💥 Article 4

Eurozone output and employment up; German investor morale improves; alleged Russian airstrikes hit Polish village, killing 2; Poland invokes NATO Article 4.


Good morning. It’s Wednesday, November 16th.

Greetings from yet another morning amid even more heightened tensions. Just as Russia intensified its airstrikes that target power lines and residential areas alike in Ukraine —probably in a fit of rage after having been forced to retreat from Kherson— an alleged Russian missile hit a Polish village about 25 km from the Ukrainian border, killing two. With Poland invoking Article 4, NATO ambassadors will assemble in an emergency meeting today.

–Atilla, with Özlem, Tanem, and Can


Eurostat confirmed a 0.2% quarter-on-quarter growth in Eurozone GDP in Q3 for a 2.1% year-on-year increase, while employment also rose by 0.2% quarter-on-quarter in Q3 for a 1.7% year-on-year rise. The European Commission expects the economy to shrink in 2022 Q4 as well as 2023 Q1 as spending and borrowing power and consumer confidence diminish due to surging energy prices and rising interest rates.

  • Trade balance issues: Eurostat measured the international trade deficit in the Eurozone at €34.4 billion in September, down from the record €50.9 billion in August — as exports increased by 23.6% YoY and imports increased by 44.5%.

ZEW Economic Sentiment Index improved sharply to -36.7 in November from -59.2 the previous month beating the market expectation of -50. However, the German investor sentiment is still in the negatives, indicating a more pessimistic view for the next six months. The Current Conditions Index also saw a stronger-than-expected increase in November, rising to -64.5 from -72.2 the previous month. 

Wages fell by 2.7% in the UK (when adjusted for inflation) in September, even as regular pay rose by 5.7% — the fastest since 2000 excluding the pandemic. Currently, the cost of living is accelerating, as Britain's consumer prices rose 10.1% from a year ago and inflation hit double digits for the first time in 40 years.


US producer prices increased by 0.2% in October, below the 0.4% estimate, with the PPI rising 8% YoY compared to an 8.4% increase last month. Core PPI, excluding the increase in food and energy prices, was up 5.4% from a year ago and dipped 0.1% monthly.

  • Business conditions: Federal Reserve Bank of New York's Empire State Manufacturing Index rose sharply to 4.5 in November from -9.1 in October, exceeding market expectations of -5.

Credit Suisse confirmed that it was selling much of its securitized products group to private equity group Apollo, as part of a larger restructuring. The Swiss bank profited from The New York-based securitized products business, which also resulted in large capital spending. The changes will cause 9,000 job cuts from the bank’s 52,000 staff over the next three years.


via FT

Vodafone cut its outlook after its profits fell in the first half as it underperformed in Germany, its largest market. The telecoms group decreased its earnings guidance from  €15 -15.5 billion to  €15-15.2 billion. Chief executive Nick Read said the company is aiming to ease the effects of high energy costs and inflation by supporting vulnerable customers, taking pricing action in Europe, and implementing energy efficiency measures.

Walmart proposed a $3.1 billion legal settlement on Tuesday over accusations of powerful prescription opioids being sold at its pharmacies, although it “strongly disputes” allegations, as US local and tribal governments still grapple with a crisis in overdose deaths. Walmart’s proposal follows those of the two largest US pharmacy chains, CVS and Walgreen, which each offered to pay $5 billion. 


Russian strikes were reported in several cities across Ukraine, including the capital Kyiv, Kharkiv, and Lviv, resulting in authorities immediately announcing emergency blackouts as the attacks knocked out power and struck residential buildings. The strikes came after Ukraine saw a period of comparative calm after Russia's retreat from Kherson and amid authorities working hard to get the city back on its feet.


via Reuters

  • What's left behind: Reports of abuse emerged in Kherson as authorities began investigating allegations from the newly-liberated city's residents that Russian forces set up at least three torture sites in the region, looking to verify reports of nearly 80 cases of enforced disappearances and arbitrary detentions.
  • More Russian retreat? Russia-installed civil servants in Nova Kakhovka, Kherson region's second-largest city, have left the city with thousands of residents due to fighting, according to local officials.
  • In other news: Russia is expected to agree to extend the Black Sea grain deal, which expires on Nov. 19, Bloomberg reported. The UN-brokered deal allows farm produce exports from the Black Sea.
  • This just in: Two people were killed in an explosion in Poland's eastern village of Przewodów, near the border with Ukraine, firefighters said; and the country's radio ZET reported that two stray missiles hit the village.
  • Responses: A US official was cited as saying the blast was due to Russian missiles crossing into Poland, according to AP, but Pentagon said it could not confirm reports that Russian missiles crossed into Poland, while Moscow has rejected all accusations. Polish government raised its army's readiness level in response and invoked NATO Article 4 for an emergency meeting.

European Council President Charles Michel urged global powers to put more pressure on Russia over its war against Ukraine, including Moscow's supporter China, speaking at the G20 meeting in Bali, Indonesia. Michel added that this week's meeting of the world's largest economies is critical in stopping Russia's push "to use food and energy as weapons."

UN High Commissioner of Human Rights called on Iran's government to immediately release thousands of demonstrators detained for participating in protests and warned that Iran can only apply the death penalty for the "most serious crimes" under international law -- following concerns that some detained protesters could be facing capital punishment.

US President Joe Biden had a brief unannounced meeting with Turkey's President Recep Tayyip Erdogan, according to Turkish media, with the White House press corps not knowing about it until it was posted by Turkish media, creating a small controversy.

US Republicans were just one victory shy of the 218 seats the party needs to secure a majority, as they are on the cusp of retaking control of the House of Representatives with a slim majority, after losing the Senate to Democrats.


Collapsed crypto exchange FTX outlined a "severe liquidity crisis" in US bankruptcy filings, which said the group could have more than 1 million creditors. Several global regulators removed licenses from local FTX units, and are looking into the company. FTX appointed five new independent directors at each of its main companies, including its sibling trading firm Alameda Research.

Top crypto exchanges by volume

via Reuters

Twitter employees were fired after calling out their new boss Elon Musk on the social media platform. Eric Frohnhoefer, Ben Leib, and Sasha Solomon all survived the massive layoffs by Musk, but got fired after they objected to his tweets apologizing for Twitter being slow in some countries and saying, "App is doing >1000 poorly batched RPCs just to render a home timeline!" 

Amazon introduced Amazon Clinic, a virtual health “storefront” where users can search for, connect with, and pay for telehealth care. This is Amazon’s second entry into the medical service industry after it canceled plans to open Amazon Care, a telehealth service that it created for its own employees, to nationwide use. Amazon Clinic is initially launching in 32 states in the US and it does not work with health insurance at this point.

WhatsApp's India head Abhijit Bose and Meta’s public policy director in India Rajiv Aggarwal have resigned, a Meta spokesperson said on Tuesday. Meta is also in the middle of massive layoffs announced last week, cutting more than 11,000 jobs or 13% of its workforce.

Web browser Opera added a built-in TikTok feature to the sidebar of its desktop browser, which allows users to view TikTok without opening a separate app or a new tab. Opera had added various messengers and social media platforms to its sidebar previously, including Instagram, WhatsApp, and Twitter.


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