President tells bloomberg positive news on the vaccine isnt a major game changer for its forecaster. She says the focus remains on stopping the economic slump from worsening. Judy sheldons nomination to the fed board is blocked. Set tome as the sec is move ahead for plans that could delist chinese companies. A warm welcome to the show. Welcome back. I hope you had a good rest become because you come back to many warning signs. From the equity markets, sell the top. Markets, the dean of debt a little to get suspect on distressed debt markets. Marie. Orning, ann annmarie good morning. When this level of optimism is high, there is usually more room for disappointment and that seems to be what we are seeing. I said facing reality. You had a good term of categorizing that reality and for me, Christine Lagarde saying the vaccine is not a game changer because it is not going to change in terms of the economic fallout we are seeing. If we take a look at where we trade this morning in the monday, coming off those alltime highs. We are seeing weakness in the s p 500 futures this morning, down. 3 . 10year treasury yield, softer. Jay powell warning the u. S. Economy still has a long way to go, and the pound, holding onto gains. Potentially a breakthrough, and if we roll over the board, bitcoin. We searched through on 18,000. We have come down a bit, but this is the highest level since the end of 2017 and we are less than 10 away from bitcoin hitting an alltime high. Manus you know what, this goes to the core of mykonos gratz when he said we crossed a rubicon. Dalio. Rite is from ray maybe wecally saying, missed something. Maybe i should look at this again at some juncture. I might be missing something about this coin so i love to be bitcoin so i would love to be corrected. Cases, that iss continuing to be front and center for investors. Warningkers are infection rates are posing significant risks to the recovery. Jay powell, sounding caution on the near term impact. Christine lagarde and Andrew Bailey warning of a tough road ahead. With the virus spreading, we are not going back to the same economy. We are going back to a different economy. Before we had this great news about vaccines, we had some pretty negative news concerning the second wave that really came about earlier than anything we had anticipated. That also has an impact on the outlook. The spur. Ay be second, we must now push ahead hard with the necessary changes to support changing the direction of our climate. Annmarie central bankers, warning the alarm around the world. Joining us, the global head of fx strategy at youpb. I want to get your thoughts initially on what we heard from ,he globes central bankers sounding alarm for the market not to get ahead of itself. Peter yeah, i fully agree. I think they are basically giving a reality check to markets and despite the good news weve had in the past week regarding the vaccine, it is clear any rollout of the vaccine is going to take time. You are looking at a situation where the most at risk groups, at best, will be fully vaccinated by the end of q1 and the other groups probably by the end of q3 next year. This is a welcome development, it is by no means yet a game changer in terms of the markets and in terms of the underlying Economic Performance in the world. The likes of Christine Lagarde and Andrew Bailey are making a salient point. We are in for the long haul and we are not going to get an immediate reopening of the economies anytime soon. If anything, the data in the United States and eurozone indicates a covid second wave is spreading more quickly than realized. Consequently, we are seeing associated lockdowns, associated reductions in economic mobility and im afraid that will not change any time soon. Manus peter, good morning. It is as if it was a sobriety meeting between the three of them, the different voices. Where do i hide in fx . I was looking at aussieyen. The high beaters have taken a knock because of the surprising message sobriety message. Do you hide out in ethics over treasuries, because the treasuries dont have the sensitivity fx has . Peter you raise a good point and the point you are raising is basically one of, do yields compensate where they are now . The answer is no, they dont. Give got a situation where if you buy u. S. Treasury, you are not going to get the same capital protection for an investment portfolio from treasuries in the future as we did in the past. This is an ongoing theme within markets and every fixedincome Portfolio Manager has to look at currency beta to a greater extent. Within the fx space, swiss franc looks good. The react relief rally in dollar swiss we saw, 0. 92 didnt last that long and we are aging below 0. 91. We will seeief dollarswiss trading beneath a. 8 handle by the end of the year. The safe haven trades are definitely back in vogue. I think gold will remain interesting and very interesting, we saw bitcoin has been doing well in recent sessions. Restrictedelatively supply there, there is a case to be made, as well. Annmarie lets pick up on bitcoin. Manus and i have been talking about this all morning. Ray dalio, saying he might be missing something about bitcoin. Is its time for people to start taking it seriously . Would you add longs . Peter people have been taking it seriously for a while. It is like all ideas. When new products come along, people are initially skeptical and there is a grudging acceptance and everybody wants to jump in on the trade. I think we are between phase two and phase 3 in the idea cycle. Where we are now is a situation where, as previously noted, the old safe havens arent really working as they did before. For the likes of bitcoin, although it is not something i would advise my clients to enter in large quantities, what is interesting about it is because it does have a limited supply, it is attracting greater funds than it did before. One of the reasons it is outperforming is because it is not as liquid as other safe havens. It is trading as a safe haven, but with a high beta. That is how it is trading at the moment. The more i look at it, the more i do see it grind higher. It is gradually getting acceptance within the investor community. I wouldnt be surprised if we see it grind higher from current levels. Manus be grudging respect that can turn into genuflection. Peter kinsella, do not hang up the phone. Lets get your first word news. The senate has blocked the nomination of judy shelton to the Federal Reserve board. It is a setback for Mitch Mcconnell and president trump. With two senators and quarantined, the republicans fell short of the votes needed. The senate can reconsider the nomination, but time is running out. Trump has fired his cybersecurity chief after he contracted contradicted claims of widespread election fraud. His agency declared the vote the most secure in american history. The move had been widely expected and comes a mida purge of senior amid a purge of senior officials. The u. K. Is announcing a 12 billion pound plan to tackle Climate Change. The Prime Minister says the move will create and support as many as 250,000 jobs. Sales of new petrol and diesel cars will be banned from 2030 and the government will invest in renewable energy. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. Coming up, the ecb president doesnt see the vaccine news changing stimulus plans. This is bloomberg. , dont owninion bonds and dont want cash because they are producing a lot of debt and producing a lot of money to fund it so that is changing the nature of how those flows go to china in terms of the comparison, particularly if it opens up. It is behaving sensibly, but dont use old multiples as reflections of the limitations of what is expensive. That was ray dalio, cofounder of bridgewater, speaking to bloomberg. Debuts of a vaccine doesnt really change the ecbs plans to add monetary stimulus. This, according to Christine Lagarde. Speaking to bloomberg. It is focused on stopping the ecb slump from getting worse and assumed a medical solution would be available in 2021. Im not sure that will be a major game changer for our forecast, simply because what we had anticipated in our baseline was that at some stage in the first half of 2021, there would be a vaccine and it could be rolled out in the course of 2021, so it might be a little accelerated, given the news we are receiving from the various providers, but i dont think that will be a serious game changer. Our forecast is being revisited almost as we speak and we will be releasing on december 10, so i dont want to anticipate what the outcome will be, but before we had this great news about vaccines, we had some pretty negative news concerning the that fully came about certainly earlier than anything we had anticipated. Together with that second wave, we also have that list of containment measures under lockdown measures that have affected one country after the other in the euro area. We have the combination of those developments that have effected negatively the situation and that has an impact on the outlook. Francine what kind of economy do you see for europe and the world. Because of the restrictions, is it a doubledip . Even if we get the vaccine, we dont know how consumers will behave. Chair lagarde i dont want to downplay the good news vaccines were, but we have to be mindful of not just the short term and the news impact, we have to be mindful of the overall situation and in that vein, i think the second wave we saw presents risks. Is the fact that consumers, investors, employers do not regard the pandemic as a vshaped we all aspired to, but as something as something that will recur over the course of time and as a result, would lead them to completely change their behavior. In other words, how about if they start saving again for precautionary purposes . How about if they continue to freeze and hold their investment plans because of the uncertainty generated by the situation . The second risk icy is the potential i see is the potential, real financial spillover, which we have managed to avoid so far. We have not had the Financial Sector amplifying the downside that has weighed on the real economy and we need to really stay clear of that, because that would be a factor. You the what surprises most in the economy in europe and worldwide given the pandemic . Is it productivity . Is it how quickly people started working again when some of these lockdowns were listed lifted . Pres. Lagarde what surprised me most from this part of the world, where i have relocated, is how, in the face of this all european, upped their game. We were first out of the gate putting together a very large package in the first half of march and we were soon followed by the european commission, the decision to apply the escape clause, to remove state aid restrictions. The decision then to put on the table a massive package that was agreed in july. That surprised me. Ecbs Christine Lagarde speaking with Francine Lacqua at the Bloomberg New economy forum. Peter kinsella is with upb. Lagarde was one of those enlightening moments, this is not a game changer. Is the 1. 8 trillion Recovery Fund the game changer . Are we leaning too heavily with being theat fund as recovery trade for 2021 . Peter i think there are two things. , what it, the recovery did was it led to a rapid and huge contraction in spreads. Weve seen there is no read on nomination redenomination trend anymore and that is good. The second thing the recovery did was it is going to create the first truly euro denominated safe haven asset. Changer for the euro in that sense. The euro is a lot more stable. In terms of the Economic Impact of the Recovery Fund, we have to in europe, everything takes time and nothing is ever easy in the eurozone. When you think of it in that context, i wont be surprised if theet an announcement implementation of stimulus measures is going to take longer than expected initially. Although many people were helping for a q1 2021 implementation, at best, we are probably looking at early q3. We are probably a bit too apeful in the context of massive cyclical upswing, but i think it is a game changer in the sense that it has reduced euro breakup risks in an appreciable manner. Annmarie the euro is inching closer to 1. 19 this morning, being 1. 20. Er to does anything the central bank due in december affects this or is this all a dollar weakness story . Peter it is primarily a dollar weakness story, and i think the problem the ecb is going to have it is the old problem, our dollar, your problem. Howissue for the ecb is they are going to ease. Could depress the euro a little bit, but with yields where they are come im not sure that is going to have a stimulatory effect. What would be a better thing to do for the ecb is to announce increasingly negative rates. We know earlier in q1, the ecb, negative rates at 1 . Could they go to 3 . It is doable. What they would enable the Banking System to do is to refinance itself at incredibly low levels. In a sense, this is helicopter money opening up from the ecb. That being the case, i think that would be seen as a progrowth measure from the ecb and eurodollar would trade higher. I would be going into the ecb meeting in december with a long euro bias. , global peter kinsella. Ead of fx strategy coming up, Goldman Sachs is getting ready to trim its workforce for the second time in three months. The details next. This is bloomberg. Manus it is daybreak europe. Im manus cranny in dubai. In london. Rdern Goldman Sachs is getting ready to trim the workforce for a second time in three months after ending its moratorium on firings during the pandemic. The lender is pushing to improve efficiency. Dani burger, the number of partners, the pool for the pie is getting smaller, but goldman is going into reset mode. Dani and this is different from the beginning of the year. Goldman, like most lenders in the u. S. , put a freeze on job cuts in the u. S. To relieve concern in the pandemic. In september, goldman and announced 400 job cuts. People familiar have told us this round is unlikely to exceed that figure. The real issue here when it comes to people hoping to keep their jobs, executives see increasingly deep job cuts through the rest of the year. This could be some of the deepest job cuts would seem in goldmans history as they try to meet various costcutting goals theyve set out for themselves. They usually let go underperforming executives. They put a freeze on that, allowing a cushion so they might take that away and start letting go underperforming executives, and they are likely to continue their program to save costs of moving employees out from major cities to other ones like dallas, for example. This to they are doing save costs, but what kind of pressure in terms of cost cutting is Goldman Sachs under at the moment . Dani goldman set a hefty goal for themselves at the start of the year, saying they would eliminate more than one billion expenses. This is before the pandemic, but they are looking at ways to meet those goals. Goldman has done very well when it comes to earnings. Theyve had a good cushion when it comes to that, but this is a figure that goldmans top executives look at. K value continues to trade they continue to trade under their book value and this is something that fuels the desire to continue to cut costs, vexed by what is happening. Exceed 40on pace to billion in annual revenue for only the third time ever. You have to contrast these two pictures to say, the stock looks poor, earnings look good. Perhaps it is costcutting . That is the metric left to take them to the next level. Manus thank you very much. Dani burger on the reality of Financial Institutions in a covid world. Lets take a quick snapshot of how the nikkei finished, because we saw tokyo see nearly 500 new cases today, a record. Youve got the warnings from Christine Lagarde, Andrew Bailey, jay powell. This is about the risk of covid. Money is going into the yen, out of the dollar. 104. 01. Where did you hide in this period of dislocation before the vaccine arrives . Coming up, ray emerging markets. Emergin markets. How will south africa look . Are you frustrated with your weight and health . 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I am Annmarie Hordern with manus cranny. This is daybreak europe and this is what you need to know today. Grim statistics. Markets are mixed as investors weigh escalating coronavirus cases. New york hospitalizations reached the highest level since june. Jay powell called rising infection rates a significant downside risk. Course, Christine Lagarde tells bloomberg positive news on a vaccine is not a major game changer for its forecast. She says the focus remains on stopping the economic front from worsening. Washington, judy sheldons nomination to the fed board is blocked. This as the fcc is set to push ahead plans that could lift chinese companies. Very good morning to you. Peter kinsella told us earlier this morning what the market is dealing with is this reality check. The notes have changed over the past 24 hours, and now it is so the vaccine and the bank of America Survey really indicating where investors are in terms of bullishn