Senior economic adviser to hsbc, will be joining us for the latest on what is happening with the vaccine from his perspective and also the employment story. But the biggest story is around the vaccine. That is where we should really start. Alix so lets do that, lets get the latest. The news overnight, russian president Vladimir Putin saying his country has registered a vaccine that will enable broad use of the shot while phase three continues. Phase three trials will start tomorrow. , joining us now is Kirill DmitrievRussian Direct Investment Fund ceo. Great to talk to you. This will help the Risk Appetite in the market. You havent started phase three trials. Can you give me some perspective on how many people have been vaccinated with this . Kirill the first two cases were 200 people. The vaccine platform has been tried for the last six years. From akes it different mini approaches used by other players, because it has been approved in russia six years ago. Vaccine and ebola have been tested on hundreds of people. It is a vaccine platform that has been tested extensively over the last few years. It uses safe adenovirus delivery platform. Other people follow what we have done. Half of our approach is used in china. Him a half of our approach is used by johnson johnson, but only russia has the delivery that makes it a Safe Delivery approach. Guy nevertheless, the World Health Organization has urged all axiom producers to make sure they carry out extensive phase three trials. Why have you decided you will not do that . Why have you decided to be different . Kirill the Russian Health ministry did and approval of all the processes and followed all of the russian regulations. Threely, we have phase trials in other countries including saudi arabia, philippines, maybe brazil. Thirdly, what differentiates us, as i told you, it is a proven platform tried for six years. When you do a trial of 30,000 or 40,000, people with unknown Technology Without studying the longterm effects of what is happening in the u. S. Right now, it is illusion all safety. What we offer is the platform. President putin mentioned, his daughter took the vaccine, myself, my wife, we were also vaccinated. We discussed the technology at the sputni vaccine. Com site. Information,sh publications on those. Some questions are basically focused on trying to tarnish the reputation of the russian vaccine. Alix well, there is damaging reputation of the vaccine, but you call it spread it. There is the idea that you call you call itke spreasputnik. There is the idea that you want to get it out there and get it out first. Vaccine readyng a to distribute before you do can be very challenging and very difficult. Tot is your response Something Like that . You move fast, you cut corners, there will be problems . Kirill it is a very uneducated comment by mr. Fauci. I respect him, but of course, russia tested this approach extensively and china did as well. The same debate with vaccines in the 1950s and 1960s. Criticized, one of us said, trust us. We love our children as much as you do. We use proprietary testing tools that allow us to measure very efficient antibodies the generated. Be testedly, it will of a nice couple of months. Mass vaccination in russia will october. It is a move to make sure our people are safe, our economy is back on track. You received more than one billion doses requested from 20 other countries. There is major momentum, and i think the world will see that russia really plays a huge role in fighting coronavirus, which is a joint struggle. Guy there has been a lot written about how russia has been moving at speed on this. To similar is your vaccine the oxford vaccine . Guy quite different. The oxford vaccine uses monkey adenovirus which has never been approved before. We use two human adenoviral factors which is very different. We chose it because it is just a slight flu virus that has been in humans for hundreds of thousands of years. Humans have not been infected with monkey adenovirus. They have been infected with the flu virus. We use adenoviral specter five and 26. Johnson and johnson uses 26. It is important we have two different factors because we believe two shots it is important that we have two different vectors. Because we believe two shots are needed. Alix lets play it out. Vaccination in october for russia. Many Drug Companies in western countries have been talking about issues with vials, getting glass vials. Ramping up mass production will have issues especially when it comes to logistics. Where is russia having problems with that . It is you are right, important to wrap things up we have invested in production in russia. We expect to produce around 10 million doses a month by december. We are also renting production ramping up production in other countries. We believe all together can produce around 500 million doses with the current capacity in other nations over the next 12 months. It is true, it takes 23 months to ramp up production. W started the process already in russia. Other countries we think we can complete this in november, december. Guy i have heard a lot today that the president s daughter has been vaccinated. Which daughter . Kirill i dont know for sure. I think it is a testament that lots of people in russia can trust the vaccine and they would not have taken this unless they really understood the science. I think once you understand the science and understand that prevent vaccine platform, then you will understand why we are moving so successfully. Russia may be lagging in some spheres, but vaccines have always been at the forefront of our success dating back 300 years ago, when russia get america. 0 years before catherine the great was the first to be vaccinated. We have a long history of vaccines in russia. Many scientists respect our institutes, that is really a firstround institute in doing vaccines best first world vaccines. Injury alix if you get one vaccination, you have to go back for a booster shot . Kirill you need a booster shot in 21 days. You need shots, because shotsdies you need two because antibodies decline quickly. The second shot is less effective if you only get one shot. Vectors. , two guy thank you very much, kirill directv, ceo of russian investment fund. Coming up, we will speak to stephen king. This is bloomberg. Guy from london, i am guy johnson with alix steel in new york. This is the european close. Of 220,000 jobs in the second quarter, the largest drop since 2009. Joining us now is stephen king, hsbc senior economic adviser. How much worse does it get . Stephen as i mentioned, the second part of this year, there a secondssibility of depression. In terms of the unemployment bubble, we are only at the beginnings. Find companies in many parts of the u. K. And other parts of the world will be letting people go. I think we are in the beginning of an unpleasant market story in the months ahead. Alix does just push off ending . He furlough conversation stephen it may well do so. In the uk, there is pressure. At the same time, if you are a finance ministry, you are a conscious part of these policies adding a lot to government debt. Continuously how they will pay for it, in terms of higher taxes, more public spending, it have to push it very hard from inflationary outcome. At this stage, the biggest single problem will be covid19 thatf, in the fact lockdowns of kind of dealt a fatal blow. Guy talking a fatal blows, we were just talking about the russian vaccine, how the russians seem optimistic that theres is going to work and will be distorted widely. Other vaccines are short to follow. How will that change your Economic Outlook if we were going to get a vaccine candidate and it would be distorted say in early 2021, how would that change your trajectory . Stephen this commission is key. Having a vaccine is one thing, making sure you can effectively inoculate billions of people is another thing altogether, it will be difficult. Having said that, many of the things we have been worried are, will people go back to restaurants and cinemas, will they go back to concerts . Start flying again . Those are the things that died away rapidly over these months and i think will begin to return. Having said that, there is still a little scarring. There are costs associated with the crisis that will not immediately go away. There is also the fact that companies and households are ending up with higher levels of debt than they would like. With higher levels of that, people will try to repay those debts rather than add to them further. So there will still be some costs out there different costs, perhaps than what were seeing currently that would cause financial constraint, rather than costs in terms of shortfalls or business consumer confidence. Alix no matter what, there are still going to be there is still going to be some tentativeness. Just because there is a vexing tomorrow doesnt mean we can all go out and start buying stuff the next day all governments will be increasing debt loads. Do we tax our way out of it . What will be the longterm it . Ring of the economy for stephen the truth is we have some lessons from history here. All the lessons come from wartime. The three big wars over the last 300 years or so that have really changed. First world the wars back in the 1800s. Than you have the first and Second World War of the 20 century. Government debt rises incredibly quickly, as it has done the last few months. But in the aftermath of these cases, after world war ii, you had rapid growth. The debt to income ratio comes down because income is going up quickly. That was the first flourishing of postwar globalization, which is probably rather in decline which is probably now in decline rather than increasing. In the napoleonic wars, there were some inflation elements. One of the interesting features of the napoleonic wars is that william the younger, who was Prime Minister in the uk in 1799, introduced income tax for the first time and it has stuck with us ever since. He introduced it partly because of the cost of fighting the war. Think of the war or the virus as being a kind of war and how taxes are going to take some of the heavy lifting in the years ahead. Probably not income tax come but perhaps wealth taxes of some kind or another, probably taxes on corporations as well. Guy why not monetize the debt . And if we are to see monetization of the debt, will that be inflationary . I was talking to someone earlier on. He is not convinced it will be because there is unlikely to be , likely to go with that as a result which he thinks, maybe monetization could be less painless. Than maybe some other people assume . Stephen one of the issues with monetization, it may be at a time when you still have lockdowns coming through. You may find people have got plenty of money in their bank account, whether they are willing to spend that money is another matter altogether. You may find the increased money supply is upset by a reduction of velocity. Nothing really happens in terms of the debt dynamics into the mediumterm. If you succeed in raising inflation, you have problems in the less than developed world. When you have an elderly population, the avenue populations with large amount of cash saved things for the large elderly populations with larger amount of cash saved things for rainy day. It may not be as easy as it 1970s,ve been in the when the very same boomers who were retiring were taking on mortgages and were happy to have inflation. What on a market basis, is we have seen in the market the last 48 hours like a dresser herself of what we will be looking towards dress will bel for what we looking towards the next few years . Is that the path of least resistance . Or do you think we will stay rangebound, where we have negative yields in the 10 year, persisting around negative 1 . Stephen i think yields will be low for quite a long period of time. Also the fact that with high levels of government debt, governments have no interest whatsoever in seeing yields rising further. As far as equity markets are concerned, they have had a pretty good time the last few level relative to th they reached in march. There may be downward pressure on earnings later this year, even though Interest Rates themselves are low. I think we are still in a very trajectory unless there is a vaccine that comes through quickly and can be used quickly. Otherwise, you are constantly facing the acidity of lockdown. With the uncertainty comes you are constantly facing the uncertainty of lockdown. [indiscernible] guy where is the dollar going . At the moment it is down. Does it continue . Stephen one of the reasons the dollar has struggled is partly associated with fiscal and monetary conditions in the u. S. There is also perhaps the sense that the u. S. Is no longer leading the world. It has raised questions as to the u. S. Leadership. The conversations going on currently are not helpful. It is also worth noting that one of the reasons the dollar dropped in the last few weeks is partly because the u. S. Has had a pretty unpleasant experience with covid19 relative to some of for example, asia and europe. To the extent of a bridge analogy the epidemiology itself is uncertain, it is just possible in the months ahead but you get the reverse. A for example, the number of infections begins to rise again in europe. Me, is not a forecast from i am simply saying that the epidemiology is uncertain. But if it is driving currency this becomes a random walk in the weeks and months ahead. Alix gold seeing its biggest drop since 2013. The like gold . Would you buy it . Is it worth anything . Stephen gold ultimately is worth only what it is worth 1970s during the big inflationary era, gold digging for the we will. Gold did incredibly well. There is no doubt it has done incredibly well over the last few months. People might say it was due in correction at some point. In terms of a longerterm forecast come it is not an area i tend to get into. Alix [laughs]. Guy mr. King, thank you very much indeed. Stephen king of hsbc. We ar appreciate it. This is bloomberg. Alix live from new york, i am alix steel, with guy johnson in london. The european close. Are bezos, jamie dimon, among 20 ceos will have pledged to hire 100,000 workers over the next decade. One of them talked to bloomberg about these kind of goals. No one has done something of this scale to date. While i agree with you that 100,000 jobs isnt going to be the answer to all the Economic Opportunities we have created, it is the first step at a really truly scale opportunity. D believe me, with the ceos on this council, we will be raising our mission as we begin to deliver on our commitment. Alix the jobs council includes the chairman of bloomberg l. P. , the Parent Company of bloomberg news. Guy, this has made a lot of headlines in the next 12 hours. The headline number is not that big, but it really comes down to education and job training to get people in the door and in a good position to move them up the chain. Guy and other time when clearly employment is at a premium in a city that has been hit hard, i think the message is clear, the corporate sector is on board. We are going to try and help, we are going to try and be good corporate citizens. Jimmied im on obviously has changed the way the Business Roundtable thinks, doesnt just talk about the profit perspective, he talks about business as being a part of society, and this is another example of that. When we come back, what is happening in European Equity trading today. We are seeing a rally. Equities trading higher. The dax is up over 2 , the cap by 2. 4 . Closes next best the cac the cac is up 2. 4 . This is bloomberg. Guy 30 seconds until the end of regular training. Lets take a look at what the story looks like this tuesday. It is turning out to be a much more interesting session that many would have anticipated. Vaccine optimism in the air, whether driven by the russians or something else, i do not know. It is present. Up 1. 6 inn stocks aggregate. Beaten up sectors are doing the best today. Some of the media stocks you would have thought would have benefited from people visiting venues again, some of the travel stocks, some of the car stocks trading strongly. Take a look at the grr, which will break down the sector story in europe, you can see that demonstrated quite clearly. Strongly,are doing but its a risk on five and terms of the mix we are seeing and the rotation we are getting for european markets. In terms of what it looks like from an individual market perspective, let me show you that. The ftse, the dax, the cac 40 all trading strongly. This is about the performance from london. The dax and the cac 40 up nicely. The cac 40 up 2. 4 . Lvmh a strong contender, driving that market. I will show you that stop in just a moment. What does i will show you that stock in just a moment. What does the opposite side look like . Gold trading off sharply. Higher. Ields the dollar trading software. Not down by much but a little bit the dollar trading softer. Not down by much but a little bit. ,n terms of individual names the wind turbine maker having a strong session, reinstating guidance. The big story has been the reversal we have seen in hello fresh. Producinge just eat numbers tomorrow. Today hello fresh strong in terms of what it told the market. This is up nearly 150 . The market looking at the vaccine story and deciding now would be an opportunity to take profits. I mentioned the outperformance from the cac 40. One stock up 3 , lvmh. The auto sectors had a strong day. Lets talk about what is happening there with scarlet fu. Scarlet credit for the auto sectors outperformance goes to a continued Sales Recovery in china. Suvs, sales of sedans, minivans, and multipurpose vehicles rose 8 in july. There had been a steady improvement until june, but the july figures reinsured investors the auto market may have reached an inflection point. All 13 auto related shares in the stoxx 600 finishing higher. This continues rotation we have been seeing, move out of growth and into value as Economic Data improves, not just in europe but in the u. S. Automakers in europe. Exposed to china. Volkswagen has called china its most important market. 40 of its cars are sold there. Volkswagen may 21 point 4 million passenger cars in china last year. 21. 4 million made passenger cars in china last year. We know recovery in china is key to an improved outlook for european economies which depend more on cyclical companies. That has to do with the weighting of the benchmark indexes. Europe does not have a lot of tech in its benchmark indexes. The Top Three Companies i