have a number of these frontes coming onto the
line in the west. what about vaccinating the developing world? how is that going to happen? broaderinathan: the accelerator program, the acceleration of diagnostics and vaccines but also to ensure access across the world. far too often in the past, we have seen the developing world, particularly the lower end low middle income countries. this pandemic has brought the world to its knees. the global economy is not going to recover until every country in the world, people are protected. the whoovacs vaccine, vaccine alliance, these organizations essentially working together on vaccines, enough a -- purchase vaccine doses to distribute
among lower, middle, and upper income countries. at least 2 billion doses, this 2021.t to the end of this would be enough to cover approximately 20% of the population. of course, apart from the bilateral deal that some of the higher income countries have made. 2022 and beyond, we should be able to scale up much faster. limited there will be doses of vaccines available. 5, sixill be 4, vaccines. we have to make sure that those at highest risk. 2021, -- quarter of
quickie: i have one question. my grandfather suffers from polio. mostly, it is eradicated around the world but there are still countries that have it. with covid, will there be pockets of the world for years to come where there will still be covid happening? dr. swaminathan: that is definitely a possibility. whether we will be able to eradicate it or not. i think the vaccine efficacy we are seeing gives us a lot of hope that if we are able to vaccinate enough people around the world and provide immunity, may virus will go away. maybe it will not go away entirely and remain as another viral infection, but not having the kind of impact it is having today. infection ifviral it continued.