Bloomberg

(Bloomberg) — Snap Inc. surged 55% in premarket trading, but even that won’t be enough to recoup the social media stock’s year-to-date losses.

The shares soared as high as $38.35 after the Snapchat parent gave a quarterly sales update that left analysts positively surprised, still well below the $47.03 where they ended 2021.

The stock is rebounding from a 24% plunge on Thursday that was triggered by concern that a growth slowdown at Facebook and Instagram parent Meta Platforms Inc. would prove to be industry-wide. Large-cap technology stocks have also been hit more broadly in recent weeks on concern around a tightening of U.S. monetary policy.

“Simply put, Snap results were better than feared,” KeyBanc Justin Patterson wrote in a note to clients. The firm is seeing “solid” revenue growth, while improvements in advertising efficacy and monetization of features like Spotlight and Maps offer potential upside drivers, Patterson said.

The stock traded at $36.25 as of 5:10 a.m. New York time. The results were announced after markets closed on Thursday.

Snap’s longer-term losses are even more severe. The stock is down about 67% since Oct. 21, when the firm issued financial guidance that missed Wall Street targets, warning that changes to Apple Inc.’s data collection rules and supply chain disruption were weighing on advertising spending.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — The European Union wants its upcoming Chips Act to rival the U.S., but there are increasing doubts from member states and European lawmakers over how to make existing funds available, according to people familiar with the matter and documents seen by Bloomberg.

The EU has an ambitious goal of producing 20% of the world’s chips by 2030 — a move that requires the bloc quadruple its semiconductor production in just eight years. Internal Market Commissioner Thierry Breton has said the EU’s plans will be “commensurate” with the $52 billion recently announced by the U.S. to fund its own chip supply chain. 

Commission President Ursula von der Leyen said Thursday that Europe’s Chips Act will have “considerable investment,” amounting to 42 billion euro ($48.1 billion) by leveraging 12 billion euros in public and private money on top of 30 billion already earmarked from public coffers.

Read More: EU Backers of Chip Subsidies Want Limits on Foreign Firms

However, with Europe’s Chip Act set to be published on Feb. 8, the proposal currently relies heavily on over-stretched member state budgets, already allocated EU funds, and the uncertainty of loosening state aid rules to finance cutting-edge production sites, the people said, who asked not to be named discussing private information.

While some senior lawmakers remain convinced member states will fund the proposals, others are expecting a battle to obtain money already allocated to other projects, and to changes to existing state aid rules.

Spokespeople for the European Commission and von der Leyen declined to comment on the funding plans. 

Funding Issues

Unlike the U.S., the EU does not have a federal budget to suddenly allocate billions toward new initiatives like bolstering its semiconductor sector. With the EU budget already allocated until 2027, the European Commission has had to get creative finding money.

The funding for the Chip Act is set to come from existing budget lines, including a digital fund worth about 1.8 billion euros and from Horizon Europe, the EU’s seven-year 95.5-billion-euro research program, according to people familiar with the talks. Some of the money could also come from extra “margin” money that is not allocated to provide the budget with some flexibility in times of crisis.

The roughly 30 billion euros mentioned this week by von der Leyen is an estimate of how much state aid EU countries could issue, but this funding will go to both smaller research and innovation projects via the Important Projects of Common European Interest program launched at the end of last year, as well as to encourage foreign companies like Intel and TSMC to set up shop on the continent.

State Aid

The Commission plans to loosen its state aid rules to allow countries to use public money for the production of chips, whether they are decreasing the size of the chips or using a more energy-efficient technology, according to the draft of the Chips Act seen by Bloomberg. 

State aid rules previously restricted state aid to just research or the first production run. The change would open the door for foreign companies like Intel Corp. and Taiwan Semiconductor Manufacturing Co. to receive public money, if they set up massive production sites on the continent.

These proposals could face steep opposition from EU countries that have previously cautioned against the overuse of state aid, warning that it could lead to a subsidy race in the EU and eventually overproduction of semiconductors.

“Europe must and can mobilize an unprecedented level of investment given the high positive spill-over effects the sector has across the economy and many areas of public interest,” the draft said. There are certain cases when “it may be justified to cover up to 100% of a proven funding gap with public resources, if such facilities would otherwise not exist in Europe.”

In anticipation of these issues, the European Commission stressed in the Chips Act draft that state aid must “be necessary, appropriate and proportionate.” The EU will check to ensure that the use of state aid does not “adversely affect trading conditions to an extent contrary to the common interest, weighing the positive effects of such State aid with its likely negative impact on trade and competition.”

Companies that receive state aid will face “public service obligations.” In times of crisis, the EU can activate emergency measures that would require companies to report stock levels and prioritize certain products. The EU could also implement export controls and launch joint purchasing schemes.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Russian President Vladimir Putin is in Beijing for the opening of the Winter Olympics and met with Chinese President Xi Jinping. They discussed relations between the two countries and exchanged views on strategic security. 

Russia’s foreign minister brushed off U.S. claims that Moscow plans to release a graphic, fake video purporting to show a Ukrainian attack on Russia or Russian-speaking people, as a way to justify an invasion.  

Moscow has repeatedly denied that it plans to attack Ukraine, while stationing an estimated 100,000 troops close to the border. Russia has decried the use of NATO forces near Russia’s borders. 

Key Developments

• Putin’s Financial Fortress Blunts Impact of Threatened Sanctions
• Putin Courts China’s Xi for Help in Showdown With the West
• Ukraine Briefing Spurs Greater Urgency on Sanctions in Congress
• What we know so far about potential U.S.-EU sanctions on Russia
• Where military forces are assembling around Russia and Ukraine

All times CET

Putin, Xi See ‘No Forbidden Zones’ (11:17 a.m.) 

Putin and Xi see no limits to the Russia-China friendship and “no forbidden zones” in cooperation between their countries, the two leaders said in a joint statement after talks in Beijing — their first face-to-face meeting since 2019.  

China “treats with understanding, and supports” Russia’s demands for binding security guarantees from the U.S. and NATO, and the two states oppose further expansion of the military alliance, according to the statement.

The pair also said in the statement that Russia opposes Taiwan’s independence in any form. The two leaders described the “new type” of relations between Russia and China as superior to the Cold War-era blocs.

YouTube Blocks Separatist Accounts (10:55 a.m.)

YouTube blocked several accounts associated with separatists in two eastern Ukraine regions, Tass reported, citing media representatives of the self-proclaimed republics. 

The Luhanskinformcenter in the Luhansk People’s Republic and the Ministry of Information in the Donetsk People’s Republic were among the channels affected, Tass said. 

The moves could expose Alphabet’s Google, which owns YouTube, to new criticism in Russia, where it’s under increasing pressure from the government. The company is facing potentially huge fines for blocking a Russian TV channel’s account on the video service and in December was hit with a $95 million penalty for not removing content. 

Russia Blamed for German Energy Cyber Attack (11:00 a.m.)

A Russia-linked cybercrime gang was allegedly responsible for ransomware attacks that took down a swath of Germany’s fuel-distribution system this week. Hackers using “Black Cat” ransomware infected computers at Mabanaft GmbH and Oiltanking GmbH Group, say people familiar with an investigation of the breaches.

While there’s no confirmed link to the Russian state, the attacks come as the U.S., U.K. and others warn of the risk of cyberattacks as part of a campaign to put pressure on Europe for its support of Ukraine. 

Lavrov Calls U.S. Claim of Fake Video ‘Delusional’ (10:10 a.m.)

Foreign Minister Sergei Lavrov dismissed claims by the U.S. that Russia plans to produce a graphic propaganda video that purports to show a terrorist attack on Russian-speaking people.

“I read on the internet that the State Department made some statements that Russia is allegedly preparing a fake video with an apparent attack by Ukrainian soldiers on Donbas,” Lavrov said in a clip posted by Ren TV. “This kind of fantasy is delusional in my opinion, and they are more and more of them every day.”

U.S. officials warned previously that Moscow may be planning a false flag event that would create a justification for sending troops into Ukraine, and have said it used similar tactics when it occupied Crimea and fought a war with Georgia.

Carlsberg CEO Downplays Impact on Business (9:30 a.m.)

The Danish brewer Carlsberg A/S said its business won’t be hit too hard by a possible Russia-Ukraine conflict. Carlsberg gets less than 8% of its profit from the two countries, CEO Cees ‘t Hart said in a Bloomberg Television interview. A decade ago, eastern Europe accounted for almost half of the company’s earnings. 

Putin, Xi Meet; Russia will Supply Gas From Far East (9:13 a.m.) 

In their first in-person meeting since 2019, Putin told China’s Xi that Russia will supply 10 billion cubic meters of gas per year to China from Far East under a new contract. 

During the summit, timed to show solidarity on the sidelines of the Winter Olympics, Putin said conditions between the two countries were of an “unprecedented nature and an example of a dignified relationship.” 

EU Warned of New Russian Cyber Threat (8:40 a.m.) 

European Union institutions were warned Thursday of a new Russian-backed cyber threat that’s been running credential harvesting activity since mid-2021, according to an alert seen by Bloomberg News. 

The alert says it’s possible the capabilities will be used for cyberespionage purposes. No institutions have been targeted yet. The alert didn’t mention Ukraine. 

The group, known as Reuse Team or Callisto, has been involved in state-sponsored espionage and criminal activity since the early 2000s, the alert said. The group has recently targeted an EU body and was involved in a campaign that targeted a European ministry of foreign affairs in 2020. It has gathered intelligence related to foreign policy in Eastern Europe and the South Caucasus, according to a 2017 report by F-Secure, a cyber security research firm. 

Gazprom Reliability in Doubt, Von Der Leyen Says (8:31 a.m.) 

Gazprom is abiding by its contracts with the EU but unlike other suppliers isn’t shipping more gas than planned to Europe, and that’s casting doubt on its reliability, European Commission President Ursula von der Leyen said in an interview with Les Echos and Handelsblatt.

Gazprom’s behavior is “weird,” and Russia is using gas deliveries as a way to put pressure on Europe, she said.

Von der Leyen also described the EU’s sanctions package in the event of a Russian invasion of Ukraine, which includes including shutting Moscow off from foreign capital, and controlling exports of critical goods to Russia needed in areas such as artificial intelligence, weapons, quantum computing, lasers and space technologies.

Macron to Visit Russia, Ukraine Next Week (8:21 a.m.) 

French President Emmanuel Macron will travel to Moscow on Monday and Ukraine on Tuesday, an Elysee official said, as he continues an active diplomatic role in the crisis. 

The trips will follow three calls in the past week between Macron and Vladimir Putin to discuss the Ukrainian situation.    

U.S. Lawmakers Briefed by Top Security Team (11:00 p.m.) 

U.S. lawmakers are rushing to draft a new round of potential sanctions on Russia intended as a deterrent to any aggression against Ukraine. The sense of urgency in Congress escalated following day-long briefings Thursday by top national security officials. 

Negotiations had been slowed as Democrats and the Biden administration resisted Republican efforts to impose more sanctions on Russia now. Both sides agree on the need for more punishing penalties should Russia invade Ukraine, which the Kremlin denies it plans to do. 

 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Meta Inc. was fined 1.5 million pounds ($2 million) from the U.K.’s competition regulator for breaching an enforcement order during its Giphy merger probe, the latest twist in an increasingly messy fight for control of the GIF search engine.

The Facebook parent failed to inform the Competition and Markets Authority that three “key” U.S. employees had left the company, a breach of its merger investigation rules, the regulator said on Friday. 

“Meta failed to alert us in advance to important changes in their staff, despite knowing they were legally required to do so,” said Joel Bamford, senior director of mergers at the CMA. “This is not the first time this has happened.” 

The regulator has taken a tough line against Meta on the deal, and already fined the tech giant 50.5 million pounds for breaching its rules last year. Meta is appealing the CMA’s decision ordering the social network to unwind its $315 million purchase of Giphy, and a hearing is set for April 25 at the U.K.’s Competition Appeal Tribunal.

“We are disappointed by the CMA’s decision to fine us,” a Meta spokesperson said, saying the company intended to pay the fine. “It is problematic that the CMA can take decisions that could directly impact the rights of our U.S. employees protected under U.S. law.” 

Facebook has a history of breaching merger rules across Europe. It paid a 110 million-euro ($126 million) fine for giving incorrect information to European Union investigators probing its takeover of WhatsApp. Austria also fined the company last year for failing to request its approval for the Giphy deal. 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Russia’s foreign minister brushed off U.S. claims that Moscow plans to release a graphic, fake video purporting to show a Ukrainian attack on Russia or Russian-speaking people, as a way to justify an invasion. 

Russian President Vladimir Putin is in Beijing for the opening of the Winter Olympics and met with Chinese President Xi Jinping, the pair’s 38th one-on-one exchange. China and Russia “coordinated their stances” on issues including Ukraine at talks on Thursday between their foreign ministers.

Moscow has repeatedly denied that it plans to attack Ukraine, while stationing an estimated 100,000 troops close to the border. Russia has decried the use of NATO forces near Russia’s borders. 

Key Developments

• Putin’s Financial Fortress Blunts Impact of Threatened Sanctions
• Putin Courts China’s Xi for Help in Showdown With the West
• Ukraine Briefing Spurs Greater Urgency on Sanctions in Congress
• What we know so far about potential U.S.-EU sanctions on Russia
• Where military forces are assembling around Russia and Ukraine

All times CET

Russia Blamed for German Energy Cyber Attack (11:00 a.m.)

A Russia-linked cybercrime gang was allegedly responsible for ransomware attacks that took down a swath of Germany’s fuel-distribution system this week. Hackers using “Black Cat” ransomware infected computers at Mabanfaft GmbH and Oiltanking GmbH Group, say people familiar with an investigation of the breaches.

While there’s no confirmed link to the Russian state, the attacks come as the U.S., U.K. and others warn of the risk of cyberattacks as part of a campaign to put pressure on Europe for its support of Ukraine. 

Lavrov Calls U.S. Claim of Fake Video ‘Delusional’ (10:10 a.m.)

Foreign Minister Sergei Lavrov dismissed claims by the U.S. that Russia plans to produce a graphic propaganda video that purports to show a terrorist attack on Russian-speaking people.

“I read on the internet that the State Department made some statements that Russia is allegedly preparing a fake video with an apparent attack by Ukrainian soldiers on Donbas,” Lavrov said in a clip posted by Ren TV. “This kind of fantasy is delusional in my opinion, and they are more and more of them every day.”

U.S. officials warned previously that Moscow may be planning a false flag event that would create a justification for sending troops into Ukraine, and have said it used similar tactics when it occupied Crimea and fought a war with Georgia.

Carlsberg CEO Downplays Impact on Business (9:30 a.m.)

The Danish brewer Carlsberg A/S said its business won’t be hit too hard by a possible Russia-Ukraine conflict. Carlsberg gets less than 8% of its profit from the two countries, CEO Cees ‘t Hart said in a Bloomberg Television interview. A decade ago, eastern Europe accounted for almost half of the company’s earnings. 

Putin, Xi Meet; Russia will Supply Gas From Far East (9:13 a.m.) 

In their first in-person meeting since 2019, Putin told China’s Xi that Russia will supply 10 billion cubic meters of gas per year to China from Far East under a new contract. 

During the summit, timed to show solidarity on the sidelines of the Winter Olympics, Putin said conditions between the two countries were of an “unprecedented nature and an example of a dignified relationship.” 

EU Warned of New Russian Cyber Threat (8:40 a.m.) 

European Union institutions were warned Thursday of a new Russian-backed cyber threat that’s been running credential harvesting activity since mid-2021, according to an alert seen by Bloomberg News. 

The alert says it’s possible the capabilities will be used for cyberespionage purposes. No institutions have been targeted yet. The alert didn’t mention Ukraine. 

The group, known as Reuse Team or Callisto, has been involved in state-sponsored espionage and criminal activity since the early 2000s, the alert said. The group has recently targeted an EU body and was involved in a campaign that targeted a European ministry of foreign affairs in 2020. It has gathered intelligence related to foreign policy in Eastern Europe and the South Caucasus, according to a 2017 report by F-Secure, a cyber security research firm. 

Gazprom Reliability in Doubt, Von Der Leyen Says (8:31 a.m.) 

Gazprom is abiding by its contracts with the EU but unlike other suppliers isn’t shipping more gas than planned to Europe, and that’s casting doubt on its reliability, European Commission President Ursula von der Leyen said in an interview with Les Echos and Handelsblatt.

Gazprom’s behavior is “weird,” and Russia is using gas deliveries as a way to put pressure on Europe, she said.

Von der Leyen also described the EU’s sanctions package in the event of a Russian invasion of Ukraine, which includes including shutting Moscow off from foreign capital, and controlling exports of critical goods to Russia needed in areas such as artificial intelligence, weapons, quantum computing, lasers and space technologies.

Macron to Visit Russia, Ukraine Next Week (8:21 a.m.) 

French President Emmanuel Macron will travel to Moscow on Monday and Ukraine on Tuesday, an Elysee official said, as he continues an active diplomatic role in the crisis. 

The trips will follow three calls in the past week between Macron and Vladimir Putin to discuss the Ukrainian situation.    

U.S. Lawmakers Briefed by Top Security Team (11:00 p.m.) 

U.S. lawmakers are rushing to draft a new round of potential sanctions on Russia intended as a deterrent to any aggression against Ukraine. The sense of urgency in Congress escalated following day-long briefings Thursday by top national security officials. 

Negotiations had been slowed as Democrats and the Biden administration resisted Republican efforts to impose more sanctions on Russia now. Both sides agree on the need for more punishing penalties should Russia invade Ukraine, which the Kremlin denies it plans to do. 

 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — U.K. car sales rebounded the most in seven months in January thanks to surging demand for battery-powered vehicles.

New-car registrations rose 28% last month, according to data from the Society of Motor Manufacturers and Traders. One in five buyers opted for a car with a battery, with shipments of fully electric vehicles more than doubling and plug-in hybrids rising 47%.

Last month’s performance compares favorably to the prior-year period, when dealerships were closed due to Covid-19 lockdown measures. Even so, it’s the biggest rise in monthly sales since June 2021. The U.K.’s growth outpaced Germany’s 8% sales increase and France’s 19% decline.

“Given the lockdown-impacted January 2021, this month’s figures were always going to be an improvement but it is still reassuring to see a strengthening market,” SMMT Chief Executive Officer Mike Hawes said in a statement. “Once again it is electrified vehicles that are driving the growth, despite the ongoing headwinds of chip shortages, rising inflation and the cost-of-living squeeze.”

The SMMT lowered its sales forecast for 2022 to 1.9 million vehicles, from 1.96 million previously, as it expects living-cost inflation and higher interest rates to weigh on demand. U.K. households are grappling with surging energy prices and face the biggest income squeeze in three decades, prompting the country’s central bank to raise interest rates to rein in runaway inflation.

Read More: BOE’s Bailey Urges Pay Restraint as U.K. Reels From Cost Squeeze

While 2021 was supposed to represent a lasting recovery from the initial onslaught of the pandemic, U.K. car registrations inched up just 1% to 1.65 million because of the persistent supply-chain snarls.

(Updates throughout with final data from the SMMT)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — U.S. equity-index futures rallied and Amazon.com Inc. led premarket gains in New York as earnings optimism returned to the technology sector. A hawkish chorus from central banks hurt stocks in Europe.

Contracts on the tech-heavy Nasdaq 100 Index rose 1.5% as e-commerce titan Amazon jumped 13% in early trading after posting a big beat on cloud-computing profit and raising the price of Prime memberships. Europe’s Stoxx 600 surrendered gains as growing rate-hike bets reduced risk appetite. Oil was on course for a seventh weekly advance. The dollar stared at the worst week since 2020.

The relief for equity investors comes after a $251 billion wipeout for Facebook owner Meta Platforms Inc. on Thursday sparked a global technology rout and pulled down U.S. indexes. Despite some weaker reports, the overall earnings picture in the world’s largest economy remains robust, providing investors a cushion against concerns ranging from Federal Reserve tightening to stubborn inflation.

 

 

 

Amazon’s premarket gains implied an increase of $184 billion in its market capitalization if the stock rises by the same extent during regular trading hours. Snap Inc. soared 55% as its first-quarter revenue forecast beat estimates.

While Meta’s sluggish numbers dominated the headlines on Thursday, the flurry of earnings releases showed they may be an exception rather than the rule. Of the 271 companies in the S&P 500 that have reported results, 82% have met or beaten estimates. Profits are coming in at 8.8% above projected levels.

Still, volatility has become the hallmark of global markets this year. Investors are trying to come to grips with less favorable monetary conditions and a moderating global recovery amid stubborn inflation.

“The first half this year we are now experiencing a rates shock,” Tracy Chen, portfolio manager at Brandywine Global Investment Management, said on Bloomberg Television. “If the Fed and BOE and other emerging-market central banks are too aggressive in hiking interest rates, potentially we are going to face kind of a recession risk in the second half, or at least more slowdown in the economy.”

 

 

 

Hawkish comments from European Central Bank President Christine Lagarde and a Bank of England interest-rate hike underlined risks from inflation. While a selloff in the region’s bonds eased, the mood in the stock market turned sour.

The Stoxx 600 slipped 0.2% after rising as much as 0.5%. Makers of cars and parts were the worst-performing industry group, while gains for technology shares limited the gauge’s losses.

Treasuries advanced, with the 10-year rate shedding one basis point. The dollar was marginally lower, heading for a 1.4% decline this week.

Investors also awaited Friday’s official jobs report from the U.S., where they focused on wage growth to gauge the health of the economy and the potential for a further surge in inflation.

The looming jobs report “is a reminder that expectations for Fed policy are the key influence on this market right now,” wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. A hot inflation print next week would “rekindle hawkish Fed concerns,” he added.

An Asia-Pacific equity gauge pushed higher partly on a 3% jump in Hong Kong, which was catching up with global markets after reopening from a holiday. 

West Texas Intermediate hit a fresh seven-year high and surpassed $91 a barrel. Brent has surged 18% this year and banks including Goldman Sachs Group Inc. forecast it’ll reach $100.

For more market analysis, read our MLIV blog.

What to watch this week:

• U.S. payrolls report for January, Friday
• Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.3% as of 9:49 a.m. London time
• Futures on the S&P 500 rose 0.8%
• Futures on the Nasdaq 100 rose 1.5%
• Futures on the Dow Jones Industrial Average rose 0.4%
• The MSCI Asia Pacific Index rose 0.8%
• The MSCI Emerging Markets Index rose 1%

Currencies

• The Bloomberg Dollar Spot Index slipped less than 0.1%
• The euro was little changed at $1.1451
• The Japanese yen was little changed at 114.96 per dollar
• The offshore yuan was little changed at 6.3594 per dollar
• The British pound fell 0.2% to $1.3572

Bonds

• The yield on 10-year Treasuries declined one basis point to 1.82%
• Germany’s 10-year yield advanced two basis points to 0.16%
• Britain’s 10-year yield was little changed at 1.37%

Commodities

• Brent crude rose 1.6% to $92.59 a barrel
• Spot gold rose 0.3% to $1,809.97 an ounce

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Spain’s government will suspend the obligation to wear face masks outdoors as soon as next week, Cadena Ser reported. Germany declared a third consecutive day of record cases.

South Korea will extend limits on gatherings and dining out for two weeks after unprecedented case numbers. Japan will unveil relaxed border controls as soon as next week, broadcaster TBS said, after some of the toughest curbs in the developed world failed to contain the omicron variant. 

In South Africa, omicron sub-variant BA.2 has become more prominent, accounting for almost a quarter of new infections in January, while a local company has made a vaccine similar to Moderna Inc.’s.

Key Developments:

• Virus Tracker: Cases top 388 million; deaths pass 5.7 million
• Vaccine Tracker: More than 10.1 billion shots administered
• Covid’s endemic shift means slowdown for virus-product makers
• New virus research will speed NIH’s next outbreak response
• What we know about omicron and its subvariant BA.2: QuickTake
• Sign up for the free Coronavirus Daily newsletter here

 

Hong Kong Reports 131 Cases, 130 Local (4:55 p.m. HK)

Hong Kong reported 131 cases, with 130 locally transmitted. Fifty nine of the 130 new locally-transmitted coronavirus infections reported on Friday are of unknown origin, Department of Health official Chuang Shuk-kwan says at a daily briefing. About 195 preliminary positive cases are detected.

Spain Set to Relax Mask Rules (4:49 p.m. HK)

Spain’s government will suspend the obligation to wear face masks outdoors as soon as next week, Cadena Ser reported.

The order, which was reintroduced last December to stem the Omicron variant, will take effect by next Wednesday, the radio station said, citing people in the government it didn’t identify. 

Malaysian Cases at Highest in Three Months (4:11 p.m. HK)

Malaysia’s new cases rose to the highest level in more than three months as the highly contagious omicron variant spreads in the Southeast Asian nation. There were 7,234 new infections on Friday, the most since Oct. 16, data from the health ministry show. 

The spike in cases comes a day after Health Minister Khairy Jamaluddin said the government is focusing on the severity of the infections, rather than the number. While Malaysia is grappling with community transmission of omicron, Khairy said the nation is better protected now — nearly 52% of adults have received booster shots — and knows how to protect the most vulnerable.

Thailand Sees Most Cases Since October (4:02 p.m. HK)

Thailand reported 9,909 new cases, the highest single-day tally since Oct. 18. Rising new cases are in line with expectations, Permanent Secretary for Health Kiatiphum Wongrajit said, adding that serious infections and virus-related deaths are showing signs of stabilizing.

S. Africa’s Afrigen Makes Shot Like Moderna’s (3:10 p.m. HK)

South Africa’s Afrigen Biologics & Vaccines Ltd. has made a messenger ribonucleic acid or mRNA vaccine similar to that made by Moderna Inc., Nicholas Crisp, deputy director general in the country’s Department of Health, said Friday.

Meanwhile, the omicron sub-variant BA.2, which appears to be more transmissible than the original strain, accounted for almost a fifth of South African cases in January compared with 4% in December, a medical official said.

Germany’s Record Cases (1:53 p.m. HK)

Europe’s biggest economy reported 248,838 new cases as of Friday morning, compared with 236,120 the day before, according to the country’s public health authority RKI. 

It’s the third straight day of record infections. The 7-day incidence rate, which has been steadily climbing since the start of the year, also rose to a record 1,349.5 per 100,000 people.

Japan to Relax Border Controls: TBS (12:36 p.m. HK)

Japan’s government will unveil relaxed border control measures as soon as next week, broadcaster TBS reported, with elaborating on how or when measures would be eased.

Daishiro Yamagiwa, minister in charge of the nation’s coronavirus response, was quoted as saying that while the government will be “flexible” about border controls that will be kept in place until the end of this month, it wants to eventually open up the country to “essential” foreigners.

China Reports 9 Olympic Cases (11:22 a.m. HK)

China reported nine infections among Olympic athletes and officials arriving at the airport and in a “closed-loop” system Thursday.

According to a statement from the Beijing Organizing Committee for the Olympics, there were 12 other infections involving “stakeholders,” which include include broadcasting staffers, members of international federations and the media. There have been 308 cases among people involved with the Games since the count began Jan. 23.

S. Korea to Keep Distancing (9:02 a.m. HK)

South Korea will extend current social-distancing curbs, including limiting private gatherings to up to six people and 9 p.m. closing hours for restaurants and cafes, for another two weeks, Prime Minister Kim Boo-kyum said.

The steps will be effective through Feb. 20. South Korea has been reporting unprecedented numbers of new cases. Daily infections hit a new record of 27,443 on Friday.

Indonesia to Review Restrictions (8:54 a.m. HK)

President Joko Widodo has ordered ministers responsible for overseeing the pandemic response to immediately review restrictions after a spike in cases.

Indonesia added the highest number of cases in almost six months as the more transmissible omicron variant spreads throughout the country.

N.Z. Welcomes Slow Spread of Omicron (7:54 a.m. HK)

The slow spread is giving more people the opportunity to receive boosters, New Zealand Prime Minister Jacinda Ardern said. The strategy has to ensure the health system isn’t overwhelmed, she said. 

“Taken as a whole there is a range of factors that are making a difference to New Zealand’s experience of omicron versus other countries,” she said. “That’s a sign of success.”

Iowa, Maryland End Health Emergencies (5:57 p.m. NY)

Governor Kim Reynolds said she would allow Iowa’s public health emergency declaration, first issued near the start of the pandemic in March 2020, to expire on Feb. 15. 

“The flu and other infectious illnesses are part of our everyday lives, and coronavirus can be managed similarly,” the Republican governor said in a statement.

Health emergencies were declared at the start of the pandemic in all 50 states, and the expanded power of governors proved contentious in many of them. Roughly half of U.S. states have revoked them, and more are expected to do so as the surge caused by the omicron variant eases. Maryland, which includes part of the Washington metro area, allowed a 30-day state of emergency to expire on Thursday.  

Colorado Hopeful on Omicron Immunity (4:36 p.m. NY)

Public health modeling suggests 80% of Colorado residents could be “immune to infection” from the current omicron variant by mid-February, Rachel Herlihy, state epidemiologist, said during a Thursday briefing. At the same time, the number of omicron cases remains elevated “and we have a long way to come down,” said Scott Bookman, Covid-19 incident commander at the Colorado Department of Public Health and Environment. Johns Hopkins researchers estimate 70.1% of Coloradans are fully vaccinated.

Amex Tells NYC, U.K. Staff to Start Returning (2:15 p.m. NY)

American Express Co. is encouraging staffers in New York and the U.K. to start returning to the office early next month as Covid-19 cases recede globally.

AmEx has previously said most colleagues will work remotely at least part of the time even after the pandemic subsides. The firm asked New York staffers in those hybrid roles to begin coming back one day a week starting March 1 before a wider return on March 15, Chief Executive Officer Steve Squeri said in an internal memo Thursday seen by Bloomberg News.

Kids’ Vaccinations Plummet (1:53 p.m. NY)

Covid-19 vaccinations among children ages 5-11 have fallen to the lowest levels since the shots were first approved, a sign that parental enthusiasm for the shots may be running low even as authorities consider expanding the shots to even younger children.

The seven-day average of first doses fell to about 37,062 on Jan. 28, marking the slowest one-week period since the government approved the vaccines for those children on Nov. 2, according to U.S. Centers for Disease Control and Prevention data. Just 31% of kids 5-11 have gotten a shot, compared with 75% of the total population.

Subvariant Has Spread Across Africa (8:50 a.m. NY)

The omicron subvariant known as BA.2 has been found across Africa, and countries should sequence more samples so the extent of its spread can be determined, the World Health Organization said. 

So far, the strain has been found in Senegal in West Africa, Kenya in East Africa and Malawi, Botswana and South Africa in southern Africa, Nicksy Gumede-Moeletsi, a virologist with the WHO, said Thursday on a conference call.

Subvariant Dominant in Denmark (8:22 a.m. NY)

The omicron subvariant BA.2 makes up 69% of confirmed cases in Denmark and will reach 100% by mid-February, according to a study from the Danish virus watchdog SSI. BA.2 is about 30% more contagious than the original omicron, known as BA.1, the study found.

While unvaccinated people have a bigger risk of contamination overall, those who have been vaccinated are more likely to catch the new strain than BA.1. Denmark lifted all its Covid restrictions on Tuesday despite record daily cases, as hospitalizations and the number of people with severe disease are gradually declining.

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