Companies we are falling following. The way stocks are positioned today, a lot of the focus is the positive news about the vaccine on the positive news by the vaccine and chart and trials resuming. Bonds in spain, portugal and france rising. Yields on german debt steady. Lets get to the first word news in london. The ball is in china posco or to seal a deal. Pot court chinas court to seal a deal. The block is stepping up its demand the china open up its economy even more. Astrazeneca is vaccine trialsnecas vaccine remain on hold in the u. S. As regulators examine a side effect suffered by patient. The interruption raises concerns about one of the fastest moving experimental shots being developed is seen as one of the likeliest to reach the market. President trump will preside over the signing of historic lomatic deals between speaking exclusively with qatars foreign minister ruled out their country following suit. Global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Coming for are citigroup employees. Pledge duringier the coronavirus. Joining us is dani burger. How steep can we expect these cuts to be. For now, this first round of job cuts we heard about is not too steep. It is 1 of the total Global Workforce which is just over to that 200,000. When you look on a net basis this year, they have hired 26,000 employees. We wont see a drop in employment when we look at the net outcome. Anyone losing their job, there is a lot of pain that comes with that especially in the middle of a recession. As you mentioned, before they had pledged they will not do this, saving their employees some concern as the pandemic kicked off. Reason to do this to get their cost under control. They are expecting their revenue to decline. They did well in trading, we saw this throughout the year. But you think about the low Interest Rates, piling loan losses. Consumers spending last. That is a recipe to pull back on costs. We also learned yesterday that citi is possibly facing regulator reprimand over there risk control and infrastructure and control system were not up to snuff. Francine thank you so much. Lets get back to the markets. Bill says investors should play defensively. He spoke in an exclusive interview with bloomberg from newport beach, california. I think demographic influence continues, globalization is in there. Globalization, which is inflationary. It course the pandemic has not helped globalization. Extent ive got to go to your memo today where you talk about 6 trillion deficit. ,e heard some other sources claudia has made clear we need much more deficit coverage. Do, what your world does the bond world do if we get out to three, 3 trillion, 4 trillion, 6 trillion deficit . The bond world at the moment is melding of the fed a melding of the fed and treasury. It sounds derogatory, but the dog and the treasury is wagging it. , thee treasury wants money fed will provide it through mmt and purchases. Do i endorse that, no . Is that a constructive thing down the road, probably not. We will have to see. It has not been in japan. The fact weve have melded fiscal and monetary. Deficits can increase, but we are at 100 of gdp already. Point, as others point it orhe fed stays out of they are influenced, inflation will come back in any case with Financial Assets and commodities and it will come back in another form. I recommend i remember the day when you recommended the dividend, the bond world fell off its chair. Now we have permanence of growth financial repression. Do we have an asset bubble or bubbles plural because we have your financial were oppression your financial repression . I think so. We have an asset bubble because Interest Rates are near zero and made parts of the world and at least my way of thinking, through dividend discount models and so on has been slated growth slots stocks and anything that have profits far in the future that are going fast. Repression, 80s something that has been swept under the rug not only by powell. It is something that can be fixed as a leader at a later point. Prior fed chad chairpersons have focused on tonvigorating the economy the extent retirees and to the extent Pension Funds and savers are being hurt, that can just wait. But at some point it can and i think we are beginning to see that. We dont have to talk about prudential or Insurance Companies or banks. We can talk about momandpop in des moines, iowa where they have no more savings and they are not able to earn money on whatever they have left. Year islem year by getting increasingly greater and i think ultimately that becomes of real chink in the armor this financial conflict. Was bill gross speaking to bloomberg. Coming up, we will talk brexit. That is coming up shortly. This is bloomberg. Erg. Francine this is bloomberg surveillance. Says china should open its market further. The representative said the ball is in chinas court. Andn other important difficult of the agreement, particularly areas, but one is Market Access and the other is sustainable development. We need china to move on these two issues. China has to convince us it is worth having a new investment agreement. Lets talk trade in the outlook for europe. Thank you for joining us. I know you have a big report looking at trade. When you look at china and the eu, how much of this trade relationship will get back on track into next year . Good morning and thank you. Becoming ever more such an important player in europe with trying to play a more Important Role in getting the main players back to the table. It is not something easy. The discussions have been ongoing for six years. Timing, be a good especially with the appointment of the new general director. Go back to the table and go again at a multilateral approach. Italy is an export led economy and an important player in the export arena, it is helpful in general for the global world. Relating to the report, that was our 14th report on the italian export forecast, china is playing a major role not only because its the most important market destination for our exports, but it is the most important driver of the recovery in our exports. We are seeing the second half of 2020 and especially getting stronger in 2021. Appetite toe more become less unilateral. If you look at brexit. Is there an appetite for countries to grow internationally again or do countries need to be more inward looking . I see opportunities at this stage. You are right when you say it will not be that simple. There are also opportunities, but there are always some threats. The elections in the u. S. Will be important from this point of view. Under a mr. Trump win, we know what the approach will be even though we cannot rule out change. Of course i am not saying in one day or two months, all the players will go back to the table and problems will be solved. The most important concept here that everybody understands that tariffs, trade war, trade tensions are the benefit of nobody. This will require longer time. Francine meaning that if we ave President Trump for second term we will have more trade tensions because this administration thinks it works . Still see big leaders across g7 countries do you still see big leaders across g7 countries . Is tariffs of view dont work. Administration, when they started at the beginning of 2017 with the threats of tariffs, they knew pretty well but for sure they dont work over the medium long term. They also knew they didnt work over the short term but they were the political message they wanted to give under the America First slogan. And now of course with the demic hit, pandemic shop when the pandemic hit. If trump were to win again, we could not rule out that there would be more tensions. Even though the facts are proving that it has not worked following that approach. Italy hasbelieve that a privileged relationship with china compared to other eu countries . Do you mean italy . Yes. I do not actually think we are really a privileged relation. China is an important market for us. Course, compared to the potential the Chinese Market does for us, we are lagging behind compared to our peers like germany and france. Maybe what we want to do is not the privilege relations, we want to catch up privileged relations, we want to catch up a bit. Francine thank you for joining us. Oil with, we will talk neil adkinson from the International Energy agency. This is bloomberg. Francine this is bloomberg surveillance. Uncertainty created by the pandemic is weighing on Economic Activity and hurting oil demand. Lowered its demand estimates for the third and Fourth Quarter of 2020. This week marks opecs 60th anniversary. Shift the balance of power from the u. S. The organization is 14 Member States and controls 80 of the worlds oil reserves. Lets get straight to neil adkinson, head of oil Industry Division at the International Energy agency. I could talk to you all day about what opec used to be and how they used to be able to move the price of oil by 10 with one sentence. Give me a state of the market. When you look at demand recovery, do you see it gaining momentum in the coming quarters . They did a pretty good job moving it in april with their agreement. Now at where they are where we are now, sentiment is certainly weaker. Demanda big rebound in and we are starting to see the demand recovery stalling. The resurgence of covid19 in europe and the buying of crude oil by china, there are some indicators out there that the market is losing a little bit of that. Instead of oil prices looking upward from 45 a barrel where they were stable for the last couple of months or so, Oil Prices Sink to seem to be looking in the downward direction. We are in for a tricky time in the next few months. What does it mean for opec . Do they need to return to deeper supply cuts . They started adding to supply, was that a mistake . I would not characterize it as a mistake. The deal was put together in times of enormous uncertainty. Getas a tribute to them to producers to join them and trying to stabilize the market. It does look as if the increase in production which was preplanned, a longawaited, no surprise to anybody, it does as if that is coming into a market as demand is starting to weaken. They would not have anticipated that when they first made these decisions. We will see if they decide perhaps an adjustment might be necessary. Its a question of more supply coming to a market that is weakening. , we heard theall market is going to get worse before it gets better. Do you agree with that . Said, demand recovery is stalling to some extent. We are seeing a higher supply. A lot of the Countries Companies we read about are being told to store oil. Market look as if the recovery is slowing. With it getting worse before it gets better, we can play word games. Francine when you look at what some of the companies have been saying, is there a danger oil consumption, even when you ,ecover from the Health Crisis it just wont be like it was before covid . Questionan enormous everyone is trying to get their heads around. Discusses and trying to understand the longterm impact it might be to the fact a lot of people are still working from home. A lot of people wish to continue working from home even when normality resumes. A lot of demand patterns out. The crisis in the aviation sector seems to be longer than we thought. Is a very interesting subject. Francine thank you so much. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Lets get to the bloomberg first word news with leighann gerrans. Tom j. P. Morgan thatsnn j. P. Morgan has the biggest u. S. Bank is urging more workers to return to offices over the coming weeks. The lender is also concerned staff are missing out on learning opportunities and being able to bounce ideas off each other. Portal sica tiktok teens not only has to pass debt oracles tiktok deal not only has to pass it has to when the approval of donald trump. Steven mnuchin said the government look over the proposal this week create a socalled tiktok global. It is not an outright purchase of the business but an investment in a newly restructured tiktok. Oppositionof russian leader Alexei Navalny has not improved further. The New York Times says the senior german official says the valley navalny plans to return to russia as soon as he can. It is being called an assassination attempt. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine . Francine now to the u. K. And Boris Johnsons plan to water down the brexit divorce deal has cleared its first hurdle in parliament. Senior members of the Prime Ministers party announced the move, but the bill passed by 340 votes to 263. The bigger battle is expected to play out when it reaches the house of lords. Joining us is jim oneill, of Chatham House, member of the house of lords. Jim, thank you for joining us. When you look at how much resistance there will be in the house of lords of this bill, do you think it will pass the echo jim it will pass . Jim i will be amazed if it passes. It is more difficult for the conservative party and the house of lords anyhow just because of the numbers, never mind when the cross bench, which i am one of, go that way. On this occasion, as we have seen with prominent conservative peers, it is going to be very difficult for this bill to clear the lot. What is the wider impact of the government trying to break International Law . A kind of states for itself in your question. Britain many, many brexit, arguably going back to my professional lifetime, is identifying things that can positively contribute forhe world, and standing the accepted rules of international behavior, particularly things agreed by independent legal settings is one of the things the u. K. Has generally proudly done so well in an increasingly complex world. And so if the u. K. Is now going to portray itself as a country thats prepared to challenge International Laws that it has played an active role in creating, that is going to change some perceptions of the u. K. , along with more persistent problems that relate to our generally weak Economic Performance and are low productivity rate and so on. Does it lose status, or could the u. K. Lose business because of it . Of the day, as we see with the main world of business, business is business. Business people, whatever they , cannot resist the and alwaysof return wait off the risk. But all things being equal, unless the opportunity is created unless the opportunities created are even bigger, i would imagine it would definitely impact the way people would think about doing business because countries wouldnt know, with the confidence they had before, that the rules sitting behind how they were conducting their relationship with the u. K. Were going to be persistently the same. It is kind of basic stuff. If you look at many credible indices such as those of the u. N. Or the world bank or ones i was involved in creating a goldman sachs, many of them often used government indicators , and the u. K. Often scores meddling and many others, but on things like that it has historically done pretty well. If this is going to set a perception that the u. K. Is going to behave differently, i think it is very much a turn for the worse. Francine how difficult a moment is this for first of all the the devolution . Does this have the makings of something that will rip the conservative party apart . Jim i think you have seen in the lead up to last nights debates and vote, and with the apparent abstentions, a pretty clear sign to the Prime Minister that there is some important conservative mps that are not prepared to just seemingly do as the whole of the cabinet does and just go along with whatever is presented. Against that, i rather strongly suspect that this is part of the same reoccurring play that we get with Boris Johnson and his apparent crucial advisor, Dominic Cummings. They like to challenge the established status quo, particularly when they think it plays well with the voting public. As you can see in the british newspapers, by and large this morning, this is being presented as taking on the ledger in brussels. I think they think they can get away with it in terms of forcing brussels to be kinder in negotiations. Maybe that will win and this will all turn out to be a bit of this,m in the teacup, but if indeed it goes ahead as a bill that succeeds, i think it would create lasting ramifications for quite a lot of issues to do with the u. K. , including aspects of how the conservative party functions, i would guess, and i quickly add, what do i know about the conservative party or for that matter, anything else . Francine you are part of the house of lords, your speaking two people and have a better idea of what is going on than most. Most people need to see this as posturing. What are the real dynamics . Do we have an understanding of what the end game actually is for the Prime Minister . Does he just want out without with wto rules . Of i think the posturing what i have just touched on is pretty clear, that this is an aggressive topic, and it comes out of the an aggressive tactics, and it comes out of the general playbook of the Prime Minister and Dominic Cummings and the e. U. Referendum in the first place. Of approachingay negotiations to a whole different nonconventional level. And it is basically designed to shock in the way this is doing, partially, including for the opposition people they are negotiating with to give in. What is really below it is more to do with state aid and other aspects of what they think they can then do on policy rather than anything to do with wto rules. I dont think that is really what they are after. Ensurennot genuinely that there are no problems with Northern Ireland being in the u. K. , but i think it is more than that. I think it has to do with state given the is bizarre, economy, it has to do with fishing as well. Francine jim oneill from Chatham House stays with us. Coming up, what shape of the economic recovery takes, as we continue the discussion with jim oneill. That is coming up next, and this is bloomberg. Francine bloomberg surveillance bloomberg surveillance this is this is bloomberg surveillance. Lets get to the Bloomberg Business flash. Leighann citigroup will resume job cutting this week, joining rivals like well like wells getting rid of the pause in layoffs. The account probably wont drop. Yearction will be cut this by 4 million units. Iny boosted orders anticipation of high demand over the holiday season, but manufacturing problems mean it cannot produce as many consoles as it actually wants. Bayer has settled thousands of u. S. Lawsuits over claimed its round up weedkiller causes cancer come after criticism the company was failing to uphold the 11 billion deal it announced in june. The settlement is marked as a significant step forward in this case. That is your Bloomberg Business flash. Francine . Francine thank you so much, leann. Astrazeneca vaccine trials may have started in the u. K. , but warriors reports they are on hold in the u. S. But reuters reports they are on hold in the u. S. The interruption raises concerns about one of the fastest moving experimental shots being developed, seen as likely one of the earliest to reach the market. Lets get back to covid19 in the impact of the economy with jim oneill, chair of chatham secretary. Commercial to the treasury. When you look at the kind of recovery we are seeing, but also the number of infections rising, is there a danger we go back into lockdown . Is there a danger that all the efforts in the economy will go back to square one . Jim i hope not. But obviously it remains ultimately the possibility. I think if you look at what a number of european leaders have said recently, i would interpret that is being very much a last resort. It is very interesting and france, where the daily infraction rates infection rates are above 10,000 now for the past few days. Background mccrone seems to macroiding a note seems to be avoiding that. Level, given the colossal scale of economic hits that we until the Second Quarter the summer took hold, you can see why. Of thehow some treatments have improved and we can reduce the scale of the size of health hits and of course the lossoflife, then until i will put it another way, until we see signs of a major rise in hospitalization rates and lossoflife, i think they are going to be very reluctant. For good reason many of which were articulated in the spring. Francine how will the Health Crisis actually how has the changed ouris economy . A lot of people are saying it will accelerate technological transformation and advanced esg, but are we going through a decade of misery before we get to these transformations . Ive got contradictory thoughts. I find myself in terms of the economic cycle, being quite a fan of a significant vshaped recovery. Every Economic Indicator i have been trained to follow, or virtually all of them for the past two years are all generally pointing the same way in so many countries. I think we will see a very strong bounceback in the Third Quarter all over the place and going into the Fourth Quarter. I am also still reasonably optimistic about vaccine introduction, which if that is true and i think there are four or five that could be brought into usage some stage by q1, and that would accelerate the recovery even more. So all of that makes me more optimistic than i still see most people saying, but there are longlasting questions about the underlying although there is a more structural outlook as to of course how we are going to pay, who is going to pay actually, doesnt mean much inflation risk . And linked to the question you just asked, can we move to a world where we dont have these colossal sociological, economic failures that the market system fails to address until we hit crisis. We willhopeful that learn to manage our Health Systems permanently better as a result of this mess, but that is simply perhaps me being an optimist rather than as of yet seeing any evidence of that. Francine should we worry about that as long as countries, as long as big countries can afford wait to worry about that for two or three years . Jim you know, i think i told you this many weeks ago, francine. I actually have become an even bigger fan of the idea of targeting. Gard i have written a couple of pieces about it. The fed at jackson hole is a step in that direction. Policymakers are extremely tempted and should be tempted to have a marginally higher inflation rate as the best way of reducing debt to gdp ratios, and i think that is a much more palatable choice than trying to time fiscal policy too soon and running a risk of what happens in so many places, particularly in europe after the 2008 target. But it is tricky because in my it might well be that the ,upply kin side of economies there is a risk that inflation could pick up more than desired, and that is something we wouldnt want. All these issues will continue to play out certainly in the months ahead and possibly the years ahead, and it means we are in for a lot more volatile macro picture for the next few years than we have been for quite some time. Francine jim oneill from Chatham House stays with us. Exchange, a heated donald trump and california state officials clashing over Climate Controls with the wildfires. That is coming up next. This is bloomberg. The dystopian future we have seen on screen for so many years where people need to travel travel space and time to to planets and shrink themselves down and started to seem less and less like hollywood imagination. The people most affected are our most vulnerable. Climate change is an equity issue. It is like u a hurricane slowly heading toward us, one we have been warned about for decades. For many, it has already reached their shores. We would simply have to look around and see the vast fires and smokefilled air here in california. Are we going to continue to be caught up in the politics of the day, or are we going to make the right decision for Environmental Justice . It is too overwhelming, or Climate Change is not real or it is too hard to tackle, so dont even try. I can almost guarantee you that that is spin coming from Oil Companies and petrochemical companies. While we have made important, progress, we need partnership on all levels of our government, to meet the enormous challenges that we face today. Francine those were some of the voices on the subject of Climate Change at the as the bloomberg green event kicked off. California environmental officials challenge the president on the issues yesterday. Take a listen. If we ignore the signs and put our head in the sand and think it is all about vegetation management, we are not going to succeed in california. Pres. Trump it will start getting cooler. You just watch. I wish i agreed with you. Pres. Trump i dont think science knows, actually. Lets talk esg and Climate Change with jim oneill, of Chatham House and secretary to the treasury. If you look at the fires and Climate Change in general, are we going to see finance investing, the general public being more mindful of what we are doing to our planet . Jim as you can probably see, im shaking my head after seeing that clip. Goodness me. Previousk it to the discussion, it shows you the significant changes we still have to make. We need to somehow advance our to provide theem right incentives to solve problems,nd economic and im very pleased to say in that regard that Chatham House continues to devote a major part of its resources to being on the forefront about measures to battle the sustainability of the planet, including economic incentives. We hope to spend a lot of time coming up with ideas about encouraging the Financial System and many economic actors in their own interest to stop this kind of thing. It is dreadful. That ae we also heard couple of chief executives at banks, including the chief executive of j. P. Morgan, that productivity amongst employees is falling because they are working from home. Thatyes, i saw you report as i was waiting to come on, from j. P. Morgan, jamie dimon. It is interesting because generally i have a lot of time for what jamie says about life, but im not sure i agree with that. Obviously it is true and at the core of the economist theory of agglomeration, and a lot of evidence comes with people mixing from me mixing with each other. Working in a small office like the one im sitting with now, never mixing with other human beings, that would ultimately be a real problem for creativity. But i think this is why we will probably end up with a lot more flexible working, and in that sense i would say the opposite of jamie, just the almost mathematical fact, that if you stop people having to waste so much time commuting long distances into big urban centers, five days or six days a week, and they can still contribute to the same amount of output, by definition, that is boosting productivity, and then might be one of the Better Things that comes out of the mess we are in. Much, jimthank you so oneill there from Chatham House. The markets are actually up. We will have plenty more on the markets. Bloomberg continues into the next hour. We look at gold, futures, and of course bloomberg green. Francine Boris Johnsons plan to water down the brexit divorce bill passes its first hurdle in parliament, but the Prime Minister faces bigger obstacles in the house of lords. Heated debate President Trump clashes with california state officials over whether Climate Change is helping cause wildfires in the region. And the ax falls at citi. The bank is set to resume job cuts, ending a promise to pause them during the pandemic. Good morning and welcome to bloomberg surveillance. Im Francine Lacqua in london. Tom keene is in new york. , i will spend a good amount of time looking at the banks, i know you want to talk about citigroup, we talk about possible mergers, or not, in europe, and we will spend a lot of time talking about brexit and the bill passed late last night in the house of commons. Tom i know you talked about it in the less our florida oneill, but i debt with in the last hour with lord oneill. This was a bombshell yesterday. It is being massaged by citigroup,