The bill awaits signoff from the president. Akron turns up the heat. France threatens to veto a brexit deal if it does not like the terms, piling pressure on the e. U. Not to make further concessions. Welcome to the program, everybody. 7 00 in london. 8 00 in paris. Lets look at the futures. We are fairly flat on futures. The young stock x50 futures flat. Yesterday, we saw some decent gains for the ftse, up by more than 1 and that was a standout compared to the rest of europe which was more mixed. It was mixed in the u. S. Session as well. We did actually see a bit of a late rally in u. S. Equity trading, up to some of those new highs we were talking about in headlines. All of that in the context of the hopes and dreams around u. S. Stimulus. The concern about what can legitimately be done in the shortterm and a lot of hope around vaccines. Perhaps oncent day some parts of the equities space and a late rally in the u. S. Yesterday and we are now pausing. We are pausing somewhat here. We are near global record highs for Global Equity markets, but pausing for thought nonetheless, treasury yields are interesting to watch. We are not far from 95 basis points. 93 on the u. S. 10 year yield. 93 basis points. We will continue to watch whether that spread continues to steepen. The pound is moving a little bit to the upside, recovering some of the losses it made yesterday after we heard barnier told ambassadors that there may not be a deal. We will carry for the headlines around french objectives on brexit this morning. Keep an eye on the dollar gradually losing ground versus a host of other currencies. Thats a quick look at the gmm. Lets get a bloomberg first word news update with lower. Laura Democratic Leaders are throwing their support behind a bipartisan stimulus plan worth over 900 billion. They see it as a foundation for a new round of talks. It marks the first public retreat from the democrats much larger proposal for nearly 2. 5 trillion dollars of spending. Germany is extending its partial lockdown by three more weeks until january 10. Angela merkel will reconvene with National Leaders the week before to reassess the restrictions. She says infection rates are far too high and they need to come down faster. Its unclear of a vaccine will be available through christmas. French president has died. He led france from 1974 to 1981 and was a key architect of european integration. Laying the groundwork for the euro and credited with helping to modernize French Society legalizing abortion and making divorce easier. He died aged 94 after contracting covid19. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna. Anna laura wright here in london with your first word news update. European and u. S. Futures are mixed this morning and the dollar is at a multiyear low against many of its peers and that comes as the pandemic continues to rage in the United States and to some extent globally. Countrys deadliest day yet. Lets get into markets with bloombergs emergingmarket strategist. Simon, good to speak to you. The juxtaposition of stocks at record highs and these high death rates coming through from the United States or in covid as we get into the depth of winter, it is jarring, isnt it . A lot of the rally has been expectations of stimulus and that continues to be the case in yesterdays u. S. Session. How realistic our way do you think . Quite realistic now. If you had asked 10 days ago, i would say its close to zero and it seems to be above 50 and that is really because the democrat side made very significant concessions dropping from a 2 trillion plus package to something below one trillion. It does look like there is a decent chance of something beforeng at least december 18. Anna that is interesting. It seems as if they are at least talking about numbers that you could imagine there might be agreements around. The gap between the two sides in the runup to the election seems so big and the gap is shrinking even if that means the size of any deal will not be so great. Let me take you to the question of the day around treasuries. For a 93 basis point the u. S. Tenyear treasury right now. We see a bit of an upward drift in the u. S. 10 year yield and some of the others as well, a steepening in the curve. The question of the day is specifically asking how would 1 treasury yield affect assets . It is not far away at all, is it . Simon no, it isnt. I think treasury yields probably have to go to at least 120 basis points or 1. 2 quite quickly to really have an effect on the market. I think the risk of yields going that high quickly is pretty low. The fed could act on december 16, will they be ready to act, intervening if necessary to calm down the bond markets . They will have learned from their mistakes during the taper tantrum in 2013. I think its unlikely that you will get a significant spike in yields such that it affects asset markets generally. Anna we will watch those reflation expectations and commentary from the fed about what it will tolerate. We keep watching its trajectory, watching its gradual fall. It is dropping to multiyear lows against a host of other major currencies. This feature is very highly in your world. The trajectory for the dollar. Do you still see that downward move . John simon yes, we do. We see the dollar as somewhat overvalued. The u. S. Has highly negative real rates and probably they will become even more negative as reflation continues. The improving Global Economy means that people who are currently over invested in u. S. Asset markets will start investing significantly overseas and as you alluded to, emerging markets has been a major beneficiary of that over the last month or so. Anna they have been a beneficiary of that. To has been a lot of excitement as we talked about all kinds of some reflation trade, some excitement around vaccines, political certainty in the United States, all of those things seems to add up to something more positive. How much of that is done and how much is there still to do in 2021 . John simon that is a great question. Generally speaking, emergingmarket currencies are still undervalued. We think that they can move significantly stronger from ine, so for example, back 2013 with qe3, you saw much more significant appreciation than we had seen so far and part of that reason, part of that is because people are really under invested so you have a significant shortfall in investment in both equity and bonds for emerging markets relative to where you would expect and relative to what they saw back in 2013. I think there is a significant amount to go in 2021. Anna thank you very much. Simon flint, joining us from the markets live team this morning. Just coming up to nine minutes past 7 00 in london. Americas deadliest day, u. S. Cobit fatalities past 2700 yesterday. Germany covid fatalities passed 27 hundred yesterday. We will talk about the latest headlines in germany, next. This is bloomberg. Rg. Anna welcome back to the European Market open. This is what futures look like. Downside on ftse futures but we saw outperformance in yesterdays session. Lets get a Bloomberg Business flash. Some of the top corporate stories. Laura officials from the u. S. And e. U. Are stepping up work to settle the longrunning dispute over aircraft subsidies. Bloomberg sources say they are hoping to reach a deal before President Donald Trump leaves office in january. It would mark a surprise turn of events after tensions and stalemates. Brussels is cautious about the breakthrough. Mcquarrie is buying other banks for 1. 7 billion. The deal expands its Asset Management business, giving it the size and scale to compete with larger rivals. Cory is pivoting towards Financial Services and away from more traditional investment banking. Is lining upy advisors as it prepares to offload some of its businesses. Bmp have beenand shortlisted for potential roles. Include a sale or ipo. No official comment yet. That is your Bloomberg Business flash. Anna los angeles ordered residents to stayathome. That follows americas deadliest day ever with covid fatalities topping 2700. Germany is extending its partial lockdown until january 10 as the country struggles to contain the virus. We are joined for a market perspective on all of this by the head of european equities strategy at barclays. Thank you very much for joining us. We always focused and should focus on the humanitarian crisis and Health Crisis that covid is but as we sit here with better news around vaccines with investors, we are talking about reflation trades and moving into cyclicals and the like. Where do you stand on how much of that pivot has already been done and how much is still to come . Good morning. We think the outlook for equities in 2021 is perspective. There was a move last month. Basically european stocks have had their best months since november 1975 so i think some is possible and healthy as well. The market has to digest what does a big move in recent weeks, and in the very short term, there are sources of uncertainty that remain. The activity momentum is stalling in many parts of the world as well. Again, i think investors should not lose sight of the big picture which is one of improvement in the mediumterm, and we have seen the diversion of travel is towards the. Tronger growth that should ultimately help risk assets. After two years of flight and safety that solve bonds and cash take a beating, equities in terms of been close. Anna you are mentioned bonds and i want to pick up on that, the link between your world, the equities sphere, and the bond market. We have seen a strong rally to new alltime highs in november, the best month ever for global stocks. That is well known. We have not seen quite as Much Movement in treasury yields. 10 year treasury yields been picking up roger willisons the summer and now, the spread between season is starting to look steeper. What are you looking for in treasuries to inform your equity view . Emmanuel i mean, clearly, the bond market has to confirm the risk on move in the equity market. The last months of rally in are trade. Since late august, we saw the u. S. Tenyear moving up even though we had still a fairly risk off equity market, underperforming. There was a disconnect between what was quite a risk off equity market and higher rates. Here, i think the equity rotation will continue if we see rates moving out. Maybe not on the cards in this short term. Going into 2021, we have seen room for maybe 40 basis point increase that could help rotation gain more momentum. We do not think rates will be, you know, going up in the equity market. If we see some confirmation from the bond market, that should benefit the equity market and thein that, given dislocation away from duration part of the equity market, it will value the cyclical parts. Anna let me ask you where that leaves the trade between europe and the u. S. In the transatlantic divide. Its quite stunning when you look at gains. They are stellar compared to what we see in europe. There are a couple of European Equity markets in positive territory but not many and as a whole, the euro stoxx 50 still down bible 6 by 6 . What do you see of relevance in that divergent performance . Do you see that gap closing at all . Emmanuel yes, i think it is starting to close. Weeks, japan, it performed as strong as the u. S. Because they have cyclicals which have the performance so theres more potential for europe to keep closing the gap within the u. S. Europe has been her to more than the pandemic. It should be stronger as long. Europe should be the big beneficiary of the vaccine should deliver a stronger activity in earnings. At the same time, positioning we have not seen much return of investors to europe. Again, if uncertainty reduces globally but also within europe, a deal on brexit, etc. , that could help europe. The u. S. Is making new highs. Europe is bigger than it was before the pandemic. There is value and potential in the next three months to six months compared to the u. S. Anna really interesting. Emmanuel cau from barclays stays with us. Coming up here on the European Market open, france adds fuel to the brexit fire, warning it could veto a deal is too many concessions are made by e. U. Negotiators. More on that, next. This is bloomberg. Going into next year, including the 50 million from this year. We anticipate 1. 3 billion in total. I dont think we disclosed what we will be providing in the first half but what i can say is, of course, we are ramping up production extremely quickly. So we can get the vaccine to everyone as quickly as possible. The biontechs chief commercial officer. You can see more from the interview shortly after 7 30 a. M. And we will bring you more of that. Thats check the futures. They have been fairly mixed, reflecting a mixed session yesterday. Ftse futures to the downside. Lets talk brexit. France warns it could veto a trade deal between the u. K. And the e. U. The french ambassador told brexit negotiator Michel Barnier not to give too much away in trade talks after nine months of work. The negotiations have reached a delicate point with officials on both sides saying a deal could be done in the next few days. He is still with us. I understand the french president is making a visit to a Fishing Community in france as we speak which is interesting timing. Let me ask you about your base Case Assumption around whether a brexit deal gets done. Still believe, we this is the most likely outcome as we get a mini deal. You know, tense negotiations going on. For yearsen waiting to get a deal and i would advise overreact inot to the short term. We are seeing the most likely outcome. Everything is possible and we might have a disappointment. Thelank the fact that currency market, in particular, a bit more comfortable with the positive outcome. If we get Equity Investor positioning, its extremely cautious. Ultimately, i dont think many investors have been buying this hope that there will be a deal and if we get something at the and, that could certainly help the u. K. Market and the more domestic part of 5050. Anna you mentioned the fx markets. 134 mark. The we lost some of that ground as a result of nervousness in these negotiations. You were underweight u. K. Versus eurozone. Does that change with any kind is that ait deal or position that lasts longer . Stick to a cautious. Iew of the u. K. Market the ftse 100 relative to the euro zone. Its not so much about brexit even though, again, stronger currency in the backdrop of a deal will not have the u. K. Market because its heavily exported. But its mostly about the market structure. The u. K. Market is a very different composition. Health care, utilities. We dont expect sectors to leave the market in the next few months. We have more value. Markets couldk. Benefit the most from a deal and improving sentiment would be the ftse 250. A domestic part of the market. Its less exposure. Anna would you go so far as to suggest that that will respond positively to a brexit deal and that you would, if we got a brexit deal, it would enable you to be more positioned in the ftse 250 or is it just too early to say . Would you need to see the details . Deal of 250. Get a with advise investors to look at opportunities. Again, thehat, rollout of the vaccine is making progress in the u. K. And we do think the economy could see a could help year that the domestic part of the index. There advising to 50 as model already in the u. K. Anna thank you very much, emmanuel cau, head of European Equity strategy at barclays. Thank you for joining us. 7 26 in london. The u. S. Ands officials. Top our guest will be speaking to us at bloomberg. Around cover that story aircraft, around aviation, and we will cover a host of other subjects, rule of law, how much that is holding back conversations on the Recovery Fund, and perhaps get a word in on currency markets as well. All of that still to come here on the European Market open. This is bloomberg. Anna welcome back to the European Market open. 30 minutes until the start of the cash equities session. Downside. Ore to the the u. S. And eus top trade officials have started work to settle a longrunning dispute over aircraft subsidies. Down Trump Leaves Office in january. Sources say Robert Lighthizer and his senior counterpart are in regular contact over the boeing airbus case. We are joined now by the European Commission executive Vice President. I would like to start by asking you about aircraft and the boeing aircraft dispute. How intensively are you talking to Robert Lighthizer right now and trying to actively reach a conclusion on this dispute . Indeed, we are in regular contact. We are discussing how we brought an end to this dispute. Eu solution preferred by the would be that both sides anddraw or at least suspend we Reach Agreement on future disciplines in aviation. That is basically what we are trying to work on. Indeed, we are still intensively engaged. Are intensive. Is it possible a deal is achieved for the end of trumps presidency . It is possible. We have to see in any case from our side, we are open to reach this agreement. Where willing to ensure tariffs from both sides are withdrawn and that we put this dispute behind us. Anna would any deal include repayment of aid received over previous, prior years . I currently cannot go into detail. Those are ongoing negotiations, ongoing discussions. I cannot go into detail of all different elements discussed. Anna let me ask you about something else. The Recovery Fund and the rule of law spewed seems to be holding us back at this point. What do you think of solutions that suggest cutting hungary and poland out of any Recovery Fund distribution at this point . We can say from the European Commission side we are working intens