Budget copper mise. This is going budget compromise. Eu budget compromise. That is going to be one of the stories we are focusing on next week. Brexit talks are a difficult place, according to one u. K. Official. We will watch carefully that story over the weekend. We will see what happens monday morning. Aroundare higher, up by 0. 4 . The payrolls seem to have provided a reason to believe that stimulus is coming. It is interesting to see what is happening there. Bonds on the other side of the atlantic to where i am now, we are up to yield highs, march highs. An aggressive move we are seeing stateside. The pound is 1. 3475. Brent crude catching a bid, just sub 50. 49. 08 is where we sit now. Alix lets get to the latest on the coronavirus pandemic. We learned yesterday pfizer scaledback vaccine targets for 2020 because they ran into difficulties getting all the materials it needs. They say they have fixed that problem now. Joining us now is sam fazeli, Bloomberg Intelligence senior pharmaceutical images pharmaceutical analyst and director of emea research. How much of this is normal, and the markets just have to understand and go with the flow a little bit here . Sam hi. First thing to say is that this change in the number of doses available in 2020 wasnt really news to us. We just didnt make a fuss about it. The last we knew about it was early november, so they dropped that from 100 million to 50 million. The fact that it is because of access to Raw Materials obviously is an issue because you do wonder whether they will be able to get the Raw Materials they need in 2021. That seems to be the case they are making, that we shouldnt worry about that. Hopefully they are right. Otherwise, we definitely need other vaccines to work. Guy does this undermine the case for the u. K. Going early . George not really sam not really. Approval is step one. You can approve something you dont have. I dont make any difference, frankly. They are just going to have 800,000 doses that they are going to have next week. I dont see what difference it makes, frank a. Nobody is going to be vaccinating massively really until after christmas makes, frankly. Nobody is going to be vaccinating massively really until after christmas. Alix they are trying to accelerate how they can distribute the vaccine because there are reports they are farther behind than the u. K. On the u. S. What kind of effort does that entail . They are only like a week or two potentially behind the u. S. Frankly, given the issues with doses, given the issues of Everything Else they need to put in place, the structures that need to deliver the vaccines, especially the Pfizer Biontech vaccine, and also making sure that hospitals and Regional Centers are ready to deliver a vaccine that has a high risk of wastage if you get it wrong, those are things that are going to take much longer than just approving the vaccine. So this is just one not small step, but a key step in that process. Guy sam, have a great weekend. Thank you for the coverage this week. We will look forward to continuing next week. The coronavirus and matt continues to have an impact on jobs. Just continues to have an impact on jobs the coronavirus pandemic continues to have an impact on jobs. National Economic Council larry kudlow trying to put a positive spin on it. Mr. Kudlow it may have come in a we bit under expectations, but 6. 7 unlimited rate is big news. The cbo and others didnt expect Single Digits until early 20 putty one early 2021, so we got Single Digits last couple of months. Guy going us to discuss this is Constance Hunter of kpmg and bonnie but wage a and bhanu baweja of ubs. I look through the numbers, and all i see our emerging evidence that we will get some scarring for the u. S. Economy. A lot of the jobs that are returning right now are basically people coming back. They were already attached to their employers, but what we are seeing is the Participation Rate moving in the wrong direction. These are the tricky things that is going to be a job for all of us to figure out over the next few years. Constance i would agree. We see some cracks in the covid impacted part of the economy. So the leisure and hospitality job growth slowed substantially. We went from a six month average of adding 577,000 jobs a month now down to 31,000 jobs this month. We expect that to slow further in december due to rising cases and increased stringency in lockdowns in the u. S. That number could even go negative. If we look at governments, we had the census workers rolling off, but we didnt see any additions from state and local government. We know state and local governments are under pressure, so in this get further assistance there, we would expect that to possibly trend negative. And the retail we normally expect during the Holiday Season didnt go to retail. We had retail drop, and that went instead to transportation and warehousing. We dont expect that to be repeated in december, and those people, to the extent they were temporary holiday workers, will be laid off in january. So we have some rough going ahead here, and that is what this jobs report tells us. Alix does the jobs report justify a seven basis point move on the 10 year to the highest since march, meaning we need more stimulus . Bhanu, it looks like you may have muted yourself. So if you could unmute, we will get to you in just a second. Constance, a similar question to you. The idea that we are going to get stimulus, what does that mean for the fed . Constance well, clearly the market thinks that this is a massive incentive for congress. Some of the moment them to get a deal done on the hill is now solidified by this data, saying look, this isnt the great vshaped jobs recovery. What it really says is that we have a swoosh, and you are going to have to provide more fiscal assistance. To the extent that that will occur, that will reduce scarring and will allow the post vaccine recovery to really be a reflation trade, so in that sense, this treasury move makes a lot of sense. Bhanu, we are up seven basis points the u. S. Tenyear. Does this make sense . Guy is this coming through ok bhanu is this going through ok . I think what is driving the bond of a globale status recovery picking up. I think what has happened to oil prices is really important. I thicket is important to i think it is important to look underneath. [indiscernible] the 10 year u. S. Inflation breakeven is at 1. 9. I would argue it is getting to levels that are going to be difficult to go much higher. In 2017 and 2018, the rate was at 2. 2, when the end up limit rate was genuinely at 3. 5 , not artificially the Unemployment Rate was genuinely at 3. 5 , not artificially. Youve got to think of the 10 year in the u. S. As a global asset. Rise, iron ore prices, other asset prices are being bid up. The global reflation trade is taking place in yields in the u. S. , but in europe as well. This is the market reassessing, perhaps too far. Toughconstance, thats for fed officials, even ecb officials because if we are looking at real reflation, but than the short term theres still issues and still problems with the economy because of the virus, what are they going to do . How did they manage that in the meeting next thursday . Nextance really, the tools to come out of the box in force is yield curve control. The tltrosecb has where they are pushing out ecb is, but i think the a bit more hampered than the fed. The fed has yet to start doing yield curve control, and it is something they could start if they felt that the physical package needed some additional assistance. We will have to see what the fiscal package ends up being. Guy on either side of the atlantic, there are problems with the fiscal package. In the united states, we are waiting to see what will ultimately happen in washington, d. C. In europe, it is hungary and poland causing drag in terms of getting the deal across the line. Do you think Central Banks are going to try and compensate . Bhanu i thicket is really difficult for Central Banks to compensate because of the size of the Balance Sheet. Q4 is going to see some of the largest accumulated gains. You will Bank Liquidity increased by about 10. 5 trillion by the end of this year. Taper untile it 2022 or 2023 in the u. S. The size of the Balance Sheet increases, but at a lower pace. The key question is can we see u. S. Tenyear real rates or the real weight in germany come much lower from here . Can the risk premia come much lower from here on credit spreads . Ultimately the price has already declined to levels where Central Banks are not going to be able to juice the economy or the market anymore, so in conventional terms, this is called a liquidity trap. I dont think the u. S. Is there yet, but i think japan and europe are almost there. , i dont think they can help the economy much more. Orhas to come from fiscal from a revival of animal spirits in the private sector which i think is more likely than the fiscal help. It will be quite negative. Alix interesting. Baweja of ubs, youre going to be sticking with us. Constance hunter, thank you for joining us from kpmg. This is bloomberg. Alix live from new york, im alix steel, with guy johnson in london. This is bloomberg markets. The u. K. Warning that negotiations are at a very difficult juncture. Speaking earlier today, italys minister of European Affairs told bloombergs maria tadeo what hes most worried about on the heels of next weeks eu leader summit. Brexit, as usual, europe is very united. Our delegate Michel Barnier has our full confidence to negotiate on behalf of the delegation. Alix maria, it has been quite the 24 hours when it comes to brexit. Where are negotiations now, and what happened . Been 24 hours of mixed signals and a lot of backandforth between the European Union and the u. K. We understand that Michel Barnier has decided he doesnt have enough to present, and he will stay longer in london to try to present a deal. In terms of deadlines, i would really not want to give a date on this. To be very honest, no one knows what is going to happen. That thisso caution is very much part of the choreography. It needs to be seen as being very difficult. It needs to be perceived especially back home so that every leader can sell this as a victory, that it was very difficult to get the deal, and that vito potentially from the french, i would say you have to factor that, but dont read too much into that. The french are being very french. This is what you are expecting from them, to take a very tough line on the u. K. At this point it is just waiting to see if we get this text by the end of the weekend, and then it is over to the european leaders and the u. K. Prime minister. That is very clear, and i would stress that until the european leadership and the u. K. Prime minister agree to this, it needs to fly politically first. Guy absolutely. I think the politics now come into force. Thank, indeed. Everybodys got thank you very much, indeed. Baweja is still with us. Do you think it is likely that Boris Johnson decides he is prepared to deliver a second blow in the form of a hard brexit . Bhanu i think it is unlikely. I think the market is correct to assume that we will get a deal, but as maria says, we dont know which what they dont know which way things are going to go. There are risks. The risks are high, and i dont think theres a point on us giving au if it is definitely going to happen or not. I think the market is price for good news, but from a near term perspective, i dont think it is very likely even if we do get a deal. Longest term, i think for markets like cable, what matters is what happens to the global economy. Ever since 2016, tradeweighted sterling has gone almost exactly in line with some of the other economies in the world. Singapore, for instance. I think sometimes we overestimate the impact of brexit on assets within the u. K. , we arenk from here expecting cable to do reasonably well between now and the end of 2021, but we are hoping and assuming that we will get a deal. Alix what happens to the euro . When it comes to eurodollar, another breakout, but the euro tradeweighted index is a different story when compared against the chinese currency. But the Recovery Fund seems to be consistently in doubt, with poland and hungary not giving anything on that end. What do you make of this . Bhanu i think we are going to see a frontloaded move in the euro. Whether people are buying chinese equities or bonds, you typically find europe going up, and that is probably because many of these Central Banks see what is happening in korea, india, buying up a huge amount of dollars, and that gets rotated into the euro. That gives the euro a bid. I think you are right to point out that the tradeweighted euro gets quite expensive if the renminbi is not moving a big way, or if sterling is not moving in a big way. We expect frontloaded gains in the euro. We are expecting 1. 25 in eurodollar. The rest of the world doesnt keep up. To 6. 4 andi goes does not appreciate beyond that. Tradeweighted renminbi has before theels it was tariffs were put on. So the market has already discounted away any trade wars, and the trade war is still effectively on. So the market is trading rotation come about a think the gains for the renminbi are limited, and that will tell the euro to slow down. Guy do you think it is too early for the ecb to start saying it has a problem with this . The rates have changed over the last few days. I appreciate that we need to take a step back and look at the tradeweighted, but nevertheless, we are at levels that last time caused philip lane some degree of concern. Do you think lagarde references it . She did last time in the opening statement, which was a bit of a surprise to everybody. Bhanu i thing it is possible they reference it. Particularly when you look at the rate at which the eurozone is going, it is very likely that a stronger trade would have euro is having an impact. What i am not sure about is what can they do. If they say that as a result of inexpensive euro, we are going to extend ppp and keep it in place longer, that is going to that is going to mean that spreads are tight, so i am not sure but the ecb can do other than express disappointment. Im not sure the ecb has the tools to cap the euro. Alix always good to catch up with you. Thanks very much. This is bloomberg. Ritika its time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. The ceo of citigroup has hes worried about his employees longterm productivity while working at home. People talk about the productivity that comes working remotely. ,ell, i work seven days awake 15, 16 hours a day, i dont take any holidays, for a time i am. Oing to be more productive i also think the other piece is preactivity. What i am mindful of is i dont want to wake up as a company come i dont want to wake up as an industry and have hollowed our skill sets out. Ritika he spoke with Carlyle Group cofounder david rubenstein. Ubs is giving up another Office Building in london. It will not renew the lease when it expires next year. Employees will also be consolidated will either be consolidated at the main londonbased or be allowed to work from home. Guy that is on golden lane. To be honest, i thing they probably made this decision a little earlier on, but ubs a couple of years back, that broad gate building they built in london, i think there was always going to be this plan to kind of bring people in and consolidate, but i think what it speaks to is the fact that you are going to see divergence between some of the older Office Buildings and some of the newer office newdings, and ubss headquarters is basically brandnew in the city of london. Alix we have seen a lot of other banks as well not ditch london, but pick and choose, to your point, where they actually covid istay, and also a nice cover for making those choices. Guy i think that is probably partially true. Theres also the brexit element. It was interesting listening to axel weber, the chair over at ubs, still singing the praises of london, talking about the fact that the fragmented nature and the zerosum game nature of the way that the European Union divvies up its financial differentn terms of notes is going to cause a problem. That is going to leave london probably still in the driving seat. Alix i wonder what that means for commercial real estate because commercial real estate was already struggling before in terms of that. Weve seen a lot of retail jobs had to go bankrupt or close. These were supposed to be the particular tenants. Ii think what are think what you are going to end up here is a real to speed market with real estate, particularly here in london. The prime buildings are going to continue to do really well, but the second tier, third tier buildings i think are really going to struggle now, and i think that is going to invert over the next few years. The european close coming up next. Those are the numbers. This is bloomberg. Are you frustrated with your weight and health . Its time for aerotrainer, a more effective total body fitness solution. announcer aerotrainers ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. Do the aerotrainer super crunch. The prestretch works your abs even harder, engaging the entire core. Then its the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. Planks are the ultimate total body exercise. Build your upper body with pushups. Work your lower body with the aerosquat. 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