Economy

Welcome to Trade Secrets. The annual IMF and World Bank meetings finished over the weekend, and it’s safe to say there was a lot more gloom around than for a long time. IMF managing director Kristalina Georgieva was on hand to stamp out any trace of optimism: “Shock upon shock upon shock,” she said. The rest of today’s newsletter looks at the global response to energy, currency and interest rate shocks, and then separately tees up a discussion of the idea a lot of people have suddenly woken up to, weaponised interdependence. Charted Waters looks at the causes of inflation.Same global shock, different national reactionsIt’s during a generalised economic shock — the previous one, before Covid, being the global financial crisis (GFC) — that hands get wrung about the general lack of effective world governance.The hand-wringers have a point, obviously. The Fed is raising rates and driving up the exchange rate according to US economic conditions. It’s not that bothered about central banks elsewhere having either to follow suit or see their currencies crash, nor the travails of middle-income governments that have borrowed heavily in dollars.Meanwhile, the multilateral institutions don’t have enough power to solve global problems. The IMF has rescue lending for individual countries but can’t exactly tell the US how to set monetary policy, still less orchestrate a Plaza-style accord to weaken the dollar. The World Bank remains underpowered, with a constructive plan to increase its firepower still fighting to get adopted. The WTO had a surprisingly productive ministerial meeting this year but still plays a mainly exhortatory role in keeping trade open. Nor, as I’ve written before, is there a predictable global system for sovereign debt restructurings.This doom-laden tale of uncoordination is neither wrong nor unusual. The world’s central banks made a show of unity by cutting rates together in October 2008, but only a few months later governments were arguing about the right amount of fiscal stimulus.But nor should it be a counsel of despair. Governments did varyingly well coping with the global financial crisis: those with strong financial regulation such as Canada were largely unscathed by the contagion; those like the UK that were vulnerable but reacted swiftly were over the worst within a couple of years; those that entirely mistook the nature of the crisis-related debt build-up like the eurozone saw the shock reverberate for years.This time round, there were plenty of worried finance ministers at last week’s meetings, but only one (the UK’s Kwasi Kwarteng) who was summoned home by his head of government to be fired. As I’ve also written before, the shocks are common but the responses are not, and errors such as the UK’s recent taxcutpalooza are unforced. Sorry, folks, but the global governance lifeboat isn’t coming. The Fed isn’t there to think about the rest of the world, and there isn’t a big currency realignment on the way. Everyone’s facing the same stormy seas, but some are sailing it better than others.‘Weaponised interdependence’: it’s hereSome people (by which I inevitably mean the twin gurus of the subject, Henry Farrell and Abraham Newman, whose work I’ve mentioned before) have been warning for a while about how governments can exploit trade and financial links with potentially hostile countries to coerce them into submission.Well, suddenly there are a bunch of examples of weaponised interdependence for everyone to look at, most obviously the US’s strikingly far-reaching export bans on semiconductors to China as announced recently. See Farrell’s Twitter thread here for more examples, including the battle between Opec and the US/EU over price caps and production quotas, the EU’s growing realisation that it needs to improve its geoeconomic instruments and the lessons China is learning from the tools used against Russia over Ukraine.I’m going to be coming back to this issue in more detail later in the week, but will today just give some Trade Secrets context. You may be thinking that this newsletter’s author has long been sceptical of the idea that globalisation is hitting a wall, and indeed of the belief that the world is breaking into geopolitical blocs. Have I been wrong? (It happens.)Here’s what I’d say: I’ve always thought that shocks not specifically designed deliberately to cut economic ties (food and energy shocks, the global financial crisis, a big ship being stuck in the Suez Canal, Covid et al) wouldn’t bring globalisation to a halt. I still think that. I’ve said deliberate attempts to do so, particularly for geopolitical reasons, have the potential to do it. But that’s only if governments try really really hard, certainly harder than Trump did with his China tariffs. Biden, depending on how this latest announcement gets implemented, certainly looks like he’s prepared to do more than I had expected. What impact that has, and what kind of retaliation the US sees from China, is going to depend on very precise detail about the semiconductor supply chain. And we’re only going to find that out once the policy has been put in place. We’ll all be watching closely.As well as this newsletter, I write a Trade Secrets column for FT.com every Thursday. Click here to read the latest, and visit ft.com/trade-secrets to see all my columns and previous newsletters too.Charted watersTwo charts today. The first shows us the state we are in with regards to inflation — it has risen fast in many countries and is even taking hold in Asia, a region that until recently had largely been an exception to the worldwide pattern.

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The second chart gives some pause for thought. Fuel price increases are one of the key factors behind the current inflationary spike. But it is worth noting — as the second chart shows — that these were rising before Russia invaded Ukraine.

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The conflict has, however, made matters much worse, leaving Europe fearing for its gas supply over the coming quarters. Inflation has now also spread into other household items — including the basics of food and housing — making the problem a much bigger and more concerning issue. You can read more about this in our excellent inflation analysis. (Jonathan Moules)Trade linksIn an interview, French president Emmanuel Macron goes all-out for US-style (perhaps even China-style) industrial policy in a strikingly aggressive way even by French standards, and focuses on electric cars being made specifically in France rather than just in the EU.Colombia has become the first country to use the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), the dispute settlement workaround invented after the US paralysed the WTO’s Appellate Body. Colombia appealed against an initial ruling in a case brought by the EU regarding Colombian antidumping duties on imports of frozen frites from Germany, the Netherlands and — where else — Belgium.The Trade Talks podcast examines whether Donald Trump’s trade war made China more protectionist.The FT reports on how ministers are trying to persuade the IMF and World Bank to increase their support for governments struggling to cope with the effects of climate change.Trade Secrets is edited by Jonathan Moules More

China will also keep economic operations within a reasonable range, state media said. Li made the comments during a meeting with party delegates from Gansu province who are in Beijing to attend the 20th Communist Party Congress, according to state media. More

Jeremy Hunt also put a time limit on energy subsidies, seeking to reassure markets and reduce pressure on Prime Minister Liz Truss.LONDON — Britain’s new chancellor of the Exchequer, Jeremy Hunt, said on Monday that he would reverse virtually all the government’s planned tax cuts, sweeping away Prime Minister Liz Truss’s free-market economic plan in a desperate bid to steady the financial markets and stabilize her government.Mr. Hunt also announced that the government would end its massive state intervention to cap energy prices next April, replacing it with a still-undefined program that he said would promote energy efficiency, but that could increase uncertainty for households facing rising gas and electricity bills.Ms. Truss’s Conservative government had planned to announce the tax and spending details of its fiscal plan on Oct. 31, but with the markets still gyrating, Mr. Hunt rushed forward the schedule. His announcement constituted one of the most dramatic reversals in modern British political history.“A central duty for any government is to do what’s necessary for economic stability,” Mr. Hunt said in a televised statement. “No government can control markets but every government can give certainty about the sustainability of public finances.”Among the new details, Mr. Hunt said the government would shelve a reduction in the basic income tax rate, the centerpiece of a tax-cutting plan that Ms. Truss had promised would reignite Britain’s economic growth. She had earlier scrapped a tax cut for high-income people and announced she would go ahead with a planned increase in corporate taxes.The pound and British government bonds rallied in the run-up to the announcement, suggesting that the news could buy Ms. Truss a few days of breathing space, though her political survival, after only six weeks in office, remained in deep doubt.Mr. Hunt’s hastily scheduled announcement came three days after Ms. Truss ousted his predecessor, Kwasi Kwarteng, and reversed another major tax cut, shredding her agenda and staining her credibility. As Mr. Hunt moved to take control of the economic levers of government, Conservative Party lawmakers were meeting to plot ways to force Ms. Truss out of power.The mechanics of removing Ms. Truss remained murky, with the lawmakers grasping for ways to find a consensus replacement for her that would avoid another full-scale and divisive leadership contest. But many political analysts said her position seemed untenable, given the turmoil of the last three weeks.Mr. Hunt’s statement laid bare a government forced into a humiliating 180-degree turn in its economic policy by an unforgiving market, rebellious Conservative lawmakers, and a wholesale loss of public support.Where Ms. Truss had last summer ruled out any new taxes, her government is now planning to rescind tax cuts for ordinary and high-income people and to impose a tax increase on corporations. Where just last week the prime minister had ruled out reductions in public spending, Mr. Hunt made it clear the government would consider painful spending cuts in an array of public services.The government’s goal is to restore Britain’s credibility in the markets by explaining how it plans to fill an estimated budget hole of 72 billion pounds ($81.2 billion). And Mr. Hunt’s measures go part of the way toward doing that. More

(Reuters) – Trend-following hedge funds are capitalising on market disruption and geopolitical unrest, with funds such as Graham Capital Management, Aspect Capital, AlphaSimplex and AQR Capital Management all near or over 40% higher for the year.Such funds profit by buying or selling when the markets make big moves and by riding that move until it fizzles out or the market changes direction.They have thrived in markets whipped around by soaring inflation, high interest rates and the energy shock. Stock market volatility as measured by the CBOE Volatility Index – known as Wall Street’s fear gauge – has risen sharply since August and an ICE (NYSE:ICE) BofA index tracking U.S. Treasury volatility is at its highest since March 2020.Trend strategies work best when volatility levels are high, says Yao Hua Ooi, principal and co-head of macro strategies at the $143 billion hedge fund AQR, which has one trend fund set for its best year so far, up 70%, according to a source with knowledge of the matter.”This is the type of environment where trend-following strategies historically have tended to thrive and provide valuable diversification benefits,” said Ooi, referring to how large investors sometimes use hedge funds in a portfolio as an alternative source of revenue to traditional investments.AQR is part of an index of the 10 largest trend-following hedge funds, compiled by Société Générale (EPA:SOGN). The index has risen almost 37% this year, compared with a 3.8% increase in data provider HFR’s broader index of hedge fund performance. BarclayHedge estimates that trend followers are $297 billion of the $4.9 trillion hedge fund industry.Other funds in the index also posted double-digit returns.Graham Capital Management’s least leveraged share class in its Tactical Trend Fund was up 40% this year as of Oct. 11, Aspect Capital’s Diversified fund is up 43.7% as of the end of September, and Winton’s trend-following strategy was up 24.5% so far this year, said people with knowledge of the matter. Hedge funds Man Group, AlphaSimplex and Transtrend have reported trend strategies with performances this year of roughly 15%, 48% and 31% respectively. GRAPHIC – Trend following hedge fund performance in 2022 “We do best when things change and particularly in ways that people don’t like,” said Kathryn Kaminski, chief research strategist at AlphaSimplex Group which manages 7.8 billion pounds ($8.8 billion) of assets. “In those environments it works well to follow the markets as opposed to asking what markets should or should not be doing.” Funds in the Société Générale CTA index include AQR Capital Management, AlphaSimplex Group, Aspect Capital, Systematica Investments, Graham Capital Management, ISAM LLP, Lynx Asset Management, Man Group’s AHL fund, Transtrend and Winton Capital Management.NEW ERA “We have seen all of these disruptors emerge,” said Razvan Remsing, director of investment solutions at Aspect Capital.Juxtaposing the war in Ukraine, the energy shortage in Europe and even the change in people’s behaviour post-pandemic with the growing reality that central banks can no longer be relied on to mitigate volatility and clearly there is a “highly uncertain and divergent macro environment,” he says. “To us this actually means more opportunity,” Remsing added. Simultaneous declines in stock and bond portfolios, a surge in volatility and unexpected market pricing have made a perfect storm for trend followers, says Robert Khoury, an independent hedge fund analyst. “They’ve been hitting it on all cylinders,” said Khoury. The ultimate aid for trend followers has been inflation, said Michael Harris, president of the $2.6 billion Quest Partners, which is up 34.7% for the year, according to a person with knowledge of the matter.Cheap money in the system and geopolitical risk has meant supply issues and therefore inflation. The world faces a new regime of monetary tightening and volatility, he said.Man Group and Systematica Investments declined to comment.($1 = 0.8863 pounds) More

As Swamp Notes readers will know, I’ve always argued for a certain amount of regionalisation and localisation of economies as a way to create more resiliency and rebalance the global economy with the politics of the nation state. My feeling is that we need a better balance of local and global to create a more sustainable, secure, and equitable world. While I get into how and why we’ve had a backlash to globalisation, there’s also a lot of optimism, and many examples of how the new trend towards economic localism is playing out in positive ways.That said, there’s no doubt that the paradigm shift from unfettered globalisation to whatever comes next brings with it massive challenges. I’ll focus on two of them in this Note. First, the chip wars are heating up. I’ve long thought that the US and China would end up with two different technology ecosystems for all sorts of reasons, from national security concerns to the differences in how each country views personal privacy and state control of data. Donald Trump began the process of decoupling. But last week the Biden administration’s new export controls on the chip industry sped it up significantly, with massive restrictions that will bar US companies from exporting advanced chips to China and limit Americans working for companies that do. (According to this Twitter thread from a Rhodium analyst, many are already leaving China in droves.) I’ve heard from one source close to the administration that the Chinese have been making significant chip purchases in recent months to build up inventory (which is what happened after the Huawei sanctions), and have been working hard to ramp up homegrown production. But there’s no question that the sanctions are going to slow down developments in artificial intelligence and advanced military technology (around things like hypersonic weapons) and lead to even more technology disengagement by US companies (and some allies, depending on how the Foreign Direct Product Rule is used). How will the Chinese react now? That’s a huge question. The best-case scenario is that they simply continue working on indigenous chip designs (and hopefully focus more on civilian usages) while the two superpowers learn to live with, and increasingly without, each other. The worst? China is backed into a corner and takes some extreme action around Taiwan. As my colleague Robin Harding pointed out in a column, if the Chinese feel that their growth is being thwarted, it could make geopolitics even more precarious. Ed, I’m curious, what actions do you think Beijing will take now? And what are you hearing from White House or State Department folks about what the best and worst-case scenarios here might be?Now for challenge two: the global competition between energy and debt. The Fed is hiking rates to control inflation in the US, and one big part of that effort is to try to bring down energy prices (by reducing consumption, though not so much that you get a hard landing). Meanwhile, many countries are having to sell down dollar assets to pay for energy, and defend their own currencies. Selling Treasuries into an already volatile market could backfire and hurt the Fed. But pivoting away from quantitative tightening before it’s time might be even worse.Vladimir Putin was of course counting on all of this. (His speech about how people “cannot be fed with printed dollars” or have their homes heated with them was creepy.) And now, with the Saudis piling in and Opec cutting production, the situation is even more dangerous. Is there any way out? The Fed is talking about some bank regulatory relief (allowing them out of certain capital requirements to stabilise bond markets). But that, too, has its risks. The bottom line is that while central banks used to be the only game in town, they now have some sharp competition from commodity rich nations. Ed, what would you add to the list of deglobalisation challenges at the moment?Recommended events and readingAnyone who is around in DC on tomorrow night, please come hear me discuss my book with the wonderful Sarah Bloom Raskin, at Politics and Prose.And if you are around Friday in New York City and want to hear more about the post-neoliberal world, check out this one day event on the topic sponsored by the FT and Columbia University Law School — I’ll be doing another book talk, but there will be many more fabulous folks like Joe Stiglitz, Gary Gerstle, Heather Boushey, Dani Rodrik, Kate Judge, Quinn Slobodian, Asutosh Padhi, and so many more.Finally, don’t miss this fascinating and sobering round-up of how FT readers are coping with inflation.Edward Luce responds You have asked me variations on the deglobalisation question a few times and I don’t have any radically different answers for you. What has taken me by surprise is the degree and speed of semiconductor decoupling by the US. Doubtless China will redouble its efforts to ascend the indigenous innovation ladder and its ability to make rapid progress cannot be discounted. China has made remarkable strides in many areas, including electric vehicle batteries, nano-technology, quantum computing and solar power. I appreciate that the high end of semiconducting design and production is probably a bigger leap. But where there is a will, there is a way — and for Xi Jinping this will be an overriding national priority. Doubtless this stepped up pace of high-tech decoupling will make Taiwan more vulnerable to Chinese aggression in the near future. I would also imagine that TSMC and other Taiwanese producers will come under growing pressure to diversify their production to other countries, including the US. Either way, we are entering a very different world in which global technology bifurcation will increasingly become a reality. If China’s growth continues to slow, and its politics continue to become more autocratic, this will lessen the appeal of the Chinasphere to other countries. On a personal note, if decoupling shortens TikTok’s shelf life no one will be happier than me. In terms of the effects of global monetary tightening, I was struck last week by the gloomy consensus at the annual IMF/World Bank meetings in Washington. We are in a “no matter how much it costs” phase of interest rate increases, led by a Fed that is determined not to see a repeat of the 1970s. It was serendipity that my Lunch with the FT with Mark Carney, the former governor of the Bank of England, came out just after Liz Truss, Britain’s omnishambolic prime minister, had fired Kwasi Kwarteng, her kamikaze chancellor of the exchequer. Carney did his best to give a diplomatic assessment of Britain’s shenanigans but his astonishment at the UK’s recent unforced errors was nevertheless evident. One very senior former UK official, who was also at the annual meetings, said the way people inquired about events in Britain reminded him of being asked about a recent death in the family — in a tone of pity and sadness. His analogy struck a chord with me. For the time being, and I very much hope for not too much longer, the UK has become the butt of well-deserved jokes. From David Cameron to Boris Johnson and Kwasi Kwarteng, Britain’s reputation is being squandered on the playing fields of Eton. Your feedback And now a word from our Swampians . . . In response to ‘America is back to being world’s tallest dwarf’:“China is in much worse domestic shape than you suggest. Omicron has ruined the zero-Covid strategy which increasingly feels to many inhabitants like a feature with no apparent end. It’s brutally enforced . . . On the macroeconomic front, the collapse of the real estate boom is still a big issue. As long as many poor, ex-peasants who are new to the cities feel they are doing better than before, Xi is probably all right. But foreigners are leaving in droves, as are the Chinese upper middle classes, with English, foreign contacts and good jobs, especially those with children. Xi is probably glad to see the back of them.” — Swamp Notes reader  “In the short term, your assessment of the US being the tallest dwarf might be correct, but it seems to me that the real long-term beneficiary of Russia’s miscalculations will be China. As the rest of us fight this conflict down to the last Ukrainian, China is expanding its ties to an increasingly enfeebled Russia, which can address China’s main strategic weaknesses. China is now the world’s manufacturing powerhouse, but it still suffers deeply from lack of water, lack of resources, climate change, and declining agriculture yields. It needs Russian assets and will simply become Moscow’s buyer of last resort thanks to the western sanctions on the Putin regime. In this new Cold War 2.0, it’s unclear as to whether the US/EU/Nato alliance will be on the winning side. Two can play at the sanctions game and the US has already degraded its manufacturing base to such a degree that it is increasingly vulnerable if and when Beijing decides to respond in kind.” — Marshall Auerback, New York, New York More

The writer is executive director of American CompassBusiness leaders who complain constantly of “talent shortages” or “skills gaps” may, in fact, have only themselves to blame. The perceived weaknesses among their staff may be the result of overambitious or flawed plans. Anyone can see the folly in trying to hire thousands of experienced biochemists at minimum wage to develop cutting-edge drugs. The problem is not a biochemist shortage; the problem is the bad idea. Equally foolish is the software executive who expects an unlimited supply of eager coders, or the plant manager who believes well-trained technicians will line up at his door. Why do employers believe they should have access to whatever labour they need at whatever wages they choose? Perhaps the culprit is globalisation? Capitalism generated widespread prosperity for centuries by rewarding the most productive uses of available labour. “Every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry, and to give revenue and employment to the greatest number of people of his own country,” posited Adam Smith in The Wealth of Nations. The invisible hand aligned private profit with the public interest not by magic, but because pursuing the former was best achieved through investments that also advanced the latter. However, global flows of goods, people and capital released that constraint. Western corporations found themselves with a seemingly inexhaustible supply of foreign workers, willing to work longer hours for lower wages with fewer protections. The enterprise no longer had to care about local workers. Entire nations now competed to deliver the needed labour. The results were splendid for corporate profits; less so for workers, their families and their communities. Economists and policymakers have begun learning from these mistakes and at least contemplating the re-establishment of immigration limits and trade barriers that would force capitalists back into partnership with their countrymen. Thus the growing, somewhat comical cries from the business lobby that one cannot possibly be expected to run a successful operation with these workers. The champions of free markets, creative destruction and competition proudly tout the power of such forces to solve any problem if incentives are right. But give them the challenge of turning a profit with the local labour force and suddenly all is lost. New research published on Thursday by the Burning Glass Institute, Harvard Business School, and the Schultz Family Foundation gives the lie to this claim, showing how much better employers can do. The American Opportunity Index uses data from millions of online job ads and CVs to analyse the career paths of US workers, typically without college degrees, through the nation’s 250 largest publicly traded companies. The index focuses on three dimensions of opportunity that employers provide: access (hiring of entry-level workers and those without college degrees), pay (median wage offered in each occupation) and mobility (how far and fast workers are promoted, how long they stay and how successful they are moving on to other companies). This quantification of employment outcomes has revolutionary potential for workers choosing where to apply, managers improving their performance and third parties evaluating social impact. For instance, fads such as “corporate social responsibility” and “ESG” have tended to encourage empty signalling toward progressive causes, bearing little relationship to core business operations. A focus on quantitative measures of opportunity provided to entry-level workers would be more useful.The most important result is the extraordinary variation between employers, regardless of industry. Those in the top quintile for providing access are hiring four times as many candidates without prior experience as those in the bottom quintile. Those in the top quintile for mobility are two-and-a-half times more likely to fill openings by promoting from within and twice as likely to have senior management following that route. In short, most companies could be casting a wider net in hiring, offering better pay, or investing more effectively in workers’ success and progression. The researchers pose gentle questions such as, “Would drawing from a wider pool allow you to access more talent?” and, “Have you considered how to better assess the talent and skills of the workers you have?”Business leaders need to start answering those questions. Policymakers must ensure they have no other choice.  More

So much for long-term strategies. Apple has put on hold plans to use chips from China’s Yangtze Memory Technologies in products such as the iPhone. Washington’s latest crackdown topples years worth of Chinese tech companies’ investment to break into the US market. This bad news could spread.The timing of recent US export controls imposed against the Chinese tech sector could not be worse. Apple is reported to have completed a complicated process to certify Yangtze’s Nand flash memory for use in iPhones earlier this month. This agreement would have boosted both sides. Yangtze could have become Apple’s main supplier for Nand flash memory for iPhones. Apple would have finally diversified its narrow flash memory supply chain, sourcing these chips at significantly lower prices than from South Korea’s Samsung and the US-based Micron.Nand flash offered one of the few export hopes for Chinese suppliers. This type of chip, used for storing text, images and music in mobile devices, does not require the high end technology required to manufacture more advanced Dram chips. Chinese chipmakers are years behind rivals like Samsung and TSMC on Dram chips. But at least China could compete on price in the Nand sector.Beijing has spent over $100bn to support the local chip industry, not just hoping for self-sufficiency but to gain from the growing global chip demand. Yangtze Memory is a major beneficiary, and has government-linked funds as key stakeholders.Worse, the latest restrictions ban US chip equipment makers from providing services that help Chinese companies produce advanced chips. Yangtze currently uses chip gear by US-based Applied Materials, KLA and Lam Research.But the real damage to Chinese tech companies will come from other restrictions. US companies are banned from sharing any design, technologies, documents or specifications to unapproved Chinese companies. This goes far beyond semiconductors. Expect other Chinese Apple suppliers, including display maker BOE and assembler Luxshare, to soon follow Yangtze’s path. More

Good morning. The UK’s new chancellor is to rush forward a statement today in an effort to calm markets.The Treasury said Jeremy Hunt would announce plans to tackle the government’s deficit, two weeks earlier than planned, before making a House of Commons statement later this afternoon.The prices of UK government bonds jumped following the Treasury’s announcement, leading to a fall in the cost of borrowing for Prime Minister Liz Truss’s administration as it tries to restore its credibility following the surprising appointment of Hunt on Friday and the sacking of his predecessor Kwasi Kwarteng. The pound also rose against the dollar to $1.126.But pressure mounted on Truss to resign over the weekend following her press conference on Friday which did little to settle the markets and the disastrous reaction to her government’s September 23 “mini” Budget.The Bank of England confirmed today it was ending the bond-buying operation it had put in place following the “mini” Budget and was replacing it with a lending facility. The central bank noted it was not there “to provide a permanent backstop” to the pensions industry, which has been hit by the volatility in the UK government bond market.This is a developing story. For updates please go to our live blog.Thanks for reading FirstFT Americas. Here is the rest of today’s news — GordonFive more stories in the news1. Jair Bolsonaro attacks Lula on corruption Brazil’s President Jair Bolsonaro went on the offensive in the first one-on-one debate with election challenger and former president Luiz Inácio Lula da Silva last night. The incumbent launched an almost six-minute monologue that played up the ties between Lula’s Workers’ party and authoritarian regimes in Nicaragua and Venezuela.

Luiz Inácio Lula da Silva, left, and Jair Bolsonaro during their TV debate on Sunday © Sebastiao Moreira/EPA-EFE/Shutterstock

2. Blasts heard as suspected Russian drones strike Kyiv At least five explosions were heard in the centre of Kyiv earlier today, as Russia conducted renewed strikes on the Ukrainian capital with Iran-suppled kamikaze drones. The attacks hit a building and the area near the central railway station in the Shevchenkivsky district of the capital, the target of last week’s strikes.3. China’s state banks step up dollar sales to support renminbi China’s state banks accelerated their sales of the dollar today to slow the decline of the Chinese currency against that of the US as the Chinese Communist party’s 20th congress got under way in Beijing. The renminbi has fallen almost 12 per cent against the dollar this year. Separately, China’s biggest state-run banks have increased their lending to help the slowing economy. The announcement coincided with President Xi Jinping’s keynote speech at the opening of the party congress yesterday.4. Hurricane Ian losses forecast to hit $75bn Hurricane Ian is set to become the most significant natural disaster for the insurance sector in decades, industry figures have warned. Initial forecasts for the industry’s losses from the storm, which swept through Florida and South Carolina last month, have reached as high as $75bn. That would be the costliest natural disaster in nominal terms and only second to 2005’s Hurricane Katrina, which generated insured losses of $99bn in today’s money. 5. Disney warns France that future blockbusters could bypass cinemas Disney will release Black Panther: Wakanda Forever in French cinemas next month but has warned that its biggest movies may go straight to streaming in 2023 unless what it calls the country’s “anti-consumer” distribution rules are fundamentally reformed.The day aheadCompany earnings Bank of America is expected to report a decline in third-quarter earnings compared with a year earlier as it sets aside reserves to cover potential losses on loans. Revenue is expected to increase, however, due to higher net interest income. Bank of New York Mellon and Charles Schwab will also report third-quarter earnings before the opening bell. Economic data Factory activity in New York state is expected to have steadied following a steep decline in late summer. The Federal Reserve Bank of New York’s general business conditions index is expected to have ticked up to minus 1 in September from minus 1.5 in August, a sign that would reflect stabilising factory activity throughout the state. Stocks to watch Investors will be closely watching Goldman Sachs’s shares today after reports that the Wall Street bank is finalising a major overhaul ahead of its results tomorrow. The Wall Street Journal reported that Goldman was planning to combine its flagship investment banking and trading businesses into one unit, while merging asset and wealth management into another. Fox and News Corp will also be in focus after reports emerged over the weekend that Rupert Murdoch wants to merge the two media companies. (WSJ)Booker Prize The winner of the Booker Prize, the leading award for English language fiction, will be announced at a ceremony in London. (The Booker Prizes)What else we’re readingAmerica’s green revolution comes to coal country The Black Rock wind farm, nestled in the remote mountains of outer West Virginia, is exactly the sort of project President Joe Biden hopes will proliferate as a result of the unprecedented clean energy cash injection he signed into law in August. Yet West Virginia remains coal country. “Dude, we barely even got any damn Tesla fuckin’ chargers in this state,” says one resident in the state capital Charleston. “It’s definitely — definitely — a coal state through and through.”Democrats’ midterms hopes falter For a brief window this summer, the Democrats’ prospects in the midterm elections were looking up. But with just under a month to go before the crucial vote, there are increasing signs that Democratic momentum has stalled. “Both chambers [of Congress] are still in play . . . but the headwinds are pretty strong,” said one Democratic strategist.The revolutionary ambitions of Iran’s Gen Z Young Iranians have surprised the country — and the world — by refusing to back down during one of the most widespread and long-lasting anti-regime demonstrations in the Islamic republic’s history. “Woman, life, freedom” has become the battle cry of young men and women in the streets.The world needs more ‘desk-bombers’ The act of approaching someone at their desk without warning has become so offensive that a buzzword has been invented to describe it. It’s part of an increasing pattern at work: an outbreak of overweening shyness, or intolerance of interruption, that is at best self-destructive and at worst unproductive, writes Pilita Clark. Asian schools top the rankings for executive MBAs Despite regional pandemic and political challenges, business schools in east Asia have strengthened their positions as leading global providers of executive MBAs, the 2022 FT EMBA rankings show.Personal productivityProductivity gurus are rising ever earlier to pack in strenuous workouts, ice baths, meditation and journaling before most of us have had our first coffee. These routines aren’t realistic for most, but they can be fun to watch, writes Emma Jacobs.

Macho routines that include intense exercise and ice baths have gone viral on social media © Getty Images More