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The Missile – January 31

THE WORLD IS SMOLDERING. How many more have to die before we force a negotiated settlement?  Where is leadership?

Russia Boosts China Trade to Counter Western Sanctions
Moscow boosted imports of technologies critical to its war in Ukraine including semiconductors and microchips from China, the report by the D.C.-based nongovernmental organization Free Russia Foundation said. China’s increased purchases of Russian exports, driven by energy sales, more than offset the declines from major Western trading partners including the U.S., U.K. and some European Union countries. 
“As the U.S., EU, the U.K. have all scaled back operations with Russia, China has emerged, by a wide margin, to be Russia’s most important trade partner,” the report says.

Biden Administration Considers Cutting Off Huawei From U.S. Suppliers
The Biden administration is considering entirely cutting off Chinese telecommunications giant Huawei Technologies Co. from U.S. suppliers over national-security concerns by tightening export controls targeting the firm, according to people familiar with the matter. 
The move—should the administration move forward—would mark the latest salvo in the high-stakes clash between the world’s two largest economies as U.S. policy makers seek to counter China’s industrial policy they say threatens Western interests.

Eurozone’s Economy Outpaced China and U.S. in 2022
The eurozone economy grew faster than China and the U.S. last year, underlining how the fading Covid-19 pandemic continues to scramble traditional patterns of global growth.  
Figures released by the European Union’s statistics agency Tuesday showed the currency- area’s economy grew at an annualized rate of 0.5% as higher energy costs weighed on household spending. This translated into 3.5% growth in gross domestic product for 2022 as a whole, a faster rate than seen in either China or the U.S. 
This is unusual. For decades, the big three engines of the global economy have had a pretty stable ranking: China grew fastest, followed by the U.S. and then the eurozone. This all changed last year because of the staggered manner in which major economies reopened in the wake of the pandemic.

Fed Points Toward a Pause in May Once Hikes Have Time to Sink In
Federal Reserve officials are on track to consider pausing interest rate hikes following their March meeting if more evidence of cooling inflation rolls in. 
That’s based on a timeline sketched out by one of the Fed’s most closely watched hawks, Governor Christopher Waller, who was an early advocate of the Fed’s front-loading rate-hike strategy last year. 
Policymakers are widely expected to raise rates by a quarter percentage point at the conclusion of a two-day gathering Wednesday, to a range of 4.5% to 4.75%, slowing from December’s 50-basis-point increase after four straight 75-basis-point moves.

Ex-Citi Analyst Who Exposed Libor Takes Aim at Its Successor
Peng says guidelines designed to limit who can use derivatives tied to the Secured Overnight Financing Rate are inadvertently heaping risk onto banks’ balance sheets, echoing warnings from TD Securities and JPMorgan Chase & Co. Left unchecked, he says, it could pose a significant risk to the smooth functioning of financial markets. 
“Banks and issuers are just starting to come to grips with this — we are at beginning of a reckoning,” said Peng, chief investment officer of Advocate Capital Management. In 2008, as the former head of Citigroup Inc.’s US rates strategy team, he was among the first to suggest that Libor was understating borrowing costs, helping spark investigations that revealed rampant manipulation and ultimately contributed to the benchmark’s demise.

Exxon smashes Western oil majors’ earnings record with $56 billion profit for 2022
Exxon Mobil posted a $56 billion profit for 2022, the company said on Tuesday, taking home about $6.3 million per hour last year, and setting not only a company record but a historic high for the Western oil industry. 
Oil majors are expected to break their own annual records on high prices and soaring demand, pushing their combined take to near $200 billion. The scale has renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies.

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