Stepping down after arguments over strategy, the bank prepares its search for his successor. Morning, under one hour until the start of cash equity trading. Equity markets under pressure. The futures picture shows relief. Ftse futures up 0. 4 . U. S. Futures point to the upside, up 0. 8 . Global stocks up 12 in november, the biggest monthly gain on record. Lets not forget that will me think about the losses yesterday and the rally he will maybe see today. Greens what we see now, a picture and it comes to the asian stock markets. Data from to take asia whether chinese or korean on the factory side. Be taking aems to turn for the better. In china a decade high for chinese manufacturing. Up on thed enthusiasm, and commodities in focus. Oil prices moving to the downside for a third day. No deal yet on opec and opecplus, and their plans for january. That will be a focus on thursday. Lets get a first word news of eight. Laura president elect joe biden has chosen janet yellen as his treasury secretary. The former fed chair was widely expected to get the top economic job. If confirmed, she would be the first woman in the world. She tweeted, the country faces great challenges but must restore the American Dream. Opec is delaying talks to give ministers more time to reach a deal after a long intense meeting on oil adduction broke down without agreement. The nations are discussing whether to increase production in january as planned, or maintain the cuts to help a rally in oil prices. Chinas economic offensive against australia could end up backfiring. Amid an ongoing spat, beijing has ramped up tariffs on a variety of australian goods. It is a warning for countries not to criticize beijing. It is adding to concerns about economic coercion and may end up pushing some asians closer to the u. S. 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. You what is tell going on in asia, this is a closely watched relationship between hong kong and singapore, and the extent we can open up a travel bubble. The travel bubble is delayed beyond 2020. That is not such a surprise. It is interesting to note in places where they have a firm control over the virus, it does seem to open air travel corridors. It was supposed to be a couple of weeks ago but was delayed. Juliette saly was supposed to be on that first flight. That coin climbed to another record level. Bitcoin climbed to another record level. It surpassed the highs of 2017. Cudmore into mark singapore. Is it a coincidence we see money out of gold at the same time we see money into bitcoin. . Are they traded in the same breath for investors . I read that this is the talk of wall street. Is hard to have a conclusive view on bitcoin. I have not heard much until recently that people are deliberately selling down gold to buy bitcoin. I think it is more that people want to allocate more of the portfolio, and bitcoin is seen as the newest and latest fad. Many argue it is the best one out there, and it is gaining institutional support. If you are allocating money rather than increasing gold holdings, you will put money into bitcoin. Im not sure we are seeing a rotation, but money in an older world would have gone into gold instead. In that way it is a transition. Warningry cohn was bitcoin could fail. Prices are at record highs. With the data through the asian session, some of the north asian Economic Data adding to the narrative that we are seeing a rebound. The chinese pmi manufacturing at a decade high. We get confirmation of what we already knew the way chinas economy is relatively rebounding from the earlier crisis, that is a positive. Mark you are right, it is not anything new but it is monster data that is positive and emphasizes a wellknown story. It validates or reinforces that china is at the forefront of the Global Recovery. Chinas excellent handling of the virus situation, how quickly it tackled it and got its economy on track. This data has come in the pbocxt that monday saw the add extra liquidity in the system that was not expected. Overall, the narrative that china will continue to perform will be a big theme for 2021, whether you are bullish or bearish, that is, knowledge. Anna what about the question about what responses on the markets live team, will the dollaryen next hit 100 door 1 100 or 110 . What is the thinking. Interestings most is how the dollaryen question is no longer clearly a haven play, because treasury yields are fixed at a low level. For many years, the idea of getting a risk adverse moment, you get a flood into treasuries that brings the yield down, and then the dollaryen comes lower. Because treasury yields are stuck at this level for a long time, dollaryen is not the obvious haven. People are addressing this question, and most people we know, clients, banks, strategists are very much in the see 2021ollar camp and will see a lower dollar. Tradeeople think 100 will before 110. I get worried when something is so consensus. Anna interesting the dollar view dominates. Rba,commentary from the saying it does not expect to increase cash rates for three years. Many people are trying to work out how in other parts of the world that the pandemic has been way worse, how long we sit with these low Interest Rates. , they rba is saying that are closer to normal life than many parts of the west. They are closer to normal life. They coped much better and have handled the pandemic better. Every central bank should give it isessage, whether about the guidance, i dont know why if you are a central banker, you would not say, we will have Interest Rates down here for as long as relevant, whether it is five years or 10 years. You can always say if we are in a Wonderful World that the situation has changed, the market is doing wonderfully, we are back to full employment, we will hike rates year there is no downside to do that if they can communication clearly. Thank you so much, good to speak to you. Mark cudmore, managing markets live editor. A strong pmi readings suggest conditions are looking up. We will talk about that further with our next guest. This is bloomberg. I desperately believe we need more stimulus, and more today. I would beg congress to go back to work and pass a stimulus bill this week. There is no time like the present. Dollars back in consumers pock ets would be important. Cohn that was gary emphasizing a stimulus bill being passed this week, he sees urgency. We have a guest who may take a different view based on the vaccine news flow. Chinas exports drive recovery. Fastestcates the expansion in 10 years. The message seems consistent with the official pmi which positions strength in external demand. We are joined by thanos papasavvas, cio founder, abp invest. You have had a positive china call for a while, and that has proved correct if you look at this manufacturing data. This manufacturing data continues to build and show strength, whether the domestic chinese economy or external economy. When you are positive on china, what are you betting on now, domestic or international . Thanos we have been positive china for over two years, and even during the pandemic we are still sticking with our view. It will very much be a balanced economy in terms of china. We are seeing structural changes, and we believe under the Biden Administration the relations will not turn around. There will be pressure and tension. The message will remain consistent, albeit the tone more productive and constructive. I see tensions continuing. I would expect the focus on growth, especially with the chinese commonest party will be to shift away from an export recovery to a domestic role, the shift to the middle class, the shift from rural to urban. There is a lot to be done domestically and regionally, which maintains the positive china story for china and korea, indonesia, australia, and the region. Anna tapping into the rising asian middleclass. Let me ask you about your other positioning around the asian road story. Like china and korea, another export economy with a strong domestic growth story in normal times. And japanese equities, why do you like that at this point . Thanos this is a new outlook in terms of japan. We have had a significant rally, we have not seen the equity prices fall for decades. The reason we are positive is because of valuations, we think of valuations quite attractive. If we look at valuations across japan, asia, europe and compare them to the u. S. , there is a clear relative value preference. Japan forms part of that. Japan is one of the few net rcpipients from the latest deal. Be positiveuld surprises. Anna interesting to see how much continuity with the regime and how much of a break. Let me ask about copper, you are positive on oil and copper. I was looking at an interesting chart, and it shows copper 2016, andping up in then again on a Biden Victory in 2020. You are making the broadpoint that certainty, political certainty is the thing these metals like. What is that for you . Thanos it was the macro environment for us. We turned positive copper in may, and the rational was we felt the chinese commonest party was going to do whatever was necessary to ensure the economy remained strong to avoid any social unrest. At the same time we felt given the experience of the euro zone financial the global crisis, the western administrations would throw everything at this crisis, therefore the excessive stimulus would be helping to grow the underlying economic environment. Copper would then if it. That also has benefits toward chile and latin america, and why we are positive chile and the peso. Play Extractive Industries when people are increasingly mandated to be issues, climate change, the impact of our resources . Some could be punished with that as a guiding force, but others allownefit because they technology, change from combustion engines to others. It is not simple to work out your strategy, so how do you play that . Thanos not only that, but the broader question is does one go active or passive . Esg for a passive strategy, and if so, how . More importantly, we have seen the maturity from an investor point of view. From managers moving away an exclusion policy to inclusion , identifying best in class, going deep into the bottom of the analyses to identify the stoxx which present the generateich portfolios. Anna stay with us, thanos papasavvas, cio founder, abp invest. Vows top, janet yellen restore the American Dream as treasury secretary. We will look at the rest of joe bidens economic team, next. This is bloomberg. But would say not just citi the Banking Industry had a Good Relationship with her. Or voted intoted the seat, i think she will do a great job. I would expect that relationship to continue. I would also shout out a Glass Ceiling broken in terms of her becoming the first female secretary treasury, which will be another great one for the books. Anna that was the citi ceo speaking to bloomberg. We will bring you more of that interview. You can catch David Rubensteins full interview this friday at 3 00 p. M. U. K. Time. His comments about janet yellen comes as president elect biden nominates the rest of his economic team. Alongside janet yellen the council of economic advisors, and neerah tandem will be budget director. Lets look where the administration goes next. Thanos papasavvas, cio founder, abp invest is still with us. We are digesting delay supplements by joe biden, getting a lot of headlines, the appointment of janet yellen to the treasury. What assumptions are you making about fiscal stimulus from here . We heard gary cohn argue that we need more stimulus. Will janet yellen be able to put something through in january, or if we look at the data and the vaccine coming, we are not sure we need a fiscal stimulus . Think the underlying key view we have is they will provide as much stimulus as necessary. Whether it is with or without a vaccine. From a political angle, i think biden has shown he is pragmatic, he is aware of the potential split with the senate, and not only on the aftermath of georgia, but if there is a 5050, he could not go too aggressive, because centrist democrats would not agree to things. Wave will not be a blue until the midterms of 2022. As a result, he has shown signs of compromise. I believe this administration will tend to left rather than the progressive left. In terms of janet yellen, i doubt she will have any issues in terms of being appointed. Yellen and to have powell being aware of the underlying requirements, alongside a potential best Case Scenario with a vaccine. Anna what will that relationship the like between the treasury and the fed . It has been tense, but we will see a new administration in january, so maybe that does not matter. There is talk about the need for fiscal and Monetary Policy in various geographies to work to the same end, even if it does not specifically cooperate. How do you expect the fed and treasury to Work Together . Thanos i think as you alluded to, the Current Situation is temporary. I do not see any significant concern. In january things will improve theeen the treasury and fed, and there will be alignment between fiscal and Monetary Policy which has worked since march. It is also something madame lagarde has spearheaded in the euro zone by bringing together the fiscal push helping toward the Recovery Fund alongside macron and merkel. We have seen alignment with fiscal and Monetary Policy. What does that mean for the debt and deficit . Of course we will see an increase in the deficits and debt, but these are issues we can deal with in the mediumterm. The cost of not dealing with economic crisis and leading to a deflationary spiral could be more expensive from a sociopolitical perspective, rather than dealing with imbalances today. Anna in western economies, or you worried about a deflationary spiral, or inflation coming back to haunt us . Thanos inflation, i believe we will move into an inflationary period, not in the next 69 months, but further from that, most definitely. The receding globalization of the multipolar world. That will increase costs. Tensions will remain across the geopolitical areas, even between the u. S. And the eu. Thirdly, i see an unprecedented level of stimulus, and very importantly, not directed toward important institutions. It is more broad based across households. And Central Banks want it. Anna thank you very much, thanos papasavvas, cio founder, abp invest. Coming up our exclusive interview with citi ceo, michael corbat. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Little0 futures fading a. Strength in the asian session. As much as that was pushed on expectations of a higher start dax to the cac and upside. At 10 00 a. M. We will get euro area inflation data for november. Bloomberg economics expected to be remained stubbornly low. Lawmakers will debate tougher covid measures for england. Wales will face tougher measures shortly. President elect joe biden reassured the nato secretarygeneral that the u. S. s enduring commitment to the military alliance. At 3 00, Jerome Powell and Steve Mnuchin will testify before the senate on their responses to the pandemic. Will recent tensions be on show or not . Equity bulls look to history for welcome news after record gains in november. The hope is a rally will take markets higher into the new year. Here is dani burger. I was reading analysis that suggested it is difficult with such a strong month what is the typical path for equities following . Add into that the complication of the arrival of the man in red . Dani there is a question of this historical phenomenon it ise as you said, coming after a record november, will that take some wind out of santas sleigh . A december which is the second best month of the year since 1991, gaining 2 after april. As to why this exists, there are a lot of theories, some of it is psychological, people are happier around the holiday season, maybe that means people want to buy, maybe Fund Managers are doing rebalancing. That rebalancing helps give markets a boost. We cannot rely on superstition. Because it comes after november, and history does not play out, i put up the stoxx 600 december returns after the last couple years. It is not consistent. We have losses as much as 5. 5 . When this comes up against fundamentals, the fundamentals that are constantly shifting due to the lockdown situation, it is hard to rely on this santa claus rally. In terms of what people are betting on for the rest of the and, the vix is still low diving into the charts, it will stay low and continue to exceed those that will rise. This level below this ratio means there are more puts and calls. Puts than calls. For what investors see for december and the start of the year heading into that georgia runoff, investors are betting on a calm december. Anna that would be a relief. Take me back to 2018 and the volatility, we saw a runup to the christmas holiday. Thank you very much. Dani burger. Lets get a first word news update. Opec is delaying talks for two days to give ministers more time to reach a deal. Thats after a long and tense meeting on Oil Production broke down without agreement. The nations are discussing whether to increase production in january as planned, or maintain the cuts to help a rally in oil prices. Federal reserve chair Jerome Powell is warning uncertainties remain for the economy, despite progress on a vaccine. He says a shot will be positive for the mediumterm, but things will be challenging for the next few months. Powell did not give an indication of how the central bank might react, but reiterated it will use all its tools to help the economy. Bitcoin has hit a record, beating its previous high set in december of 2017. It takes this years surge to more than 170 . Even with the recent rally, bitcoin ownership remains concentrated with a small number of investors. About 2 of accounts control 95 of positive digital assets. 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. Anna lets have a quick check on the markets. Some better data out of asia has been supportive of sentiment on the first trading day of december. Up 1. 8 . Out, we areointing seeing deterioration in ftse futures. Maybe that limits where we can go. S p futures in the u. S. Point two the upside. Lets focus on the u. S. Citigroup Ceo Michael Corbat spoke to David Rubenstein about janet yellen, and why the u. S. Needs more targeted stimulus. But would say not just citi the Banking Industry had a Good Relationship with her, and if she is elected into, or voted into the seat, i think she will do a great job. I would expect that relationship to continue, and i would shout out another Glass Ceiling broken in terms of her becoming the first female secretary of the treasury, which will be another great one for the books. David there are many people in washington who think the economy could use another stimulus bill. We could not get one so far before the election, but maybe in the lameduck there might be one, or in the new congress. Do you have the view the economy needs a stimulus bill until we get all the vaccines this riveted . I think it is unclear whether we will get the stimulus package between now were late january. If we do not get something done right now, we will get something done fairly early 2021. The question will not be the if, but more about the size and what can get past. I think that will be largely determined by the outcome of the senate races in georgia. With covid 19 cases on the rise, additional stimulus through unemployment checks, ppp loans, rebates are all helpful tools to bolster the economy. While also helping individuals recover from the hardship of the pandemic. We know while we are in the same storm, we are not in the same boat. If we can get these moneys ,argeted at those most affected it would be a good thing in terms of helping restore the economy quicker than it would. David say we have a stimulus bill, some have said we could use a stingless bill but we cannot ignore the fact that the debt is rising rapidly. We have 27 trillion of federal debt, and up deficit of 3 trillion a year, borrowing half the money we spend. How much longer can we keep borrowing this money without people saying this is too much borrowing . We all should be worried about it. We have been talking deficits for years and what is sustainable. The consequence and the prospect of lower for longer in terms of Interest Rate obviously significantly reduces or holds down the borrowing cost. We cannot believe rates will stay where they are forever. We have to be mindful. I think it is important we are targeted in terms of getting the moneys to those in need. We know the longer this goes on and the more Small Business and individuals, certain geographies and neighborhoods get affected, it makes the comeback from that much more difficult. We have seen that and it is proven from an historic perspective. Anna that was the citigroup ceo, michael corbat. You can catch that conversation with David Rubenstein friday at 3 00 p. M. U. K. Time. Coming up, oil falling again as opecplus seeks more time to reach a deal on production policy into the new year. We will discuss that next. This is bloomberg. The real important announcement was the development of 15,000 people in the u. K. , and 4400 people in south africa. Those are really great executions of clinical trials. We will wait and collect data to see with the efficacy levels from those are. Just a reminder of the vaccine studies still to come. Let me take you through the futures picture. The london market set to underperform. Cac and dax point to the upside, but we may see a laggard in london. Oil prices are weaker and can sometimes weigh on the london market. Oil falling again as opecplus seeks more time to reach a deal on production policy after talks want up without an agreement. Ministers will meet thursday rather than tuesday to allow more time to deliberate on whether to delay a planned increase scheduled from january. We are joined by alex booth, head of market analysis, kpler. What signal do you take from the news that the meeting itself has been delayed until thursday . What signal is that for you . Alex good morning. I think what it demonstrates is how hard the situation in the group is at the moment. Is conflicting signals from the data we see in the market. Ultimately, we are in a period of relative stability, having had a multi was year. Tumultuous year. We could be going one direction or the other. Positive demand environment in asia, but it will be interesting to see what happens with the statistics out of the u. S. In terms of what demand and Transportation Demand was like for thanksgiving. That will give a taste of what we can expect through the holiday period in the western hemisphere. There is conflicting data. Anna the diversion picture having to do with the eastwest divide. Which should win out . In opec thinking, with the state of Global Growth where it is and the Global Recovery in asia and not so much in the west, which data sets should be uppermost in the minds of the opec delegates . Alex ultimately in the last six months the market has improved out of a terrible situation back in the spring. We have been taking oil, the net crude imports, and importing more crude than exporting. That has been decreasing. We went to 1. 5 Million Barrels a day back in september to a halfmillion now. A continuation of the recovery in asia. Anyeally get behind increase in production at this point. Things are good in china, they are importing crude. However, that is going into storage. We have seen a huge build through the course of the year, up 280 Million Barrels in november versus last year. That means it is harder to absorb barrels onshore. If we look at europe, things are of imports,in terms we are down one Million Barrels a day this year. Q1 this year. To bring that volume of crude back, things will be slow through the winter in the western hemisphere. Ultimately, how much can asia depend on its own internal demand relative to growth in the rest of the world . Anna it sounds as if you are suggesting there will be a decision to postpone any production increase. If we are narrative, taking oil and storing less on the seas, but increasing onshore inventories, what does that tell us about the picture globally . Alex ultimately it is a fine balance, and this is why there is a difficult situation. It is hard to come to an agreement in the organization ,ecause any significant change i feel we will go back into an oversupply market. Have to look at the price action on that. Any serious recovery will lead to a gradual pickup in production in the u. S. Any material strength in spreads will incentivize barrels to come out of storage onshore and pressure the market further. There is a fine balance. Anna we have seen some rebellion in the opec ranks, let alone opecplus, in particular the uae breaking commitment and got a dressing down in riyadh. Other analysts point to unhappiness amongst the nigerians, the iraqis and others. Where do you see the tension in opec . Doubt afteris no the events of this year, the price action this year, a lot of producers are under pressure. Agreement will see an , whether the continuation of the cuts. Ultimately, the countries understand on the back of what happens at the start of the year, they see what can happen to price action with the levels of production. The onshore ability to absorb all of those extra barrels will be hard to see. You look at what happened with chinese buying of u. S. Barrels in aprilmay, they have only been digested in china. Can that happen again . It is very hard. They will be wary what happened this year to steer that decision. Anna we understand overnight the Saudi Oil Minister threatened to resign from a key opecplus panel out of frustration. He is concerned about things you mentioned. Saudi play . Ould alex a very good question. I think trying to secondguess any of the opec plus members moves at the moment is a difficult, dangerous game. They will want to get a decision, a positive outcome over the meetings this week. Ultimately, they have demonstrated they are prepared to flex their muscle. When they need to reach a consensus decision. It shows the sheer frustration they feel. Ultimately, the saudis are hurting as well with the price at this level. Bufferse bigger compared to other producing countries. They are also hurting at this level, and it is the long game for them, i think. Anna thank you, alex booth, head of market analysis, kpler. Lets get a Bloomberg Business flash with the corporate stories we are covering. Laura Credit Suisse is proposing the outgoing ceo of Lloyds Baking Group shareholders will vote on the nomination. Steered lloyds to profitability after the financial crisis. Credit suisse is trying to reverse a run of low profit. Jp morgan is planning to boost annual bonuses for its sales and trading workers despite payouts declining across the company, after generating a record 23 billion of revenue for the first nine months of the year. The bonuses will increase up to 20 . Teslas debut on the s p 500 will come all at once, likely sending a ripple through the entire markets. Money managers will have to adjust portfolios to make room the company. F s p has considered adding tesla in two parts, which would have been unprecedented. Exxon is considering cutting gas fields by up to 20 billion. It could be the industrys biggest move since the gulf of mexico spill by bp in 2010. Anna minutes away from the market open. Up next, stocks to watch. This is bloomberg. Anna minutes away from the market open. Lets get your stocks to watch. Dani burger has a breakdown. Dani we have to keep our eye on unicredit, stepping up its search for a new ceo after its current ceo announced he would leave next year. He had clashes with the board over strategy. He wanted to pursue more organic growth rather than acquisitions. Begun to has already identify and reach out possible candidates. Credit suisse is also stepping up their search for someone as the chairman. They proposed the chief of lloyds as the next ahead there board. He is probably one of the best wellknown u. K. Executives, and perhaps this will give confidence that he can reverse Credit Suisses run of low profitability. We spoke strategy to the cfo about that strategy. Business acquisitions, which is likely to advance our strategy, where we believe we can derive synergies and cost and revenue terms, and why we believe in three years, it has to be at the right price and time. Dani they are looking at a reorganization of their structure, and they say ring better financial target. Bring better financial targets. Anna four and a half minutes into the start of the trading session. Ftse futures improved a little, european futures suggest a little to the upside in paris in frankfurt. Cac futures look strong. Perhaps london will be weighed down by exposure to big banks and oil. This is bloomberg. Its down to the wire, the teams been working around the clock. Weve had to rethink our whole approach. Were going to give togetherness. Logistically, its been a nightmare. Im not sure its going to work. Itll work. I didnt know you were listening. Anna one minutes ago until the start of cash equity trading. Here are your headlines. A well oiled machine, stocks get a boost from positive factory data in asia. Futures point two a positive open. Delayseak, the Cartel Output talks until thursday as ministers fail to reach a deal. Ceo is stepping down after arguments with Board Members over strategy. The bank prepares its search for his successor. Welcome back to the program. Seconds into the start of the European Equity trading session. We have lower expectations in london. I should have mentioned exposure to gains in the pound, up 0. 4 against the dollar. That can take the wind out of the sails of the ftse 100. Slightly moderating our expectations from what we will see on the ftse this morning. Other markets in europe look as if they will pick up on strength of the data out of china. That tells us about the ability of that part of the world to continue its rebound from the coronavirus. The ftse 100 is the first to open, modest gains to the upside despite the strength in the pound. We are constantly waiting for the next line to drop in regards to brexit. The ibex up 0. 4 . The paris market opens to the upside, 0. 4 . By 0. 5 . 0. 4 . Ac up positive data in the asian session. Factory data coming through from on thewith positive news vaccines is bolstering expectations for the Global Economy. Joining us is alan higgins, cio managing director, coutts company. This is not new news the way china is managing to rebound, but the more data points we get from china that look positive, the more it tells us Something Interesting about the domestic chinese story and the regional growth story. Alan yes, really good data out of china. Not just china but pmis higher everywhere across asia. I love the chinese pmi data. A lot of suspicion about chinese data. You showed it earlier, the graph of pmi, the vshaped recovery. It goes to show the data was real. It had collapsed in quarter one, so this rebound is real and positive for the Global Economy going into 2021. Rotation back into value and cyclicals, how real is that . Was real in november, pretty dramatic after a long period of underperformance for cyclical stocks. For us, the rotation has legs. When you have cyclical recovery like we are seeing in china and expect in the g7, that is the time to be in cyclically oriented stocks. The valuation and what i am seeing from performance inflows are overweights these areas, so there is a chance for these cyclical stocks to work. Yesterday was shorterterm cash flows compared to longduration tech. These shortterm cash flows can come back with a bang. Anna we are waiting for an opening price on unicredit. We have been covering this story and the change of ceo, the architect of the turnaround plan for the past four years is set to leave the business. And we will talk about banks when we get that. As we talk about value and moving into value, what is the timeframe around that trade. . We were talking about value before the pandemic, and all of that got put on hold. Is this something you trade through the vaccine delivery phase, or something that has legs for many years . Alan not likely legs for many years. You typically see a year or so of high performance. The focus on longer duration cash flows, whether it be bonds or quality or technology stocks. It is a relatively short term play, maybe 36 months, but it can be violent in november. It is something to position the portfolio for for six months or so. We will have a call, and allocation to equities because this is what we want in the long run, more reliable, consistent earnings. For the next 69 months, you can value. Lical stocks have anna another thing is a long euro call. My colleague put together a you see this as broadly supportive of the euro. Will it continue to be so . Euro dollars the and dollar in general, it is a messy chart in the sense of where is the correlation . You are looking at 10 years, but the point being if you go prepandemic, the spread between the euro zone, whether short or longterm Interest Rates, was very extreme in one context the context of a low yielding world. That spread was very large. The euro zone is driven by germany, that is a positive. Now that Interest Rate for the u. S. Has gone away. Yes, it is a consensus call, makes me a little worried to be bearish on the dollar. But it is still right to be proeuro, prosterling. Thingspeaking of all euro and value, that takes me to know opening price on unicredit. Followed around unicredit seems to be whether there would be a consolidation story and italian banking. Side, leave those to one we can, but the consolidation story in banking, is that enough to get you interested in european banks . Yes, we are invested, when it comes to equity, in the u. S. Almost a deep value market. In the euro zone, it takes a big leap of faith. They are extremely cheap but the profitability is weak. Happen. Ation needs to unicredit said for a while it is considered crossborder, especially with the ceo coming from societe generale. Does not seem to have happened. Are minnowsanks compared to j. P. Morgan and citibank. The european banks, rather. It does need consolidation, but i would argue in the whole of the euro zone. Anna thank you very much. Stay with us. Still to come, opecplus delays its meeting after ministers failed to make progress on production. We talk energy, next. Bloomberg. I desperately believe we need more stimulus, and we need it today. I would beg congress to go back to work and pass a stimulus bill this week. There is no time like the present. Dollars in consumers pockets would be very important. Anna that was the former National Economic council director, gary cohn. Quick check on the markets, we are 10 minutes into the trading session. Anticipated. Than futures suggested there might be weakness in london, but that has not come to pass. Astrazeneca of into the upside. We see strength in the pound, going above 1. 34 for the first time in a few months. That is of interest. Ooking at the dax and cac, bmps just opening up, 8 , the fallout at the top of unicredit is part of the future of this business, and consolidation in the italian banking space. Unicredit stock opening to the downside, 7 , on the news the ceo is leaving. This suggests more m a by unicredit, more deals in italy is likely now. That is what that price action is telling us. Thats get a Bloomberg Business flash. Chief isicredit stepping down. The departure follows clashes with the board over strategy and the plan to sell the troubled bank. He will remain in position until april or until a successor is found. Credit suisse is saying its next chairman should be the outgoing ceo of lloyds bank. Shareholders will vote in april. Credit suisse is trying to reverse a run of low profit. J. P. Morgan is planning to boost annual bonuses for its sales and trading workers despite payouts declining across the company. After generating a record 23 billion of revenue for the first nine months of the year, the bonuses will increase by up to 20 . That is your Bloomberg Business flash. Prices are falling again as opecplus seeks more time to reach a deal on production policy after talks wound up without an agreement. Ministers will meet on thursday rather than today to allow more time to deliberate on whether to output. Plan to increase lets talk about commodities, oil and the esg agenda with alan higgins, cio managing director, coutts company. One of the things they are grappling with is something you point out, if the vaccine is successful in the mediumterm, 2021 could be a strong year for oil. How do you see the tussle oversupply . How do you see the tussle over supply . Alan they are in a better economic environment, and stronger oil nearly always happens provided the supply side is not ridiculously overdone. This will be a tricky one to figure out. If we are right about the Global Economy, we should expect Higher Oil Prices next year. Wonder how we then will look back at 2020 and see the big writedowns that many oil and Gas Companies have had to do around their assets. Exxon over the last 24 hours facing an historic right down, cutting the carrying value of their western hemisphere gas assets, a substantial number. We have seen that from other players in this space. Could the weakness of the prices in 2020 be shortlived . Im not so sure, there is a longerterm theme which is the move toward renewable energy. And is understandable, you see with the oil majors moving to renewable energy. The writedowns ought to be a longer term right down. We are not calling for 150 for oil or anything like that. It is a lowquality forecast in any case. 50 60 oil, and increase. They see thestand writing on the wall of a less intensive oil economy going forward. Having said that, demand continues to hold up in china. One of the indicators i look at is china oil demand, and like the pmi, there is a sharp vshaped bounce in china oil demand. That will help. The longer term trend is toward renewables. Anna you mentioned that you have a big esg mandate. I wonder what is the nature of that mandate and how quickly you see that emerge. Alan we have always run ethical portfolios with excluded stocks whether it be tobacco, alcohol. What we knew now is focus on what we do now is focus on engagements. We may own the best in class oil major, but we will spend time with our partners engaging with them in terms of where they are on their journey to increase renewables. What we want in 2030 years time have a smallmajors amount of Oil Production, and to be diversified with renewable and what we will need. About theme ask you opecplus grouping will be wrestling with the dynamics we have been referencing. Also the mediumterm structural shift away from oil. Also thinking about the various stimulus governments will put into markets, and assumptions on the u. S. Economy around that. You make the point around stimulus and raise questions how much is needed in the u. S. Whoeard from gary cohn, thinks they need to get back in the room and hammer out a stimulus next week. Why do you have a different view . Alan of course to minister would be helpful, and if they can do a package some time, that would be fantastic. But if you take the view that the vaccine is a game changer we do it is hard to change human behavior. We saw that with consumption during the vshaped recovery. Therefore we should have a Strong Enough economy to get through this next year. It would be nice to have. It is not necessary. We street strong Global Economic growth year anyway. Anna where do you see the u. S. Heading and the risk of insolvency for corporates . Im thinking about a call around highyield. What are your hopes and fears in 2021 . Alan we are already seeing defaults form in the u. S. , and the credit market, financial conditions in general are easy. The credit markets are open for almost anyone, whether in the cruise industry or shale. You could say default seems to be the hardest word, because we are not having the default cycle you might have expected given the sharp recession, partly because of the stimulus, but partly because as a result of. He fed buying Corporate Bonds it has made the credit markets very open for all kinds of issuers. As they are open, default can be put off. It is not the hard closure of markets. It is generally positive, but if you look at the valuation of highyield, the highyield market knows this already. You said, maybe this does not hurt the Banking Sector if it is thanks to the fed. There have 10 concerns that perhaps there have been concerns. How do you see that link . Huge provisions we have seen in the u. S. Can be released, and i have sympathy for that. Some u. S. E pricing of bank stocks is starting to realize that should we see a recovery, do we need all these provisions . Could they be released back in terms of profit . There is a default cycle. We have had a huge recession, and there will be huge pain in the service sector, but it will tend to be Smaller Companies rather than Larger Companies that have access to the Corporate Bond market. Lot fromhave heard a regulators and the u. K. About the need to allow capital to flow where needed, to get involved in infrastructure investment. Inont know if you invest infrastructure, or if you have any thoughts on why you dont have much exposure in that place, what would enable you to have more . Alan we have had some exposure in infrastructure. It can be hard to scale in a liquid way. Not all our portfolios are liquid, but the main ones are liquid, and you are buying infrastructure stocks rather than owning the piece of infrastructure that is happening , whether it be the london sewer project. They can be attractive, they have lower volatility than general market stocks. It is just not an area we focused on. We have been there before, on the lower interest regime is a help, but it is not a sector we are focused on now. Anna thank you for spending time with us, alan higgins, cio managing director, coutts company. He will continue his conversation with us on bloomberg radio. 21 minutes into the european trading session, and lets look at the italian banking space. We heard overnight about the departure of unicredits ceo. The fallout seems to be around m a strategy, the extent unicredit would get involved in m a with italy, and that resulted in the ceo stepping away. Unicredit down 7 . For more on this, lets bring in Francine Lacqua. Abrupt is this departure . Was pretty abrupt, but we had leaks sunday night when the Board Meeting was called. There was concern he was not doing what the Italian Government wanted. If you go back to see what he has and has not done, there are benefits he has been doing, he is considered one of the smartest bankers of his generation. You see a testament to that as the share price is falling. He will not renew his contract after april. There was an emergency summit by the board sunday, and rumors that they were looking for a replacement. I think it has come quickly, but we heard rumors between he and the board and a strategy they wanted in place over the past couple weeks. It came to a head sunday night as they met to discuss his future and the future of unicredit. Anna i wonder who is being looked at as a possible person to replace him. There is an increased expectation of domestic consolidation, that seem something for them to think about, whoever the replacement is. Francine we know the disagreement was over m a. The big arrival of unicredit bought an italian bank, and the Italian Government has been shopping around for many years. There are three or four names on the list, none confirmed. Our reporters are trying to call the companies to see if there chief executives would be interested. They are italian names, and one of the narratives on the market is that it is difficult to have alarge bank owned and foreigner being in charge. If you look at what was done for shareholders, the share price was lacking. He had done well giving back to shareholders, and always put them above anything else, which is why we are seeing share price dropping today on the back of the news. Anna thank, Francine Lacqua what the latest on the Banking Sector, change at the top, and reaction in markets. Tesla is added to the s p 500 later this month, and it will happen all at once. S p and Dow Jones Indices announced the decision late yesterday, they previously considered adding tesla in two parts, given its size. What is behind the s p decision . Not have doned this unless they were extremely confident that Market Players could handle this. Before making the decision, they riod where they surveyed investors to see what they thought. This reflects optimism that they can handle this massive addition. It will be a record to the company being added. S p said there was enough liquidity for this to be handled without any easement. One strategist told bloomberg it is like ripping off the bandaid. Wouldng it off into two have been risky for a company unprecedented like tesla in terms of size. Anna what Market Impact will this have . Dani we are expecting 72 billion in shares to exchange hands. The average is less than half of that. The prior record was 53 billion. This will create a highvolume day of trading when it occurs. Anna thank you very much, dani burger with the latest on tesla. Unicredit ceo steps down. Proposes lloyds chairman as its new ceo. Coming up, a round of the banking news this morning. This is bloomberg. Anna welcome back to the European Market open. 30 minutes into the trading session, we have managed to get some decent gains. Futures appointed to the upside. The ftse 100 outperforming. Up by more than 1 . The Banking Sector moving to the upside. That is not entirely the italian story. Basic resources moving higher. That plays well in london. Autos and parts moved to the upside. The dax up by more than 7 10 of 1 . Here is laura wright. Laura joe biden has chosen janet yellen as his treasury secretary. She was widely expected to be the economic job. Faceseets the country great challenges but must restore the American Dream. Chinas economic offensive against australia may end up backfiring. It is awarded to countries not to criticize beijing but chinas moves are adding to concerns about economic coercion and may push nations closer to the u. S. Bitcoin has hit a record, beating its previous high set in december of 2017. It takes this years surge to more than 170 . Even with the recent rally, bitcoin ownership remains concentrated with a small number of investors. Recorded to flipside crypto, about 2 of accounts control 95 of positive digital assets. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thank you very much. As we have been covering, unicredit shares falling as the ceo says he is stepping down after four years. The announcement comes amid clashes with the board amid strategy. Credit suisse is announcing the new chairman will be the outgoing ceo of louise banking group. Shareholders will vote on the nomination in april. Lts stick at the banking scene and joining us now is calvin metcalf. Lets start with the news. Credit suisse has had a turbulent task. What is he coming into . Looking at the share price reaction this morning, we dont see in a norm us about of Credit Suisse. What is he going to be arriving into . Tom i think turbulent is probably the right way to put it. Credit suisse is one of those banks that always seems to be making headlines. Good and bad reasons. Year, trading has disappointed while all the banks have sped ahead during the pandemic. There has been quite a few big loan losses from the Wealth Management arm in asia and then youve had the bank involved in spy gate following a departed executive before going to ubs. The petrol turmoil at the moment. Bet is interesting, he will replacing a chairman who is very swift and at the same time, they had a new coo. Very new leadership team. Lloyds, very bunch bank focused on retail going to Credit Suisse which is a Huge Investment bank. Market that is very different to the u. K. Kind just looking at what of reaction we are not seeing Much Movement in the Credit Suisse share price but a lot of movement elsewhere. The italian story, we have covered quite a lot but u. K. Banks doing well this morning. Hsbc up more than 3 . Given the weighting of banks in london, that means the ftse 100 is doing well. It is up five 1. 25 . We are stronger on the pound and that could have some impact in london what is happening, the broader story around u. K. Banks, the Banking Sector more generally. It is interesting because it is not clear what is driving that. The big story in u. K. Banking is dividends. The prospect of payments being allowed to reach dated there has been chatter the bank of england has allowed that. Theyre the thing is the vaccine story. More and more positive news about that and the economy gets back to normal and that will be great news for the banks. Perhaps low losses will be smaller than that provided. Anna barclays up by 3. 5 . Not an entirely u. K. Story. There is certainly something, maybe the rotation story, the value is part of the narrative. Bonusessk you about because i know the jp morgan story has been got a lot of attention. A decent story around bonuses paid that to be expected . Tom interesting. If you look at how well trading has done, you would think yes, trade would have decent bonuses. Jp morgan is saying we will give 818 rise from last year. At the same time, from bank of america, a big rival, the messaging is they will keep their bonus flat. That is driving concern about how strong the economic recovery will be. Boomustainable the trading we have seen this year. That came out before the jp morgan news and stymied the optimism. Jp morgan put a stake in the ground. Some of these, you have seen jp morgan, i think the revenue is 48 this year. For them, they may be going, where is the missing 28 . Hard for bonuses. Anna stories are so well read. Thank you, tom metcalf with the latest. A lot going on this morning. Plenty of price action. Up next, the mission of the century. Airlines plan to distribute billions of Coronavirus Vaccines across the globe. The clock ticks on approval for the producers. We will hear from our interview with the ceo of moderna, next. This is bloomberg. I think a real for an announcement was the final moment of 15,000 people in the u. K. And 4400 people in south africa. I think those are really great executions of clinical trials. Now we wait and collect data to see what the efficacy levels on those two trials are. A really important milestone we achieved. Ceo that was the novavax speaking to bloomberg after the study reached full enrollment. Lets stick with the subject of vaccines and hear from one of that trials rivals. Moderna is requesting clearance after a new Analysis Shows it is highly effective. We asked the ceo about the results and how the Company Plans to distribute the vaccine. Two weeks ago, we have the intermediary analysis of phase 3. Today, we are announcing the final analysis. What is most important for me are the serious cases. When you think about what that happened in terms of serious cases leading to hospitalization, leading to death, this is a big moment in the fight against this pandemic. I think and needs to get the vaccine approved in the coming , many other countries. Hoping to get approval on the next few weeks in the u. S. , for , the fda informed us on decemberely to 17, the advisory committee. Then, i will expect within 24 to 72 hours. We are working very closely in the u. S. Working to make sure that within 24 hours after approval, product will be out the door and vaccinations can start so we can help protect as Many Americans as we can. We are still on track to deliver up to 20 million doses in the u. S. Before the end of the year. How do you imagine it actually working . What does it look like with this starts to get rolled out . When people start to come forward and say they want the vaccine or being offered the vaccine . Stephane it will be a typical flu vaccination, just that a scale that has never happened in the world in terms of the number of people to be vaccinated at the same time. It is like a regular shot. You go into a private room, you show your arm to the nurse or doc. Antiinfective to clean your arm, they inject the product. You need to get your boost 30 days after. A lot of systems developed by the government to track which vaccine in the prime injection. We get the same vaccination by the same manufacturer. That is how it will look like. If you go back to the data, you have 94 chance of having no disease if you get infected. You get the vaccine and 94 chance of not getting it. In the small chance, it will be a mild disease. We got zero severe disease. That is why i think vaccination will be so important to stop this pandemic. We can save lives and go back to normal. Can you help us break down the data, older than 65 . Any sort of effects that youve noticed in your testing . Stephane we have not disclosed. We do that when the fda meeting meets. We literally got it yesterday. The team is looking at everything. The study, was the elderly above about a third of the study was the elderly above 65 years old. The elderly data is similar to other age groups. It is very similar to other age groups. People with diabetes also very high efficacy. By the time we meet with the fda on december 17, the Advisory Board, we will roll out all the details and those will likely be put online by the fda a few days before the Advisory Board as it is usually done. Guy is there anybody that shouldnt get the vaccine . Stephane today, the study has only been done for people above the age of 18. We are going to start very soon, this year, studying teenagers. Teenagers should not get vaccinated because there is not data that is reliable yet. Anna that was moderna ceo speaking to bloomberg. Really interesting conversation there. 2020s forgotten industry perhaps is a key role to play in rolling out the Coronavirus Vaccine this year and next. Linking back to the vaccine conversation, how will it be dish or beaded . Airlines have been working on plans to rapidly distribute shots around the world, while keeping them stored safely at subzero temperatures. Wouldd a ceo who said it be the largest and most complex logistical exercise ever. Joining us now to discuss the complexity involved, our European Aviation editor who has written extensively on this subject. Looking at the big picture, is there enough freight capacity or capacity in aviation to carry this vaccine . I have to calculate some 8000 747 freighters, each would be210 tons needed to fulfill the left over the next Eddie Munster two years. That is a lot of aircraft capacity. The problem is at the moment, there are only 2000 frates to start with and none of those are 747 size. Most of the load will be need to be carried by passenger planes as belly freight. The bulk of the passenger planes are not operating. They have been grounded by the virus. The big push now is to get as much Airline Capacity back flying, not just the freighters but the passenger planes, in order to carry the vaccine. Anna the government might have some interest in the happening. Some interest in getting those passenger planes in the air if that is the case. Have big of a problem are the temperature requirements going to be . It is perhaps the space in an aircraft, but it has to be at the right temperature controll ed conditions. Chris it is a complicated matter because, as we know, the different vaccines to be carried at different temperatures. With the pfizer vaccine, the reality is 70 degrees since celsius is not a degree that can be a hold in any plane. And easily within the container the vaccine is carried in. Many are various kinds of, use dry ice to get down to that supercold temperature. Other use insulation. Others plug into the planes electrics. Most planes would be you were to carry these containers. The bigger problem is on the ground perhaps. Airport facilities. Cargo, round 20 of the world that can deal with the pfizer vaccine. There are more that can handle t the refrigerated rather than frozen temperature. Huged that, there is a challenge of getting the vaccine be the airport and into the community. Anna the last mile obviously could be a challenge. We heard that from the bulk of deutsche bank, suggesting that is the difficulty. How difficult is it going to be to reach the more remote parts of the world and how long might it take . You said a research that it would take a year and a half to two years. Chris that is where the biggest challenge lies for the airlines. Unicef is heading an effort to reach 92 of the worlds poorest countries because of their huge experience in distributing vaccines day today. So, those countries have signed up to buy the vaccine and distribute the for them. Another 17 will pay for unicef. The airlines are speaking with unicef and trying to work out exactly what they can do, where their routes will fit and someone. That is likely to be the focus for getting the vaccine into south america and africa and parts of southern asia. The airlines can get it out there, get it to a safe hub on the ground. Within the process of moving it forward from that point is where the real difficulties might live. Anna really incredible to think about the difficulties this sector has faced due to the coronavirus and the role it might play in bringing all that to an end. Thank you so much. European aviation editor, chris jasper. Back to the matters and lets check in on the market and whats going on with the italian Banking Sector. Weakness in the unicredit share price. The ceo stepped away from the business. Followupe with the board over m a strategy seems to be part of the story. That is why we see it falling to the upside, up by 4 . There is building momentum, building suggestion in the market that some deals could not be more likely. Coming up, as the time finally come for cryptocurrency . Bitcoin celebrates another record. This time, it is different. We will discuss next. This is bloomberg. Citi,ould say not just but the Banking Industry had a Good Relationship with her. Or if is elected into, she is voted into the seat, i think she would do a great job and i would expect that relationship to continue. I would also shout out another Glass Ceiling broken in terms of her then becoming the first female secretary treasury which would be another great one for the books. Ceo that was the citi michael corbat. You can catch David Rubensteins full interview this week. Lets get to the market conversation right now. Kristine aquino joins us now. Lets talk about whats going on with the markets. 2. 5 anking sector up by which is a good performance. I wonder if investors woke up first of december and said lets take the value trade very seriously. What do you think is happening . Kristine exactly. I think there is definitely an element of valley revival here. That trade did very well in december, barring the price action yesterday. We have seen these battered sectors all here finally catching some attention once investors have cleared some uncertainty out of the way. In november, we got more definitive answer to the u. S. Political situation for one we also got lots of vaccine development. I think the combination of these things really gave investors the goahead single to go ahead and look at these unloved sectors that have been ignored for most of 2020 and take a good look at these. The Banking Sector is one of the sectors that is finally getting investor attention and perhaps seeing a bit of a comeback. Anna december started off in stunning fashion in that regard rated kind of volatile few weeks but it has performed strongly as of late. Bitcoin up at record levels. Some people say bitcoin has dropped to a record just as billions of institutional dollars have fed gold. Are you linking the two together . Investigatingre why there is a link between the two in terms of the public debate over it. Over theuminated merits of bitcoin as an asset class on its own and not necessarily an alternative to goldplated some of my colleagues will dispute that claim. I think it is very interesting. Whentends to happen bitcoin does hit level such as this that we are seeing now in such a speedy fashion. The merits of bitcoin we have observed. To getty is managed through various cycles of booms and busts even in the last five years or so. It is still part of the markets conversation. It shows you how much it has evolved as an asset class. Whether or not you believe in the longevity of the gains itself. It is hard to dispute longevity of bitcoin as an asset and it is here to stay probably in the next decade. Anna kristine aquino, thank you. German unemployment data. Fallen by 39,000 in november. The estimate was going up by 8000 so that never seems better than anticipated. The german labor market shrugging it off. Worsening pandemic and new restrictions with this better picture for unemployment declining for a fifth month in november. This is bloomberg. [announcer] imagine having fuller, thicker, more voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music francine the group delays not until thursday after ministers set to reconvene. After arguments with Board Members over strategy. The bank searches for its successor. And Credit Suisses new chairman. Looking for its next german outside the establishment. Good morning, everyone. Im Francine Lacqua in london. It is