matt: welcome to bloomberg markets. this is "the european open." markets say the optimism stays. european equity futures trade mixed and the dollar declines amid failing prospects for higher u.s. stimulus checks. trump rebuffed. mitch mcconnell blocks a quick vote on $2000 stimulus payments.

the president warns failing to act for republicans is a death wish. open for business. eu and chinese leaders are set to approve a hard-fought investment deal paving the way for more foreign opportunities thisina, at least from continent. boris johnson rushes his trade deal through parliament. both houses debate the agreement today. just an hour away from the start of cash trading in europe. we see already arrows when you look at european futures. almost all. aex futures are up in amsterdam. most of the big benchmarks, futures contracts are trading lower. euro stoxx futures down 0.3%, as our dax futures. u.s. futures are trading slightly higher, although some of the air came out of the rally after mitch mcconnell shot down a quick vote on those $2000 stimulus checks and made it very

unlikely that any vote on them will pass this week. we have some breaking news on the astrazeneca vaccine, the oxford university vaccine that had been authorized by the u.k.. we knew they were pushing for that. now it has been authorized in great britain. you could see even more vaccines spread across the country that has already immunized well over 600,000 people. i do not know what numbers were added yesterday. they are doing it at a breakneck pace. to seelook at the gmm how we are set up for the day today. go ahead and pull up that screen. g20can see in terms of countries, the asian markets are a little mixed. ,he csi 300 is higher indonesia is down. -- it is arabian real

interesting to see him move up of 0.02%. move this is a currency that does not move very much. a tiny little nudge is a huge move. the australian dollar up, the indian rupee up. these are today's top stories from the terminal. u.k. prime minister boris quickn set to win parliamentary approval for his post-brexit trade deal. hard-line conservatives will back the accord after speculation they might vote against it. the opposition labor party will also support it. labor has criticized the agreement but says crashing out without a deal would be even worse. mcconnell ismitch rebuffing president trump,

blocking an attempt to increase stimulus checks to $2000 apiece. the president is warning failing to act now amounts to a death wish for the republicans. mcconnell blocked attempts by democrats to pass the bill quickly, making it unlikely to pass before congress adjourns on sunday. the eu and china are poised to announce a hard-fought investment tax. it will expand opportunities for international investors in china. willes tell us eu leaders hold a video conference with xi jinping today. this will signal the completion of the packed which has been negotiated since 2013. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. turning to markets, u.s. and european futures are mixed amid fading prospects for bigger , those checks to

individuals. let's get to the markets now with laura cooper. the market mood globally really has been moved by u.s. stimulus efforts. now that we know it is less likely they will get this money in the immediate future, we see markets, we see risk off sentiment, don't we? >> that certainly is the case. the fact we are not seeing this bump up in payments is really having markets reassess the timeline for stimulus. we certainly did see that play out yesterday in the cap session in the u.s.. small caps saw their largest daily drop this month. we are starting to see this kind of nascent rotation back into the tech sector away from small caps. it is likely this is just reflation trade stalling rather than an inflection point.

tradecutting into this through the year end. today on the mliv blog, an interesting question. what challenges await green champions? what does the question mean and what are you hearing? >> what we are seeing is this rotation into the broader kind of green environmental strategies, esg factor. something that is less looked upon by investors is actually just potential negative consequences of these. for example, green waste. where do countries put all these turbine blades, the difficulty in recycling lithium-ion batteries. it is something investors need to take more caution toward. ultimately, the fact this is a -- ultimately, green

energy is going to be the driver of the next five to 10 years. the questionhink of the day is really just kind of pointing to highlight what , broader challenges trend toward this environmental factor? laura cooper, bloomberg's mliv macro strategist talking about what the markets are going to take from this mitch mcconnell rebuffing president trump. we are going to continue talking about it next and what it means for markets as republicans shoot down the possibility of $2000 stimulus checks, at least this week, maybe this administration. germany records a record number of daily virus cases once again. we are going to speak shortly after 8:30 u.k. time on german

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matt: welcome back to bloomberg markets. this is the european open. we are 50 minutes away from cash trade oclaro's -- across europe and in the u.k. we told you this already, the oxford astrazeneca vaccine has been approved by the u.k., as had been anticipated. maybe that will have some sort of effect on markets today. let's get the bloomberg business flash news. apple briefly rallied to an intraday high yesterday. it is continuing its year-end surge on a cement thing its amazon as 2020's best performer

among the gigantic tech stocks. wall street is bullish on apple. analysts predict the recovery will fuel more demand for iphones. this huge company is up like 84% year to date. big driver. boeing 737 max has returned to commercial service in the u.s.. it is the jets first flight since march of 2019 after two deadly crashes. prompted the longest. grounding in american history. u.s. regulators lifted the ban in november. the max returned to regular service in brazil and now it has flown from miami and back to new york. hong kong media tycoon jimmy line is stepping down as chairman of next digital, facing charges of endangering national security as part of beijing's sweeping crackdown on the city's pro-democracy movement. appleigital owns the daily newspaper that has championed protests in the city. that is your lumber business

flash. senate majority leader mitch mcconnell blocked an attempt by democrats to force a quick vote to increase direct stimulus payments to americans to $2000 from $600. president trump warned the move amounted to a death wish, that is a direct quote, by republicans. joining us now is the deputy cio to talk about what this means. it has been interesting, the whole year stimulus payments in the u.s. tended to drive the move around the globe to such an extent we are seeing european futures down while u.s. futures remained lifted. why is it so important to europe that americans get these stimulus checks? dependentis very much on european goods. that is certainly one thing.

also the european economy has pulling up the global economy. matt: what do you expect in terms of rotation? extent then to some start from growth stocks to value. and i guess we have seen to some extent the start from rotation out of the u.s. into european stocks. will continuethat in 2021? say whatdifficult to is going to happen. we have a lot of uncertainty around what measures are going to be taken. i think one thing that is very clear is that market concentration is at record

highs. this is something that has become worse in 2020. history tells us early or later investors,ething -- eventually investors may have to be prepared. matt: what do you think of the stimulus efforts of western governments eventually backfiring for investors? for now it is clear investors want to see government give consumers more money. but you are concerned longer-term that this becomes a problem in terms of debt loads. >> yes indeed. it is very interesting to observe differences with different governments. the german government paying for revenue, restaurants and other

businesses, i think this is an incredible amount of money pushed into the economy here. , it has beennomy much more prudent, giving money to businesses that had to close down. they are awarey this debt will have to be paid one day. generations about like my generation and many of the much younger people. , they will not -- anymore. matt: what do you think the biggest problems are in terms of debt loads? germany continues to play it conservatively.

messages fromt people like all optional's, -- like thatz, it looks will continue regardless of who wins the next elections. the u.s., when you consider what is expect it from the next administration. >> yes indeed. the u.s. has already increased the amount of debt to spending over the last four years. it has already put a lot of damage. this kind of whatever it certainly notas helped. the question is when and how this can be repaid. thato think europe is not prudent here. france, financial

aid, it is something i find concerning. be ablesure they will to sustain such high subsidies. we are going to talk more about europe. deputy cio ate tobin. it has been more than seven years in the making. china and the eu are poised to announce an agreement to expand opportunities for foreign investors. we will bring you the details next. ♪

matt: welcome back.

we are 40 minutes away from the start of trading across europe and in the u.k.. tothe eu, leaders are poised announce an agreement to expand invest inies to china. and vice versa. ursula von der leyen is expected to signal completion of negotiations that were started in 2013. the tobam deputy cio is still with us. is this an opportunity, especially since the u.s. and the u.k. have shut themselves off from china? well andrything goes both sides keep the promises they make, it is going to be a good deal. the promisesdent

will be kept. well ifthe eu is doing they are sticking close to the u.s. in the future when it comes to trade agreements with china. i think they will have more power to also renegotiate what should be kept. matt: we see continued cooperation and i think of german companies, especially companies, doing much more with the chinese, and that ends up on the bottom line. is this for those types of companies at least a good thing? having an certainly areement means there certain promises made. for those companies, there is some progress. the high hope is that behind , i'm notement

completely confident this is justified. let's talk about what you expect in the next year in terms of market trends. rates, zombie companies, this is something a lot of people have stopped talking about, even as central banks extend forward guidance further and further out. and we have not seen this cascade of bankruptcies that was predicted by so many back in march, april, may. is it still coming? >> i think there is a very elevated risk. effect, i think several companies still have

reserves. at some point if the lockdown measures continue, they will just not be able to keep going. it is going to already have an effect. the second effect is going to be there are lots of companies left today that should probably be -- reorganize debt. if they should never be able to repay the debt, there will be more money. foruld be watching out this. we are very prudently positioned here. we expect there might be more of 2021n the summer this kind ofore of consumer downturn and it is maybe not a one-shot thing.

it is something that will happen over time. you about yourk expectations for the vaccine rollout. we have been reporting the oxford astrazeneca vaccine was approved by the u.k.. the eu is looking to approve further vaccines as well. are these rollouts going to be fork and efficient enough the v-shaped recovery expected by so many in the market? underestimate the fact that having a vaccine does not mean the virus is over. us to gete will help the health situation under control. hospitals also will be able to treat other patients.

it will not mean the virus -- it will not make people completely immune. say aill just have let's lower probability of a really hard effect from the virus. preparedmy should be that we still have an impact of the virus going into 2021 or even longer. -- i sawt about the news today nord stream 2 is getting close to completion. in the german economic zone they are done, just to complete the denmark portion. governments,ds of i'm thinking of a vladimir putin and the other authoritarian governments of eastern europe, going to cause a problem in 2021?

>> everything which is more like a conflict that could arise at the level of some authoritarian beene causing trouble has largely sort of overlooked. situation ofomic those countries, i think it is a popular measure of authoritarian regimes, to kind of create some byues on the political level starting some aggression to just sort of get their population so they will not focus on the deficiency of their own country. i think there are lots of potential issues. has not beenion very much on this.

matt: it may well shift. thanks so much for your time this morning. tatiana, deputy cio at tobam. ♪

matt: welcome back to bloomberg markets. 30 minutes away from the start of cash trading across europe. futures are up. not huge gains, but that is a turnaround from what we saw 30 minutes ago. some of the air has been taken out of this rally by mitch mcconnell's move in congress. authorized the use of the astrazeneca vaccine marking the first national approval for this immunization. that could be what is injected

-- no pun was intended but it is pretty good -- the optimism back into these futures. joining us now is a variola just at university college london -- ogist at university college london. we have already got millions of people immunized around the world. is it going to happen quickly and efficiently? >> good morning. happen quickly and efficiently and in the u.k., we are at a peak of all time of cases and hospitalizations. the advantage of the astrazeneca known, it, as widely does not need the cold chain. it does not need these heavy freezers and it does not need currentited time the

pfizer vaccine requires between defrosting and being given to individual. the pfizer vaccine is very difficult to develop the infrastructure to deliver it to people. you have to deliver it within vaccine centers. the astrazeneca vaccine gets more stable at fridge temperatures. it can enable a much wider immunization. that is the real strength of this announcement this morning. about theeading delays in the u.s. rollout, i see the cooling is one of the issues that states are having problems with. even in the united states of , we have issues with these technological snafus or the technological i should say requirements.

is that going to make it much harder for everyone else as well? it is interesting to observe how things are moving with the fda in the states. from afar, i'm not involved, there has been negative discussion about the astrazeneca vaccine mainly because of complexities in the trials leading up to the approval, if the data were more messy, there has to be a linking together of things from different trials, compared to the pfizer trial which was done from a scientific point of view with a much cleaner vaccine. there is no doubt the pfizer , toine, the moderna vaccine a lesser extent, still needs a cold chain where the astrazeneca, there is a big statesge here within the , europe, but also the rest of the world, allows for a much wider distribution.

the problem still is, i think, the challenge now is how to get a large number of people immunized in a very short time. i think it is that ramping up very quickly rather than allowing it to go for a whole year. the ramping up is going to be the real challenge, it will depend on local infrastructure available. matt: the first case of this new strain out of the u.k. has been discovered in the u.s., i believe colorado. are you concerned this virus mutates in a way that makes these vaccines -- that reduces their efficacy? >> that is a really good question. at this moment in time, it does

not look like that is the case. ary and, all viruses mutate. it was originally thought this virus would not mutate as much as we have seen it doing. those mutations that are happening are happening in that bit of the virus which is targeted by these vaccines. it is a concern. it is not just a question of giving the vaccine. the vaccine rollout needs to be associated with a significant attempt to ramp up social u.k. in orderthe to significantly reduce transmission while we get the vaccine out. more transmission of this virus is the way in which further mutations abound. on the back of our existing mutant strain, mutant variant

s, a variant will develop which is less effectively prevented by this vaccine. it requires ongoing surveillance of this virus. we may need to get a second generation of vaccines if indeed this first variant becomes resistant. matt: thanks very much. i hope we can get you back. i have a lot more questions. it is so great when we have a chance to talk to a virologist. that virus variant we were talking about has been found in the u.s. for the first time. a man in colorado with no recent travel history. president-elect joe biden attacked the nation's vaccination plan, criticizing the slow rollout.

>> the administration's plan is falling behind. we have only vaccinated a few million so far. the pace the program is moving , if it continues, it is going to take years, not months, to vaccinate the american people. matt: joining us now is bruce einhorn. what are the next steps for biden or the first steps when he comes into office trying to control the virus? >> president-elect biden has rolled out a more aggressive plan. he said he would invoke the defense production act which would allow him to force companies to make materials needed for the vaccine. people named nine more to his response team, including

experts in charge of supply chain management, vaccinations, and testing. he said he's going to go back to congress to ask for more money for vaccine distribution and reopening plans. so they could do more for getting protective equipment to front-line workers and to reopen schools. all of this is in contrast to the current approach of a president trump after biden's speech released a tweet that pointed out the trump administration's approach is to leave a lot of this to the states. biden would be taking up more centralized federal approach to this. matt: what about the stimulus? mitch mcconnell essentially buried the possibility of $2000 checks. donald trump said that was a death threat.

>> what he has said is he is happy to consider this as long as he can include these other things the democrats are not going to go along with. he wants to include some of the things trump has called for such as an investigation into the also, theion, and repeal ofliability -- liability protections for social media companies. these are poison pills that would be opposed by some people on both sides. this is what mcconnell will put forward, chances are this is not going anywhere. matt: bruce, thanks for joining us. bruce einhorn talking to us about republicans shooting down the stimulus proposal.

donald trump says that as a death sentence for her public ins. -- republicans. itry summers told bloomberg was bad economics in the first place. we spoke to the president of the peterson institute for international economics about that. >> in economic terms what we have to focus on is we have unnecessary human suffering and a lot of uncertainty for unemployed people because of the disruption in getting the checks out the door. the stimulus package that is going to get approved, it is one that includes some of the key aspects you need, extending unemployment assurance -- insurance, extending it to gig workers, backing moratoriums on evictions, giving aid to school systems. what is missing is the state and local government aid which mcconnell also blocked previously. the dynamic, maybe

if trump had passed stimulus earlier, he would have won the election. it is hard to understand why mcconnell is opposed. to that aid tot state and local governments. first i want to get to larry summers and the actual size of those checks. he said democrats capitalizing on the rift between senate republicans and the president might be good politics for them, but it is not good economics, saying this arbitrary number is not as targeted as it should be. do you agree? >> i disagree with larry on this point. if the choice was getting out the $600 or getting out the $2000 and that was the choice, obviously get the $600 out because it is more important to get it out timely and it is more important to get the whole package out.

probably larry agrees. the idea is that the $2000 is going to be that big a difference -- what you will end up doing, a lot of people put it in their savings account so you won't get maximum stimulus, but a lot of people have a lot more than $600 need. it goes into their savings account, you tax it, get it back later. i don't think of this is a big deal versus making sure the d.imulus we've got got passe i wish it had been faster. if we were designing this from the start, you would have wanted more emphasis on needs. state and local government, unemployed people, evictions, you have some of that, but have more of that. not based on giving everybody a check. parents who have been having to play for tutors. that $2000 can go a long way to

the middle class as well as the lower middle class. that should be something everyone agrees on. in terms of where the united states in terms of stimulus checks -- compares to other european countries, for example, how is the united states stacked up against other countries in terms of providing check relief to its citizens? >> the u.s. has put out more other rich democracies, but the gap is smaller than the topline number. every other rich democracy, you have health insurance, you have college paid for, you have other provisions. this is more with the u.s. calls discretionary spending. that intou take account, the u.s. has spent more. then there is the debate about orther it has done more good

not. france, germany, and others have tied their aid to keeping businesses afloat. u.s., it has been more disengaged. it goes to people who may be leaving their jobs. has spent more, but it is partially catch-up because we don't have a safety net. only over the next year or two will we see what differences it makes. posen speaking with bloomberg. next, powering on. russia steps up work on the nord stream 2 pipeline before the u.s. is able to tighten sanctions again. will they get it finished? ♪

matt: welcome back to bloomberg markets, this is "the european open." 13 minutes away from the start of cash equity trading. a big story that has gone under the radar, russia is stepping up work on the nord stream 2 to pipeline before the u.s. gets a chance to tighten sanctions against the controversial project. pipe laying was completed in germany's exclusive economic zone this weekend now i believe only denmark is left. joining us to talk more about this is our european gas reporter. she lives, sleeps, eats, and breeds nord stream. let me ask you what is left for russia to do here? >> thank you for having me. it sounds like russia will complete this controversial project.

kilometers.han 1000 a 5 billion euro project. sanctions were imposed when only 160 kilometers were missing. russia was able to invest in on monday apipes -- new milestone was the completion of pipe laying in germany's exclusive economic zone. it was and it is an important step, but the bulk of the work will actually happen in denmark's waters. the vessel which is laying down as muchline can lay it as one kilometer of pipes per day. at that rate, analysts estimate nord stream 2 could start the 10th ofs soon

next year under optimistic scenarios. they can do that as per maritime authorization. think the do you biden administration's take on nord stream 2's going to be? >> biden has showed his opposition to the pipeline. we are nottion is going to see a lot of change on that. if the u.s. wants to expand penalties to companies that provide technical certification -- it wasthe ideas

battled by trump. the house of representatives voted to override the veto. new sanctions against nord stream 2 will turn into reality if the senate overrides it. things will not change with the u.s. administration. matt: great story today. i recommend bloomberg users check it out. she is our european gas reporter, writing very much on nord stream 2. there minutes away from open. next, your stocks to watch, including the miners as iron ore futures tumble. ♪

open this is "the european

." futures have turned back lower. futures have been bouncing back and forth between gains and losses. some places like here in germany, we are at a record high. other places like london on the ftse, they are still down more than 10% year to date. there is still a lot of ground to make up. let's get your stocks to watch this morning. mentioned miwere i ners. watch for british-based or london traded miners because the price of iron or has faded. you can see the ftse get dragged down, they are heavyweights on the benchmark index. astrazeneca also trades in london and on the other hand, astrazeneca, these are the year to date by the way, year-to-date

prices. they have done well year-to-date especially compared to the ftse. they should have a difficult time today. your today for astrazeneca, you interesting chart here, down 2%. it should get a boost today as it is improved -- approved in the u.k.. 2020 has thrown the issue of equality into sharp focus, the death of george floyd shown a glaring light on the discrimination the black community faces in america well the impact of the coronavirus deepened existing economic inequalities. for more we are joined by our bloomberg quicktake reporter. george floyd, the catalyst that proved. what action has the corporate world taken since then? blackhas been a lot of squares on instagram, what about actual movement?

>> that has been key. we did see corporate america and corporations around the world address inequality in the way we have not seen before in the past. more important were the steps they announced they were going to take versus the statement. we saw a lot of movement in that front. one of the most historic and really notable actions we saw this year came from the nasdaq. earlier this year they announced they plan to mandate company is listed on the exchange to diversify their boards. we also saw many companies outside the nasdaq focus their efforts on leadership ranks. who is in their leadership, who is in senior management, and whether or not they have diversified enough, what more can be done. -- corporations made employee data more public. that is another focus that has

been part of corporate america and also sets what will likely be open dialogue about this issue in 2021. matt: at least a little more transparency. we are going to hear more from you throughout the day. this is bloomberg. ♪

matt: welcome back to "bloomberg market: the european open." just a minute from the start of cash trading, let's get your top headlines. trump has been rebuffed. senate majority leader mitch mcconnell blocks a quick vote on $2000 stimulus payouts. the president once failing to act is a death wish for republicans. becomes the first country to clear astrazeneca's covid-19 vexing. saysealth secretary

britain will be out of the pandemic by this spring. andopen for business, you chinese leaders are set to approve a hard-fought investment deal, paving the way for more foreign opportunities -- well, more european opportunities is the idea in china and also, you can forget, more chinese opportunities in europe. that is the idea. futures, a mixed picture, up and down throughout the session. now the global macro movers screen, in the left-hand, equity indexes. it will populate as they open up. -- ftse opened up, unchanged. have done so well this year, they are expected to fall. astrazeneca is expected to rise, also another heavyweight on the 40 down .2% as is the

ibex. the dax, little changed. the interesting thing here is the momentum seems to have been stopped and that is due to the failure of president donald trump to get stimulus checks boosted to $2000. blocked by his own senate majority leader mitch mcconnell in that effort and the u.s. stimulus efforts have been so important to global markets. us, the senior economist. let me get your take. i had an answer in this discussion earlier this morning about the benefits and drawbacks and we were told him

yes, investors seem to love these headlines now, but in the long run, it is going to be a problem if you keep spending this much money financed by debt. what is your take on $2000 checks for every american? >> it is a moment where the pandemic is the big problem and even if you translate income to households, it is not obvious they will be able to spend all of it. what we would probably see if you got the $2000 agreed, you would probably see a rise in involuntary -- this year but over the course of the year, as virus restrictions eased and we get over this second wave, that much will be spent. anything that is agreed now, should be viewed as boosting demand over the course of the year. of the fiscal consequences, the debt consequences, i'm fairly

relaxed. u.s., we wille get a faster recovery than in europe so by the end of 2021, we will probably be at pre-covid levels of economic output and the difference between getting to pre-pandemic levels of gdp rather than later, this adds higher debt, i think markets probably prefer you get back to pre-pandemic levels of gdp faster, get employment up and it is easier when you are at full employment to do the fiscal correction. if you pull back prematurely you get a have it, stalled recovery that gets you back to pre-pandemic levels much slower than you would expect. matt: what do you think about larry summers warning that the economy could be overheated by such payouts? to see i'd much prefer the economy overheated over the next 18 months then slow growth equally grim because we didn't

recover -- equilibrium because we didn't recover. if i look at inflation expectations, the fed is still committed despite limitations in the u.s. -- inflation in the u.s. below 2%. i would prefer a supercharged recovery and if we start inflation risks, callback at a later date. i think the risks are dommetric, that better to too much than too little. it will be easy to deal with the inflation problem than being trapped into a slow growth equilibrium. looking at the headlines, it seems the u.s. is doing a lot more in terms of stimulus to fight this pandemic in europe. am i reading that wrong? because the national breakdown of the eu or does europe have more work to do? kallum: in the u.s., most of the

stimulus has been discretionary as we are looking at congress ruled more income to households. there is a bigger automatic component so mostly it is working out through the furlough scheme, which is workers on short hours received income to live -- compensate for a lack of income. there is an automatic component. both sides have the credit guarantees and there is a bigger question of the five-year view, who has the biggest commitment infrastructure spend. at the moment, the u.s., but let's see what comes out of the spending negotiations or the european budget agreements. matt: and of course, what comes out of the biden administration. i suppose we have to wait and see how these georgia runoff votes go, but don't you expect democrats in the administration in coming to be much more

proactive in terms of infrastructure spending? sweep: if you get a full for the democrats and control of both houses, it is easier to do your big infrastructure spend, but if you have a mixed but it is important to look at this from a global perspective. across the world, we have a big fiscal response to the covid pandemic in terms of the emergency response and in terms of the five-year commitment to higher investment. this is decidedly different from the response to 2008's financial crisis and it is important people think about the economic consequences of that. over time, you have more inflationary growth outlook, high productivity growth, wages could be a little stronger, so the next five years, things will look fairly good and at the moment, with the covid risks, we

are probably looking at a good two or three years of synchronized global growth boosted a lot by fiscal policy. matt: what do you think about asset prices, even with a decent recovery, a v shape bounce back to pre-pandemic levels, we still have stocks trading in some cases 30, 40, 50 times forward multiples. becauseat a problem even pre-pandemic levels wouldn't be enough to justify the prices we are looking at now in some places. kallum: that's the question to ask. where stocks fairly priced before the pandemic? i don't think it is hard to come up with an argument as to why we should recover to pre-pandemic levels. this was a big economic shock, but what it did not do is significantly damage the underlying capital structure of economies so if you are not devaluing the capital, there is

no reason for the equity wide, so the full recovery makes sense. in terms of valuations, i am an economist. is we have good growth momentum expectations, strong gdp growth, and across the board, discount rates are low mainly because central banks are keeping them low and inflation expectations are under control so the question is how long do we go before markets start to sniff out some inflation and then we might get a wobble in equity markets. until then, we've got pretty good momentum. until we've got three big risks off the board, trump, brexit and hard to become more pessimistic. they become more optimistic and then we think about inflation coming through. long-term models rise and we get a correction. matt: kallum pickering,

berenberg bank senior economist stays with us. we are showing you a time of pictures of matt hancock. i've never seen so much matt hancock. he's an interesting man right now with the oxford astrazeneca vaccine being approved. crossing the tunnel, crossing the channel, coming up, the landmark eu, u.k. trade deal will be signed by ursula von der leyen and boris johnson today. to ill switch from hancock guess david frost? this is bloomberg. ♪

>> it is officially called now. leadumbers remain 48%, 52%. >> -- leave 52%. >> brexit means brexit. >> the proposal, the one the prime minister has put, is dead. twofter three years and missed deadlines, we must leave the eu. >> it is not just about some legal extrication.

it is potentially a moment of real national renewal and change . boris johnson is headed down a path that will end in a harder exit. >> the clock is ticking and time is running out. >> time is quickly running out. >> we have no more time to lose. we must have a final agreement by the end of october. >> sometime in the last moment, you will find a solution. >> honorable members, the next few days are going to be decisive. >> looking at where we are, it is vital everybody now gets ready for that australian option. i cannot 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, canada style free

trade deal between the u.k. and eu. >> we can finally put brexit behind us. lightshose were the low of the last four and a half years of brexit negotiations. the u.k. and european union will sign an agreement formalizing their post brexit trading deadline. kallum pickering is still with us. is there a way to spin this positively other than it is better than no deal at all? way thiss there any turns out to be really great for the uk's economy? kallum: the deal itself does two things. it brings an end to the uncertainty, which has weighed on the uk's economy to a lesser extent the european economy the past four years so that will be

positive for underlying growth momentum and it limits some of the damage from brexit. in way to think about brexit terms of potential growth, growth haseu, the been around 2%. if we would have had a hard exit, depending on what happened with u.k. integration, that can lower to 1.5%. with this deal, we should be looking at u.k. growth of north of 1.7%. euros on growth was 1.5%. the new deal is about damage limitation. what does the u.k. do with these so-called freedoms that could potentially lift its momentum over the long-term? the u.k. do?n drastically cut taxes, subsidized state enterprises, make amazing new trade deals? is any of that on the table?

kallum: i would caveat this to say most of the things the u.k. needs to do to lift growth potential it could have done as member. i didn't see anything restrictive that kept the u.k. from dealing with key problems and mainly linked to public investment and the right liftingucture, long-term productivity and the u.k. has a discrepancy between the north and the south. the mosteast, one of productive regions in europe, fast-growing but north of england because of lack of investment is very far behind, so it is mainly a fiscal problem how to raises, living standards in the north of england. to u.k. is leaving the eu gain regulatory freedoms, but if you look at the u.k. and the labor market, business competitiveness, the eu is one regulated. lightly

outside of the eu, i am puzzled as to what the u.k. government intends to do with these freedoms, but there are some things that can be done to offset the costs of brexit fiscally and less so on the regulatory side. matt: what about for the eu? eu do the -- why did the feel the need to make this deal? would it have been really problematic if they hadn't? eu, this is the mainly about politics, not economics. the eu is about four times more exposed to the economy. exporting to the u.k., but the eu's ambition all along was to have something random link -- relations amicable with certainty about the rules

of interaction with what is still the second biggest economy in europe, a key trading partner, a key ally when it comes to foreign policy and geopolitical issues, so to eliminate the uncertainty that would have come from a very rare trade andagreement to no joint agreements for cooperation in other areas, to go to what is compared to eu membership, but in an area that goes beyond trade, they have a basis to interact fairly closely and my bet would be geography is destiny. both economies are intertwined and going forward, their interests will be aligned and on an event basis, they will have to move closer together if they cooperativeng between the two sides. things look better in the future as a result of this initial agreement now. matt: what do you expect from assets?

we saw the ftse jump yesterday. the pound hasn't done much in dollar terms at 1.35, but even righto terms at 90 pence now, what do you see in terms of asset price movement? choir --terling held is held down by covid uncertainty because we have a new strain in the u.k. causing cases to surge. we get something like a national lockdown's that extends into 21 -- but i think the brexit uncertainty fading will push sterling higher. that complicates things for u.k. stocks so if you look at the ftse 100, around two thirds of her earnings are in non-sterling so if we get a stronger sterling, the ftse 100 may lag a little, where the mid-caps, which are domestic oriented in

the u.k., they will probably benefit and across sectors, you have the house builders which benefit from decent domestic recovery and there is a question about what happens with manufacturers that are exposed to u.k.-eu trade. i think we are going to have to figure out over a few weeks exactly what the implications of this free trade agreement are, how big are those frictions in practice as the u.k. moves from the single market to a free trade agreement in goods. matt: thanks so much for joining us. kallum pickering, senior economist at berenberg. he will continue the conversation on bloomberg radio at 9:00 a.m. u.k. time. tune in to london dab digital for that. coming up, climate in focus. 2020 was going to be the year time at change went mainstream. how much has covid put the

brakes on that, or is the pandemic and accelerator? this is bloomberg. ♪ ♪ you can go your own way it's time you make the rules. so join the 2 million people who have switched to xfinity mobile. you can choose from the latest phones or bring your own device and choose the amount of data that's right for you to save even more. and you'll get nationwide 5g at no extra cost. all on the most reliable network. so choose a data option that's right for you. get nationwide 5g included and save up to $300 a year on the network rated #1 in customer satisfaction. it's your wireless. your rules. only with xfinity mobile.

>> lots of people do want to get the shot. our estimate when we did the survey, 42% of the people would like to get vaccinated near-term. this is similar to so many other nations with 50-50. we believe as people see

empirical evidence, their neighbors have immunity, those numbers will increase but lots of people want to get vaccinated negativeans, there is narrative the western media is promoting. the real narrative is we have a be a vaccine and we will major player in vaccines and will be saving lots of lives inside and outside of russia this year. >> if that is the case, why won't you get published peer-reviewed data? >> reestablished phase one and phase two -- we published phase one and phase two and we will publish it in a magazine in the next two or three weeks. we have full transparency. that is another part of the fake narratives western media are portray. we will publish our protocol, we've done clinical studies in

the uae, india, venezuela, belarus. this is just part of the fake narratives propagated by google who want to contain rush -- people who want to contain russia. you mentioned an example where we showed one of our components that would be useful to the astrazeneca vaccine. time will tell and time will show we have a vaccine that is safe, efficient, we don't need -70 degrees for our vaccine, it is plus eight. weekere was a poll this that said only 38% of russians want to get vaccines. the you think that is totally made up? 38%, 42%, those are close numbers but you will see in january our vaccine is demanded by many people around the world. in russia, people are being vaccinated.

we have lots of people vaccinated. i myself got vaccinated. we see this narrative trying to portray for competitive reasons russian vaccine in a negative way and what we should really do is to blind wine tasting of vaccines. , pluse good track record two, plus eight, and we used two different sectors for delivery, so the hours will do better. sputnik wins and this will be curtain many nations, but we want to cooperate with other vaccines. we will announce a partnership with a mandate -- chinese manufacturer in a couple of weeks. we are setting a trend of operating an operation between different producers. was the ceo of the russian direct investment fund.

coming up, u.k. lawmakers have been recalled to vote on the 1200 page brexit deal. conservatives and labor say they will vote in favor. the s&p and liberal democrats will vote against.

matt: welcome back to the european open. --are 30 minutes away from it has been 30 minutes since the open. for equity markets, it hasn't been terribly fascinating in terms of size. gotooks like we've direction decided to some extent right now, up around .1%, but we have been bouncing back and forth between red and green arrows. lease the moment and has been stopped for the

continued rally. let's get the first word news from the bloomberg terminal. the u.k. has cleared the covid-19 vaccine from astrazeneca and the university worldwide the first approval for the shot, which will be prioritized for the country's most vulnerable. it is the second vaccine cleared for emergency use in the u.k. has sentenced 10 hong kong activists over an attempt to flee by boat in august. one was jailed for three years, but most were given lighter terms of seven months. the decisions defied international calls for the release. the case has become a rallying cry for pro-democracy activists in the city. russia is stepping up pressure , opening aon leader new criminal case against him for allegedly. wantss president putin

him behind bars after a failed assassination attempt in august. he failed a nerve agent attack. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. virus deaths surpass 1000 for the first time days after the country starts its campaign of vaccinations. we tried to gauge business confidence. this is bloomberg. ♪

matt: welcome back to "bloomberg market: the european open." 35 minutes into the session and looking at solid green arrows. almost up25%, the dax as much and ibex gaining .2%. in europe the u.k. and european union will sign a treaty formalizing the post-brexit trade deal. toliament is being recalled rule on an agreement that say the rules between -- that sets the rules. joining us, the snp deputy

westminster. great to have you on the program, especially because the snp is going to vote against this deal. is that a protest vote or would you prefer no deal at all? >> what we would prefer is the deal we already had. as members ofdeal the european union. this deal which boris johnson is pooring back is a really shadow of that deal. his deal makes everyone in scotland, the u.k. or soft. it is just -- worse off. it is not possible for us to do a deal we know will do harm to those communities in scotland. there are other parties who are not supporting this. none of the parties representing northern ireland are supporting this deal. are notntries in wales

supporting this deal, the green party are not supporting this deal and i suspect liberal democrats may not, either. there are a number of labour mps which won't support the deal, although confusingly for me in the labour party, they are backing up the conservatives with this deal they also know -- matt: i'm not sure it is that confusing. train has really left the station so even though a lot of economists would agree with you, the country will be worse off outside of the eu, it is far that.te to vote on right now, your choice is either this deal or no deal, so are you saying you would prefer no deal? no deal is not on the order paper for today so conservatives will push this through the european parliament. there is no option for no deal

on the order paper, but that doesn't mean the deal they are bringing back is something we can support. the scottish government -- matt: if you vote this deal down, the no deal is the option. this is the only deal on the table. if you vote this deal down, time runs out and you fall into no deal. regrettably -- and it is regrettable it is such a short time available, the conservatives have a majority of 80 in the westminster parliament so it won't matter what scottish mps do. matter the 80% of scottish mps at least do not support this deal, it will go through and people in scotland will unfortunately have to suffer the consequences of that. matt: got it. so it is a protest vote.

i understand that -- that is how you got into this in the first place, isn't it? kirsten: can i just say, we voted overwhelmingly to remain in the eu, so it is undoubtedly the case england wanted to leave suspect for people there to make that choice. in scotland, we did not vote for on aand we returned 80% strong european platform. 75% of people wanted to remain in the eu and it is undeniable that there is a strong pro-european feeling in scotland. people don't want to leave and i don't support us leaving. matt: that brings me very well to the next question, which i'm sure you are asked a lot over years and years, but doesn't it make the most sense now to take scotland out of the u.k. and join the european union?

does, andt absolutely 17 consecutive polls are showing people in scotland favor independence as the base reform for scotland, the way we can make our own decisions for people who live here. europe is a big part of that. scotland is pro-european so to be able to have that seat at the table in the eu to influence things in the way that is based for the people here is increasingly attractive and it is obvious it is the only way we are going to get the outcomes for the people here in scotland. contrast with the direction of travel from westminster, which doesn't reflect what people in istland want and which running completely contrary to all of the efforts the scottish government have made to engage with the u.k. government to put forward compromises and these songs have all been ignored

i think it is undeniably time for us to take our own path here. matt: how quickly can you get another referendum on the schedule? how quickly do you think you could make this happen? kirsten: sooner rather than later and the future of scotland is up to the people who live in scotland. that is an opportunity that will be presented to them to make that choice. it is not for anybody else to make it for the people here. it is certainly something that has to happen sooner rather than later because we can see there is such an emergence in aspiration -- divergence in aspiration and concern about the deal all the brexit over scotland, whether that his students that had previously been able to take part to broaden their horizons or

promised a sea of opportunities and for many of them what they will now have is a worse deal than they are ready have. these are not looking positive in terms of the breads it deal and it is time to take a different path. will you be able to convince boris johnson to allow a referendum or does that not matter to you? would scotland go ahead with what the u.k. would see as an illegal referendum? kirsten: i think that is an interesting way you phrased that. what boris johnson allow. it is not for boris johnson to allow a referendum in scotland. boris johnson is not the person who decides the future of scotland. boris johnson may very well suggest he would not permit that, but it is not his choice. boris johnson can't stand in the would domocracy and

well not to try and stand in the way of the country deciding its future. matt: thanks very much for your time. kirsten oswald is the deputy westminster leader of the scottish national party talking about the vote in parliament today and a possible vote in scotland in the coming months and years. germany's new coronavirus deaths surpassed 1000 for the first time since the pandemic started and new infections hit another record. this comes days after the country started its vaccination campaign. in berlin, angela merkel's government is considering extending a hard locked down that was imposed earlier this month, possibly making it even stricter. clemens fuest.

clemens, what do you think about the situation in germany? do theseof an effect increasingly alarming numbers have on business confidence and the economic climate in this country? it is a serious situation. germany started this pandemic as one of the less infected -- affected and this has changed now. we are in the middle of a this hasave and stopped the recovery. at the same time, the situation is very divided so manufacturing continued its recovery, the ok,ation was relatively everything was bad related to hotels, travel, and this will continue to be difficult for some time. do you expect a lockdown to be extended and even stricter than the current lockdown that we face here in germany?

that is very hard to predict because that obviously depends on how infection numbers develop. yes, i do expect the current lockdown to be extended. it is a lockdown which is stricter than what we had in the autumn. nevertheless, we should bear in mind manufacturing companies and service companies are operating. i would also expect schools to ,pen, but if we open schools there will be little room for relaxing other restrictions, so i'm afraid we will have this type of lockdown maybe until march. it was indeed a rough lockdown. the travel situation? our travel restrictions going to get more serious in germany for people trying to get in and out, either for vacation or for

business? they are already serious. in many cases, people have to go into quarantine for some time, which means effectively, it is uncomfortable to travel and a lot of people don't travel, so i wouldn't think this situation will change. travel is currently not considered -- international travel is not considered a main risk at thee major moment is people are going home to see families over christmas or for the new year and rise.ions i wouldn't expect a kernel -- external restrictions to be lifted. you think about this deal? what does it mean for german businesses? clemens: i think the key issue is that we have a deal. toreally would have been bad

have gone into this without a deal at all. at the same time, it is not the same as continuing relations as before. these new regulations in place now will have to be tested in practice. overall for germany, the news is germany,use for the u.k. is a destination for good, and there will be zero tariffs on goods. especially the car industry can live with this. we have to understand there will be a lot of new regulations, border checks, questions about rules about the origin of goods that are traded across border, so things are going to be more complicated, but it could have been worse. and of course, there is a question about the finance industry. how do you see that playing out with more cities, financiers

moving into frank for -- frankfurt? clemens: this has been discussed and expected for some time. what has happened is very limited. some companies have extended their offices in french for it, but up until now, we have seen more movement to dublin and some movement to paris, so i would think a lot of the finance industry will continue to stay locations --mmer some relocations but they will be limited. matt: there has been talk today and yesterday over the eu-china investment deal. we are expecting that with a phone call from ursula von der leyen. how does this affect german business? i've spoken to so many ceos that see awith china

real effect on their bottom lines from those joint ventures. clemens: i think it is extremely important, especially for the german economy and german companies to develop relations in china and put them on a more solid footing in terms of the rule of law. how these new rules will play out in practice is an open question because in the end, if theys don't go very well, go to court and so on but there has been improvement. there were concerns about the security of investments, the security of ip in china and i think this is a step into the right direction toward deeper, economic relations. the currenter situation, the chinese market is extremely important to german companies.

clemens: great to get time with you. always appreciate you. fuest is the president of the ifo institute. coming up, boris johnson hopes to get a trade agreement through both houses of parliament today. we will bring you more on the pound and market reaction to the deal, plus bitcoin hits a new hall time high -- all-time high. this is bloomberg. ♪

matt: welcome back to "bloomberg market: the european open." see european equity indexes gaining this morning, or we did see indexes gaining. they have dropped into the red on some of the benchmarks, but really not a lot of size in the directional moves we see. right now, i want to bring in richard jones from bloomberg's mliv blog. he is the fx and rates strategist, and i don't know if , at least not for richard's generation, but bitcoin has hit an all-time new high this morning. change that it

touched before retreating a little bit. richard, a lot of people would consider this a currency. others say it is a commodity. what do you think about this continued appreciation of digital code? richard: good morning, matt. the one thing, even though it is not something i focus on closely, the one thing my experience tells me is that when things are moving like this, the trend is often your friend and i think standing in the way of a move like we are seeing in bitcoin is something that experienced traders will be a little hesitant about. it has been a massive move. it seems to not only be maintaining its momentum, but increasing its momentum so when you have moves like this, it is difficult to stand in the way of it. the best thing to do is get out of the way of it. have 3.4 know that i

bitcoin locked in a wallet since 2012 and can't find the password? richard: that's absolutely tragic. matt: do you realize what we could do with that kind of money? it could be a weekend locked in. let me get to the pound. that is another issue we will see some issue on -- movement on today. we haven't really seen a lot of strength and we did get this trade deal through. was it just priced in? people were casting 1.45 pre-brexit trade deal and everything that is coming out of the pound seems to be from dollar weakness. sterling,ok at euro when the trade deal was announced last week, we had the pound ratcheting higher in a knee-jerk fashion, but has given up all of those gains. it is the same with the gilt

market, gains spiking higher and those have reversed. the reason is the market is saying it is better we have a trade deal than europe and the own termsng on their but it is not a game changer. it is a very slim deal. there is not a lot contained within it. anle we avoid the worst case area, i don't think it is a massive game changer. that is why we see the reaction from the pound and u.k. yields. there is a reality setting in that there is still a lot of challenges for you a -- u.k. economy. this trade deal didn't change a lot. richard jones, bloomberg mliv fx and rates strategist. that is it for the european open. stay with bloomberg television because next, i will be hosting bloomberg surveillance. lacquafrancine

today. this is bloomberg. ♪

matt: the u.k. becomes the first country to clear astrazeneca's covid vaccine. the health secretary matt hancock says it means britain will be out of the pandemic by spring. trump has been rebuffed. senate majority leader mitch mcconnell blocks a quick vote on $2000 stimulus payouts. the president warns failing to act is a death wish for republicans.