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FirstFT: Breakthrough in Northern Ireland trade talks

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London and Brussels have them made a breakthrough in the devastating dispute over Northern Ireland’s post-Brexit trade relations, paving the way for a new impetus to solve the long-standing problem.

After months of stalemate and disagreements, the UK and EU issued a joint statement yesterday announcing a deal in principle that would give Brussels access to UK IT systems for trade across the Irish Sea.

The statement described the talks between James Cleverley, UK Foreign Secretary, and Maroš Šefovic, Vice President of the European Commission, as “friendly and constructive”. “It looks good,” said an EU official.

Brilliant and Sefcovic will meet again on January 16, with EU and UK officials hoping the two sides will agree shortly thereafter to enter a final negotiating “tunnel” to resolve important outstanding issues.

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Securing a deal would be complex and politically risky, at least for UK Prime Minister Rishi Sunak, whom Eurosceptic Conservative MPs could turn against if he is deemed to have “sold out” to Brussels.

1. The United Kingdom weighs the supply of tanks to Ukraine Britain evaluates the merits Supply of Challenger 2 tanks to Ukraine To fight the Russian invasion. If the deal is implemented, it will be the first time that a Western country will provide Kyiv with modern heavy battle tanks.

2. The Cornwall satellite failed to get into orbit Britain’s historic attempt to launch the first commercial satellite from Western Europe Failed last night When Virgin Orbit’s LauncherOne rocket suffered an “anomaly” that prevented it from reaching orbit. The failed mission is a severe blow to the United Kingdom, which had hoped to outpace rival spaceports in Norway and Sweden.

3. The White House is under pressure to fire Bolsonaro After violent riots in Brazil by supporters of the country’s former president, Jair Bolsonaro, Joe Biden under pressure from Congress to expel him from the United States. Bolsonaro, who has faced investigations since taking office, including for allegedly spreading election misinformation, has been in self-imposed exile in Florida since leaving office.

The entrance to the office of the President of the Brazilian Senate the day after the congress was stormed by supporters of former President Jair Bolsonaro
The entrance to the office of the President of the Brazilian Senate the day after the congress was stormed by supporters of former President Jair Bolsonaro. © Eraldo Peres / AP

4. Toyota’s leasing unit warns of electric vehicle challenge A senior executive at one of Toyota’s leasing companies has warned that the world’s largest automaker is in trouble ‘Unprecedented’ challenge To revive sales of its first mass-produced all-electric vehicle. The company risks missing its already low target in Japan for the second year in a row.

5. Chinese Tesla owners protest price cuts Tesla owners are in major cities across China Protesting automakers’ price cuts, upset that their cars had lost a great deal of value. The protests come as Tesla grapples with slowing electric car sales in China and increasingly fierce competition from local rivals.

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FT Live will host a number of events alongside the World Economic Forum in Davos next week. View events and register for free here.

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Economic data The British Retail Consortium releases its Retail Sales Monitor for December, while the UK Employment and Employment Consortium publishes its monthly jobs report. France has industrial production figures for November.

Global Economic Prospects Report The World Bank launches the winter edition of its biannual world economic outlook.

Governor of the Bank of England speaking Andrew Bailey leads a panel discussion on central bank independence and potential future risks at an event hosted by Sweden’s Riksbank.

Meloni hosts Kishida in Italy Prime Minister Giorgia Meloni hosts her Japanese counterpart Fumio Kishida in Rome.

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Corporate earnings Employment consultancy Robert Walters got a fourth-quarter trade update, while British gaming maker Games Workshop released first-half results.

What else do we read?

Joe Biden’s claim to presidential greatness Like Harry Truman and Lyndon Johnson, Joe Biden is an underrated former vice president who excels in the Oval Office. Although a second term may seem extended, Don’t bet on itwrites Gideon Rachman.

How could the Murdoch family fight for control Dilemmas of succession, joint control and intertwining family loyalties hampered Rupert Murdoch’s career. Now, they are set to fall heavily on the next generation of the media dynasty. With a $27 billion plan in the works to reunite Fox and News Corp, one question looms: Will the rest of the family Let Marduk’s eldest son and chosen heir, Lachlan, run the show?

Xi Jinping’s plan to reset China Amid a chaotic exit from the Covid-19 lockdowns, Beijing is looking ahead reduce its international isolation and enhance its growth rate. The impetus for the reset: a confluence of economic, social and foreign policy pressures that have reached critical levels, say Chinese government officials and advisors.

TikTok undercuts competitors with cheap ads Ad spend is growing away from Twitter and Meta to TikTok, as a social networking platform Offers lower rates and better participation Compared to its competitors, advertisers say, it is in a battle for growth amid slowing online spending.

Pakistan secures $9 billion for flood recovery International lenders and governments have pledged more than $9 billion Helping Pakistan rebuild from last year’s disastrous floodsBut analysts say the aid will not alleviate the country’s immediate liquidity crisis. The government imposed cost-saving measures such as energy rationing and companies cut back on production.

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Who is the Peruvian novelist and playwright who won the Nobel Prize for Literature in 2010? Try 1-down in our crossword puzzle.

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Economic

We need to pay more attention to skewed economic signals

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

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International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

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The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

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However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

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Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

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Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

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David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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German automakers point to easing supply chain problems

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

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BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

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Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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