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Eurozone business activity returns to modest growth, Finland says time-out needed in talks with Turkey, Ukraine purges officials in corruption shakeup


Good morning. Today is Wednesday, January 25th.

More than a dozen top Ukrainian officials, including governors of major battlefield provinces, were dismissed as part of an anti-corruption purge by President Volodymyr Zelenskiy, marking the biggest overhaul in the country’s leadership since the beginning of Russia’s 11-month-old invasion. In the meantime, Germany and the US are warming up to the idea of sending tanks to Ukraine, after remaining wary of responding to Kyiv’s pleas for months.

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—Özlem, with Tanem and Can


Eurozone business activity unexpectedly returned to modest growth in January, an S&P Global survey revealed on Tuesday, adding to signs the downturn in the bloc may not be as deep as feared and that the currency union may escape recession. A flash estimate for the Composite Purchasing Managers' Index (PMI) rose to 50.2 from 49.3 in December, registering above the 50 mark —which separates growth from contraction— for the first time since June 2022.

Eurozone PMI

S&P Global

  • Zoom in: In a sign of business optimism, the employment index rose to a three-month high of 52.5 from 51.9 in December. The flash Services PMI went up to a six-month high of 50.7 from 49.8 in the previous month and above a forecast of 50.2. The flash Manufacturing PMI came in at 48.8, up from 47.8 in the month prior and beating a 48.5 forecast.

German consumer morale is set to improve for a fourth consecutive month in February as energy prices fall, a GfK institute survey showed on Tuesday. The consumer sentiment index rose to -33.9 heading into February from a revised reading of -37.6 in January but was slightly below a median forecast of -33.0.

  • PMI data: The strain on Europe’s largest economy alleviated further in January, although sentiment was still shy of predicting a return to growth. S&P Global's flash Composite PMI, which tracks both the manufacturing and services sectors that together account for more than two-thirds of the German economy, rose for the third consecutive month, to 49.7 from 49.0 in December.
  • In other news: German exports to Russia plunged 45% year-on-year to €14.6 billion last year, a level not seen since 2003, Reuters reported, as sanctions targeting Moscow for the war in Ukraine took their toll on once-close ties. Imports from Russia, however, grew by 11% to about €37 billion due to high oil and gas prices.

Business climate in France remained mostly stable in January, as it has been since September, while the employment climate improved further, monthly survey results from the statistical office INSEE showed on Tuesday. The composite business confidence index that comprises the responses of business leaders from all sectors edged down to 102 from a revised reading of 103, slightly above its long-term average (100).

Business climate France


  • PMI data: French economic activity declined slightly overall again in January, mainly due to a continued decline in the country's dominant services sector, preliminary data showed on Tuesday, but manufacturing output improved for the first time since August.
  • Zoom in: The flash Composite PMI slipped to 49.0, from 49.1 in December. Manufacturing PMI rose to 50.8 from 49.2 last month. Services PMI came in at 49.2, a 22-month low and down from 49.5 the previous month.

Britain’s government borrowing reached £27.4 billion in December, the highest December figure since monthly records began in 1993, the Office for National Statistics revealed on Tuesday, reflecting the huge cost of energy support and soaring debt interest linked to rising inflation. The figure was also £9.8 billion more than an official forecast by the Office for Budget Responsibility (OBR).

  • PMI data: Business activity in the UK declined at its fastest rate in two years in January, as businesses blamed higher interest rates, strikes, and weak consumer demand for the slowdown. The flash Composite PMI dropped to 47.8 from 49.0 in the previous month, contrasting a slight rise in economic activity in the eurozone.

The decline in US private sector activity softened at the start of 2023, according to a preliminary reading from S&P Global released on Tuesday, as manufacturers and service providers signaled moderations in their respective downturns. The flash Composite PMI rose to 46.6 in January from 45.0 in the previous month, below the neutral 50-line and registering its seventh consecutive month of contraction.


Swatch is expecting record sales of as much as 9 billion Swiss francs (€9bn) this year as China rolls back strict anti-Covid policies, CEO Nick Hayek said. The Swiss watchmaker gets more than 40% of its revenue from China according to analysts, and Hayek said sales in that market already exceeded last year’s very profitable January, while demand in Europe and the US also remains strong for its MoonSwatches.


via FT

US pharmaceutical Eli Lilly is planning an expansion worth $450 million (€414mn) to its manufacturing site in North Carolina, which will double the production of its diabetes drug with the potential to treat obesity. Demand grows for Mounjaro, Lilly’s drug that mimics incretin, a hormone that gives the sensation of having eaten. The trend is a part of the soaring demand for drugs that can help with weight loss. 

Verizon forecasted annual profit below expectations as the growth led by the pandemic slowed down and the company increased spending on 5G technology. Once the top communication company among post-paid customers, Verizon last year lost subscribers to AT&T and T-Mobile, which offered more affordable plans or had better 5G networks. 

Ken Griffin's Citadel made a record $16 billion profit for its clients in 2022, surpassing John Paulson’s 2007 bet against subprime mortgages that generated a profit of $15 billion and becoming the top-earning hedge fund manager ever. The top 20 hedge fund firms last year collectively generated $22.4 billion in profit after fees, LCH Investments estimated.

Ken Griffin

via Bloomberg


Poland formally requested permission from Germany to export 14 Leopard 2 battle tanks to Ukraine, with Poland's PM Mateusz Morawiecki saying he hoped Berlin would respond quickly, accusing them of "delaying, dodging, acting in a way that is difficult to understand."  Morawiecki also said they will ask the EU to compensate the cost of the tanks they want to send to Kyiv.

Polish Army Leopard tanks

via Bloomberg

  • This just in: Germany will send Leopard 2 tanks to Ukraine and allow other countries such as Poland to do the same, while the US may supply Abrams tanks, Reuters reported on Tuesday, citing two sources familiar with the matter.

More than a dozen Ukrainian officials were dismissed due to some corruption scandals, including governors of several major battlefield regions such as Kherson, Zaporizhzhia, Sumy, Dnipropetrovsk, and Kyiv. A top adviser and four deputy ministers were among those who were forced to leave their posts on Tuesday, as Ukraine launches a broad anti-corruption drive.

Finland's Foreign Minister Pekka Haavisto said a time-out was needed for a few weeks in Finland and Sweden's talks with Turkey in their bid to join NATO, after Turkey's President Erdogan said Sweden should not expect their support following a protest that included the burning of a Quran near the Turkish embassy in Stockholm.

Finland's FM

via BBC

  • What's more: Haavisto also suggested that the country may consider joining NATO without Sweden if Turkey continues to block their joint bid, but later backpedaled and said his comment was "imprecise" and that their goal to join the alliance jointly remained unchanged.
  • In other news: Russia's newly-appointed military operations chief Valery Gerasimov said the country's new military reforms respond to possible NATO expansion and the "collective West"s use of Kyiv to wage a hybrid war against Russia.

Bulgaria is set to hold yet another parliamentary election —its fifth one in two years— after the Socialist Party said they failed to form a government stating "there was not enough will to form a working government." Failing to form a Cabinet for the third and final time in this parliament, the country is heading toward a general election once again, most likely to be held in April.

California was staggered by back-to-back deadly shootings, as Saturday's shooting in Los Angeles that killed 11 was followed by a shooting in the coastal town of Half Moon Bay where another gunman killed 7 farm workers and fled, just two days after the LA shooting in Monterey Park.


Amazon has launched a medication subscription service for Prime members, in its latest venture into the healthcare industry. The service, called RxPass, allows patients to order generic medications for more than 80 common health conditions, the company said on Tuesday. Customers need to be subscribed to the $139-a-year Prime membership and pay an additional $5 per month for the pharmacy service. 

Binance, the world’s largest crypto exchange, processed almost $346 million (€318mn) in bitcoin for the Bitzlato digital currency exchange, whose founder was arrested by the US Justice Department last week for allegedly running a "money laundering engine," Reuters reported. Binance was among Bitzlato’s top three counterparties by the amount of bitcoin received between May 2018 and September 2022, US Treasury said.

Twitter is facing lawsuits over unpaid rent at its headquarters in San Francisco and offices in London. The SF landlord says Twitter owes $3.16 million (€2.9mn) in unpaid rent and is seeking late fees and interest plus attorneys’ fees. The allegations come following Elon Musk’s cost-cutting strategy, which included slashing the workforce and auctioning off memorabilia and office furniture.

SpaceX announced it completed a major test of its latest Starship prototype. The test, known as a "wet dress rehearsal," fueled up Starship prototype 24, stacked on a Super Heavy booster prototype, at SpaceX’s Starbase facility in Texas. It didn’t include firing up the engines but showed the vehicle can be safely filled with liquid fuel before a launch. The next step in flight testing is an orbital launch attempt.




♻️ Comment: With emissions on track to rise by 2030, companies urgently need to step up climate action

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Aposto Europe

The news, every weekday at 07:30 (CET), with a distinctly European perspective. Your briefing on markets, politics, business, tech and more — under 5 minutes



Composite Purchasing Managers' Index

employment index

GfK institute

consumer sentiment index


S&P Global


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