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Çarşamba, Mart 29, 2023
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🌍 is in a "sorry state"

Eurozone inflation eases as expected, UK inflation edges down while food prices surge, Microsoft set to cut 10,000 jobs amid recession fear


Good morning. It is Thursday, January 19th.

Ukraine's Interior Minister was killed in a helicopter crash, marking the death of the most senior official since Russia invaded nearly 11 months ago. There was no immediate word on whether the crash, which occurred on a foggy morning in a suburb of Kyiv, was an accident or related to the war. Meanwhile, speaking at the World Economic Forum in Switzerland's Davos, UN Secretary-General Antonio Guterres said the world is in a "sorry state" right now due to interlinked challenges that are "piling up like cars in a chain reaction crash."

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Eurozone consumer inflation decelerated to 9.2% year-on-year in December, according to data from Eurostat on Wednesday, confirming an earlier flash estimate and matching analyst expectations. Consumer prices in the single currency bloc fell 0.4% month-on-month, thanks to a continued fall in energy prices that had earlier lifted inflation to record highs.

  • Zoom in: Energy prices fell 6.6% month-on-month for a 25.5% year-on-year rise, decelerating from the 34.9% year-on-year gain the month before. As a result, energy was no longer the main contributor to the overall year-on-year number, adding only 2.79 percentage points, while food contributed 2.88 percentage points.

Britain’s consumer inflation eased to 10.5% in December from November's 10.7%, the Office for National Statistics said on Wednesday, in line with forecasts. However, while lower energy and clothing prices pushed down the headline rate, food costs were 16.8% higher than a year earlier, the sharpest increase since September 1977.


via The Guardian

Italy’s trade balance rose to a surplus of €1.45 billion in November 2022 from a deficit of €2.12 billion in the previous month, data from ISTAT showed Wednesday. Exports in November grew 18% year-on-year, while imports rose 20.4%. The balance of trade in Europe’s third-largest economy had been negative since December 2021, largely because of the soaring cost of energy imports.

Italy trade flows


US producer prices fell sharply by 0.5% in December, the Labor Department reported Wednesday, beating analyst estimates of a 0.1% decrease and suggesting inflation is beginning to ease. The drop was mainly due to a sharp decline in energy prices, which plunged 7.9%. For the year, the headline PPI rose 6.2%, the lowest annual level since March 2021.

  • Meanwhile: Retail sales fell 1.1% in December, slightly more than the 1% forecast. Those numbers are not adjusted for inflation, so the latest reading reflects both receding inflation and tepid consumer demand during the holiday shopping season.
  • Furthermore: US industrial production fell a more-than-expected 1.3% in December, the Federal Reserve said on Wednesday, while figures for November were revised lower to show factory output decreasing 1.1% instead of the previously reported 0.6%. Output fell 0.5% on a year-on-year basis in December while it decreased at a 2.5% annualized rate in Q4.

The Bank of Japan maintained ultra-low interest rates on Wednesday, defying market expectations amid mounting inflationary pressure and sending the yen tumbling. The BOJ left the short-term interest rate at an ultra-dovish -0.1% and the 10-year Japanese Government Bonds yield around 0%. The central bank also kept its yield curve control targets unchanged.


Microsoft announced it would cut 10,000 jobs, which amounts to around 5% of its workforce, to brace for a potential recession as the customers reassess their spending. Microsoft also plans to take a $1.2 billion charge in the second fiscal quarter in accordance with the layoffs, which will shave 12 cents off of earnings per share, the company said in a corporate filing.

  • On a related note: Amazon.com began cutting some jobs in the US, Canada and Costa Rica by the end of Wednesday as part of its plan to lay off 18,000 employees, the e-commerce giant said in a memo seen by Reuters.

The new owners of French football team Olympique Lyonnais plan to float their multi-club business in the US this year through a blank check company, targeting a $1.2 billion valuation in what would be a first for the football industry.

John Textor

via FT

  • Zoom in: Eagle Football Holdings, a London-based company controlled by US businessman John Textor, completed the purchase of Lyon on December 19 in a deal valuing the Ligue 1 club at €800 million. The group also owns Brazilian club Botafogo, Belgian second-tier club RWD Molenbeek, and a 40% stake in Premier League club Crystal Palace.

Corporate greed has "gone too far", especially in the US, the CEO of Norway’s sovereign wealth fund said in an interview at the World Economic Forum in Davos on Wednesday. Nicolai Tangen added that the $1.3 trillion wealth fund is pushing back on companies offering some of the most extravagant pay packages to executives.

CEO Tangen

via Bloomberg

  • Furthermore: In an interview with the Financial Times, Tangen warned that returns for stocks could be "very, very low" for an extended period of time and added that a new cycle of Federal Reserve rate rises was "not that unlikely" and "not in anybody’s estimates."

More than a dozen of Apple’s Chinese suppliers are receiving initial clearance from India to expand in the country, helping the tech giant’s efforts to diversify its assembly network beyond China. AirPods and iPhone assembler Luxshare Precision and a unit of lensmaker Sunny Optical are among the companies gaining approval, Bloomberg reported. 

  • A step back: The clearances from key Indian ministries are a step toward full approval for expansion in India, and the companies will still likely be required to find local Indian joint venture partners, the report said.

A helicopter carrying Ukraine's Interior Minister crashed into a kindergarten near Kyiv, killing the minister and about a dozen other people, including children on the ground, authorities said. There was no immediate information about whether the crash on a foggy morning in Bovary was an accident or related to the war.

Crash in Bovary

via NYT

  • What Zelenskiy said: "This is not an accident because it has been due to war and the war has many dimensions, not just on the battlefield," President Volodymyr Zelenskiy said.
  • Meanwhile in Russia: President Vladimir Putin could be ready to announce a second round of mobilization to expand his army, as early as Jan. 18, analysts at the Institute for the Study of War said.
  • In other news: Dutch PM Mark Rutte said the country had the intention to follow US and Germany’s effort to train and arm Ukraine with advanced Patriot missile defense systems, in a meeting with US President Joe Biden at the White House.

UN Secretary-General Antonio Guterres said the world is currently in a "sorry state" due to interconnected challenges —such as climate change and Russia's war on Ukraine— at the World Economic Forum meeting in Davos, Switzerland, adding that the problems are "piling up like cars in a chain reaction crash."


via DW

  • Furthermore: Ukraine's President Volodymyr Zelenskiy asked Western leaders to send weapons more quickly, addressing the World Economic Forum in Davos via video link, warning that, "The time the free world uses to think is used by the terrorist state to kill."

The Church of England bishops refused to allow priests to marry same-sex couples in its churches, but they will be able to have a church service with "prayers of dedication, thanksgiving or for God's blessing"  following a civil marriage or partnership. The decision came after five years of debate on the church's position on sexuality and is expected to be outlined in a report in its national assembly next month.

Climate activist Greta Thunberg was released after being briefly detained by German police, along with other activists, during a protest against a coal mine expansion in the small village of Luetzerath.

Taiwan's military will allow women to volunteer for reserve force training for the first time, the defense ministry reported, as China proceeds to increase military pressure on the island.


Spotify and other media companies urged the European Commission to take action against Apple for anticompetitive and unfair practices, in a joint industry letter addressed to the EU antitrust regulator on Wednesday. The music streaming platform has accused Apple for years of abusing its market position and using its Apple Store rules to stifle competition.

Apple postponed the launch of its lightweight augmented-reality glasses indefinitely due to technical challenges, but is still planning to unveil its first mixed-reality headset —which will cost around $3,000— in this year's spring event, Bloomberg reported on Wednesday. Apple's mixed-reality device would compete with the likes of Meta’s Quest Pro headset, which was launched late last year for $1,500.

Apple's rumored MR headset

via AppleInsider

Over 500 advertisers have paused spending on Twitter since Elon Musk's takeover, and the social media company's daily revenue on Jan. 17 was 40% lower than the same day last year, The Information reported.

China is set to launch a state-backed transportation platform that will include services like ride-hailing, cargo trucking, road transport, and flight — which is expected to integrate more than 90% of its total transportation market capacity. The news comes amid the ride-hailing giant Didi's ban on the country was lifted on Monday, after the market-dominating company took measures to provide data security.


🪖 Analysis: Germany's new defense minister faces pressure on tanks, army upgrade

💶 Opinion: Germany & France account for most EU subsidies. Here's why it's a concern

📉 Demographics: Threats, advantages seen in China’s shrinking population

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