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tv   Bloomberg Markets European Close  Bloomberg  December 7, 2021 11:00am-12:00pm EST

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>> the count and is on in europe. this is bloomberg markets, european close. with guy johnson and alix steel. ♪ guy: 30 but it's going to the close, let's you where we are in your. equities surging higher with that story represent by tech today. it's on both sides of the it went. the nasdaq is doing well. european tech is up over five percent. the stoxx 600 near session highs. we are up by 2.5 percent. the dollar is generally stronger, the pound is down and the euro is down. we are down by 3/10 of 1% -- 0.3%. we are watching the talk between
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president biden and vladimir putin. the fear is if we do see a ukrainian invasion, that could limit europe it building to buy gas from russia. gas futures are up 5%. alyx: the s&p is up two percentage points. oil is participating in this rally. it's the second-best performing asset. like i mentioned, up almost 3%. the bond market is selling in the front end. the curve is flatter. you have 48 basis points in the two-year. we have a 54 billion dollar auction coming at 3:00 p.m. it's a tough case to sell into. this is the vix. we are down it, we are still elevated. the vix for the nasdaq is also down, also elevated. it's elevated more than the vix. you have to wonder if the pros
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are more skeptical of the rally than we may look i taking a snapshot of the headline number. guy: it is cautious whether or not to buy the dip. in europe, technology is rising, up 5%. the luxury sectors up. the retail store is up. cars are trading higher, volkswagen is part of that narrative. his tech defensive or not? it is very much of the top of the story. telecoms, utilities, grocery stores, the insurance sector, that is the value end of the space. if the cautious and of the story. tech is a. it does feel as if the market has a little bit of momentum right now, nevertheless, volatility remains high. how bumpy is going to be between now and christmas? alyx: to you, do you buy into
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the rally? on a -- >> markets were a bit ahead of themselves and overestimated the impact. we are still not out of the woods yet. i think they are trying to get back on track. guy: volatility is high. how high is it going to get? >> i think we are navigating the peak in equity markets. we have seen that in the u.s.. investors are going to be selective. 2021 was a year of growth. they are doing extremely well. you mentioned tech has been a dominant performer. in 2022 given the fact that we have rising pressure, sectors
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such as quality and value will come to the forefront. alyx: it feels like to trade was we are prepping for really high inflation. then the fed changes the game. it feels like we are looking at the market pricing in inflation peaking in 2022. do you agree with that? how do you traded? >> you are right. i agree with it more so in europe. the reason for that is if you look at the projections, ecb is essentially expecting around 2%. clearly, the weakening effect of the season. there was a bit of loosening pressure on the wage front.
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obviously, you've seen rising wages. a lot of that was due to the fact a very large chunk of the workforce was not there. all of these we try to abate. guy: you talk about the ecb. i am wondering it, how the divergence is going to play out between the ecb in the fed. we get the bank of england's week. we are going to get that division laid bare very clearly. the euro is responding to this. we have a 112 handle on the euro. some think we will get to 110. is that a headwind or a tailwind for european stocks? aneeka: we at wisdom tree, we wouldn't be surprised if it hits 110.
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i wouldn't say it's a headwind. i think it is just a repercussion of the way you are going to see essentials across europe. the fed is definitely on track to normalize policy. the rumblings are coming from the ecb board members. he is going to be the decision, it's not going to made until march 2022. we could see a gradual unwinding i march 2022. for the exporters, given europe relying heavily, it would be beneficial. that is where we do see it, not acting as a headwind. the fact that the euro will be week. alyx: here in the u.s., we've made -- the fed has made it
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clear they will be tapering with a hike. we also heard robert holtzman talk about how we don't need to tie those two together. you could hike for you unwound. does that matter? >> i think it definitely matters and sends the message to the market. the recovery in europe has been very fragile. prior to the covid pandemic, we have seen a strong resurgence in the market. the ecb is still navigating this recovery that we see. we see the easing of supply. as far as sequencing is concerned, we get to see the tapering. so far, we've only seen a decision of the rate hike pushing forward.
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that's opposed to the first order of 2023. guy: one question we are trying to figure out in europe is whether or not -- everybody is convinced there are two different markets. the fed has had to admit defeat on transitory. is there a point where the ecb has to change its language around? what could cause that? we are watching carefully what happens with energy prices. nevertheless, is the fed just six month ahead of the ecb in its thinking? aneeka: i think the big risk here is essentially watching them try. we have this very important meeting. russia has a military base
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around ukraine. that is raising a lot of pressure. it's the reason why the u.s. and russia our meeting today. if the u.s. has sent a message, they could actually restrict the supply of energy coming in from russia. that will lead to a lot of pressure on energy prices. energy accounts for 46% of the market. one of the decisions the ecb has made, it could change dramatically. we are already waiting for german regulators to give approval. the only thing holding it back is the company which is nord stream 2. it should be registered in the eu. we are waiting for that decision to be made.
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that is only going to impact europe in the biggest way. and very negatively. that is a big risk. christine lagarde held on so firmly. guy: political interference in the financial markets and the inflation narrative, we will watch the results of this conversation between president biden and prudent very carefully. thank you very much. we gray shall he -- greatly appreciate. coming up, the german government comes in. it is starting to line those up. how is it going to factor in the eurozone debt burden. the next chance that will be sworn in tomorrow. the incoming finance minister sounds a little more hawkish. we will talk about that next. this is bloomberg. ♪
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>> from 2023, we want to return. we want to forgo the burden of higher taxes. guy: the finance minister as he
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is about to become germany's new government, sending coalition agreement. he will get sworn in tomorrow. we have an outgoing finance -- finance minister who will become chancellor. the incoming can you compare and contrast for me the styles and the outlook of schultz and christian limb there. >> firstly, it's quite compelling it is first real press conference in this incoming role as finance minister. not only did he down on the commitments they one from their more dovish counterparts, when it comes to committing to the constitutional debt rate by 2023 and no higher taxes. you had a shift in tone from the way schultz would talk.
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the european -- eurozone has taken on in order to deal with the coronavirus pandemic. alyx: was he talking to germany when he said that? was he talking to greece, spain, and italy? aggi: interestingly, it was in response to a question on inflation. the fact that he was so eager to take it to the european focus, it was a harbinger of what's to come from this new finance ministry. when it comes to the position of the new stp led finance ministry. i think this was a thing the european union will be listening and four. guy: he talks about the ecb in a way i haven't heard. he talks about his concerns around the way that the ecb will be limited in its ability to
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maneuver monetary policy because of the high debt levels. what is the objective here? i think it's really interesting. aggi: i think it's interesting that he is doing his this first ever press conference. it's important to note that this is part of a broader tone of a germany that is currently very worried about inflation within the euro zone. i think he is speaking to his own base here. he is signaling a german finance ministry that is going to take a more hawkish stance going forward. alyx: what happens with the covid virus? at a meeting in brussels, the outgoing health minister said it was necessary to treat an vaccinated people differently. do you think the new government is going to build on that?
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aggi: they are going to build on that and this drive for 30 million inoculations i the end of the year. it's worth noting that in austria today after a successful lockdown and cutting down the verona -- coronavirus, they have decided to lift those messages -- measures on people who are already vaccinated. two countries with very high infection rates and low vaccination rates right now are singling out those that are not vaccinated already. alyx: thanks a lot. thanks for sticking around for us. common up, helping the markets today and delivering some hope of positive headlines for therapeutic and the vaccine. this is bloomberg. ♪
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>> the u.s. will push germany to agree to stop the gas pipeline. the buy demonstration is seeking a commitment from the incoming german government. the president is holding a high-stakes meeting with vladimir putin today. we will give you -- one year after she was detained in china.
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the editor-in-chief said 12 months in detention is a long time for anyone to endure. the company is worried about her well-being. her legitimate rights and interest are fully guaranteed. the new vaccine has shown 71% effectiveness. it was developed in canada. the code to trial results, no person felt serious disease. no side effects were reported. the test will be -- it will be tested against the omicron variant. this is bloomberg. alyx: here with the latest on those developments from glasgow is bloomberg intelligence. what are your thoughts on the latest out of glasgow doing well against the different variance.
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sam: i think what i'm really particularly happy about is the antibody -- it has shown to be effective in terms of neutralizing the omicron variant. that has to be studied in a comparative analysis of looking at people. we need to see how much of the efficacy is impacted. honestly, threefold is not a big number in the world of neutralizing antibodies. guy: how does that work? how should we think about this with all of the other therapies advancing -- vaccines?
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is it different the way the targets the virus? is there some commonality with the other therapeutics? sam: all of these monochrome anybody's, what they all try and do is provide sufficient amounts of anybody in your system such that the virus you have caught gets coded. if they do that enough, you'll end up with the virus not been able to infect cells. that is produced by having an effective cell. that is the hope. that's what they do. the problem is if the virus is mutated to a degree that that specific part of the antibody binds to his changed, you lose that coating.
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it's never black-and-white. it is all degrees of 15 fold. where does this fit in with t cells? if anybody's don't have the same effect as t cells, are we still ok? >> this is for people who have been infected. it's there to help them if they have a high risk. it doesn't do anything to your own immune system. the t cells have hopefully kicked in. those are the ones that come in potentially within a few days of having and the virus. these antibodies don't do anything. guy: we are starting to see a second wave of vaccines coming out. we are trying to figure out how they are going to fit into the story.
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you had a nice piece on j&j boosters, or can more effectively if you had the mrna vaccine. as we start to see more mixing and matching, how do the new vaccines fit in? how will governments approach this as we go through next year? how exact of a science is it at the moment? sam: i will take you back to the study the u.k. published. they took a bunch of vaccines. they tested it as a booster along with the moderna shot. that is where these things will fit. the other angle, if they are successful and we do need to see the details, you can judge how
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well. they are easily -- easier to ship. it requires freezing and refrigeration. the others require it. they all do. the easier you make the way to transport and store these, the easier it is for the areas of the world that have yet to get access to vaccine to get access. guy: on that note, we will leave it. thank you very much for the update. we greatly appreciate. more on the picture vaccination. the founding director is going to be talking to us. how do you persuade people to get vaccines? european stocks are rallying into the close. this is bloomberg. ♪
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guy: stocks on a tear as we get into the end of the day here
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near. we are about to close the markets down. it's been one way traffic. that has pointed up. we seem to be recovering very quickly from our concern about the fed and omicron. as you can see, there are some subtleties. the ftse 100 was held back by astrazeneca. the dax, absolutely roaring, porsche and wells fargo on the front foot. those stocks are getting a significant boost. we have really positive performances coming through from the luxury sector. let me show you have the session has developed. it has been one way traffic from the get go this morning. it plateaued through the day. u.s. markets are open. retaking 480.
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the sector story looks familiar. we see on both sides of the limit. tech is leading. that's the narrative as you can see. tech is up by 5.4%. that's helping at the london market a bit. the luxury sector is in there as well. it is up over 4%. retail is up, industrials are up. the car sector is up. more defenses, they are up by 1%. utilities and telecoms, the more defensive end of the market, it's doing well. it is also underperforming to the top of the market. volkswagen getting the surge. there was a report out suggesting may be the porsche ipo is on. the market has been waiting on this for long time. they are looking at unlocking significant value in a volkswagen. we have a whole bunch of
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lockups. as i say, it's up a little bit. these are pieces of important news. one is on its therapeutics, which do seem to have a positive impact, some of the therapeutics that we've been talking about, they are proving to be less effective against omicron. the story may be looking more positive. it's interesting. the bigger effect is on the wider markets. certainly, the market is taking positive news. alyx: i thought we saw that yesterday as well. we are building on that. we have a huge rise in cases in europe. yesterday, italy cases doubling. in the u.k., 100 more cases of
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omicron have been reported. 7000 people are hospitalized. she specializes in social and political factors affecting health intervention. for we get to what we do with vaccines, the data that we got, a huge amount of case increases in italy and more hospitalizations, how do you interpret. what is your take? >> i don't think it's just more people getting tested. there are a lot of cases. if you look at italy in the u.k., they were some of the early ones to get vaccinated. they are probably -- some of these vaccines have been fantastic. we are learning how long they last and we are trying to understand their efficacy against this new variant. we have a lot of work to do. we can't lose our masks. guy: absolutely.
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how do we convince people to wear masks and get their vaccines? there are a multitude of options in front of governments for persuading people to do both of those things. how would you score the various options? we mandated? do we leave it up a choice? how do we make this work? heidi: mandates, you can't use them to loosely. i think there are situations where a mandate could be appropriate. frontline hospital worker situations, you have your freedoms until they start to risk harming others. i think when you are in a situation whether it's work or another kind of engagement or you might risk threatening other people, a mandate should be considered.
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it really needs to look at the situation. i think it's not an easy call. you need to look at one of the other options people have. people want choices. alyx: what are those options? in the u.s., we maxed out in terms of the mandates we are able to put on before lawsuits ramp up. one of the other options? heidi: i think a lot of the measures of reducing large gatherings, it's a really tough call. particularly in terms of the holiday season where it's a time of bringing people together, we have a lot of travel coming up. we've been through this last year. it was a different stage of the epidemic. there are things you can do to keep your head down. the storm is not over. i think masks are something we
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might normalize. there are countries in asia that have a lot of experience with these things. you don't leave home without one. you don't have to wear it all the time. if you are on public transport, i'm not saying we have to do this forever, it does help. guy: we are starting to see with omicron it, this is evidenced by what we are getting from south africa, young children look like they may be susceptible. how does that change the way society responds? >> we have to remember that a lot of our focus early on was on the elderly and super elderly. they were the first to be diagnosed. they already have other issues.
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that's where the vaccinations started. as we vaccinate more the adult population, the violence looks to replicate. the least vaccinated our children. it's not a total surprise that we are seeing how that plays out. it can be quite serious with children. vaccinations to the extent that his been proven effective and safe, i think it's an important choice. alyx: do we prioritize boosters for the elderly? heidi: i think it depends where you live. if you look at africa, it's going to be a very different situation. there are some countries where some people haven't had the opportunity to get there first. you have to look at the setting. if you've done well with your vaccination, move on to boosters.
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in the u.s. by state or locality, we need to get local with the engagement. we do see the under vaccination, it needs local engagement, trying to find out who the trusted messengers are. we need to try and keep people focused on getting to the other side of this. guy: on that note, we will leave it. thank you very much indeed. thank you very much indeed. we are done here in europe. the european markets are closed. we did take a little tech lower. the ftse 100 closing by 1.5%. look at the dax. huge rally. luxury stocks a been very good
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today. we will carry on the conversation about this rally. we will do that on the cable show. you can also find us now on spotify and itunes. we have a podcast. we are very excited about that. alyx: we are very excited about that. we will take you through all of that action as well. common up, it's a high-stakes video call between president biden and vladimir putin. we are going to discuss it all with a georgetown university professor next. this is bloomberg. ♪
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>> common up, this is bloomberg.
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♪ alyx: live from new york, guy johnson is in london. it's been over an hour since the president's started their virtual conference. top of the agenda was dealing with tensions on the ukraine border. the u.s. will push germany to stop nord stream 2 if russia invades ukraine. join us is a professor from georgetown university. she is author of vladimir putin's world. it feels like the nord stream 2 was an obvious thing to go too quickly, to put some leverage. how does vladimir putin take that? angela: he believes the west is out to get him. he does want nord stream 2 to go ahead. it will depend on what the german government itself does. the new german government that
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is just come into office. if they do somehow shut down or don't let nord stream 2 open, i think he will see that as another hostile act by the united states against him. he will use that to wrap up. i think he realizes there is a military move in ukraine, that's a consequence he has to pay. guy: let's set the stage a little bit. the concern is russia has huge numbers of troops on the border. the u.s. has been suggesting to its allies if there is an invasion, that could come next year. is this the last opportunity to de-escalate? angela: i think it's one of the last. what they have to do is find some way to agree the u.s. will get more actively involved in
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the process. they are trying to. there has to be diploma. it has to be backed up by the threat. if there is a russian military move into part of ukraine, sanctions and possible stepped up systems from nato. alyx: how seriously do market purchase infants need to look at this? it feels like we've ignored geopolitical risk to some extent. how seriously do we need to be taking what's happening here? >> i think you have to be taking it very seriously. what we haven't realized is prudent was upping the ante.
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he wants to do, he wants to bring ukraine back into the fold and get guarantees from nato that ukraine will not join nato. i think we should take this very seriously. they are amassing 90,000 troops. they could be ready by january if he wanted to invade. this is a very serious moment. guy: how serious -- i'm confused. my view of the situation is ukraine is miles away. from joining nato. there is very mixed opinion about whether or not that would be desirable. europe and the united states don't want to take away the opportunity for that to happen. they don't want to remove that from a sovereign nation. why is vladimir putin so
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concerned about this nato option when it seems so far away? angela: there is no prospect of ukraine joining nato. germany and other european countries are against it. joe biden's said it's not happening at the current time. it's a way of getting the west to accept the fact that russia does have a right to its influence. we are not going to do that in so many words. he wants to get the west to understand he sees ukraine joining the west as a threat, particularly having nato weapons and nato military trainers working with them. that's a concern. he realizes the prospect of joining nato would be very far off. guy: it's a bigger risk to
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prudent, happens in ukraine is a democracy that starts to develop ingrained traction. vladimir putin his made it clear that he feels the russian sphere of influence is an area which democracy doesn't work. if it can be shown to work in ukraine, it can be shown it to work in russia. angela: imagine if we don't know who's going to win. we need a successful economy. at the moment, the economy in ukraine is not in great shape. that would be a threat to the system. i think that is a major threat to the kind of hold on power he has. it's already a different model. alyx: as we look for a readout of the meeting later and all of
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these nuances factoring in. what does a successful diffusion of conflict look like? what are you going to highlight? angela: the most important thing would be an agreement to say that they are going to step up negotiations on resolving the issue. you have russian troops and russian backed proxies there. that would be accessible outcome. we are not going to have vladimir putin it changes mind. that would be a success. guy: thank you for the insight. we really appreciate it. thank you very much indeed. as we were mentioning, we are watching the story around
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natural gas and what is happening between those two presidents. nord stream 2 is back in play. she leads the team covering gas and power here in europe for bloomberg. there has been a suggestion today that if there was an invasion of ukraine it, the u.s. would put a lot of pressure on europe, on germany to effectively get rid of nord stream 2. is that something europe can afford to do right now? given the lack of gas that exists in this part of the world? >> that's a really good question. it's tough to say. politically, the u.s. has to be seen as doing something. these other countries has to be seen as doing something. we have an energy crunch. if we continue to withdraw gas,
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we are going to end up with the lowest stockpiles on record. that's what people really fear. can europe afford it? probably not. will it do it for political reasons? that's a different ballgame. >> a lot of it depends on the weather. it's warm enough to give some cover. that may be a different story. do we have an idea with the winter will look like? >> we are not even in february. we are not where it gets colder. we are starting to see some temperatures. we've seen snow in the north of the u.k.. we've seen snow in germany.
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it was -21 in moscow today. i think that little bit of a lack we are seeing, we are seeing that reflect prices. prices are up. power prices are up quite a bit in europe. there is that issue. we can't say that for sure. the weather is so variable. we don't know what the winter is going to look like. we are definitely getting warmer as of next week. this doesn't mean anything for the rest of the winter. guy: can i point out that we have had snow in the south of england so far. it's gotten chilly around here. alyx: it was 60 degrees here yesterday. now it's going to snow tomorrow. what is that?
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thanks a lot. we appreciate your time. this is bloomberg. ♪
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alyx: the nasdaq is up by almost 3%. volume is light. the volatility for the nasdaq is falling. it is still elevated relative to the vix. right now, a superstrong rally. will it hold? this is what we are watching. we love to hear all about that. we will see what he says about inflation and removing transitory for the fed. guy: we will get a readout of the call from presidents joe biden and vladimir putin. the decision kicks into gear.
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back of india out with a decision, back of canada. all out with decisions. in germany, the new german chancellor will be sworn in. christine lagarde is speaking for the fifth european systemic risk board. alyx: i'm looking forward to gamestop. guy: i'm curious to see what's going to happen there. if people are piling back into the stock story, i want to know if that's going to be a catalyst. we will continue on bloomberg television and radio after this. this is bloomberg. ♪
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>> from the world politics to the world of business, this is "balance of power" with david westin. ♪
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david: from bloomberg world headquarters in new york to our television and radio audiences worldwide, welcome to "balance of power." president biden is still holding that video conference call with russian president vladimir putin. we turn now to our white house correspondent josh wingrove. we don't have a read out yet of what came out of it, but going into it, what were we expecting? josh: we expect president biden to layout consequences if putin proceeds with incursion or invasion of ukraine. wheezing that would include knowing sanctions between the eu and u.s., in particular targeting russian banks and foreign currency exchange, may be stopping short of other more severe measures like trying to freeze russia out of the swift payment's program.


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