🇳🇿 A kind farewell

• "A large number" of ECB policymakers preferred a 75-basis-point interest rate hike in their Dec. 14-15 meeting, an account showed on Thursday, but eventually compromised on a smaller 50-basis-point rate increase alongside hawkish messaging about future increases. Officials also agreed on a slower speed for quantitative tightening — shrinking its bond portfolio to decrease the money supply.

^{via Bloomberg}

• On a related note: President Christine Lagarde, speaking at the World Economic Forum in Davos, warned financial markets on Thursday that the ECB was determined to "stay the course" and signaled further big interest rate rises lay ahead to get inflation down.

• Norges Bank kept its key rate unchanged at 2.75% on Thursday, in line with market expectations, and said it aimed for a hike in March. Core inflation was “markedly above” its goal of 2.0%, Norway’s central bank said, and the labor market remains tight. However, inflation was weakening household purchasing power, while many companies expect a fall in activity in the time ahead.

• Around 18% of British businesses expected their sales to fall in February, compared with the 29% which had expected to take a hit in January, a survey conducted by the Office for National Statistics showed on Thursday. The ONS also published data showing the total number of online job adverts rose by 7% in the week to Jan. 13 but was down 14% from a year earlier.

• The Philly Fed index —a key gauge of US manufacturing activity— rose for a second straight month to -8.9 in January from an upwardly revised level of -13.7 in December, the Philadelphia Federal Reserve reported on Thursday. 

• A step back: The modestly improved reading did not calm fears of a looming recession that swept the markets after December data for retail sales and manufacturing production both fell short of expectations, and an analogous index published by the New York Fed plunged by nearly 22 points to -32.9, its lowest level since May 2020.

• Procter & Gamble raised its full-year sales forecast on Thursday and said it plans to continue raising prices despite a drop in sales volumes. Sales fell 6% in the final quarter of 2022 due to declines in P&G’s grooming and fabric & home care divisions. Rising transportation, commodity, and labor costs, and the strong dollar caused the hikes in prices, the company said.

^{via Reuters}

• UniCredit shareholders can expect higher returns on 2022’s earnings than the year before, as rising rates and a streamlining of the Italian lender provided tailwinds, its chief executive said on Thursday. Speaking in Davos, CEO Andrea Orcel said credit losses were still shrinking despite the expected economic shock ahead from higher interest rates and the cost of living crisis.

• JP Morgan won Chinese regulatory approval to expand operations in the country, which will allow the largest bank in the US to take full ownership of China International Fund Management, in which it holds a 49% stake. British bank Standard Chartered was also approved to set up a new securities brokerage unit in China.

• What is going on: Beijing is speeding up its approval process for the expansion of foreign companies after it lifted its strict anti-pandemic policies.

• Chinese businesses are expected to report their highest earnings growth in five years, Reuters reported on Thursday, as economic reopening after Covid-19 lockdowns and accommodative monetary policy raise hopes for higher profits. According to Refinitiv IBES data based on 1,164 companies with a market capitalization of at least $1 billion, profits for China's large and mid-cap companies are seen rising 16.2% in 2023.

^{via Reuters}

• Germany's new Defense Minister Boris Pistorius met with his US counterpart Lloyd Austin in Berlin on Thursday, just hours after he was sworn into office, as Germany faced mounting pressure to allow its Leopard tanks to be sent to Ukraine.

^{via CNN}

• In accordance: Western allies pledged billions of dollars in new weapons for Ukraine, a day ahead of a meeting in which defense ministers from several nations gather at Ramstein Air Base in Germany for an event hosted by the US Secretary of Defense.
• On a related note: Poland's PM Mateusz Morawiecki said they may send German-made Leopard tanks to Ukraine without Berlin's permission if they don't give permission, saying that "we will do the right thing ourselves."

• France's unions staged a day of mass strikes and protests against President Emmanuel Macron's plans to raise the retirement age by two years to 64. Despite the protests, which included halting trains and cutting electricity production, Macron said he would press ahead with the reforms to "save" the pension system.

^{via CBC}

• Other perspectives: The Labour Ministry argues the changes will bring an additional €17.7 billion in annual pension contributions. Labor Minister Olivier Dussopt acknowledged "concerns" but said the government rejected other options involving raising taxes or reducing pensions because it would hurt the economy and cost jobs.
• More strikes ahead: Buoyed by their success, the country's leading trade unions called for a second day of strikes on Jan. 31 in a bid to force Macron and his government to back down on the reform plan.

• British PM Rishi Sunak defended the latest allocation of a government fund, which provided more capital to the richer southeast England than the poorer northeast. Sunak pointed out that the north had received the most cash in terms of funding per person and that parts of the south are deprived and in need of investment, while Labour claimed northeast England was "one of the big losers" from a funding model that they called "unfair."

• Context: A total of 111 areas across the UK were awarded money from the second round of the government's Levelling Up Fund, aiming to close the gap between rich and poor parts of the country by improving services like education, broadband and transport.

• New Zealand's PM Jacinda Ardern announced her resignation, saying she no longer has "enough in the tank" to lead. Becoming the world's youngest female head of government when she was elected in 2017 at the age of 37, Ardern steered New Zealand through the pandemic, the Christchurch mosque shootings, and the White Island volcanic eruption. Her Labour Party's MPs will vote for a new leader on Sunday.

^{via People}

• Yum Brands, the parent company to fast food chains like Pizza Hut, KFC, and Taco Bell, said a ransomware attack affected some of its information technology systems, which led to the closure of nearly 300 restaurants in the UK for a day. The company added all the stores were now operational and it had initiated response protocols, and an investigation had also been initiated while Federal law enforcement was notified.

• Elon Musk made a "split-second decision" to tweet that he had "funding secured" to buy out Tesla in 2018 after seeing a report in the Financial Times, his lawyer told in court in San Francisco. According to his statement, Musk sent the tweet after reading Saudi Arabia’s Public Investment Fund had quietly acquired a $2 billion stake in the EV company. "In a rush, he used the wrong words," Spiro said.

^{via FT}

• What happened: Musk was sued by Tesla shareholders for manipulating the EV maker’s stock price with several tweets including one that said: "Am considering taking Tesla private at $420. Funding secured."

• Twitter said it will price its Blue plan at $11 per month for Android, the same as for iOS users. An annual subscription to Blue, only available on the web, was priced at $84, a discount to the monthly web subscription price of $8. The blue check mark will now be open to anyone who pays.

• Google failed to avert a 13 billion rupee (€148mn) fine in an appeal to India’s Supreme Court in an antitrust case, which charged the company with abusing its dominant market position for its Android mobile operating system. The court delayed the Jan. 19 implementation of the directives of The Competition Commission of India (CCI) by one week but declined to block them.

• A step back: The CCI said in October that Google had strengthened its position through anti-competitive moves, such as by making the installation of its own apps compulsory on new handsets. The CCI asked Google to remove restrictions imposed on device makers, and fined the company. 

🏴 Worklife: Which countries have the most strikes in Europe and what is the impact on the economy?

💸 Explainer: A looming US debt ceiling fight is starting to worry investors

☕ Environment: Coffee pods better for planet than filtered brew