🪆 Babushka revolt

Russia faces anger from mothers and wives of mobilized troops as support for war slips, Sweden lifts key rate to highest level since 2008, China expands lockdowns as cases mount amid rising unrest over policy


Good morning. Today is Friday, November 25th.

Another important indicator of Europe's economic health, Germany's business morale index, rose more than expected, joining eurozone PMI data from Wednesday. Both gauges suggested that the bloc's expected recession might be milder. Friday will see several more key indicators released —including German GDP and French consumer confidence— which hopefully will signal similar results.

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ECB policymakers feared that inflation may be getting entrenched so rates would need to rise further to reach the 2% medium-term target, the accounts of their Oct. 26-27 meeting —in which they raised rates by 75 basis points to 1.5%— showed on Thursday. Policymakers also put the reduction of the bank's €9 trillion balance sheet through quantitative tightening on the agenda.

  • Looking ahead… Markets are expecting a more modest, 50 basis point move on Dec. 15 as a string of policymakers suggested that a slowdown after back-to-back 75 basis point increases was appropriate due to growing recession concerns.

The EU delayed efforts to approve an energy relief package as member states struggled to resolve a deep split over a push to toughen the planned price cap on gas imports. Energy ministers holding an extraordinary meeting in Brussels agreed on the content of several emergency measures, but will put formal approval on hold until mid-December, EU energy chief Kadri Simson said.

German business morale rose above expectations in November, according to an Ifo survey released on Thursday, fueling hopes of a shallower recession and faster recovery. The Ifo business climate index jumped to 86.3, exceeding a forecast of 85.0 and following a revised reading of 84.5 in October.

Ifo business climate


  • Zoom in: While companies were somewhat less satisfied with their current business, Ifo said, pessimism regarding the coming months reduced sharply, with an improvement seen particularly in manufacturing.

The Riksbank raised its key interest rate by 75 basis points to 2.5%, its highest level since 2008,  and hinted that further increases were likely, as the Swedish central bank’s governor Stefan Ingves bowed out after 17 years at the post. The central bank now expects the country’s economy to contract by 1% next year, downgraded from a previous forecast of a 0.5% reduction in output.

China's biggest commercial banks have pledged at least $162 billion in fresh credit to property developers, bolstering recent regulatory measures after many developers defaulted on their debt obligations and were forced to halt construction, Reuters reported. The news came amid worsening economic prospects due to renewed Covid-19 lockdowns.


Renault agreed to buy solar power from Voltalia over 15 years, in what is France’s biggest renewable corporate power-purchase deal, as part of the automaker’s efforts to reduce its carbon footprint. Voltalia will install 100 megawatts of solar panels on the carmaker’s sites across France from 2025, with that number rising to 350 megawatts by 2027, the Paris-based company said Thursday.


Renault Group

  • Zoom out: The deal comes as Europe’s industry contends with surging energy costs caused by Russia’s gas cutoff and nuclear utility EDF’s extended power production issues.

Bruce Linton, founder of the world’s biggest marijuana firm, is betting on the growth of the legal cannabis market in Germany. Linton, the former chairman of Canopy Growth, acquired a stake in Munich-based SynBiotic when it raised capital last month and will also become chairman of its newly created advisory board, with an option to buy further shares as compensation, the company said in a statement Thursday.

Foxconn, the Apple contractor that operates China’s largest iPhone assembly factory, said a pay-related “technical error” occurred when hiring new recruits and apologized to workers a day after videos of a worker protest over pay and sanitary conditions —where disgruntled workers clashed with police in hazmat suits and riot gear—circulated on social media.

share of iphone shipments

via Reuters

  • A step back: The Covid-hit factory in Zhengzhou had seen many workers flee the site over COVID outbreaks, strict quarantine rules, and food shortages since October after management implemented a so-called closed-loop system that isolated the plant from the wider world.

Germany rejected Poland’s request to send the Patriot missiles that Berlin offered to Warsaw to be sent to Ukraine instead, saying that the air defense units are "intended for NATO territory use only." Germany added that any use of Patriots outside NATO territory should require prior discussions with NATO allies.

Patriot defense system


  • In other news: Poland's PM Mateusz Morawiecki said he will press Hungarian PM Viktor Orban to support Finland and Sweden's acceptance into NATO "as quickly as possible."

The European Commission is to recommend that around €7.5 billion should be withheld from Hungary due to the government's failure to deliver necessary reforms to make sure that such funds are protected from corruption. Summing up an estimate of 65% of the funds Hungary received under EU Cohesion programs, the bloc's decision to freeze came over corruption concerns after it triggered a rule of law mechanism.

Women in Russia are campaigning for men to return from fighting after President Vladimir Putin ordered the mobilization of about 300,000 reservists in September. Protests took place in at least 15 areas, with families calling for making sure the mobilized men get adequate training and equipment and are taken care of at the front.

Support for the war in Russia

via Bloomberg

  • Meanwhile: Russia's parliament gave final approval to a "gay propaganda" law that puts significant restrictions on activities seen as promoting LGBT+ rights in the country. The new bill expands a ban on "propaganda of non-traditional sexual relations" to minors, in Russia's latest move in their crackdown on the LGBT+ community.

Eastern Europe's arms industry is churning out military supplies at a pace not seen since the Cold War, as countries in the region lead efforts to aid Ukraine to push back against Russia. The US and the UK committed the most direct military aid to Ukraine between Jan. 24 and Oct. 3, a report shows, with Poland in third place and the Czech Republic ninth, as the former Warsaw Pact countries see the war in Ukraine as a matter of regional security.

Arms production

via Reuters

The number of new Covid-19 cases in China rose by 31,444, its highest number of daily cases since the pandemic began in late 2019, the National Health Commission said Thursday, despite strict measures to eliminate the virus under the country's zero-Covid policy. 


Binance said it was committing $1 billion to establish an industry recovery initiative (IRI) that would invest in companies from the digital assets sector, as the crypto market is going through a crisis after the collapse of FTX. Binance added that it intends to ramp up the commitment amount to $2 billion in the near future, depending on what is needed.


via Reuters

  • On a related note: The International Organization of Securities Commission (IOSCO) chair said FTX's crash put greater urgency into regulating the crypto sector and targeting such "conglomerate platforms" will be the focus for 2023.

Twitter has lost its last two remaining employees at its Brussels office, which was a regulatory hub for the company, the Financial Times reported. The small office of six was cut to two recently after Elon Musk decided to cut the workforce in half, and losing the remaining two created fears it might be difficult for Twitter to adhere to new EU regulations regarding content moderation.

The UK government decided to restrict China-linked security cameras at its departmental buildings, citing "current and future possible security risks," Cabinet Office Minister Oliver Dowden said.

US Food and Drug Administration (FDA) approved a hemophilia drug that would cost $3.5 million per dose, making it the world's most expensive medicine. Hemgenix, a one-time gene therapy administered by IV fusion, is to treat adults with hemophilia B, a genetic bleeding disorder resulting from missing or insufficient levels of blood-clotting Factor IX.


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