🇫🇷 Pension reform

• French industrial production bounced back at a stronger-than-expected pace in November as operations returned to normal after a labor strike in refineries, figures from INSEE revealed on Tuesday. Industrial output climbed 2.0% from the prior month, following a downwardly revised drop of 2.5% in October and beating a forecast of a 0.8% rise.

^INSEE

• On a related note: Industrial production in Spain fell by 0.4% month-on-month in November, data from INE showed on Tuesday. Adjusted for seasonal and calendar effects, output rose by 2.5% from the same period a year prior.

• UK consumer spending in December lagged inflation, representing a sizable fall in real-term expenditure, surveys showed on Tuesday, despite contributions from Christmas shopping and the World Cup, strengthening forecasts by most analysts that Britain's economy is now in a recession.

• Zoom in: Barclays said spending on its credit and debit cards rose 4.4% in December compared with a year ago, a long way behind consumer price inflation which stood at 10.7% in November. Separately, the British Retail Consortium said spending in store chains rose by 6.9% in annual terms in December — also representing a decline when adjusted for inflation.
• Furthermore: Britain's labor market cooled further in December, according to a survey published on Tuesday by the Recruitment and Employment Confederation trade body and accountants KPMG. The monthly index of vacancies fell to 53.0 last month, its lowest since February 2021. The survey, watched closely by the Bank of England, may ease some of the central bank’s concerns about the risks of longer-term inflation pressure.

• The eurozone economy is expected to grow by 0.6% this year, Goldman Sachs said on Tuesday, compared with its previous forecast of a 0.1% contraction in GDP for the region, thanks to easing energy prices and the reopening of China's borders. Eurozone inflation is expected to be around 3.25% at the end of 2023 compared with a 4.50% forecast earlier, Goldman Sachs economists said.

• Industrial production in Turkey declined by 1.1% monthly and 1.3% annually in November, according to data from Turkstat released on Tuesday. Meanwhile, in a separate release, Turkstat said the seasonally adjusted unemployment rate stood at 10.2% in November, a slight increase from the previous month.

• Core inflation in Tokyo, a leading indicator of nationwide trends for Japan, rose a faster-than-expected 4.0% in December from a year earlier. The increase, which was the fastest pace in four decades, will likely prop up market expectations that the Bank of Japan may phase out its massive stimulus by tweaking its yield curve control policy.

• BMW said its Q4-2022 sales rose 10.6%, helped by easing supply chain problems in a year that has been troubled by the war in Ukraine and lockdowns in China. Full-year deliveries were down 4.8%, but sales bounced back in Q4 as the group adjusted supply chains in Europe and lockdowns were lifted in China.  Sales grew 10.9% and 12.7% year on year in Europe and China respectively.

• Germany’s Uniper announced that chief executive Klaus-Dieter Maubach will step down as the energy company grapples with the fallout from Russia's invasion of Ukraine. Maubach is the biggest casualty of a management shake-up in the struggling gas importer after a multibillion-euro government bailout.

^{via FT}

• A step back: Uniper reported a €40 billion loss for the first nine months of 2022, and was bought out by the German government from Finnish energy group Fortum, for fears that the company’s collapse would shake the economy.

• Amazon said on Tuesday it is closing three UK warehouses this year as the company cuts costs after a squeeze in customer spending. The closures at fulfillment centers in Hertfordshire, Yorkshire, and Scotland will affect 1,200 jobs. Workers affected by the closures will be offered alternative roles in nearby Amazon sites or retraining opportunities.

• A step back: The announcement comes a week after Amazon announced it would cut more than 18,000 staff from its global workforce.

• Canada is buying 88 F-35 stealth fighter jets in a $14.2 billion deal, with the first of the US-made planes expected to enter the Royal Canadian Air Force in 2026 and the full fleet being operational by 2033 or 2034, a Canadian government news release said. With the deal, Canada becomes the last of the F-35 program’s original eight partners to acquire the fifth-generation fighter, regarded as one of the best fighter jets in the world.

• Ford Motor will partner with LG to build a new battery plant in Turkey, dropping a deal with SK On, as the US carmaker seeks to speed up the shift to clean cars and diversify its battery suppliers. The facility in Turkey is slated to open as soon as 2025 with an annual capacity of 30 to 45-gigawatt hours.

• President Emmanuel Macron’s government presented a plan to restructure France’s pension system on Tuesday, raising the minimum retirement age from 62 to 64.

^{via Reuters}

• Looking ahead... The long-delayed overhaul —which the government insists is essential to boost low employment rates among seniors and avoid deficits in a system funded by worker contributions— must now be approved by parliament, where they do not have an absolute majority.
• Contrary perspectives: Labor unions have vowed to go on strikes and protests if the French President goes ahead with his plan. A retirement age of 64 is opposed by four in every five citizens according to a poll.

• Russia is now "likely" to be in control of Ukraine's eastern salt-mining town of Soledar after its troops and mercenaries from the Wagner Group made advances in the past four days following a months-long battle, UK Defense Ministry said. Striving to make their first breakthrough in the east in months, seizing Soledar would give Russian forces an advantage as they fight to capture the nearby city of Bakhmut.

^{via Reuters}

• Shoutout to NATO: Kremlin spokesperson Dmitry Peskov said that the US and NATO have become an "indirect side of the conflict" in Ukraine — by providing weapons, technology, and intel, as the bloc emphasizes that they are not going to become a party to the war.

• On a related note: Russia's artillery fire has decreased dramatically from its wartime high —in some places as much as 75%— a further indication that Russia's position continues to get weaker on the battlefield, US and Ukrainian officials told CNN.

• The EU and NATO formally signed a joint declaration to improve cooperation to counter Russia's war on Ukraine and boost security in the region. This marks the third joint declaration between the two organizations and builds on the previous ones signed in 2016 and 2018.

^{via DW}

• China halted issuing short-term visas for individuals from South Korea and Japan, in response to the strict Covid-19 restrictions placed on travelers from China where cases have been on a surge. Beijing said that the pause on visas will remain in place until "discriminatory" entry restrictions are lifted.

• Meanwhile: World Health Organization's EU office said they see "no immediate threat" for Europe from an outbreak in China, but that more information was needed to monitor the situation.

• Brazil's former president Jair Bolsonaro was admitted to a Florida hospital on Monday with stomach pains, as around 1,500 of his far-right supporters were detained in Brasilia after storming government buildings over the weekend. President Lula da Silva, who was invited to the White House by Joe Biden after condemning the attacks, said that the military did nothing to stop people who were trying to storm key buildings in the capital.

• Microsoft is in talks to invest $10 billion in ChatGPT-owner OpenAI as part of a funding that will value the firm at $29 billion, Semafor reported on Monday. The news shows rising interest in the artificial intelligence company, whose chatbot has dazzled amateurs and industry experts with its ability to imitate human speech and literature’ and debug codes.

• The first-ever satellite mission launched from UK soil ended in failure as the jumbo jet operated by the American Virgin Orbit company carried a rocket out of Newquay, Cornwall, to release it high over the Atlantic Ocean. The rocket ignited and appeared to be ascending correctly but then it suffered an "anomaly." The mission had been billed as a major milestone for the UK space agency, marking the birth of a home-grown launch industry. 

^{via BBC}

• One step further: Shares in Virgin Orbit fell more than 20% in pre-market trading after the failure of the historic attempt to launch the first commercial satellites from western Europe.

• US crypto exchange Coinbase is planning to cut 950 jobs, which amounts to around 20% of its workforce, and to shut down "several" projects as it looks to reduce expenses to increase its "chances of doing well in every scenario." Coinbase co-founder and chief executive Brian Armstrong said that this is the second round of major layoffs at the crypto exchange, and is a part of their efforts to cut its operating expenses by about 25% quarter over quarter.

• UK battery startup Britishvolt is in talks to be rescued for £32 million (€36mn) —a valuation 95% less than it was last year— organized by a consortium led by Dealab Group. 75% of shareholders' vote is needed for the deal to be signed for Britishvolt, whose funding round last February valued the company at more than £774 million.

🇩🇪 Opinion: Germany's economy faces huge challenges

🇫🇷 French pension reform: Government fails to win over public opinion

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