Tested positive. 10year fore spanish bonds and portuguese bonds ever lower. Yesterdayorld shifted in the United States of america. We are on the cusp of a constitutional crisis. I have no idea in america how friday is going to work. The president is clearly inserting himself on a constitutional basis into the state crisis in michigan, and into wisconsin. What im watching friday is simple. Vice president pence travels to georgia. It will be fascinating to see if he makes Public Comments on this contested election. Absolutely, tom, and we are also trying to find out what the next step is. Lets get to first word news in new york city with ritika gupta. Ritika good morning. Another legal setback in President Trumps bid to overturn joe bidens election victory. Last night a federal judge denied a request to halt georgias certification of its election results. That is supposed to take place today. According to a hand recount completed wednesday, biden won georgia by more than 12,000 votes. Meanwhile, President Trump is reaching out directly to michigan lawmakers to try to overturn the states vote. Bloomberg has learned the president will meet with Republican Leaders of the state legislature today. Some trump allies have urged him to preserve legislatures in testing to he is the electoralive college the vote. Using remdesivir to treat hospitalized coronavirus patients, the w. H. O. Says there is no evidence that improves that improves survival or the need for ventilation. A warning for the European Union. The leaders of france and belgium are urging the block to step up reservations preparations for a no deal brexit at the end of the year, in case lastminute talks do not work with the u. K. And results in a trade and security agreement. If there is no deal, there will be disruption in higher costs. Ecaus 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, im ritika gupta. This is bloomberg. Tom thanks so much. Lets look at equities, bonds, currencies, commodities. It is real simple, real quiet, and maybe that is what you see with the news flow and the inc battles between politics and where we are heading. It has been a massively divisive week. Sustainsote the vix under 23. 22. 96. Dollar churning, i dont know what else to say, francine. Odd data screen this morning. Francine what is even more odd is that there is a difference that we dont see very often, between what european stocks are doing and u. S. Futures. It is clear the top two American Economic policymakers clashed, and that is worrying investors. Mining, energyil stocks rally and. In europe, i want to show you gold, to give you a sense of what is happening. That im looking at these two yields, the spanish 10year, a portuguese 10year, because they are very close to 0 . I think that would be a game changer psychologically for a lot of investors. We will have plenty more on that and a great rotation. Director anding Christine Lagarde are caused bashar calling on governments to do more about the pandemic. Here they are. Infections wave of is slowing down the recovery. , and ouring momentum first message to leaders is, do not withdraw support for the economy prematurely. Stay the course. Decisive policy actions are needed. It will certainly affect the environment in which Central Banks operate. Isncine joining us now peter dixon, commerzbank Global Equities economist. I guess the concern is that the market has been largely ignoring what was happening over in the u. S. With a difficult transition. We see this public spat between the fed and the treasury. Is this politically motivated . And what does that mean for how the markets will take it . Is highlyuspect it politically motivated. We have entered a very difficult transition period. How this plays out, time will tell, but i think markets generally will start to look ahead. Manynk there are too fundamental problems to worry about, whether they be corona related, whether they be fiscal related or european economics related, to bear on the markets for too long. Attention will be very much elsewhere. Peter, what will move what will the markets actually look at in the next three to four months . Is it going to be a lot of haven buying . Peter i think in the short term, maybe, getting toward the they are looking to try to secure their gains as long as they can ahead of year end. Over the course of the next couple of weeks, we will upbably see flows draw significantly. Looking ahead to four months, perhaps even before the end of the year, we will start to see a number of vaccines getting approved, especially here in the e. U. There are suggestions we are on the verge of an approval here. Under those circumstances, i think markets can look ahead for 2021 with more confidence, and i a three to four month horizon you will start to see a move towards cyclical stocks, which are likely to be pick up inat will general economic sentiment. Tom i look at where we are in the cacophony of this week. There is a massive divide between the bulls and the bears. Which way does commerzbank go . Peter well, economists are in the middle. I think in the short term, i am count,y in the bearish not very much. But i think fundamentally on a mediumterm perspective, i am fairly bullish. The economy is set to recover next year, hopefully, despite all the concerns that we have about the degree of fiscal stimulus or not. I think the economy will still recover. Pumpingbanks are still vast amounts of liquidity into the system. That this signs are is an environment in which you would probably want to continue buying equities, at least in the first half of 2021. And thereafter, we will have a pause to see how things develop. Tom with the ballet of institutions, and particularly what we heard from the imf yesterday and, granted, they have a mandate to be cautious imfi get that as the said, is instability in our future, where we could jump conditions in Interest Rate markets . Term i think for the near , instability remains the name of the game. But i think in the longerterm, it is probably going to be an environment of relative stability, relative positive stability. What is going to drive Interest Rates higher . Central bank actions, i would venture to suggest. But we are not going to see anything on that front for many years to come. They may even be going lower in some cases. Conditions, there are those who think that we will get a bit of inflation, with this huge amount of Central Bank Liquidity permission. I remain skeptical that it will show its face any time over the next couple of years, given the damage to capacity and the demand we have seen over the course of the last few years, a huge amount of economic scarring. I think we have plenty of capacity to prevent inflation anytime soon. Aancine this is despite vaccine . If we have a vaccine, how quickly do we return back to not beso that there will a shock to spur inflation quite so quickly . Peter there is such a huge amount of Spare Capacity , that even if we get we are not going to run into capacity constraints. That is not a view shared by everybody, because there has been a lot of damage to the supply side of the economy. But the numbers i am running at the moment, is going to take 2, 3, possibly four years to get back to where it was prior to the onset of recession. That is sort of a general feature. I dont think we are going to get to that position, vaccine or not. Francine peter, thank you so much. Peter dixon of commerzbank stays with us. Coming up next, we will also talk about the budget, the e. U. , and a lot of things that have not been going to plan for european politicians. We will speak to wolfgang munchau, euro intelligence director. That is coming up shortly, and this is bloomberg. Delay. Pe there is no the german presidency is strongly committed to finalizing negotiations as soon as possible. The European Parliament is also very much engaged so that we can reach a solution, and so the target date of january 1 should be should continue to be our target date. Of course we are going to fully use the 140 billion, but the rules are so that the grand part has to be committed by 2023. The grand part announced to amounts to 72 billion, and we are interested in making sure that we commit the amount in the first three years so that we do not lose the euro from the grand part. Francine that was the spanish withmy minister speaking maria tadeo. European leaders remain divided over stimulus after poland and e. U. Package, the introducedlion plan at the end of july will not be put in place until 2021. What is the elegant or not so elegant way for the e. U. To get around this problem . What they should be doing now that they should realize they are not bluffing. A verye very this is serious threat to their own finances, which it is. It was intended to be a serious threat, so this is not surprising. What theyhing need to do is to take the Recovery Fund out of this package. The reason we have this veto is because it is all in the package. It needs everybodys approval for that. But if you take it separate, but , withcovery fund in a box a condition of inside the e. U. , there is the possibility, a legal possibility to look at this in some details and it is legally possible to do that. They other the other thing they need to do is take the rule of law, conditionality, to making sure that money only goes thatries that comp compromise with e. U. Principles and take that out of the passage out of the package irrespective of the budget. And then they will not veto the budget. Time is this the and i know there are millions of questions for countries that need the fund, some arguing that if it goes to esm it would be political suicide but is it time for europe and Central Europe to stand up to autocratic regimes that feel like they are holding them hostage . Wolfgang i think it is the time, because the Recovery Fund is delayed. We hearpine the spanish finance minister being very optimistic about when she will get the money. She will not get it quickly. When thenot get it budget was supposed to be agreed to by now. That they know Recovery Fund is delayed. It probably will not kick in until the middle of next year. Longer the e. U. Is held hostage, the longer it will take. This will not be a paid free option either. Wet will also take time, and shouldnt have started from here. We should have done this in july. But this is still faster than waiting for or bond to cavein, which she may not do. Tom i want to look at the ft chart. It is an obscure chart but it shows the massive Second Derivative of the deaths in cases in europe versus other regions of the world. It is friday and we dont want to do too much math. Are politician in europe aware of the rates of change of the pandemic in europe . Yes, they are. I think of all the leaders, merkel is probably the one who is most aware of the rate of hasge that the pandemic caused. Rising fast, and this is not going to go away. We are not going to have christmas in europe. That is already clear. The lockdown will last. There is also the question about the lockdown that we have agreed, where the children go to school it is not clear that this is the right mix. Im not saying it is the wrong mix because i have no idea. I find people are generally too certain about these things, looking at data to see this country is doing better than another. I dont know. The numbers of the first wave are not the numbers of the second wave. Early on, quite good but then it didnt. Certainly the economic impact, you could say that this is going to be much worse. We talk about a vshaped recovery this is not going to happen. Of is the federalism europe unraveling in this third week of november . The germans dont like the green effort in terms of fiscal support. His federalism drifting away this november . Wolfgang it might be. It might be. As always, we have the opportunity, we have the means to do this. We could do this if we wanted to, but we probably are not going to do it because we are probably going to offer softer solutions and ultimately turn out not to do these solutions that we now see with the veto and all the fuss that people made about the Recovery Fund. The reality is that the action has already failed and the Recovery Fund probably will not the money will not be spent until the crisis is over. The deeper question about the future of federalism i agree, there is a lot, we have a lot of ambitions in europe, but the concrete realization at the moment, this is a test case. The ultimate veto is a test case for a federal solution, and we will see. If we meet the test or if we dont and my predation is we dont because i am not the greatest optimist when it comes to the eurozone. But if they do, i will be the first to say congratulations. But my experience is i have been looking at it a long time my experience has been that they will miss that opportunity. Tom wolfgang munchau, and we are thrilled that he will be with us in the next halfhour as well. Coming up, Darren Bernstein advising the president Jared Bernstein advising the president. What is the economic biden policy . What does it mean, and particularly what does it mean given the new gridlock of washington . Futures are negative seven. Stay with us. This is bloomberg. Good morning. Ritika this is bloomberg surveillance. One of americas top chocolate the coco depending on market. Hershey is taking an unusual step, directly sourcing a large amount of cocoa through the ice futures u. S. Exchange. Instead of buying beans in a physical market, it will save millions in the deal. But it will send delivery futures to a record premium over the next contract. Turning to an American Company to electrify struggling pickup trucks. The japanese automaker may buy a factory electric powertrain from hercules electric vehicles. It would be used to tighten pickup with u. S. Sales down 24 this year. That is your latest Bloomberg Business flash. Read on the screen, but ever so slightly, not a weight to the tape, but just a sluggish tape. The yen, 103. 85. Over the last three hours, yen has breached 104 two a stronger position. Yuan in the last two days. Francine . Francine i like the fact that you mentioned yuan. If you look at the u. S. And europe, they are trying to figure out what the top officials feuding means to the markets. Also whether there will be more stimulus for their battered economies. We are really looking at the u. S. And much more on conversation from world leaders, from the Bloomberg New economy forum. [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 tom good morning, everyone. Bloomberg surveillance. Lots going on. Francine lacqua in london and tom keene in new york. Extraordinary news out of washington for our international audience, this election seems to be case after case but there are some interesting goings ons between the president of the United States and Michigan State lurs and election officials. This all happening in the last 24 hours. Well have much more on it throughout the morning. Wolfgang, i want to take brexit and go off an ian bremmer yt which is every nation for itself. Is every European Union on brexit now or is it britain and six other voices on fishing rights, agricultural rights, the nittygritty of brexit. It is interesting. Angela merkel never she kind of held it together by not evoking national interest. Macron, the fishing industry. The question many germans are asking themselves were we right to withhold on the interest and having a trading with the u. K. En macron is threatening about the fishing. The unity held up so far. The germans kept it together quite well. But as we approach the end game and we are approaching it at some point, nobody wants to make predictions when it is going to happen. The case of covid19 and negotiating on hold for now. There may not be a deal next eek. Also emergency provisions going on and being prepared for what happens if there is a delay. They are going to keep negotiating. They are not going to let a deadline get in the way. The unity to have e. U. Will at one time come under some strain unless there is a deal at the moment. They know exactly what the deal is. Tom you know, im going to steal a line from politico e. U. Here. In cod we trust. I get the fishing thing and that is that fishing is a heritage issue for other nations as well. How many other cods are out there . At the moment, not many. The u. K. And the e. U. Have a difference on state a for example. That is a matter between the u. K. Because they dont want to bind themselves. I think the u. K. Will not cave in on this but it will accept the principle that it needs to have to have a robust policy and it cannot completely disline from the e. U. The trid relationship are suffer as a consequence. Hat is a tradeoff that might my hunch at the moment is to say there will be a it wont come to this. Problems enough. I dont i do not at the moment anticipate a big row between france and germany unless of course british play this really hard. Im not agreing to anything. I want a deal that is trade only and nothing else. The germans may at one point say we want that too. But it hasnt happened yet. Merkel has been quite wise not to fall for any she has been really kept her subdued. The longer that drags on, the greater the chance for serious francine the election in the u. S. , we dont fully understand what the legal challenges could be because also there is obstruction for this transition at the moment. This is the United States of america were talking about. Does it change diplomacy . Does it change the way that we do politics or do you assume that come january 21, we just go back to s