Good morning. Today is Thursday, February 23rd.
In a move that reminds us of the ‘liquid mac and cheese martini’ cocktail, The Veltini, by the violently American “cheese” company Velveeta; Starbucks just announced the Oleato coffee line, an olive oil-infused beverage of sorts that is steamed with —to add insult to the injury, I guess— oat milk. In Velveeta's defense, at least they haven't launched their product in France—a country that has a rich culture around cheese. In contrast, Oleato will be launched in Italy, where Starbucks is as highly esteemed a coffee maker as much as Domino's is regarded as a pizza maker.
– Atilla and Tanem
• German inflation came out at 8.7% on the year in January and 1.0% on the month after changes to the index, showing no signs of easing at the start of the year. However, the EU-harmonized annual inflation rate (HICP) for January is at 9.2%, increasing by 0.5% from the previous month.
- Driving the surge: Excluding the 23.1% increase in energy prices, the inflation rate stood at 7.2% in January—including the 20.2% increase in food prices.
- Retroactive measures: Germany's corrected inflation reading for 2022 came out at 6.9% —one point lower than what was previously reported— as the German statistics office rebased the consumer price index from 2015 to 2020.
• Italian HICP fell 1.5% month-on-month but was up 10.7% YoY in January, revised down from preliminary data. Core inflation, which excludes food and energy, was up 6.6% YoY.
• German business sentiment improved in February for the fourth consecutive month, as ifo Business Climate Index for Germany stood at 91.1 following a revised reading of 90.1 in January.
- French business sentiment improved slightly in February, standing at 103 points —up from a revised figure of 102 for January— according to data from INSEE.
• Iraq's central bank said it weighs the option to allow trade from China to be settled directly in yuan, which have previously been financed in US dollars only, to compensate for a dollar shortage in local markets.
• The majority of Federal Reserve officials agreed at their last policy meeting to slow the pace of increases in the benchmark interest rate to 25bps, but also said the risks of high inflation remained a key factor shaping monetary policy and warranted continued hikes, with only ‘a few’ participants outright favoring a larger increase, FOMC minutes showed.
• Tesla will focus battery cell production in the US, despite that the company has begun assembling batteries in Germany, "due to the framework created by the United States Inflation Reduction Act (IRA)," the company said.
- “EV Shakeout”: Tesla’s Model 3 sedan now sells for $4,930 less than the average new vehicle sold in the US —EVs and gasoline-fueled cars combined— which has risen to $47,920 in January, according to a new Bloomberg analysis.
• Stellantis exceeded profit forecasts due to higher-than-expected merger benefits and strong car prices, but warned of pricing pressure as industry-wide supply chain issues eased. Due to a shortage of semiconductor chips, automakers have raised prices, and Stellantis reported a 29% increase in full-year 2022 operating profits.
- Behind the scenes: According to CEO Carlos Tavares, the semiconductor crisis was primarily caused by major first-tier suppliers struggling to manage their own supply chains.
• Chinese authorities have urged state-owned firms, with China's Ministry of Finance being among government entities that gave informal guidance, to stop working with the Big Four (PwC, Deloitte, KPMG, and EY) once their contracts expire—in the latest move to curb Western influence and possibly retaliate against data security concerns following a landmark agreement allowing US audit inspections of hundreds of Chinese firms listed in New York.
• Ford and Koç Holding announced they have signed a non-binding agreement with LG Energy Solution to form a joint venture to create one of Europe's biggest EV battery cell facilities in Turkey, after South Korean EV maker SK On withdrew from the joint venture two weeks ago.
• British shoppers, affected by the cost-of-living crisis, flocked to German-owned discount stores Aldi and Lidl over the Christmas period, switching about £58 million (€66 million) of purchases to Lidl from Tesco and Sainsbury's, according to Lidl GB CEO Ryan McDonnell.
- Bottom line: The discounters' size guarantees better terms when negotiating supplier deals, while they are also able to take a longer-term view on profit because they are privately owned and do not have to worry about shareholder returns or stock prices, Reuters reports.
• Semiconductor chip giant Intel announced it will slash its dividend payments by two-thirds to 12.5 cents per share—to the lowest level in 16 years. The decision was made to create the financial flexibility to navigate a period of macroeconomic uncertainty, the company said in a statement.
• Google parent Alphabet said it will cut 240 jobs from its operations in Ireland as part of a reduction in its global workforce—a 4.3% cut in Google’s 5,500-person Irish workforce, but still short of the global 6% headcount reduction being implemented across the company.
• Crypto firm Polygon said it laid off nearly 20% of its workforce, amounting to 100 employees, after combining multiple business units earlier in the year. The blockchain platform said employees will each get three months of severance pay, regardless of their level or tenure, as they joined a growing list of crypto and tech firms to lay off their workforce.
• US President Joe Biden said Putin made a "big mistake" for suspending the country from participating in the New START treaty, the last remaining nuclear arms deal between the two nations. Biden's condemnation came as he carried out a four-day visit to Ukraine and Poland meeting with Bucharest Nine leaders.
• Russia's President Vladimir Putin said his Chinese counterpart Xi Jinping would soon visit Moscow, saying their ties had reached "new frontiers" over US warnings that Beijing might provide support to Russia's invasion of Ukraine. Meanwhile, Putin welcomed China's top diplomat Wang Yi where they talked about bilateral trade, and said it could soon reach $200 billion a year, up from $185 billion in 2022.
- In other news: Russia's warship equipped with new-generation hypersonic cruise missiles arrived in South Africa to launch joint exercises with China, Russia's state news agency reported.
• South Korea, already holding the world record for the lowest fertility rate, dropped to a new low with an average number of expected babies per woman falling to 0.78 in 2022 from 0.81 in 2021, new data showed.
• EU's two venture capital (VC) firms Amadeus and Apex are partnering up their resources for a new fund specifically targeted at early-stage deep tech startups. Two firms raised an initial €28 million for the Amadeus-Apex Technology Fund, with plans to close it out at €80 million.
• EU's antitrust regulators set March 28 as a deadline to decide Google's acquisition of Photomath, a Croatia-based maths app that uses a phone camera or scientific calculator to recognize and explain math problems. European Commission filing said the regulators can either clear the deal after the initial review or open a four-month-long probe if it has serious concerns.
• Uber is launching a redesigned version of its app that puts all its services in one place and makes use of the latest iPhone and iOS features, such as using the dead space around the camera as a status indicator or using iOS 16's new Live Activities feature to share ride status and eta.
⚡️ Lightning Round
- WhatsApp's latest beta update contains references to a new "Newsletter" feature in its code that is currently under development, according to Wabeinfo.
- Twitter will now notify its users if they have liked, replied, or retweeted a tweet that receives a Community Note showing possible misinformation, the company said.
- Spotify is launching a new ‘DJ’ feature that offers a better personalized music experience with AI-powered spoken commentary to tell users about the song it chooses for them.
💬 Opinion: Putin has decided to normalize his war.
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⌨️ Liability of hosting: Supreme Court arguments this week could reshape the future of the internet.