chart in a moment to show you what we have. the countdown to the close starts right now. >> the countdown is on in europe. this is bloomberg markets: european close, with guy johnson and alix steel. ♪ guy: let's talk about the markets. the stoxx 600, 460. brent crude down by have a present. i want to talk about the btp market. it wrapped up as we were finishing the last hour. the ecb is crafting a crisis tool to activate if bond yields

jump. what it is, i have no idea. the ecb has been in the business of managing spreads. the ecb has yet to decide if the backstop would be revealed preemptively. difficult to know what kind of a trigger there would be, but the crisis is still being figured out. the fear is that if we start raising rates in europe, we will see potentially a big blowout and periphery spreads. that is something the central bank is very worried about. i am not sure how they would manage this, how this would work, but maybe it would do with reinvestments. certainly it's having a meaningful impact on the btp right now. kailey: where they are not dropping is here in the u.s., and that is influencing the market here, specifically

technology stocks. the nasdaq 100 underperforming the other benchmarks. of three basis points on the 10-year treasury yield. we were north of 270 for the first time earlier. real yields, inflation-adjusted, now sitting at -17 basis points. how problematic is that for equities? 1207 on the bloomberg dollar spot index. that is the strongest dollar going back to july 2020. guy: back to the ecb story and trying to figure out what is happening. working on a crisis tool to use in the event of a bond yield low blowout.

not fully thought out yet, but working on it. can you walk us through what this could like, what the trigger could be, with the objective would be in managing spreads? >> you have to have in mind, ever since the start of 2015, short interruption in 2019, the ecb has been in the market will large-scale asset purchases. it is coming to an and at a time of high uncertainty because of the war in ukraine. policymakers are reasonably concerned that spreads will blowout, countries, particularly in the south, where sovereign debt is high, and has become higher because of spending in the pandemic, will be a focus on investors again.

there is work on the way in the ecb, as we understand, on a backstop that will help to keep those yields and check. work is at the early stages. people thinking about what a program should look like. of course, that would involve bond purchases of some form. we will have to see. what is also not clear is if they will present the program, put it in the window for everyone to see, or if they will keep it in the drawer for when it is needed. kailey: so we shouldn't expect any clarity on this when the ecb delivers its next decision? >> very unlikely i would say. the ecb said any new policy decisions would be happening in june when new forecasts are

available. from what we hear, they will use the meeting next week to look at the economy, what is happening with inflation, financial markets, and use that meeting to discuss what will come at the june meeting. it is quite unlikely for us to hear any more details about that tool next week, although you never know what happens between now and then. there is a small chance they may shed some more light on it. kailey: thank you for hopping on the phone to bring that to us. really appreciate it. now let's turn to tim ash, senior sovereign strategist over at bluebay asset management. the ecb could potentially be hiking rates by the end of the year, one central bank not hiking today was russia.

a 300 basis point rate cut. what is your reaction to that? tim: russian markets have been heavily controlled since the russian invasion of ukraine. it is not a meaningful market, not much liquidity there. this is a pr stunt from the cbr, meant to support the kremlin in its invasion of ukraine, unfortunately. its independence has gone out the window now. the reality is, the invasions of ukraine, the sanctions applied have been devastating, are going to get worse. russia's ability to provide energy to europe will diminish over time, whether they are embargoed this year or not. there will be massive restrictions on russian energy sales, and that is terrible for

the russian economy. russia will be in recession this year and will be stagnated for years to come. the cbr is thinking about how it can support the russian economy. guy: thus far, the optics look more favorable for russia. they have not defaulted yet. how sustainable is this? it looks like it wants to default. tim: i do not agree with you, this does not look great for russia, at all. they have been cut off from most trade, every day we see more sanctions, this is devastating for the economy. the ruble may rally but try treating it. -- trading it. i don't think it is looking good for russia at all. it is going into an erratic, north korea type of situation.

guy: i guess the point i was trying to make, from vladimir putin's point of view, as he talks to his people, on every street corner, the dollar-ruble rate is there, everyone knows what it is. from that point of view, the optics look favorable. you say the fundamentals underlying that are more difficult. when is that story, this wave going to break? the u.s. clearly wants russia to default. when will that happen? tim: they probably are already. the payments that were due 30 days ago were not paid. i don't understand why the rating agencies have not declared that a default. russians want to avoid a default, given the actions they have taken in recent weeks of trying to make payments, but i

think russia goes into default when the general license ends may 27. that will be impactful for a long time. 1998, russia came out of default quickly, the imf wanted to help them come out of restructuring. this time, the treasury wants them to remain in default. it will be hard for bondholders to negotiate. russia will be in default for perhaps a decade, like venezuela. no access to international capital markets, very high cost of borrowing, even from the chinese, low investment, no growth, low living standards. it's a terrible outlook for russia, for the cost of the invasion of ukraine. kailey: essentially you are saying russia will be untouchable to international investors for an indefinite amount of time? tim: even if there is peace in

ukraine, putin has crossed the rubicon with his actions in ukraine. from an esg perspective, companies do not want that kind of bad plum the city of doing business with russia because of putin. that is a fact. guy: vladimir putin probably is knows that. what does that mean in terms of his actions elsewhere, particularly on about appeals in ukraine? i spoke to you before the invasion happened, and you were adamant that this would be the direction of travel. you painted a bleak picture then, how do you see it now? tim: the battle of donbass will be critical. they will be a defining winner and loser. it is remarkable when you think about it. february 24, most analysts expected the ukrainians to lose in a matter of hours. the fact that they are still

there, have pushed the russians out of the north, they have a chance in this battle. the west has realized the ukrainians need to defeat putin, and if anyone is going to defeat putin for them, it is the ukrainians, so they are escalating in terms of providing more serious equipment, to enable the ukrainians from beating russia. russia will have to probably escalate as well. this is an impossible battle for prudent. he is losing big time at the moment. if he loses the battle for donbass, i'm not sure he can survive in russia. everyone says he is untouchable but the economic devastation caused by sanctions, the huge number of russian troops that are dying, have died already, there will be huge consequences for putin. this battle over the next few weeks will be enormous for russia and for european

security, the relationship between the west and russia. guy: we believe there, hopefully come back soon and talk about what is happening here. a quick note. we have a jury reaching a verdict in the ex-goldman banker case. we will bring you those details shortly. we are also minutes away from the launch of an historic mission to the iss. we will go live next to the kennedy space center in florida. this is bloomberg. ♪

guy: there has never been a mann ed space mission like this one. four private citizens are about to blast off to the international space station. ed ludlow is at the site. >> this is the first all private

mission to the international space station. in the past, russia has taken a private citizens but they have been assigned with officials. this is the first real commercial trip to iss, but they will be doing some scientific experiments while they are there for eight days. as we confirmed, three of the crew paid $55 million per seat to go up. one of the members may be recognizable to our audience because he was a more nasa astronaut. now he is the executive at axiom which brokered this deal. he is experienced, the other three are high net worth individuals seeking a thrill.

kailey: how reaching is a launch like this one? >> this is the fifth human mission they have done, they have done orbits around the earth with inspiration. this falcon 9 booster has flown two human missions in the past. it cap so endeavor, this is their third trip to the iss. with any launch, there is a risk with the propellant, kerosene, and the complexity of what they are trying to achieve. guy: it is rocket science, and in the past things have gone wrong. we will continue to monitor and hopefully see the launch off without a hitch. let's listen in to mission control. >> t -15 seconds. 10, 9, 8, seven, 6, 5, 4, 3, 2,

1. zero. ignition. go falcon. go dragon. axiom one. [applause] >> together, a new chapter begins. godspeed ax-1. >> propulsion speed is nominal. >> t plus 38 seconds into this historic mission, crew flying on dragon and talk and nine -- falcon 9. guy: let's go to ed. talk us through what we are seeing now, what comes next.

ed: for the audience on bloomberg television, the fee that you are seeing is about 20 seconds behind real time. i knew that the launch was successful, but now we have hit the moment of maximum aerodynamic pressure on the vessel. the falcon 9 has a series of merlin engines, you chose which has a maximum of one point million pounds of thrust. they will be traveling at 17,500 miles per hour. spare a thought for the crew inside that cap show experiencing that intensive g force. they will accelerate through the thickest part of earth's atmosphere over the next two minutes or so. kailey: these are private individuals. what kind of training did they have to undergo to be on this mission? ch. scholz: fantastic question -- ed: fantastic question.

up to 1000 hours of training. what they did was replicate the training that a nasa astronaut would go through, getting in and out of the capsule, how the emergency protocols work, how to where the spacesuit properly. the biggest part of their training was their time on the iss, weightlessness, the studies that they will do, many related to health care in conjunction with the mayo clinic. they had to quarantine for the weeks running up because of covid-19, but ultimately everything is looking good. guy: as they head downrange, how long is the iss, how long is the journey to the station? ed: iss orbits at around 240 -- there you have first and second stage separation. the falcon 9 booster fell away from the second stage, which is a smaller rocket, a single

engine that you see on the right-hand side. that is propelling the dragon capsule. later on, we will see that capsule separate away from that engine as well. they are getting into the internationally recognized boundary of space. the journey is 20 hours in total to the iss. after about 12 minutes, they basically enter in orbital trajectory where everything slows down. thrusters on the capsule will put them on the exact trajectory to the international space station. kailey: as we watch these pictures, never short of amazing to see this kind of human accomplishment in space. it is a spacex mission. talk about axiom's ole and -- role, and how their work together. ed: space is basically the

airline, axiom is the travel agent. they brokered the agreement between spacex, nasa, getting the money for these individuals to go up. they want to make the future of space stations commercial. there is a plan in 2024 four axiom to launch a new module attached to the international space station. the iss is due to be decommissioned in 2031, crashed into the ocean. but the plan is to build it up to a certain extent where there are commercially operated arms, that when it is to be decommissioned, they can break up, and that new generation of private sector space exploration exists. it's part of a larger plan from nasa to differ the cost away from them into the private sector. guy: if axiom is the travel agent, how long before it goes mass-market?

how far away from mass-market travel into space? ed: this is the $3 billion question. elon musk talking about at the launch site tops out at $3 billion in sales annually, and it is hard to understand the cadence of launch that you would need to achieve a mass-market. all we know from axiom, this is their first mission, three private astronauts and a pilot from axiom. they have ax-2 and 3 which are sold out, and still selling seats for ax-4. there are a finite number people who can spend that kind of money. i certainly don't have that kind of change to go up. kailey: that price tag, which is not accessible to the average human being, is this the kind of thing that as the market grows, becomes more scalable, is that

cost expected to come down? or is spaceflight only going to be for the choice few? ed: i never thought i would be sitting at kennedy space station talking about the parallels between inflation, commodities, higher price inputs, and space exploration. the most expensive part of the launch is kerosene. it is not produced on site locally. spacex has talked about doing that to lower the cost. that is the welcome -- the bulk of what it cost to go to space, the propellant. we know that spacex has raised prices for its satellite clients because of those higher input costs, linked to inflation on the component side, but also the energy component and the development of oil products like piercing. guy: has there been any thought about using synthetic harassing? -- kerosene? prices have skyrocketed recently

but i'm wondering, from an esg point of view, how sustainable is space? ed: it's an interesting debate and there is no uniform answer. blue origin, the start of run, owned by jeff bezos, they use a mixture of hydrogen and oxygen. but they only going to low orbit. elon musk has spoken plainly about this. forgive me because i'm not a rocket scientist, i just report on them. but my understanding is that kerosene is the best of the best. if you want to get to 17,500 mile per hour, orbit of 250 miles above earth, kerosene is the best propellant. kailey: you are the closest thing to a rocket science that bloomberg has. we are thankful for your reporting. you mentioned lou origin, virgin galactic. how far behind are they relative

to what spacex is doing here? ed: interesting question, especially in the context of the conflict in ukraine. the conflict in ukraine has shown, if you take away the russian rocket system, spacex is pretty much what is left right now. boeing, united launch alliance, northrup launches services but they don't do it at the same cadence, they don't price as competitively as spacex, especially when it comes to transporting human beings to the international space station. around $50 million a seat per astronaut, which is what axiom is charging. if you look at what ula or boeing is offering, it is much higher. we know that because nasa is transparent about its contracting awards. now thatsoyuz has gone away, you have a large body of private satellite creators who are

looking at spacex as an alternative because they lost the ride on soyuz. guy: there are russians waiting for the astronauts that have just blasted off. we heard earlier on from nasa suggesting that relations would be cordial. is that what people expect in the long-term? what is the future of the iss? walk us through what is happening on the screen. ed: on the left-hand side is the falcon 9 booster landing on a drone ship in the atlantic. i am giving it a few seconds, but it looks like it successfully landed, which makes it the 86th successfully used booster in spacex's history of rockets. to answer your question, my understanding from nasa officials i have spoken to is that there is every expectation

that relations aboard the iss with the four private citizens that you see and the cosmonauts on the iss already, it will be cordial. it is at the discretion of the three cosmonauts, the citizens on board, to invite not just those four private astronauts, but those that are already on iss. if they want to come over for dinner, have a meal, they can do that, but it is at the discretion of the russians aboard. kailey: i am just taking a listen here. i heard the commentators saying that everyone is healing comfortable. can you walk us through, at this point in the journey, what is left for these guys to do? just sit and wait until they arrive at the international space station 20 hours from now? ed: the velocity that the crew would be feeling, i cannot imagine the sensation, but it

would be very different from that initial three minutes of climbing. as you enter the boundary of space, you lose velocity and things slow down. eventually, in two minutes time, the dragon capsule will separate from that second stage booster. from that point, it is a 20-hour trip to the international space station. frankly, they will take time to rest. they will have a nap, eat, take off their spacesuits at one point, put them back on, and then around 7:30 eastern time saturday morning, they will reach the international space station. guy: ok. ed, fantastic coverage, fantastic insight, even for a non-rocket scientist. we appreciate it. watching that incredible lift

off, though launch taking the astronauts up to the international space station. now a long journey to the iss. you can track that on your bloomberg and on the spacex website. we are cutting you down into the final seconds of european trading. we are wrapping up the session in europe. the view from space looks like this, we are looking at a fairly -- story. toward the end of the week, looking fairly good as we head into the start of running season next week. you have the main markets up by 1.5%. let's look at the stoxx 600 to get an idea of what it has been doing today and throughout the week. the intraday, 460 is the current price and a fairly tight range.

457 towards 461 but closing in the middle of that rate. we are up by 1.2%. that is the story. over the last few days it has been interesting. you have to factor in what has been happening with the currency market. we see volatility in the currency market. let me show you what has been going on. earlier we had a move below 130. we are back about that but down around half a percent -- down around .5%. we had news from the team covering the ecb, working on a mechanism to contain spread whitening. we are seeing that's happening within europe. and that we have dollar-ruble which has round trip, but try trading the ruble right now. that is not a real number. russia may already be in default.

we will see the final verdict on that in the next few days. let's talk about stoxx 600 over the last five days to give you clarity as to how the week has developed. we have gone sideways. we are up by around .5%. we really have not gone anywhere this week. a little bit of intraday volatility but nothing really going on at an extensive level in terms of what has had with the indexes. at a sector level, things are more interesting. let's go to the gre function on the bloomberg terminal. how has the rotation works this week? health care utilities, food and beverage the best performing sectors this week. we are seeing a much more defective by come into the market. technology, industrials, cars, travel and leisure are where the weaknesses have been. let's talk about those from an individual point of view.

-- rising nearly 10%. credit agricole buying in that business, will we see banking call it -- consolidation happening? roche holding, we have seen a fantastic week for the health care sector. 398.25, up by 1%. a double upgrade for k+s, a fertilizer company. jp morgan delivering and upgrade by 2.5%. kailey: we are going to continue that conversation as global food prices are rising at the fastest pace ever according to a new report which says the war in ukraine has. supplies. joining us is the formal director of the u.n. food and agriculture organization, jose graziano da silva. how much can we stock up to the

war in ukraine at how much is this something that will prove persistent even if there is a resolution to the conflict in the medium-term? jose: my opinion is we have much more to look ahead kailey: -- much more to look ahead. next season's planting will begin in spring. what is going on now with this is a lot of speculation. if you look for the numbers, they reveal it is a better scenario than it was in january. the stocks remain on their place. the consumption is a bit lower.

there is no reason for this spec of prices in february except the fact that the financial markets are pushing it. guy: the pushback against that argument would be we have enough food but it is in the wrong place and shipping costs are going up and fertilizer is going up and the market is looking forward and anticipating prices will rise. while we have sufficient food, we have to move it to where it is needed. that is going to cost a lot more money. jose: it is true. but we do have enough food where we need it. the country that will be most affected by the problems in ukraine are the middle east and north africa countries. unfortunately, the poorest of the poor in the world.

in other regions like europe and latin america, u.s. and canada, they do have enough stocks. there is no reason for this concern about a food crisis globally. in this moment, it could be worse if we have the countries starting to put a ban on sports, for example. kailey: if we could talk about what we could do to avoid it getting worse, what is the approved it policy response from countries here? dachshund the appropriate policy response -- the appropriate policy response from countries here? jose: a culture and marketing system -- that tried to make the market more transparent, give

realistic information about what is going on in different countries and parts of the world. this is what we need to calm down the markets. the stability of other areas politically and financially is affecting the prices of food. this is the point. guy: if we continue to see difficulties in ukraine persisting, how much higher do think prices could go from here? the u.n. is warning we could see another 22%. could it be worse than that? jose: i think so. you saw in a month we went up 13%. 20% is a bit more than that. if you want to persist in stability in the global markets

-- not only what is going on in ukraine and russia but all around the world. this could turn to even worse than we have ever seen. the worst crisis i saw was 2008 -2011. we are ahead of the prices of that time the. but we are in a much more comfortable position on the stocks of food. at that time, stocks were below 20%. now they are up to 31%. we should have in this moment more transparency if you want to deal with the crisis. of course, avoid countries to put a ban on exports. that is the worst scenario that

could happen. kailey: there is an old adage that the cure for higher prices is higher prices. can you talk about the elasticity of demand when it comes to food in particular, something people need? jose: remember, usually higher price would stimulate more production, especially in regions like where i am now in south america, the breadbasket of the world. this region is a net importer of fertilizers. fertilizers have jumped ahead of food prices. the cost for the farmer to produce is even higher than what you expect us to receive.

i would say also even important is what the countries will do to import the food they need. many countries in the region, not here in europe, need to spread imports of wheat. wheat is heavily affected by what is going on in ukraine, especially the exports for the ports. guy: we will leave it there. we appreciate your input and thoughts on what is going on here. jose graziano da silva, former director general of the u.n. foods and agriculture organization. a check on where we finished with equity markets in europe, we are through the auction process. a fairly positive session but a defensive session for europe.

ftse 100, 7669. the dax up by 1.5%. the cac 40 ending up 1.34%. we will be talking about the post round election. the polls have narrowed a little bit. we will talk more about that at 5:00 p.m. in london, 12:00 p.m. in new york. you can get this on the bloomberg terminal and get us on spotify and apple. kailey: coming up, we will look at what is looking like a two person race for the presidency in france. round one for voting takes place this sunday. we will talk about what this is doing to the market with the chief officer of sycomore asset management, stanislas de bailliencourt.

this is bloomberg. ♪

ritika: you're looking at a live

shot of the support room. coming up, -- this is bloomberg. guy: in france, the first round of voting for the presidential elections takes place this sunday. most recent poll shows that an annual macron leads. that is the second round. the first round is close as well with the expectation is out of the first round. we will see those progressing into the second round, the runoff round. over the last few days, we have seen the risk of victory growing and the markets starting to price this in. we are joint by the chief investment officer of sycomore asset management, stanislas de bailliencourt.

let's talk about the risk, what would it mean for the financial markets if marine le pen was to win? stanislas: it is not expected by markets until a few weeks ago and it is true in the last few days both came really close. so far, markets are not moving that much. we see spreads widening on french government bonds as well as french banks. today, it is clearly priced in victory by marine le pen. kailey: what would that fully priced in look like? how much more damage are we talking about? stanislas: this is quite a big surprise. five years ago the two were

already together in the second round. if you days before the second round, there was a debate where marine le pen was really weak so the market started to rebound. this time it will be different because she is backtracking some of her ideas, like france exiting the eu. probably the debate which will take lace on the 20th between emmanuel macron and marine le pen will give more clear indications than last time. there will be pressure on government bonds in france and other countries and in the industrial and banks in france. guy: even if emmanuel macron wins, he is unlikely to win as convincingly as last time.

what will that mean for france? what will it mean if he faces a hostile parliament? stanislas: it is a very good question. if you cheat something like 25% in the first round, it is a better score than last time. that is positive. secondly, there is an election which will take place two months from now. there is delay between the two. he will keep the majority if he wins in parliament. there are some interesting things. clearly he is a pro-european president but more than likely this is good for construction and implementation of european programs, integration of economies in europe.

the election of macron will be a positive for markets in europe. kailey: obviously, this election has become about the issue of the cost of living in france. what are your expectations -- and you alluded to it -- on fiscal policy on either side if either one of them wins? stanislas: macron, there will not be a major change. it has been going down the past few years and there is more to come. marine le pen, there's less information and decision about what she will be doing, but who will be her team to manage the country. from a market point of view, this would be a big surprise. it would be harder to know what would really happen to the economy. for european construction --

this will change that. guy: final question from me, she said very clearly she does not want france to leave the euro zone. is that still the risk? stanislas: no. after the last two years, after what mario draghi achieved, it proved that europe is a strength for everybody in the euro zone. they are in favor of staying in europe because they know that would be a big risk. i don't think there's any risk from the currency exit from france in the program. kailey: stanislas de bailliencourt, sycomore s -- sycomore ceo. thank you. this sunday, francine lacqua

will be live as harris decides on their next government. don't miss that. this is bloomberg. ♪

guy: a lot of breaking news. the u.k.'s chancellor has admitted he held a green card while he was chancellor. you're meant to green cards up one year after being out of the country. he had the green card and he lived in the u.s. before he entered politics. he returned it on his first trip as chancellor and is already under considerable pressure because his wife, a multimillionaire, holds non--- cases which means she does not

pay taxes on her foreign earnings. that does not look good for him. kailey: what trouble could that spell for the chancellor? elsewhere, legal issues, a folder -- a former goldman executive found guilty on fraud accounts. here is sonali. talk us through it. sonali: he faced three counts of conspiracy and is found guilty on all counts. he was the only banker to go to trial in this case. as part goldman goes, they are watching it closely and so far as what details came out of it, we did see the extent to which this played out. tim leistner testified in this trial so it was eight weeks of a lot of detail. goldman has allocated $5 billion around the world, to pointed in

dollars -- $2.9 billion in -- they have made a lot of changes when it comes to compliance. certainly a turning of the page. guy: in terms of closing the book and turning the page, clearly it would be for oden. what were the face in penalties? give us the expected sentencing around to this. sonali: the most significant thing is he could be spending 30 years in prison. given he was the only banker to go to trial, we have tim leistner who also pleaded guilty. plenty of goldman executives left. many faced reduced pay. facing risen for 30 years because of this. guy: thank you for the update. we will get more details as we continue to follow the story.

don't forget, you can track all of this news or listen in on bloomberg radio. the cable show is coming up at the top of the hour, 12:00 p.m. in new york and 5:00 p.m. in london. you can find the podcast on itunes and spotify. kailey: the questions of politics and geopolitics will continue on "balance of power." the chairman of the kkr global institute will be joining david westin. that will wrap it up for guy and myself. have a good weekend. from new york and london, this is bloomberg. ♪

>> from the world of politics. >> we have to assume the talks are going nowhere slowly and this war is going to continue

for the foreseeable future. >> to the world of business. >> i do think innovation thrives when you have an open market and that is what we need when it comes to technology. >> this is balance of power with david westin. david: from bloomberg world headquarters in new york to our audience worldwide, welcome to "balance of power." it has been an interesting week for the bond markets and to get caught up on how it is ending, we turn to kriti gupta. kriti: the idea here is that perhaps people market is dead, especially in light of a real yield that is turning positive. at the same time, we have a very aggressive