it is the ecb we want to focus on. i want to bring your attention in terms of real yields on high-yield bonds in europe. as a result of that enormous balance sheet held by the ecb, those real yields of high-yield bonds are in negative territory. that 3% inflation picture, you get negative yield in the high-yield space. that talks about the reach, the lack of yield as a result of the oversight ecb balance sheet. will that change to any degree? will the middle move at today's meeting? is this a bet by investors that the inflationary picture is more transitory than hawks are suggesting? we have great interviews coming up. we will get perspective from the chief economist at commerzbank, joerg kraemer. then later on, china tech and the regulatory scrutiny, and opportunities for investors, talking to duane kuang, founding managing partner, qiming weichuang venture cap. also some great interviews out of egypt. manus cranny has been in cairo at the international forum. you have been speaking with the finance minister. lots mor

the ecb decision just around the corner. tom: i don't know if it is a big deal or if they will do anything. i have to admit, this is where lagarde gets tested at the press conference. does she want to be assertive? i have not observed that. jonathan: the risk today, a reduction in the pace of purchases in the program with any sale about the degree of support that goes beyond next year. you can call it tape or if you want to, but you have to be clear that a tapered from the ecb could be different from a taper from the federal reserve. tom: i will go with that as well. with the pandemic and the uncertainty out there, every central bank wins by delay. i don't think the ecb is any different. jonathan: every line in that news conference will be interrogated by everybody. lisa: christine lagarde does not always delivered in that type of circumstance. i love the idea that we are talking about a dovish taper. that is the new code. exactly. ubs talking about the doorway she ecb taper. jonathan: we have to be clear about this. they ca

you say the ecb has the flexible. should today, do you think, should they be reducing the pace of those purchases at this time? jean-claude: well, again, as always, you have -- there are pros and cons for any kind of measure. in the past, because they were afraid of the impact of the health situation, they, as i said, decided to accelerate the purchases. we will see what they do. they could pretty well go back to the previous level of purchases, or again, consider that the situation is still uncertain in terms of covid-19, that the pandemic is still there. but what is rejoicing, whatever decision they take, what is rejoicing to see that the open economy is going faster than was anticipated, at least euro stats is telling us that. i am looking very carefully to the pmi, so-called purchase director index, and clearly we see there an acceleration in july and august in comparison to the u.s. we have better pmi in europe than in the u.s. in august, for instance, which is more or less reflecting the fact that the situation

tom: the distinction on ecb is simple. u.s., maximum stimulus. ecb, far less stimulus. jonathan: capital economics, their line came out a couple of minutes ago that sums up things perfectly. the ecb slows purchases, but will keep policy ultra-loose. the real test for that is in the italian bond market. the italian bond market is rallying. tom: what does that mean for the bundesbank? jonathan: right now, let's see what you've got. can you make sure the flex ability -- the flexibility in this pandemic emergency purchase program does not get folded into the asset purchase program next year? tom: the smartest thing i've heard, off of sabbatical, just getting back into it, risa, you talked about the pendulum of the s word -- lisa, you talked about the pendulum of the s word. lisa: just to be clear for jon starts rolling his eyes at me, it is hard to talk about stagflation when you are looking at a gdp growth rate of 5% in the united states. it is hard to call this a dismal backdrop economically. however, this dynamic of peak margins which savita subramanian was talking about

in about 45 minutes, the ecb joins in. tom: everybody is going to hang on every word of the press conference. you are expert on it. but the press conference may have some real value. she's got to change the dialogue in what way? jonathan: we should get some understanding about the pace of purchases. 30 minutes past the next hour, it is the news conference. at the start of the news conference, you will get some forecasts just in terms of what they do with their outlook for inflation. tom: we just heard from johns hopkins university. the pandemic is no different over there. she's got to be pandemic affected. jonathan: that is the story for the pandemic emerges the purchase program. the key is emergency. are we still in the emergency phase of all of this? do we still need a program that bag with that much flexibility? that's the conversation they will have in the governing council and a news conference with journalists. tom: but in manchester city, they will have 30,000 people in the stands, one thing? jonathan: you had to go

i think the fed is further ahead than the ecb. we think somewhere in november there will be mentioning that is implemented the month after. behind that, it will not do anything that soon and i think you still have this tailwind for european equities. alix: where in cyclicals you want to go? maarten: i think we have seen weakness and materials over the last two months. they kind of traded sideways or lower. materials have been affected by the fact that there was worries about chinese growth and the strong measures that china takes whenever there is a covid case. that kind of disrupts many things. i think we will see a gradual improvement. we will look at that and price action as well. china is going to come up with some benefits for smaller or medium-sized companies and more infrastructure spending. these things will bode well for european material stocks. after having had a pause for a month, month and a half, underperforming the broader market, when growth basically is confirmed to be strong still in the u.s. and china, it is a g

no major problems out the ecb today. but they have pushed out the hard discussion, the hard decision to december. i think the problem for investors is when you asked what the ecb are now trying to achieve, it is a step back from what we heard seven weeks ago. we knew that the goal was we are defining our inflation target in a different way. we are determined to get back to target. now i think there is a risk that investors look at this decision today and say, hang on, maybe this is a taper, and maybe they are not as committed as we first thought. so it fuels confusion, i think, and a risk of misunderstanding as we move towards that december meeting. taylor: what does this mean for all of the signals central bankers are giving us about peak growth in behind us? what you do with that in terms of a market perspective? hugh: i think that means that the easy gains in the equity market are now likely behind us. we still see scope for further upside, but i think it is a bumpy path as we head into the winter. really now, you are

here's the ecb's christine lagarde earlier. ms. lagarde: the bond space in the recovering euro area economy is increasingly advanced. output is expected to exceed its pre-pandemic level by the end of this year. with more than 70% of european adults fully vaccinated, the economy has largely reopened, allowing consumers to spend more and companies to increase production. taylor: joining us with the latest, mario taddeo, who is outside the ecb headquarters in frankfurt. i am curious, from your perspective, does this feel like a stronger economic story or an inflationary story? maria: i think for me, it is still a story about a very dovish ecb. going into this meeting, we spent two weeks talking about the hawks on the council, all of them saying we worry so much about inflation pressure taking hold in the european union. but if you look at the press conference from christine lagarde, she sounded as dovish as in every meeting and the pandemic. when it comes to inflation, she was cleared with knowledge we are seeing prices climb, but con

what do you expect the balance of the ecb to be? antoine: the hawks are becoming increasingly noisy, and the result was a communication tight rope to walk if they want to taper that program. i find it interesting all of your guests earlier thought there was no case to be made to withdraw accommodation, and we might have new inflation forecasts next year. how do they communicate reduction in ppp? and how are they communicating with the current spike in inflation? mark: my colleague this morning wrote a note arguing the next six months bunds will underperform treasuries. treasuries have already priced the taper later this year from the fed, but bunds have not priced that in, but might be coming later this year. what are your thoughts on that? antoine: i do agree with the view that six months in my opinion. that challenge the ecb has around tapering is a risk. the decision shows the disagreement around this. that could send yields higher. the more hawkish the reaction, it will send the ecb back to the table. it is not a long-term conce

francine: what you say from the ecb -- expect from the ecb? you are looking at -- when you're looking at italian bonds, they are looking narrower. does that make sense? tom: in the end, it is compression. if we have more ecb stimulus into the market, we will have spreads low across the board. we expect the bund at -50 basis points. then also we have the market compressed heavily but also the chance of credit spikes is limited because countries are been helped at the same time. the ecb is going to be here for longer. we expect extensions. the market at the moment wishes for more inflation. if you look at core inflation, it has not been going anywhere. we expect to be in a lower scenario that is priced in a the moment. francine: do you worry more about deflation or rapid inflation? tom: deflation on that side. especially in europe, there were more worries on that side. central banks are so closely involved now with markets. the chances they would accident lee raise too quick is slim. -- excellently -- accidently raise too quick is slim. for us,

the ecb slows the pace of bond buying,

there is apsley no reason for the ecb to rush. the total envelope is largely deficient to continue buying at the current rate. the balance of risk is a dovish surprise. could they slow it's a below 60 billion, which seems to be the consensus? i don't think so. it makes no sense. it would be a big mistake, a big risk at least. in terms of communicating this kind of decision. you know, convincing the market to not taper before the end of the program, which is a very different decision to make. guy: as taylor was mentioning, there is a debate it seems to becoming increasingly public between the hawks and doves. maybe as you suggest, the doves do more tomorrow. but the debate is starting about what happens. it is less to do with the paper and more to do with the app program, the longer asset purchase program that has been in existence pre-pandemic. there is a suggestion that with inflation starting to run as high as it is, that is what we should be thinking about right now. we should not be thinking about taking flex ability from the

the ecb meeting, inflation will be a debate. it is possible they may raise the gdp forecast for the rest of the year. whether they begin to tailback their programs is increasingly likely if momentum in the economy looks good. mark: they raised the gdp forecast and talked about pulling in their pet programs, but these are incrementally hawkish moves. will there be any change in the scenario in the next 6-9 months were the ecb is perceived as hawkish and a threat to equity markets, or do they have a near permanent tailwind? marcus: i think they are in the same boat as the fed, and they have to be careful how they communicate. we are seeing the effects of that. at the moment europe seems better positioned than many regions because of higher vaccination rates. all of these variants create huge risks on the horizon that make it difficult for central banks to manage. anna: i'm thinking in the european context, but it has a lot of relevance to the united states and what we heard from jackson hole last week. how much does the taper disc

are you excited about the ecb this week? will we see anything exciting from the ecb? chris: i find it hard to get excited about the ecb. clearly movements are happening. we are seeing lots of comments from various ecb governors. you touched on them in recent weeks and it looks as though they're willing to move towards starting to change their pandemic, their pepp program they have had in plaisance q2 last year. i think it should be quite interesting. into that we get on when they start the tapering. the fed is where the main action is but isaac this could be one of the more interesting ecb meetings. we are looking forward to it. guy: no chance the ecb does anything on tapering before the fed. chris: will they taper before the fed. a good question, absolutely. i think it is a bit of a tossup to be honest. it is interesting what happened with the market chatter after the payrolls on friday, clearly pushing back on that taper narrative in the states by a meeting into november. whether they start before the ecb, who knows. what matters is when they start between the two o

what is expected from the ecb? >> that's right, brian you can see from behind me that there is a bit of cautiousness into the ecb meeting in a couple of hours time. handover from asia was weak. that is why you see red. ftse 100 down 1.3% 7,000 is the level to watch there. it is a key level. we have been around there for the last couple months cac and france is .50% and the under performer for this week, the xetra dax. down ...40% on trade numbers. the issue is the election in a couple of weeks time as you mentioned, big day today when it comes to monetary policy we are watching closely what the ecb decides to do. they won't deliver the latest rate decision. in a couple of hours time with two key questions that are set to be answered number one, whether it will tweak the pandemic emergency purchase program and whether it will raise monthly asset purchases. investment banking analysts are thinking it will remain unchanged. also, brian, don't forget they will release the updated growth and inflation forecast it will b

i would imagine the ecb is celebrating that. they have done a worse job of hitting their inflation targets than the fed has. i do not think that will represent a shift in ecb thinking or a concern they need to go ahead and pull away monetary accommodation quickly. it is just a reflection of higher inflation. it is appropriate, they had earlier agreed to buy more assets every month than they had expected and you're just ramping that down a little bit. i do not think it suggest they will continue to ramp down the purchases and i do not think they will suggest the pep program do to end in march will end, i think they will keep that off the table. lisa: you think this is basically a bluff, the ecb members who say it is time to start talking about tapering? megan: i think this is a tweak we might see if they go ahead and do this and do not think it fundamentally means the ecb is thinking about inflation or economic growth any differently than they have been. jonathan: megan greene, always good to catch up. megan greene of the harvard

does it make a difference to the ecb? it has been relatively tame as of late, but there were periods, certainly under draghi, when it became a concern. silvia: i think for the ecb, this is not a concern at the moment. one focuses on inflation. supply bottlenecks will be there for the next few months, but what is key is what happens to wage growth. so far, we have not seen any second-round effects from the acceleration of inflation. euro area is about to start to wear the end of the year, according to our forecast. but wages have remained pretty lackluster in terms of growth rate. we need to watch what happens with wage negotiations next year. our view remains that the slack in the labor market continues to be absorbed, but at a pace that will not imply a strong increasing wage growth. matt: thank you for joining us, silvia ardagna, talking about today's ecb decision, her expectations for the economy. employers divided over whether to require vaccinations for employees. we will discuss who is in who is not mandating the ja

the ecb decision just around the corner. tom: i don't know if it is a big deal or if they will do anything. i have to admit, this is where lagarde gets tested at the press conference. does she want to be assertive? i have not observed that. jonathan: the risk today, a reduction in the pace of

i am not saying that the ecb will raise rates over the next three years. what i find a bit complacent is the fact that the market is currently pricing a zero chance of that happening, and that is the bit that i am actually finding a bit complacent. and right now, we know that rogues is rotating towards europe. you can see that in the relative pmi's between europe and the u.s. you also have the next generation eu funds that are going to be put into work and potentially going to start helping growth even further, therefore narrowing the output gap and putting some pressure on inflation. i find it weird that we have zero chance by the market priced in that the ecb and the next three years will do nothing at all. jonathan: such an important point. good to catch up. there's a difference between having a base case, maintaining the base case, and adjusting the balance of risk, the probability around that base case. clearly there is some risk in the mind of vasileios. lisa: that there is a 0% risk priced into the market, that alone speaks volumes. jonathan: total

jonathan: the ecb should not disregard the risks of two fast inflation in their ecb meeting next week. tom: lisa, please take over, inflation is out of control. lisa: the idea is that you have seen a lift on european yields over the last few days following the faster than expected inflation trend with a number of officials coming out, frankly, saying perhaps that this does affect the tapering discussion and going to the point earlier that we will end up having a meeting -- jonathan: this is some real dissent and you have got to have this kind of conversation. the bank governor out this morning was making some headlines and saying the following that the inflation jump was temporary and what seems to get the most play at the moment is the hawks and perhaps that speaks to the moment we are in right now. tom: john, i'm going to say that life goes on away from the suits in the ties and the fancy phd's. yesterday i believe it was the 9000 count for a small firm with amazon listing 4.1 percent according to reuters with 55,000 bodies out there. that way more important. jonathan: speaking to t

way over the base case for the ecb. where is the most dangerous level of inflation that would endure and means the most to the european data? france, germany, or spain? where are you worried about the stickiness of inflation? good morning. >> germany certainly expected to be among the highest, around 4%. i would say that is not so concerning. there are significant base effects within that inflation from the lower prices last year that ended in december. by the time the january data comes out, we should start to see inflation fall. i think the concerns about inflation staying high are the supply and demand shocks which we are not completely certain will wash out. so, oil prices, gas prices, i think over the whole of winter, there are concerns that they could stay high and have an impact on households. while businesses were energy sector companies are going to increase supply, i think we are likely to see high gas prices overwinter in something like a significant cold spell likely from the east in 2018 and then a cold spe

i think right now everybody is so nervous about an earlier taper by the ecb, and the ecb quick to say it is not true. rishaad: you're going to have a very busy week next week. kathleen hays, bloomberg's economic and policy editor. yvonne: and we look at allegations that the current head of the imf when she worked at the world bank pressured economists to boost china's ranking among global markets. this is bloomberg. ♪ yvonne: the imf managing director has been called out by her former employer, the world bank, for applying pressure to boost china's ranking in a report of global economies while she was ceo there. rishaad: let's get to bloomberg's imf and world rank reporter, eric martin. this is quite a revelation. if it is proven to be true, where does it leave her? eric: absolutely. in the last few minutes, the last hour or so, we have seen the first statement that i have seen suggesting this could be an existential threat to her continuance as managing director of the imf. there republican congressman from arkansas, member of the house financial services committee, who says this a

going into the weekend, the ecb did not rock the boat. what is your take on the way the messaging was handled? maybe that was quite something to pull off, to cut back on those purchases even if it is just a modest trimming. to do that, but not spooked the market. mark: they have done a great job. i wanted to get excited about the ecb meeting, but they have made it a nonissue and that is their job. they should not be rocking the market. this is an excellent job of communication. whether to call it a taper or not is not relevant. the ecb is extremely dovish, and yes, they needed to tweak things. the ecb balance sheet is crazy and they do not need to be buying so many bonds this time of year. it does not matter whether they are calling and tapering or not. it leaves a lot of flexibility for the future. the ecb has done a great job, but given the inflation expectations, for most of this year, we are like, inflation is a u.s. threat, nem threat. it definitely will not be persistent in the u.s. europe has its own inflation problem. it's going t

the markets, do they need to price in a more hawkish ecb? >> i think any discussion around the tech program, tech emergency services program, should be viewed as operational. because there will be questions around what will happen when the program expires in march next year. in our view, the asset purchase program still needs to be stepped up. even though in the near term we see the transitory spike in europe, as we have seen inflationary prints, in the medium-term, the forecast will we will see the medium-term inflation to be materially behind, materially below the target of the ecb. it would warrant greater easing over the medium-term. if that should be compared with the fed, where any kind of a near-term spike in inflation can contribute to where it is not forecast -- indicating the framework. they could let bygones be bygones, which is my medium term inflation below target should warrant greater easing, and is one of the reasons why we are overweight european assets at this juncture. tom: that is one of the reasons you have upgraded it.

should the ecb start pulling back some of this stimulus? tim: emergency stimulus versus normal stimulus. when the emergency stimulus front -- i guess the answer is probably. for the ecb, they have a targeted end date and they can use that i think to massage expectations around the broader state of balance sheet. i do not think the hawks necessarily win out. i would suspect inflation will remain around 3% for the rest of the year. some of that is due to basic facts but also made last year, you saw some weakness in prices that will keep inflation propped up by thinking to the end of the year and that will give them a lot to talk about. will it make a meaningful shift in policy? i suspect not. nevertheless, the euro zone is pretty robust. we really like european equities on that basis. we like the euro. any hawkish rhetoric on the euro side should support the euro in our view. manus: in the same way as you said, it was a taper delayed but not denied in the united dates of america. tacos through your -- united states of america pay or talk us t

it's likely to keep ecb policy easy. ben emons thinks the opposite. they're already showing the impact of price power and that may have implications for decisions by the bank of england and the ecb. tom: dani burger breaking down the energy story for us, getting us up to speed. we heard from goldman sachs warning of the risk of blackouts in the street. danny just did a great job of breaking down where we stand. hout said is this risk now? >> i think in terms of gas supply, the question really is how much are we prepared to pay for it. manus: please continue. >> at the moment -- unless something is done about it over the coming few months, the situation could resolve itself if we have a mild winter. manus: what does the near-term supply landscape look like? asia is outbidding europe for lng. this strikes me as being a very tight market so where are we, and is it going to get a lot worse? >> we been following the gas market and for 22 years, we've never seen prices like this in forward markets. as we hit winter things could certainly get worse. if it's

the ecb is not. the power of china to disrupt that trajectory of raising rates, i wonder. >> if it -- if chinese markets are in the financial sector, that could postpone any plans any central bank might have of tightening. the fed is now expected to start some form of papering. in england, markets are pricing in a rate hike or two. we do not think that will happen. we don't think that will hike rates. the ecb is still accommodative. the ecb is discussing whether to go from a decision of maximum accommodation to slightly lower accommodation. again, central banks will respond. we know that. alix: it was good to catch up with you. thank you very much. coming up, we will have more on what is happening in the bitcoin market after china's crackdown. the chief strategy officer will be joining us next. what this means, china's crackdown, for the crypto industry. this is bloomberg. ♪ guy: this is the big -- alix: this is the big story we are following. crypto prices. we want to get a reaction from the corn

ecb will be in that market for a long time. tom: we have george goncalves with us, head of macro strategy. the screams like 2006. the ig market as well, is it a mirror of 2006? george: it is always hard to find perfect analogues for the past. can we abbreviate? i love hearing your italian. it might get quicker to the punch. it is another acronym for is a ton of liquidity. for the reasons why the fed has to taper it. you cannot blame the corporate's who were hanging and waiting for the supply season to open up. the spreads are super tight. we are stretching this idea of supply against demand to a whole another level. even what the markets would have a hard time digesting, rates lower. jonathan: fundamentals have been decent. we have to talk about -- i've no idea how you put a price on the story right now. corporate credit in america and in europe and beyond. how do you do that? george: you look at the whole community forecasting after the summer we have had and it has moved more tactical in nature. from economists, strategists f

most ecb meanings are not very exciting. inflation figures are high. producer price inflation was the highest going back to 1982 plus 12.1% year on year. we have core inflation at the highest since 2012. europe has a major inflation issue and we kind of ignored the issue because the whole debate about inflation this year is will it be transitory or not? the driver is seen as well it feature to wage inflation? we have been very focused on the u.s. because european labor markets are different and there has not and that flexibility, that massive removal from the labor force to move back in. there is the general view that the inflation trend is more of a u.s. problem, not a european one, but may be a european one as well. this is the week will be -- we will be talking about a given that several policymakers have been hawkish lee saying that we can remove this kind of emergency stimulus that they are -- hawkishly saying that this is the emergency stimulus that they are looking at. anna: different dynamics, different labor market behind it, different structu

pretty much everyone is forecasting no change with the ecb. tom: i look at three moving average studies and when the three averages come to a point, that describes stasis. we are not there yet, jon, but give it a week or two. jon: it is the story of the bond market. good morning to you all. we will try to make it a little more exciting as the show progresses. yields pretty much where they were last friday and the friday before that. equity futures down. a little bit of a lift in the euro. lisa: it has not been the most exciting week. this looming credibility crisis among policymakers. it all depends on policy. that is what we are looking at. this goes with respect to monetary and fiscal policy makers. the fda panel is meeting about vaccine boosters, whether to recommend everyone get vaccine boosters. pfizer says, everyone get vaccine boosters, we also make them. some scientific advisors from the fda resigned because they did not think that was enough evidence to support that. kailey leinz said it is quadruple witching day for markets. the seco

finally, ecb rate decision on thursday ahead of friday's ppi figures. back with us are subadra rajappa, collin martin, jim bianco. thursday, is that a live meeting? subadra: it will be an important meeting, somewhat tricky for the ecb to thread the needle on trying to announce some sort of reduction in volume of asset purchases, as well as start discussing how they will potentially start tapering asset purchases sometime early next year. i don't think they go too much into the tapering part, pandemic program to the asset purchase program, but there are a lot of tricky communications they need to get through index thursday's meeting. jonathan: every meeting in those conference has been a total snooze. i hope that you are right because we will have full coverage here on bloomberg tv. let's get to the rapidfire around. three quick questions, three quick answers. the 10-year yield is at 1.33. what is first, 1% or 2%? subadra: that is a tough one. i will say 1%. jim: i agree. 2%. collin: 2%. jonathan: taper announcement, september-december, or november? suba

david: yes, the ecb is on tap today. the broader story when you look at this next graphic here and the reason we have that, you will find out in a couple of minutes because our guest is here with us in the studios. if you remember the bond markets going back decades, there you go,. does it taper really matter? we are in the midst of starting a tightening cycle. do we get an end to this trend? rishaad: that is a dilemma for the federal reserve as well. when do they start easing on the bond buying plan that they have? according to one fed president, you have got to also, down the road, have a bit of admonition left. >> i would -- have a little bit of admonition left. >> i would love to see us sooner or later start taking our foot off the accelerator, because i think the longer we make these purchases for longer than necessary, i think it may actually make it so that we have less flexibility down the road. david: our next guest, we alluded to us a couple of minutes ago, believes tapering will not affect credit markets, but

euro area inflation and the 10-year high is what we will talk about when we talk about the ecb. u.s. consumer confidence, a six-month low, but not just a six-month low but the -- but the biggest one-month drop in 10 years. these are based on servers, the consumer response to sentiment numbers, and apparently people are telling them that yes, they are more nervous about the delta variant. they are not worried about the labor market, at least not yet. here is something that you could see pretty clearly if you look at south east asia. you can see that countries that were already below 50 are further below. korea is holding up pretty well. taiwan is holding up pretty well. this is the question -- how much worse does this get? is this just losing a little ground? this is what investors are beginning to wonder about. certainly something central banks are watching very closely as well. david: it is no coincidence that korea and taiwan, to your point, are among the best performing markets right now because it is where you are seeing growth in demand. you mentioned europe a little bit. i

tom: the ecb is to discuss raising regular qe when the ppp program ends. this has been the question. what happens post-pepp? you have spoken to christine lagarde about this. other lines from the ecb, it is more likely inflation surprises on the upside. francine: because the ecb is split into hawks and doves, we have seen a lot of countries trying to go for a more dovish -- a more hawkish stance. this is emergency programming, it will not last forever. this will be significant looking at the fed today. tom: coming up, the u.k.'s green bond debut has smashed records. we are going to get the details. more on that next. ♪ francine: welcome back to the market open. here are your top stories. ever grand investors -- will repay one bond interested tomorrow. it is fed day. u.s. futures fluctuate ahead of the decision. they are expected to signal a reduction in stimulus. it is four days until the vote in germany. the chancellor angela merkel campaigning in the race. we get the latest from berlin. a lot going on in the markets. the fed, china, the markets are caug

they raised the ecb forecast for 21 -- 2021 growth. >> it is not tapering. what we are doing is recalibrating this. this is the pandemic emergency purchase program. >> the fed president says they are selling all of their stock holdings by the end of the month. this after equitable concerns about their trading activity. they released nearly identical statements to the fed president. both said they will invest in diversified index funds or cash. about 200 foreigners flew out of afghanistan on a commercial flight from kabul's airport. it is the first large-scale departure since they ended their withdrawal at the end of last month. the flight marks a significant breakthrough in the rocky coronation. global news -- global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> still to come, china ever grand is said to have received the green light to reset the terms of his debts with banks and creditors. we look at what is next with the deputy general ma

going into the ecb, euro-dollar unchanged. lisa: i'm glad you picked up on that yield going higher and i wonder how much is that to do with structural issues like supply-chain disruptions. that will be what is in focus today. angela merkel is kicking off the iaa mobility trade show. this is not an auto trade show. this is a mobility trade show talking about all the things going into mobility, which highlights all of the supply constraints that have hit the auto industry hard. you see that when you look at shipping costs. you take a look at the cause of shipping from shanghai to los angeles come a record highs. you have people complaining that you have record delays in terms of getting supplies. how are they planning to remedy that? when we -- we will be hearing from the qualcomm co shortly. today, bitcoin becomes legal tender in el salvador. you have people coming out, "it is sex a pretty dangerous." to be, how much this intermediates the intermittency's. i think that is really the point. at four clock p.m., president biden is

maybe on a different trajectory when it comes to the ecb. breakevens higher here, not really moving anywhere in europe. real rates moving higher here, not really moving in europe. i wonder what kind of relative opportunity that might unfold. winnie: that is a really good point. in the u.k., you obviously have compounded headaches related to brexit, with supply chains and labor and inflation. i think it is important to consider that the fed is the really significant driver of global monetary policy. the u.s. markets are the most liquid. they are the largest. when investors are considering global relative value, particularly in fixed income, i think the u.s. is going to lead the way because a lot of investors are viewing the u.s. markets as a cash surrogate right now, and really keeping a keen ion the fed, and just expecting a lot of the other central banks to be a bit more of a follower, despite the fact that we have seen some hawkish messaging and tightening from some of the european central bank's, from some of the em central banks. it is a

the ecb has cancelled the joint tours of the men and women's sides to pakistan next month. it follows a move by new zealand cricket to abandon their visit to the country on friday on security grounds. but, as patrick gearey now reports, england's withdrawl is to protect the mental and physical well being of the players. in pakistan, wherever and whenever they can, people play cricket. the problem is getting visitors to come and join in. problem is getting visitors to come andjoin in. it'sjust problem is getting visitors to come and join in. it'sjust got much tougher — as new zealand were on their home having cancelled a tour over security concerns last week, now england announced they won't be playing scheduled men's and women's matches, theirfirst playing scheduled men's and women's matches, their first games playing scheduled men's and women's matches, theirfirst games in playing scheduled men's and women's matches, their first games in the country in 16 years. the cricket board said in a statement... it's now more than 12 years since the sri lankan team bus was attacke

there's no fears of paper, either from the ecb -- of taper, either from the ecb or the fed. >> i think they will announce taper in december and start in january. >> we know for a fact every time some the goes wrong, they come back with even more policy stimulus. >> there is a serious debate going on, and they have agreed to disagree on taper -- to disagree

the ecb on one side, the fed on the other. euro-dollar 1.1849. it is not about divergence of the data between europe and the united states but convergence between central banks, the reaction of function between the fed and ecb. euro-dollar looking for a move down to $1.14. tom: i saw matt in one of your other properties yesterday. it is an outlier call. this way or that way, it is the scale of the moves. nobody is ready for four big figures. jon: the debate is wide open. you lost me, every single morning. where is the dow? >> oh my word. jon: that's the price action. >> the macro story has pushed folks to the sideline. as far as some of the individual stories, keep an eye on madonna. the company did release results from the study of using its vaccine as a third dose booster shot and will seek approval from the u.s. and europe. another story, this is baxter that makes ivs and infusion projects. they are going to buy hill. baxter approached this company. shares up about 3%. the price is 156 on the yield. there is a lot going on in the software spac

baby steps in the exit, still moving, and other central banks in the ecb -- thanks, like the ecb, are telling a different story. it should always be in the price but it is enough to get you grinding higher on the dollar or buying the dollar on every dip. tom: there are several doubts out to 2024 in the vicinity of 1% or less. these are people that do not buy the vector described by the dot plots. what does the dollar do if we are in the vicinity of the seven dots two years out? daragh: well, then that should limit the amount of upside we get. tom: so you're limited -- i don't mean to interrupt but this is critical. you are limiting the amount of upside versus the gloom of an ever weaker dollar? daragh: yeah. i think so because -- look, it is a relative story at the end of the day. can we get to a point two years out where the fed has not been able to do anything much with rates? just kind of put in 50 or 75 or whatever. that most likely reflects an environment where everyone else in -- else is in the same boat. the ecb, two years out, they might be doing that. one dollar isolation get

looking at what the ecb did, we are also looking at concerns about growth and also the delta variant. that was really responsible for what happened in the state where we saw declines for the big three markets. dow was down and so was the s&p. the hong kong market leading the charge, and it is what david will talk about in a second, responsible for the move up. commodities very much in focus. let's get to the biggest movers on the hong kong market. there they are. tech shares responsible for the bulk of the moves. david: a-based rebound we are seeing, if it's on platforms, game makers, hardware -- resuming trade over in malaysia. the news is it has been allowed to resume exports to the u.s., and its stock is going through the roof. at last check, it was up. currently up 9.4% -- well, 9.7 percent in kuala lumpur. oil going down and industrial metals going the other way. rishaad: the chinese coming out saying they released oil, sending the oil price down. it has leveled off. this is a new session, but we are at 68 bucks for the wti. looking out aluminum, we are at 13-year highs at the mo

what we are seeing is the ecb or the market is expecting the ecb, some form of acknowledgment with what other central bankers are doing. and realistically, particularly in europe, you've got the energy crunch in gas prices soaring. the ecb must, in one way or another, ease market concerns in that regard. and this is where we are right now in terms of that. tom: in terms of how this overlaps in the commodity space, i noticed iron or today, the oil picture looking a little stronger as investors weigh some of the implications. he also have to weigh chinese recovery. that's the view for many. how is this view playing out? nour: i was thinking crude was going to struggle this year. i've been proven wrong. i'm happy to admit that. china had their auction to sell some of the reserves. realistically, those fell short of expectations, and they're going to sell more as we go. if you look at the rally for brent, the global benchmark for oil, it's been stunning, up almost 50% this year, trading at 40% just last year. there are expectations for it to hit 80% and 90%. this puts crude in a nice positi

as we inched toward that ecb -- as we inch toward that ecb. >> let's talk about fundamentals. the openings for the month of july, a new record high north of 10 million job openings in the u.s. economy as these frictions do persist. i am looking also at the participation rate and how much this really bleeds into a participation rate that just won't go back to where it was. bond sales continues. $38 billion of 10 year notes. $120 billion of u.s. debt this week. i'm very interested to hear what john williams has to say about the pace of the economic recovery, given the backdrop of delta, given the rolloff of some of the fiscal concerns. he is one of the big three in addition to jay powell. right now, the fed balance sheet, $8.3 trillion, a record, and probably going higher. jonathan: stay on that. even if they do start to taper, even if they completely unwind, that stays exactly where it is. >> i'm struggling to understand this argument that the removal of accommodation is basically a tapering. it continues to expand, just at a slower pace. even though we do have economic growth

the ecb refuting the ft article. let's turn to the latest on troubled developer china ever grand. it is said to be ready in a fire sale of unsold property as it seeks to eliminate a liquidity crunch. payoff angry investors and avoid an outright collapse. for the latest on the ever grand saga, chief north asia correspondent, stephen engle. one more day, one more headline, what is this about? stephen: a fire sale and what might describe as a dumpster fire for ever grand because they are having a severe crunch of setting off creditors, fending off investors in wealth management products, 70,000 of which were sold to the tune of $6.2 billion. that needs to be paid back and people are getting angry and they are going to beat -- they have offered three options. you can get cash but only 10% of every quarter so it will take 2.5 years to get back at all because the company might collapse. their preferred option according to sources of evergrande, not necessarily those jilted, is selling off unfinished properties at a severe discount. up to 28% for residential properties. 46% for office-ba

the federal reserve would agree with the ecb. i think if you want to a cup this affects market and get some clean directional trades on the likes of euro-dollar, we need to see divergence between central banks. just given the way things are starting to set up for next year, maybe we start to see that between the ecb and the federal reserve to the back end of next year. tom: i think they are both massively data dependent. i get where you're going, but i don't know how you do that if you don't have a plan, if you don't have a belief. right now they are all just staggering to the next set of economic data. jonathan: you have to say the ecb will be much more reluctant to raise interest rates than if of ever reserve -- then the federal reserve. lisa: i also want to note come of this is one of the biggest economic experiments in terms of how you deal with the labor market. clearly there is more slack in europe following what they did to keep people employed, versus the money spray they used with checks on households. have got lots of s

saying that the language used by the ecb does risk the possibility of fuelling the idea that the ecb is tapering they did not announce a taper policy that would be due to moderately lower purchases most think that probably means $70 billion euro a month, perhaps 60 the idea is that they are reducing it and staying there for now and would use more tools, if necessary. quick headlines. they just started. she said the economy has largely reopened but the delta variant could delay reopening. we expect the economy to rise to prepandemic levels by year end and pressures are building slowly they are not that concerned about recent pressure. talking about the idea of more vaccination and consumer spending more while they reduce the monthly spening. >> talking more about all of this facing the challenges and the monthly federal reserve. the head of the firm's global allocation team. we'll talk about george in a bit but let's talk about what the ecb is doing and what jay powell is thinking? >> i think the ecb is dg the right thing. they are moderating these back take that number down and you a

maybe at the end of the day, the ecb will be accommodatiaccommod. maybe the bank of england. what it comes down to, julianna, is the central banks and what they are saying and all of them are keeping the foot on the accelerator, on the gas accelerator. >> that is fair, joumanna, and tying it to what corporates are doing. i think one of the key questions is also will companies be able to sustain the high margins we saw in the first half of the year if we see companies forced to pay up an increased wages, to what extent will that eat into corporate earnings a lot to think about from the corporate perspective, but a lot starts with the central banks and what they do from here on out. you will go through that with the ecb this week and the federal reserve later this month. >> you mentioned corporate activity we did get corporate news from europe let's bring that to our viewers attention. softbank and deutsche telekom will become a strategic partner in the german group. agreeing not to sell before 2024 it will acquire 45 million shares in t-mobile with the intention of getting 20

coming up, area banks are said to reopen for investors as the ecb bust bs dividends cap expires. -- ecb's dividends cap expires. that is next. this is bloomberg. ♪ tom: welcome back to the open. you are looking at gains across the european space. there and that u.k., gains -- here in the u.k., there are gains. we have the central bankers coming out around the question of inflation. jay powell is reassuring us that things will remain transitory, he does not know for how long or how high prices will get. they're looking at a similar message from christine lagarde and the boe. we have the markets note pricing in free rate hikes coming 2022. we talked about the challenges. francine: inflation. a senate majority leader says lawmakers have reached an agreement to fully -- to avoid shutdown of the u.s. government. the debt issue still looms. what can you tell us about the deal that has been reached in the senate? >> it sounds like what is going to happen is that on monday, democrats try to bring forward a big deal that would fund the government through december 3. that was blocked twice by rep

going into the ecb tomorrow we always talk about risk. talking about risk we are nearly always talking about downside risk. the number one question is what is the upside risk? what's the risk that things go right? that's been the most unappreciated risk for much of the last decade. lisa: this is where you will tweak me today because this is the issue. to me the idea this has been the issue, people missed out on the upside. if in doubt, buy. that's how it has been over the past 20 years per what breaks that paradigm? jonathan: we can do that with the northwest mutual management chief. investors in these three camps they fall into. those worried the economy is growing too fast, those were the growth is peaking, of those worried that stock valuations are too high. are you in any of those? >> no. we got to may or june and economic growth was strong. covid cases were declining and we also figured out about what was next. people were worried about those three things occurring. that's where the worries were. see each one of those subsiding as we