Good morning. Today is Wednesday, February 22nd.
Russian President Vladimir Putin said the country is suspending its participation in the New START treaty, the last remaining nuclear arms control pact with the US, adding that Russia could resume nuclear weapons tests if the US does so. At the height of the tensions between the two countries over Russia’s invasion of Ukraine, US President Joe Biden said Moscow would never defeat its neighbor.
– Özlem, with Tanem and Atilla
• S&P Global's Composite PMI flash for the US rose to 50.2 from 46.8 the month prior. The data point to a stabilization in the US private sector economy, driven by the services sector, as manufacturers' output continued to fall. A flash reading of services PMI has shown 50.5 while the manufacturing PMI performed below the threshold at 47.8, still beating the estimates.
• The flash UK composite PMI rose from 48.5 in January to 53.0 in February, above the 50 threshold for growth for the first time since July. The pound jumped against the dollar and netted its biggest gains against the euro in a month, while British government bond prices fell on the back of the PMI which was stronger than readings for both France and Germany.
• Eurozone business activity rose at the fastest rate in nine months in February, driven by services and manufacturing output as the composite PMI rose to 52.3, beating economists' estimations. The flash PMI for Germany rose to 51.1 while France's private sector activity had a reading of 51.6.
- Driving factors: The data are the latest to underscore the region's resilience to the energy shock caused by Russia's invasion of Ukraine. Business confidence has improved as shortages of natural gas become increasingly unlikely, and inflation has moderated. The data will likely strengthen the European Central Bank's resolve to continue raising borrowing costs.
• The cost of European pollution permits rose to €100 ($106.59) for the first time, boosted by an improving economic outlook and expectations of a rebound in industrial output, with the benchmark prices in the EU's Emissions Trading System climbing as high as €100.70 a ton on Tuesday, taking their gain to 20% this year.
- Zoom out: The surge in carbon prices comes as policymakers work to tighten the European Union's cap-and-trade system to help the bloc deliver on a goal to slash emissions by 55% by the end of the decade from 1990 levels. The trajectory is expected to continue, potentially hitting €150 by next winter.
• Porsche borrowed €2.7 billion on its debut in the largest-ever deal for the Schuldschein market. The offering in the German market, which was initially marketed at only €500 million, pulled in about 120 investors including European, Asian, and American banks, pension funds, and insurers.
- Why it matters? The" deal shows enduring demand for the sports car company, after its stock offering last year was Europe’s biggest in a decade.
• US Treasury warned companies in China and around the world that they will be punished if they keep doing business with Russia in violation of US sanctions. Deputy Treasury Secretary Wally Adeyemo said, “Companies and financial institutions should not wait for their governments to make the decision for them.” The US will also put new pressure on countries that help Russia evade sanctions.
• 18 out of 61 companies that adopted a four-day working week in the UK said they would continue the practice permanently, and 38 companies will continue with the trial.
- Driving the news: The six-month trial organized by campaign group 4 Day Week Global caused revenues to rise more than a third, staff to feel less burnt out, and the number of employees leaving their jobs to fall significantly.
• Putin said Moscow is suspending their participation in the New START nuclear weapons treaty, the last remaining nuclear arms control pact with the US, which is a move that would end a global ban on nuclear weapons tests in place since Cold War times. Putin accused the US and NATO allies of openly declaring the goal of Russia's defeat in Ukraine, and the country will not allow the US and the alliance to inspect its nuclear facilities.
- US response: US Secretary of State Antony Blinken called Putin's decision "deeply unfortunate and irresponsible", noting that they will be watching Russia closely but that they also remain ready to talk about strategic arms limitations.
• The EU urged its member states to provide more ammunition to Ukraine from their stockpiles and from any orders that might have been already placed with their defense units to help Kyiv defeat Russian forces. EU foreign policy chief Josep Borrell said he wrote all defense ministers in the bloc, urging them to "give Ukraine priority" when it comes to weapons and ammunition.
- In other news: US President Joe Biden visited Poland's President Andrzej Duda and delivered a speech in Warsaw where he pointed to his unannounced trip to Ukraine and reaffirmed Washington's dedication to EU security in the light of Russia's invasion of Ukraine.
• Israel’s parliament gave initial approval to a controversial judicial reform bill despite mass protests across the country among those who see the bill as a threat to democracy. The bill gives more power to the government in the committee that selects judges, and to deny courts the right to rule on law they see in conflict with “Basic Laws”.
- What the UN said: UN's High Commissioner for Human Rights called for Israel to halt all legislation concerning their efforts to overhaul the judiciary, saying that it would "undermine the ability of the judiciary to vindicate individual rights".
- What Netanyahu said: Israel's PM Benjamin Netanyahu said he backs efforts to talk about and minimize overhaul disagreements, while also accusing the opposition of refusing to negotiate.
• 6 people died and 294 were injured after Turkey's already-hit Hatay region was struck by another 6.4 magnitude earthquake and aftershocks on Feb. 20, 14 days after two deadly earthquakes killed nearly 46,000 in Turkey and Syria.
• A South Korean court recognized social benefits for same-sex couples for the first time after a Tuesday ruling to offer government health insurance spousal coverage to a same-sex couple. However, South Korea has not legalized same-sex marriage or civil unions.
• The heads of Microsoft’s and Sony’s gaming divisions met with EU regulators at a closed-door session in Brussels to discuss Microsoft’s potential purchase of Activision Blizzard, with Phil Spencer, the head of Xbox, defending the $68.7 billion acquisition while Jim Ryan, the head of PlayStation, expressing Sony’s worries about the agreement. A deal is yet to be reached.
- Meanwhile: Microsoft announced that its Xbox games will be available on Nvidia’s cloud gaming service effective immediately, and promised to bring all Activision Blizzard titles to GeForce Now once the deal closes. Microsoft also signed an agreement with Nintendo "to bring Call of Duty to Nintendo players with full feature and content parity".
• ChatGPT is creating a boom in AI-written e-books on Amazon. As of mid-February, there were over 200 e-books in Amazon’s Kindle store listing the OpenAI chatbot as an author or co-author, and the number is rising daily. In addition to children’s books and poetry collections, there are also books about using ChatGPT, written entirely by ChatGPT.
- On a related note: AI spam has forced one of the best science-fiction and fantasy magazines to close submissions. Hugo-winning Clarkesworld magazine had to temporarily stop accepting submissions because it was getting too many AI-generated submissions.
• TikTok started giving more people access to its data as part of its "continued commitment to transparency and accountability." The short-form video platform is expanding its research API’s availability to researchers affiliated with non-profit academic institutions in the US. Researchers approved by TikTok’s US Data Security Division will get access to public accounts and content information users post on the app.
🏛 Post-earthquake: Ruins of the Turkish city of Antakya tell the story of a rich past.
💥 An unannounced visit: How do you sneak a US president into a warzone without anyone noticing.
👩💻 Work in progress: Worker burnout is even worse than at the peak of the pandemic.