Aurelia Butler

Good morning. Microsoft has agreed to buy video game maker Activision Blizzard for $75bn in the biggest ever deal by the tech company. Under the terms of the all-cash deal, Microsoft will pay shareholders of the company behind Call of Duty and World of Warcraft $95 per share, a 45 per cent premium on the closing price last week. The purchase price includes Activision’s $6.37bn of net cash, valuing the company at $68.7bn. It is the latest in a wave of dealmaking in the gaming sector. Take-Two Interactive, the maker of the popular Grand Theft Auto game series, agreed last week to buy rival Zynga, the maker of FarmVille and Words with Friends, for $12.7bn. The video games sector has taken centre stage in the latest scramble for dominance in digital entertainment. Microsoft said the Activision purchase would power its move into the metaverse, the name given to the immersive virtual worlds that the big tech companies are racing to build.Thanks for reading FirstFT Asia. Here is the rest of today’s news — Angelica.Five more stories in the news1. Goldman Sachs profits drop 13% after big bonus payouts The Wall Street bank paid out $3.2bn in bonuses and overall salary costs were up 33% while its revenue dropped by 7%. Despite earnings missing estimates, full-year net profit for 2021 came in at $21.2b, the largest in the banks’ history. 2. Kazakhstan’s former president reappears to deliver TV address Nursultan Nazarbayev surfaced yesterday for the first time since deadly protests erupted more than two weeks ago, saying he remained in the capital and denying rumours of a power clash with his chosen successor, Kassym-Jomart Tokayev.3. AT&T and Verizon limit 5G service near US airports after airlines’ outcry The telecoms companies have agreed to scale back or postpone their debuts of high-speed 5G technology after eleventh-hour warnings from the aviation industry that it could interfere with aircraft safety and navigation systems.4. Tech billionaire seals Spac deal amid Uyghur controversy A Spac backed by tech investor Chamath Palihapitiya has agreed an $825m deal to merge with a healthcare company focusing on kidney disease. The move comes after Palihapitiya stirred controversy by saying “nobody cares” about the Uyghurs in China. 5. Bank of Japan revises inflation projection for first time since 2014 The BoJ revised its inflation projection upward from 0.9% to 1.1% for the fiscal year starting in April, driving the yen lower as a nation that has battled deflation for decades faces the mounting pressure of price rises in food and energy.Coronavirus digestHong Kong will cull more than 1,000 hamsters and quarantine over 150 pet store visitors in extreme caution over suspected animal to human transmission.Humanitarian efforts to assist Tonga after a volcanic eruption are being complicated by the South Pacific nation’s determination to keep Covid-19 at bay.Covid-19 endemicity will not be painless, argues science commentator Anjana Ahuja. Countries with high exposure to the Omicron variant are recording record numbers of child coronavirus hospital admissions, although health experts stress that severe cases in the young are rare.The day aheadUS banks earnings Morgan Stanley and Bank of America will report their Q4 earnings today. EU presidency French President Emmanuel Macron will address the European Parliament today after France takes the revolving presidency of the Council of the European Union. Ukraine tensions US secretary of state Antony Blinken is to meet Ukraine’s president Volodymyr Zelensky after last week’s talks between US, Russia, and Nato reached a ‘dead end’. What else we’re readingFacebook patents reveal how it intends to cash in on metaverse Pupil movements, body poses and nose scrunching are among the flickers of human expression that Meta wants to harvest in building its metaverse, an undertaking that is essentially a ‘global human-cloning programme.’What we know about Evergrande’s ‘black-box’ restructuring The crisis at Evergrande, the world’s most indebted property company, reached a milestone in December when it officially defaulted after months of missing payment deadlines. The rest of the saga could take years to unfold. Here is what we know.Moscow’s sanction-proofing efforts weaken western threats Moscow’s ‘Fortress Russia’ strategy is likely to make US and Europe’s proposed sanctions less of a deterrent from invading Ukraine. However, the EU has not reduced its dependency on Russian gas, leaving the possibility for Moscow to retaliate by limiting supplies. Patriotic Gen Zs fuel pandemic jewellery boom in China Gen Z is leading the growth of jewellery retail sales, using their willingness to spend big on “China-chic” pieces to feed the $69bn industry. Business leaders have to play a better political role Like it or not, business leaders are potent players in our fragile democratic politics, and they need to play the role decently and responsibly, writes Martin Wolf. BooksNow that the headlines from last year’s COP26 climate change summit in Glasgow have faded, you might think attention to planetary havoc has drifted. Not so in the publishing world, where 2022 has begun with an absorbing crop of environmental books on everything from the polar vortex to veganism and, of course, global warming. More

(Reuters) -A fast pace of monetary policy readjustment to curb inflation could lead to a flattening of the U.S. Treasuries yield curve, warned BlackRock (NYSE:BLK) chief Larry Fink, amid a recent spike in yields that some said had echoes of 2013 “taper tantrum.”The shape of the yield curve reveals investor expectations for U.S. growth and monetary policy. A hawkish stance by the U.S. Federal Reserve planning sooner-than-expected rate increases has pushed up short-term rates, flattening the curve.”I think the yield curve is going to be flattening, you know, and I can even see if the Federal Reserve is very aggressive, I can see a, you know, a negative yield curve”, Fink told CNBC in an interview on Tuesday, according to a transcript.A negatively sloped or inverted curve is a phenomenon that is considered bad news for the short-term economic outlook and has presaged past recessions.”The shape of the yield curve is going to be the critical issue that’s going to determine the economy,” Fink said.The chief executive of BlackRock, the world’s biggest asset managerwhich oversees $10 trillion as of Dec. 31, added that he expects inflation to be higher and the Federal Reserve to be “aggressive” for the next two years.Fink’s remarks follow some Fed speakers such as Kansas City Fed President Esther George who last week urged a swifter runoff of the Fed’s balance sheet than in the last tightening cycle due to the risk of flattening the yield curve if rates are raised while the balance sheet is swollen.Financial markets are expecting that the U.S. Federal Reserve could raise rates as many as four times this year after post-pandemic stimulus measures that boosted the U.S economy but also caused inflation to rise.On Tuesday, two-year U.S. Treasury yields, which track short-term interest-rate expectations, rose above 1% for the first time since the start of the pandemic, further eroding the yield advantage longer-dated securities usually hold over shorter-dated ones.The yield curve between two- and 10-year notes earlier flattened to 81 basis points, the smallest yield gap since Jan. 3. BOND TANTRUM?The yield spike had some echoes of the 2013 taper tantrum, BlackRock Investment Institute (BII) said in a research note on Tuesday. At that time, bond yields jumped after then-Fed Chairman Ben Bernanke signalled the start of the unwinding of the Fed’s bond purchase program and sparked the taper tantrum.”Yet we see key differences: It’s not driven by fears of a sharp increase in the policy rate; growth is strong; and the Fed has honed its signalling,” it said.Thomas Mathews, an economist at Capital Economics, told Reuters that, similar to the 2013 taper tantrum, the recent spike in yields was linked to the rate hike implications of the Fed’s hawkish pivot, but also pointed to distinctions.”The rise in yields over the past couple of months has still been quite a bit smaller than we saw back then, and while there have been some wobbles, we haven’t seen the big sell-offs in risky assets, especially those in emerging markets, that characterised that episode,” he said.Not everyone sees a flatter curve. U.S. investment firm PIMCO said last week it is looking to position portfolios for a steeper curve in expectation of more normal economic conditions. More