Tag Archives: EZC

Business

Shares and bonds nervy as rate-hike week looms

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  • Fed seen hiking 25 bps, ECB and BOE by 50 bps
  • Technology giants lead host of earnings results
  • Shares edge down after robust January rally

LONDON, Jan 30 (Reuters) – Stock markets worldwide halted their January rally on Monday, pausing for breath at the start of an agenda-setting week of central bank rate hikes and data releases that will clarify if progress has been made in the battle against inflation.

Investors expect the Federal Reserve will raise rates by 25 basis points on Wednesday, followed the day after by half-point hikes from the Bank of England and European Central Bank, and any deviation from that script would be a real shock.

Europe’s benchmark STOXX index fell 0.8% on Monday morning, echoing a slight dip in MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), which has surged 11% in January so far as China’s reopening bolsters sentiment.

The U.S. Nasdaq index is likewise on course for its best January since 2001, a rally that will be tested by earnings updates from tech giants this week.

U.S. stocks were set to follow the nervous Monday mood with S&P 500 futures down 1% and Nasdaq futures falling 1.3%, as investors await guidance later in the week on the Federal Reserve’s policy.

Analysts expect a hawkish tone suggesting that more needs to be done to tame inflation. read more

“With U.S. labour markets still tight, core inflation elevated and financial conditions easing, Fed Chair Powell’s tone will be hawkish, stressing that a downshifting to a 25bp hike doesn’t mean a pause is coming,” said Bruce Kasman, chief economist at JPMorgan, who expects another rise in March.

“We also look for him to continue to push back against market pricing of rate cuts later this year.”

There is a lot of pushing to do given futures currently expect rates to peak at 5% in March and to fall back to 4.5% by year end.

Europe offered a brisk reminder that the fight against rising prices is far from over, as bond yields in the region rose sharply on Monday in the wake of stronger-than-expected Spanish inflation data.

The data showing inflation rose 5.8% year-on-year in January, against expectations of 4.7%, pushed up the zone’s benchmark German 10-year government bond yield 7 basis points (bps) to 2.3190%, its highest since Jan. 10.

Italian and Spanish yields also inched up.

The dollar index was flat ahead of the week’s key data, on course for a fourth straight monthly loss of more than 1.5% on growing expectations that the Fed is nearing the end of its rate-hike cycle.

APPLE’S CORE

Yields on 10-year notes have fallen 33 basis points so far this month to 3.50%, essentially due to easing financial conditions even as the Fed talks tough on tightening.

That dovish outlook will also be tested by data on U.S. payrolls, the employment cost index and various ISM surveys.

Reading on EU inflation could be important for whether the ECB signals a half-point rate rise for March, or opens the door to a slowdown in the pace of tightening. read more

As for Wall Street’s recent rally, much will depend on earnings from Apple Inc (AAPL.O), Amazon.com (AMZN.O), Alphabet Inc (GOOGL.O) and Meta Platforms (META.O), among many others.

“Apple will give a glimpse into the overall demand story for consumers globally and a snapshot of the China supply chain issues starting to slowly abate,” wrote analysts at Wedbush.

“Based on our recent Asia supply chain checks we believe iPhone 14 Pro demand is holding up firmer than expected,” they added. “Apple will likely cut some costs around the edges, but we do not expect mass layoffs.”

Market pricing of early Fed easing has been a burden for the dollar, which has lost 1.6% so far this month to stand at 101.85 against a basket of major currencies.

The euro is up 1.5% for January at $1.0878 and just off a nine-month top. The dollar has even lost 1.3% on the yen to 129.27 despite the Bank of Japan’s dogged defence of its ultra-easy policies.

The drop in the dollar and yields has been a boon for gold, which is up 5.8% for the month so far at $1,930 an ounce .

The precious metal was flat on Monday ahead of the slew of key central bank moves and data releases.

China’s rapid reopening is seen as a windfall for commodities in general, supporting everything from copper to iron ore to oil prices.

Oil steadied on Monday after earlier losses, with prices bolstered by rising Middle East tension over a drone attack in Iran and hopes of higher Chinese demand.

Brent crude rose 10 cents, or 0.12%, to $86.76 a barrel by 1200 GMT while U.S. West Texas Intermediate crude added 4 cents, or 0.05%, to $79.72.

Reporting Lawrence White and Wayne Cole; Editing by Christopher Cushing, Arun Koyyur and Christina Fincher

Our Standards: The Thomson Reuters Trust Principles.

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Business

Rheinmetall eyes boost in munitions output, HIMARS production in Germany

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DUESSELDORF, Jan 29 (Reuters) – German arms-maker Rheinmetall is ready to greatly boost the output of tank and artillery munitions to satisfy strong demand in Ukraine and the West, and may start producing HIMARS multiple rocket launchers in Germany, CEO Armin Papperger told Reuters.

He spoke days before Germany’s defence industry bosses are due to meet new defence minister Boris Pistorius for the first time, though the exact date has yet to be announced.

With the meeting, Pistorius aims to kick off talks on how to speed up weapons procurement and boost ammunitions supplies in the long term after almost a year of arms donations to Ukraine has depleted the German military’s stocks.

Rheinmetall (RHMG.DE) makes a range of defence products but is probably most famous for manufacturing the 120mm gun of the Leopard 2 tank.

“We can produce 240,000 rounds of tank ammunition (120mm) per year, which is more than the entire world needs,” Papperger said in an interview with Reuters.

The capacity for the production of 155mm artillery rounds can be ramped up to 450,000 to 500,000 per year, he added, which would make Rheinmetall the biggest producer for both kinds of ammunition.

In 2022, Rheinmetall made some 60,000 to 70,000 rounds each of tank and artillery shells, according to Papperger, who said production could be boosted immediately.

Demand for these munitions has soared since Russia’s invasion of Ukraine last February, not only due to their massive use on the battlefield but also as Western militaries backfill their own stocks, bracing for what they see as a heightened threat from Moscow.

Papperger said a new production line for medium calibre ammunition, used by German-built Gepard anti-aircraft tanks in Ukraine for example, would go live by mid-year.

Germany has been trying for months to find new munitions for the Gepard that its own military had decomissioned in 2010.

HIMARS PRODUCTION LINE IN GERMANY?

At the same time, Rheinmetall is in talks with Lockheed Martin(LMT.N), the U.S. company manufacturing the HIMARS (High Mobility Artillery Rocket System) multiple rocket launchers in heavy use with Ukrainian troops, Papperger said.

“At the Munich Security Conference, we aim to strike an agreement with Lockheed Martin to kick off a HIMARS production (in Germany),” he said, referring to an annual gathering of political and defence leaders in mid-February.

“We have the technology for the production of the warheads as well as for the rocket motors – and we have the trucks to mount the launchers upon,” Papperger said, adding a deal may prompt investments of several hundred million euros of which Rheinmetall would finance a major part.

Rheinmetall also eyes the operation of a new powder plant, possibly in the eastern German state of Saxony, but the investment of 700 to 800 million euros would have to be footed by the government in Berlin, he said.

“The state has to invest, and we contribute our technological know-how. In return, the state gets a share of the plant and the profits it makes,” Papperger suggested.

“This is an investment that is not feasible for the industry on its own. It is an investment into national security, and therefore we need the federal state,” he said.

The plant is needed as shortages in the production of special powders could turn out to be a bottleneck, hampering efforts to boost the output of tank and artillery shells, he noted.

A few days before the meeting with the new defence minister, Papperger pushed for an increase of Germany’s defence budget.

“The 51 billion euros in the defence budget will not suffice to purchase everything that is needed. And the money in the 100 billion euro special funds has already been earmarked – and partially been eaten up by inflation,” he said.

“100 billion euros sounds like a giant sum but we would actually need a 300 billion euro package to order everything that’s needed,” he added, noting that the 100 billion special fund does not include ammunitions purchases.

Even before Russia’s invasion of Ukraine, Germany was 20 billion euros short of reaching NATO’s target for ammunitions stockpiling, according to a defence source.

To plug the munitions gap alone, Papperger estimates the Bundeswehr (German armed forces) would need to invest three to four billion euros per year.

In the talks with the minister, the defence boss hopes for a turn towards a more sustainable long-term planning in German procurement, stretching several years into the future, as the industry needed to be able to make its arrangements in time.

“What we are doing at the moment is actually war stocking: Last year, we prefinanced 600 to 700 million euros for goods,” Papperger said. “We must move away from this crisis management – it is crisis management when you buy (raw materials and other things) without having a contract – and get into a regular routine.”

Reporting by Sabine Siebold, Editing by Angus MacSwan

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World

Ukraine in talks with allies about getting long-range missiles, Zelenskiy aide says

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Jan 28 (Reuters) – Expedited talks are under way among Kyiv and its allies about Ukraine’s requests for long-range missiles that it says are needed to prevent Russia from destroying Ukrainian cities, a top aide to President Volodymyr Zelenskiy said on Saturday.

Ukraine has won promises of Western battle tanks and is seeking fighter jets to push back against Russian and pro-Moscow forces, which are slowly advancing along part of the front line.

“To drastically reduce the Russian army’s key weapon – the artillery they use today on the front lines – we need missiles that will destroy their depots,” presidential adviser Mykhailo Podolyak told Ukraine’s Freedom television network. He said on the Russian-occupied Crimean Peninsula there were more than 100 artillery warehouses.

“Therefore, firstly, negotiations are already under way. Secondly, negotiations are proceeding at an accelerated pace,” he said without giving details.

Zelenskiy, speaking separately, said Ukraine wanted to preempt Russian attacks on Ukrainian urban areas and civilians.

“Ukraine needs long-range missiles … to deprive the occupier of the opportunity to place its missile launchers somewhere far from the front line and destroy Ukrainian cities,” he said in an evening video address.

Zelenskiy said Ukraine needed the U.S.-made ATACMS missile, which has a range of 185 miles (297km). Washington has so far declined to provide the weapon.

Earlier in the day, the Ukrainian air force denied a newspaper report that it intended to get 24 fighter jets from allies, saying talks were continuing, Ukraine’s Babel online outlet said.

Spain’s El Pais newspaper, citing Ukrainian air force spokesperson Yuri Ihnat, said Ukraine initially wanted two squadrons of 12 planes each, preferably Boeing F-16 jets.

But in a statement to Babel, Ihnat said his comments to a media briefing on Friday had been misinterpreted.

“Ukraine is only at the stage of negotiations regarding aircraft. Aircraft models and their number are currently being determined,” he said.

Ihnat told the Friday briefing that F-16s might be the best option for a multi-role fighter to replace the country’s current fleet of ageing Soviet-era warplanes.

He also told Ukrainian national television that allied nations did not like public speculation about jets, Interfax Ukraine news agency said.

Deputy White House national security adviser Jon Finer on Thursday said United States would be discussing the idea of supplying jets “very carefully” with Kyiv and its allies.

Germany’s defence minister this week ruled out the idea of sending jets to Ukraine.

Reporting by David Ljunggren; Editing by Daniel Wallis and Cynthia Osterman

Our Standards: The Thomson Reuters Trust Principles.

David Ljunggren

Thomson Reuters

Covers Canadian political, economic and general news as well as breaking news across North America, previously based in London and Moscow and a winner of Reuters’ Treasury scoop of the year.

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World

Pro-Western, retired general Pavel sweeps Czech presidential vote

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  • Pavel wins in runaway vote over ex-PM Babis
  • Pavel gives clear support backing Ukraine, West
  • Pledges to end divisions brought by Babis, incumbent Zeman
  • Voter turnout record high in presidential election

PRAGUE, Jan 28 (Reuters) – Former army chief and high NATO official Petr Pavel won the Czech Republic’s presidential election on Saturday with a pledge to keep the country firmly anchored in the West and bridge society’s political differences.

Pavel, a 61-year-old retired general running for office for the first time, won 58.3% of the vote with all voting districts reporting final results, defeating billionaire ex-premier Andrej Babis, a dominant but polarising force in Czech politics for a decade.

Pavel, a social liberal who had campaigned as an independent and gained the backing of the centre-right government, conveyed a message of unity when addressing his supporters and journalists at a Prague concert venue on Saturday as results showed he had won.

“Values such as truth, dignity, respect and humility won,” he said.

“I am convinced that these values are shared by the vast majority of us, it is worth us trying to make them part of our lives and also return them to the Prague Castle and our politics.”

Pavel has also fully backed continued support for Ukraine in its defence against Russia’s invasion.

Czech presidents do not have many day-to-day duties but they pick prime ministers and central bank heads, have a say in foreign policy, are powerful opinion makers, and can push the government on policies.

Pavel will take office in March, replacing outgoing Milos Zeman, a divisive figure himself during his two terms in office over the past decade who had backed Babis as his successor.

Zeman had pushed for closer ties with Beijing and also with Moscow until Russia invaded Ukraine, and Pavel’s election will mark a sharp shift.

Turnout in the runoff vote that ended on Saturday was a record high 70.2%.

The result of the election will only become official when published in a legal journal on Tuesday, but the outcome of the poll was already clear on Saturday.

Babis, 68, a combative business magnate who heads the biggest opposition party in parliament, had attacked Pavel as the government’s candidate. He sought to attract voters struggling with soaring prices by vowing to push the government do more to help them.

Babis and Prime Minister Petr Fiala congratulated Pavel on his victory. Slovakia’s liberal President Zuzana Caputova appeared at Pavel’s headquarters to congratulate him, a demonstration of their close political positions.

Ukrainian President Volodymyr Zelenskiy congratulated Pavel on his election on Twitter and said he looked forward to close cooperation.

Reuters Graphics

EU AND NATO TIES

Pavel has backed keeping the central European country of 10.5 million firmly in the European Union and NATO military alliance, and supports the government’s continued aid to Ukraine.

He supports adopting the euro, a topic that successive governments have kept on the back burner, and supports same-sex marriage and other progressive policies.

A career soldier, Pavel joined the army in Communist times, was decorated with a French military cross for valour during peacekeeping in former Yugoslavia in the 1990s, and later rose to lead the Czech general staff and become chairman of NATO’s military committee for three years before retiring in 2018.

“I voted for Mr. Pavel because he is a decent and reasonable man and I think that the young generation has a future with him,” said Abdulai Diop, 60, after voting in Prague on Saturday.

Babis had campaigned on fears of the war in Ukraine spreading, and sought to offer to broker peace talks while suggesting Pavel, as a former soldier, could drag the Czechs into a war, a claim Pavel rejected.

Reporting by Robert Muller, Jason Hovet and Jan Lopatka; Additional reporting by Jiri Skacel and Fedja Grulovic; Editing by Hugh Lawson, David Holmes and Helen Popper

Our Standards: The Thomson Reuters Trust Principles.

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Health

U.S. CDC still looking at potential stroke risk from Pfizer bivalent COVID shot

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Jan 26 (Reuters) – New data from one U.S. Centers for Disease Control and Prevention (CDC) database shows a possible stroke risk link for older adults who received an updated Pfizer (PFE.N)/BioNTech (22UAy.DE) COVID-19 booster shot, but the signal is weaker than what the agency had flagged earlier in January, health officials said on Thursday.

U.S. Food and Drug Administration officials said they had not detected a link between the shots and strokes in two other safety monitoring databases.

The new data was presented at a meeting of outside experts that advise the FDA on vaccine policy.

Earlier this month, U.S. health officials said they had detected the possible link to ischemic strokes in people over age 65 who received the newer booster shots in its Vaccine Safety Datalink (VSD) database. They said at the time it was very unlikely to represent a true clinical risk.

Dr. Nicola Klein of healthcare company Kaiser Permanente, which maintains VSD data for the CDC, said the rate of strokes observed in the database had slowed in recent weeks, but the signal was still statistically significant, meaning likely not by chance.

Most of the confirmed cases had also received a flu vaccine at the same time, which might be a factor, she said.

FDA scientist Richard Forshee said the agency plans to study whether there is any increased risk of stroke from receiving the two shots at the same time.

Both agencies still recommend older adults receive the booster shots, now tailored to target Omicron variants as well as the original coronavirus.

Dr. Walid Gellad, professor of medicine at University of Pittsburgh, said the issue required further investigation.

“Sometimes signals are not clear,” Gellad said in an email. “It makes sense to look into it more, and it doesn’t make sense to change practice given the known benefits (of getting the booster) in this age group.”

(This story has been corrected to fix the name to Nicola from Nicole in paragraph 5)

Reporting by Michael Erman; Editing by Bill Berkrot

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World

EU wants to send more migrants away as irregular arrivals grow

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  • EU border agency says 2022 irregular arrivals highest since 2016
  • Ministers discuss stepping up returns to states including Iraq
  • Hardline migration ideas return to fore
  • Top EU migration official says no money for ‘walls and fences’

STOCKHOLM, Jan 26 (Reuters) – European Union ministers on Thursday sought ways to curb irregular immigration and send more people away as arrivals rose from pandemic lows, reviving controversial ideas for border fences and asylum centres outside of Europe.

EU border agency Frontex reported some 330,000 unauthorised arrivals last year, the highest since 2016, with a sharp increase on the Western Balkans route.

“We have a huge increase of irregular arrivals of migrants,” Home Affairs Commissioner Ylva Johansson told talks among the 27 EU migration ministers. “We have a very low return rate and I can see we can make significant progress here.”

Denmark, the Netherlands and Latvia were among those to call for more pressure through visas and development aid towards the roughly 20 countries – including Iraq and Senegal – that the EU deems fail to cooperate on taking back their nationals who have no right to stay in Europe.

Only about a fifth of such people are sent back, with insufficient resources and coordination on the EU side being another hurdle, according to the bloc’s executive.

The ministerial talks come ahead of a Feb. 9-10 summit of EU leaders who will also seek more returns, according to their draft joint decision seen by Reuters.

“The overall economic malaise makes countries like Tunisia change from a transit country to a country where locals also want to go,” said an EU official. “That changes things. But it’s still very manageable, especially if the EU acts together.”

‘WALLS AND FENCES’

That, however, is easier said than done in the bloc, where immigration is a highly sensitive political issue and member countries are bitterly divided over how to share the task of caring for those who arrive in Europe.

The issue has become toxic since more than a million people crossed the Mediterranean in 2015 in chaotic and deadly scenes that caught the bloc off guard and fanned anti-immigration sentiment.

The EU has since tightened its external borders and asylum laws. With people on the move again following the COVID pandemic, the debate is returning to the fore, as are some proposals previously dismissed as inadmissible.

Denmark has held talks with Rwanda on handling asylum applicants in East Africa, while others called for EU funds for a border fence between Bulgaria and Turkey – both ideas so far seen as taboo.

“We are still working to make that happen, preferably with other European countries but, as a last resort, we’ll do it only in cooperation between Denmark and, for example Rwanda,” Immigration Minister Kaare Dybvad said on Thursday.

Dutch minister Eric van der Burg said he was open to EU financing for border barriers.

“EU member states continue making access to international protection as difficult as possible,” the Danish Refugee Council, an NGO, said in a report on Thursday about what it said were systemic pushbacks of people at the bloc’s external borders, a violation of their right to claim asylum.

While EU countries protest against irregular immigration, often comprising Muslims from the Middle East and North Africa, Germany is simultaneously seeking to open its job market to much-needed workers from outside the bloc.

“We want to conclude migration agreements with countries, particularly with North African countries, that would allow a legal route to Germany but would also include functioning returns,” Interior Minister Nancy Faeser said in Stockholm.

Additional reporting by Philip Blenkinsop and Bart Meiejer, Writing by Gabriela Baczynska, Editing by Bernadette Baum

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World

Ukraine pledges sweeping personnel changes as allies jostle over tanks

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  • Zelenskiy promises changes amid corruption scandal
  • Poland says it is planning to send Leopard tanks to Ukraine
  • Germany hints at tank export approval as allies apply pressure

KYIV, Jan 24 (Reuters) – Ukrainian President Volodymyr Zelenskiy said personnel changes were being carried out at senior and lower levels, following the most high-profile graft allegations since Russia’s invasion that threaten to dampen Western enthusiasm for the Kyiv government.

Reports of a fresh scandal in Ukraine, which has a long history of shaky governance, come as European countries bicker over giving Kyiv German-made Leopard 2 tanks – the workhorse of armies across Europe that Ukraine says it needs to break through Russian lines and recapture territory.

“There are already personnel decisions – some today, some tomorrow – regarding officials at various levels in ministries and other central government structures, as well as in the regions and in law enforcement,” Zelenskiy said in his nightly video address on Monday.

Zelenskiy, who did not identify the officials to be replaced, said his plans included toughening oversight on travelling abroad for official assignments.

Several Ukrainian media outlets have reported that cabinet ministers and senior officials could be sacked imminently.

On Sunday, anti-corruption police said they had detained the deputy infrastructure minister on suspicion of receiving a $400,000 kickback over the import of generators last September, an allegation the minister denies.

A newspaper investigation accused the Defence Ministry of overpaying suppliers for soldiers’ food. The supplier has said it made a technical mistake and no money had changed hands.

David Arakhamia, head of Zelenskiy’s Servant of the People party, said officials should “focus on the war, help victims, cut bureaucracy and stop dubious business”.

“We’re definitely going to be jailing actively this spring. If the humane approach doesn’t work, we’ll do it in line with martial law,” he said.

‘SPRING WILL BE DECISIVE’

On the battlefront, front lines have been largely frozen in place for two months despite heavy losses on both sides.

Ukraine says Western tanks would give its ground troops the firepower to break Russian defensive lines and resume their advance. But Western allies have been unable to reach an agreement on arming Kyiv with tanks, wary of moves that could cause Moscow to escalate.

Berlin, which must approve Leopard re-exports, has said it is willing to act quickly if there is a consensus among allies.

Polish Prime Minister Mateusz Morawiecki, whose country borders Ukraine, said Warsaw would seek permission to send Leopard tanks to Kyiv and was trying to get others on board.

Germany is not blocking the re-export of Leopard tanks to Ukraine, the European Union’s top diplomat said on Monday.

American lawmakers have pressed their government to export M1 Abrams battle tanks to Ukraine, saying even a symbolic number would help push European allies to do the same.

Britain has said it will supply 14 Challenger 2 tanks. French President Emmanuel Macron said he did not rule out the possibility of sending Leclerc tanks.

Moscow sought to apply its own pressure.

“All countries which take part, directly or indirectly, in pumping weapons into Ukraine and in raising its technological level bear responsibility” for continuing the conflict, Kremlin spokesperson Dmitry Peskov said.

Ukraine and Russia are both believed to be planning spring offensives to break the deadlock in what has become a war of attrition in eastern and southern Ukraine.

“If the major Russian offensive planned for this time fails, it will be the ruin of Russia and Putin,” Vadym Skibitsky, deputy head of Ukraine’s military intelligence, said in an interview with news site Delfi.

One person was killed and two injured in Russian shelling of a residential district of the town of Chasiv Yar on Monday that damaged at least nine high-rise buildings, Pavlo Kyrylenko, governor of Donetsk region, said on Telegram.

“The Russians are deliberately terrorizing and killing the civilian population. And they will pay dearly for this,” he said.

Reuters could not independently verify battlefield reports.

‘ACTING AGAINST THE WEST’

In the 11 months since invading Ukraine, Russia has shifted its rhetoric on the war from an operation to “denazify” and “demilitarise” its neighbour to casting it as defence against an aggressive West. Kyiv and its Western allies call it an unprovoked act of aggression.

On Monday, the new general in charge of Russia’s military operations in Ukraine warned that modern Russia had never seen such “intensity of military hostilities”, forcing it to carry out offensive operations.

“Our country and its armed forces are today acting against the entire collective West,” Chief of the General Staff Valery Gerasimov told the news website Argumenty i Fakty.

Military reforms, announced mid-January, could be adjusted to respond to threats to Russia’s security, which include Sweden and Finland’s aspirations to join NATO and “the use of Ukraine as a tool for waging a hybrid war against our country,” he said.

Ukraine imposed sanctions on 22 Russians associated with the Russian Orthodox Church for what President Zelenskiy said was their support of genocide under the cloak of religion.

Reporting by Reuters bureaus; writing by Costas Pitas and Himani Sarkar; Editing by Stephen Coates

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World

Erdogan to Sweden: Don’t expect Turkish support for NATO bid after Stockholm protest

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ANKARA, Jan 23 (Reuters) – Sweden should not expect Turkey’s support for its NATO membership after a protest near the Turkish embassy in Stockholm at the weekend including the burning of a copy of the Koran, President Tayyip Erdogan said on Monday.

Protests in Stockholm on Saturday against Turkey and against Sweden’s bid to join the North Atlantic Treaty Organization (NATO) have heightened tensions with Turkey, whose backing Sweden needs to gain entry to the military alliance.

“Those who allow such blasphemy in front of our embassy can no longer expect our support for their NATO membership,” Erdogan said in a speech after a Cabinet meeting.

“If you love members of terrorist organisations and enemies of Islam so much and protect them, then we advise you to seek their support for your countries’ security,” he said.

Swedish Foreign Minister Tobias Billstrom declined to immediately comment on Erdogan’s remarks, telling Reuters in a written statement he wanted to understand exactly what had been said.

“But Sweden will respect the agreement that exists between Sweden, Finland and Turkey regarding our NATO membership,” he added.

Sweden and Finland applied last year to join NATO following Russia’s invasion of Ukraine but all 30 member states must approve their bids. Ankara has previously said Sweden in particular must first take a clearer stance against what it sees as terrorists, mainly Kurdish militants and a group it blames for a 2016 coup attempt in Turkey.

U.S. State Department spokesperson Ned Price said Finland and Sweden are ready to join the alliance, but declined to comment on whether Washington thought Erdogan’s comments meant a definitive shutting of the door to them.

“Ultimately, this is a decision and consensus that Finland and Sweden are going to have to reach with Turkey,” Price said.

Price told reporters that burning books that are holy to many is a deeply disrespectful act, adding that the United States is cognizant that those who may be behind what took place in Sweden may be intentionally trying to weaken unity across the Atlantic and among Washington’s European allies.

“We have a saying in this country – something can be lawful but awful. I think in this case, what we’ve seen in the context of Sweden falls into that category,” Price said.

The Koran-burning was carried out by Rasmus Paludan, leader of Danish far-right political party Hard Line. Paludan, who also has Swedish citizenship, has staged a number of demonstrations in the past where he burned the Koran.

Several Arab countries including Saudi Arabia, Jordan and Kuwait denounced the event. Turkey had already summoned Sweden’s ambassador and cancelled a planned visit by the Swedish defence minister to Ankara.

Reporting by Ece Toksabay and Huseyin Hayatsever; Additional reporting by Niklas Pollard in Stockholm and Humeyra Pamuk in Washington; Editing by Hugh Lawson and Grant McCool

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Business

New suppliers race to plug in to electric car market

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WOKING, England, Jan 23 (Reuters) – The global auto industry has committed $1.2 trillion to developing electric vehicles (EVs), providing a golden opportunity for new suppliers to grab contracts providing everything from battery packs to motors and inverters.

Startups specialising in batteries and coatings to protect EV parts, and suppliers traditionally focused on niche motorsports or Formula One (F1) racing, have been chasing EV contracts. Carmakers design platforms to last a decade, so high-volume models can generate large revenues for years.

The next generation of EVs is due to hit around 2025 and many carmakers have sought help plugging gaps in their expertise, providing a window of opportunity for new suppliers.

“We’ve gone back to the days of Henry Ford where everyone is asking ‘how do you make these things work properly?’,” says Nick Fry, CEO of F1 engineering and technology firm McLaren Applied.

“That’s a huge opportunity for companies like us.”

Bought from McLaren by private equity firm Greybull Capital in 2021, McLaren Applied has adapted an efficient inverter developed for F1 racing for EVs. An inverter helps control the flow of electricity to and from the battery pack.

The silicon carbide IPG5 inverter weighs just 5.5 kg (12 lb) and can extend an EV’s range by over 7%. Fry says McLaren Applied is working with around 20 carmakers and suppliers, and the inverter will appear in high-volume luxury EV models starting January 2025.

Mass-market carmakers often prefer to develop EV components in-house and own the technology themselves. After years of pandemic-related parts shortages, they are wary of over-reliance on suppliers.

“We just can’t afford to be reliant on third parties making those investments for us,” said Tim Slatter, head of Ford (F.N) in Britain.

Traditional suppliers, such as German heavyweights Bosch and Continental (CONG.DE), are also investing heavily in EVs and other technologies to stay ahead in a fast-changing industry.

But smaller companies say there are still opportunities, particularly with low-volume manufacturers that cannot afford huge EV investments, or luxury and high-performance carmakers seeking an edge.

Croatia’s Rimac, an electric hypercar maker part-owned by Germany’s Porsche AG (P911_p.DE) that also supplies battery systems and powertrain components to other automakers, says an undisclosed German carmaker will use a Rimac battery system in a high-performance model – with annual production of around 40,000 units – starting this year, with more signed up.

“We need to be 20%, 30% better than what they can do and then they work with us,” CEO Mate Rimac says. “If they can make a 100-kilowatt hour battery pack, we must make a 130-kilowatt pack in the same dimensions for the same cost.”

NO TIME TO LOSE

Some suppliers like Cambridge, Massachusetts-based Actnano have had long relationships with EV pioneer Tesla (TSLA.O). Actnano has developed a coating that protects EV parts from condensation and its business has spread to advanced driver-assistance systems (ADAS), as well as other carmakers including Volvo (VOLCARb.ST), Ford, BMW (BMWG.DE) and Porsche.

California-based startup CelLink has developed an entirely automated, flat and easy-to-install “flex harness”, instead of a wire harness to group and guide cables in a vehicle. CEO Kevin Coakley would not identify customers but said CelLink’s harnesses had been installed in around a million EVs. Only Tesla has that scale.

Coakley said CelLink was working with U.S. and European carmakers, and with a European battery maker on battery wiring.

Others are focused on low-volume manufacturers, like UK startup Ionetic, which develops battery packs that would be too expensive for smaller companies to make themselves.

“Currently it costs just too much to electrify, which is why you see some manufacturers delaying their electrification launch,” CEO James Eaton said.

Since 1971, Swindon Powertrain has developed powerful motorsports engines. But it has now also developed battery packs, electric powertrains, e-axles and is working with around 20 customers, including carmakers and an electric vertical take-off and landing (eVTOL) aircraft maker.

“I realized if we don’t embrace this, we’re going to end up working for museums,” said managing director Raphael Caille.

But time may be running out.

Mate Rimac says major carmakers scrambled in the last three years to roll out EVs and now have strategies largely in place.

“For those who haven’t signed projects, I’m not sure how long the window of opportunity will remain open,” he said.

($1 = 0.8226 pounds)

Reporting by Nick Carey
Editing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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Spotify to trim 6% of workforce in latest tech layoffs

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Jan 23 (Reuters) – Spotify Technology SA (SPOT.N) said on Monday it plans to cut 6% of its workforce and would take a related charge of up to nearly $50 million, adding to the massive layoffs in the technology sector in preparation for a possible recession.

The tech industry is facing a demand downturn after two years of pandemic-powered growth during which it had hired aggressively. That has led firms from Meta Platforms Inc (META.O) to Microsoft Corp (MSFT.O) to shed thousands of jobs.

“Over the last few months we’ve made a considerable effort to rein in costs, but it simply hasn’t been enough,” Chief Executive Daniel Elk said in a blog post announcing the roughly 600 job cuts.

“I was too ambitious in investing ahead of our revenue growth,” he added, echoing a sentiment voiced by other tech bosses in recent months.

Spotify’s operating expenditure grew at twice the speed of its revenue last year as the audio-streaming company aggressively poured money into its podcast business, which is more attractive for advertisers due to higher engagement levels.

Reuters Graphics

At the same time, businesses pulled back on ad spending on the platform, mirroring a trend seen at Meta and Google parent Alphabet Inc (GOOGL.O), as rapid interest rate hikes and the fallout from the Russia-Ukraine war pressured the economy.

The company, whose shares rose 5.8% to $103.55, is now restructuring itself in a bid to cut costs and adjust to the deteriorating economic picture.

It said Dawn Ostroff, the head of content and advertising, was leaving after an over four-year stint at the company. Ostroff helped shape Spotify’s podcast business and guided it through backlash around Joe Rogan’s show for allegedly spreading misinformation about COVID-19.

The company said it is appointing Alex Norström, head of the freemium business, and research and development boss Gustav Söderström as co-presidents.

Spotify had about 9,800 full-time employees as of Sept. 30.

($1 = 0.9196 euros)

Reporting by Eva Mathews in Bengaluru; Editing by Sherry Jacob-Phillips and Shailesh Kuber

Our Standards: The Thomson Reuters Trust Principles.

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