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Asian Stocks Rise, Dollar Gains Amid China Focus: Markets Wrap

(Bloomberg) — Asian stocks climbed while the dollar advanced on its appeal as a haven amid split market sentiment over the prospects of China easing its Covid-Zero policy.

Equities in Hong Kong advanced, quickly reversing initial declines, while benchmark gauges in Japan, South Korea and Australia also climbed. Mainland indexes fluctuated.

US and European futures trimmed losses while oil and gold remained down, but above their lows for the session.

The Australian and New Zealand dollars saw the largest drops among Group-of-10 currencies given their sensitivity to the outlook for Chinese economic growth. The offshore yuan was weaker.

Confidence was also damped by Apple Inc. projecting lower shipments of its newest iPhones than previously expected amid the impact of China lockdowns on operations at a supplier’s factory.   

Markets continue to be whiplashed as traders veer between hope of China reopening from Covid-19 and fear that harsh curbs will persist. Chinese officials on Saturday vowed to remain “unswervingly” strict in Beijing’s approach to stamping out the coronavirus. The nation’s stocks had rallied aggressively on Friday on bets for an easing of virus curbs.

“Sentiment on Chinese stocks is so low that any potential catalyst would send stocks racing,” David Chao, global market strategist for Asia Pacific ex-Japan at Invesco Ltd. “Pent-up money sitting on the sidelines is chasing this rally. If you look at the stocks that have benefited, it’s the large-cap tech stocks and I’m not surprised.”

The debate over China’s outlook comes as investors contend with headwinds from Federal Reserve interest-rate hikes. US data Friday — showing strong hiring and wage increases along with higher unemployment — offered a mixed picture for Fed officials debating how long to extend their campaign to curb elevated inflation.

Fed fund futures are leaning toward pricing a 50-basis-point hike in December, with the peak around 5.1% next year.

Wall Street’s fear gauge is well below the panic levels seen during the pandemic or the 2008 crisis, but volatility is very much a feature of 2022. 

Treasuries were little changed in Asia after the two-year yield, which are more sensitive to imminent policy moves, reversed course and came down on Friday.

“Over the next three to four months, dollar will continue to keep moving higher,” Mahjabeen Zaman, head of FX research at Australia & New Zealand Banking Group Ltd., said on Bloomberg Television. “That’s really consistent with the recent FOMC Fed meeting we had where they said they’re going to slow the pace but push on peak rates.”

Markets will watch the latest US inflation reading on Thursday after the core consumer price index rose more than forecast to a 40-year high in September. Even if prices begin to moderate, the CPI is far above the Fed’s comfort zone.

Key events this week:

  • China trade, Monday
  • Fed officials Susan Collins, Loretta Mester and Tom Barkin speak at events, Monday
  • Euro zone retail sales, Tuesday
  • US midterm elections, Tuesday
  • EIA oil inventory report, Wednesday
  • China aggregate financing, PPI, CPI, money supply, new yuan loans, Wednesday
  • US wholesale inventories, MBA mortgage applications, Wednesday
  • Fed officials John Williams, Tom Barkin speak at events, Wednesday
  • US CPI, US initial jobless claims, Thursday
  • Fed officials Lorie Logan, Esther George, Loretta Mester speak at events, Thursday
  • US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.3% as of 12:05 p.m. Tokyo time. The S&P 500 rise 1.4% on Friday
  • Nasdaq 100 futures fell 0.3%. The Nasdaq 100 rose 1.6%
  • Japan’s Topix index rose 1%
  • South Korea’s Kospi index rose 0.8%
  • Hong Kong’s Hang Seng Index rose 2.2%
  • China’s Shanghai Composite Index rose 0.2%
  • Australia’s S&P/ASX 200 Index rose 0.5%
  • Euro Stoxx 50 futures fell 0.2%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.4%
  • The euro fell 0.3% to $0.9929
  • The Japanese yen fell 0.4% to 147.26 per dollar
  • The offshore yuan fell 0.6% to 7.2286 per dollar
  • The Australian dollar fell 0.8% to $0.6419

Cryptocurrencies

  • Bitcoin fell 1% to $20,923.15
  • Ether fell 1% to $1,588.14

Bonds

  • The yield on 10-year Treasuries was little changed at 4.15%
  • Japan’s 10-year yield was little changed at 0.25%
  • Australia’s 10-year yield advanced five basis points to 3.90%

Commodities

  • West Texas Intermediate crude fell 1.5% to $91.20 a barrel
  • Spot gold fell 0.6% to $1,671.53 an ounce

–With assistance from Michael G. Wilson.

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©2022 Bloomberg L.P.

Asia Earnings Week Ahead: SoftBank, SMIC, Nintendo, NAB, Nissan

(Bloomberg) — Asia’s earnings reports haven’t done much to boost market sentiment yet this season, but this week may bring some bright spots. SoftBank Group, due to report on Friday, is expected to return to profit after a record loss hit it hard the previous quarter. Analyst consensus is also predicting year-over-year profit growth at the world’s biggest coal miner, Coal India, at Chinese chipmaker SMIC, and at Nintendo, Nissan and National Australia Bank. And even after Chinese health officials vowed to “unswervingly” stick to a Covid Zero policy over the weekend, traders may be holding on to hopes of a reopening, with Hong Kong-listed Chinese shares rebounding within minutes of opening lower on Monday.

In terms of commentary and outlook, investors will be combing releases for any information on SoftBank’s listing plan for its chipmaking unit Arm Ltd., its exposure to Chinese assets, and SMIC’s measures to address a shortage of semiconductor-making tools. With heightened tensions between the US and China clouding the outlook on everything from chip export controls to Taiwan, all eyes are on whether a potential meeting between US President Joe Biden and Chinese President Xi Jinping at a Group of 20 summit later this month will bring some improvement to their relationship.

  • To subscribe to earnings coverage across your portfolio or other earnings analysis, run NSUB EARNINGS function on the Bloomberg terminal.
  • Follow results, analysis and market reaction to SoftBank’s report in real-time on the TOPLive blog.
  • For more on what’s going on in other regions, see the US Earnings Week Ahead and the EMEA Earnings Week Ahead, and the ESG Stock Watch for a selection of environmental, social and governance themes that may come up on this week’s earnings calls.

Highlights to look for this week:

Monday: Coal India (COAL IN) is likely to report second-quarter results after market close. The world’s biggest coal miner is set to benefit from an energy crisis in Europe that’s boosted global demand and prices of thermal coal. The state-owned company is estimated to report a near 90% surge in net income for the quarter versus a year ago, after monthly production increased by 8.5%-12% during the period. Since Russia’s invasion of Ukraine, the e-auction premium for coal surged to more than 290%, analysts at Motilal Oswal wrote. Investors will be watching for management commentary on coal volumes available for e-auction going forward, as well as guidance on production and sales volumes for the financial year. Other topics of interest are the ongoing negotiations on wages — one of the biggest cost tabs for Coal India — and a likely price hike for coal sold to power producers through long-term agreements. Any plans to invest further into cleaner power will also be of interest to ESG investors.

Tuesday: Nintendo (7974 JP) will report second-quarter earnings after market close. The Kyoto-based video game giant should continue to enjoy a profit windfall from a weaker yen, though slowdown in hardware sales could drag down overall revenue. Yet software sales are expected to be strong thanks to a bigger contribution from high-margin first-party titles, according to Bloomberg Intelligence. That includes family-friendly online shooter Splatoon 3, which had the biggest opening weekend of any Switch title to date in Japan. Regarding the console, Nintendo said the previous quarter that manufacturing bottlenecks had affected sales but it expects to catch up on production from the late summer. Investors will be eager to know if it was able to make good on that promise ahead of the all-important holiday shopping season.

Wednesday: Nissan Motor (7201 JP) is set to report its second-quarter earnings after the bell on Wednesday. It follows larger peer Toyota Motor, which was forced to revise output goals downward on Tuesday as the persistent chip shortage continued to hamper its production. Toyota shares took a pounding despite unveiling a 150 billion yen buyback program. Nissan’s immediate concerns surround how it will reshape its alliance with Renault, which is said to be in the final stages of negotiations. The Japanese carmaker probably won’t tell us much about those plans until an event planned for later in the month, but its quarterly performance may set the mood for what’s to come. Results are likely to reveal how much the weak yen has propped up profit amid higher input costs and an expected charge on exiting Russian operations, according to Bloomberg Intelligence analyst Tatsuo Yoshida, who also sees room for a profit upgrade.

  • Higher Rates: National Australia Bank (NAB AU) will announce its second-half and full-year results before market opens. Lenders in Australia and New Zealand are benefiting from tighter central bank policies as borrowing costs for mortgages climb more than deposit rates. NAB is seen to have achieved FY cash profit of about A$7.1 billion, or a growth of 8.4% over FY 2021, according to analysts’ estimates compiled by Bloomberg. Strong Australian lending in September and higher margins are likely to boost NAB’s revenue, though this could be partially offset by cost inflation and a surge in investment costs, according to Bloomberg Intelligence. Australia’s third-largest bank could sustain its 2021 11% ROE through 2023 on improving margins and healthy loan growth. With house prices falling and energy costs increasing, investors will parse banks’ results for signs of stress from borrowers.

Thursday: Semiconductor Manufacturing International Corp. (981 HK) is scheduled to release third-quarter results after market close. Bloomberg consensus estimate shows a 1.6% sequential growth in its third-quarter revenue but it may turn down in the fourth quarter. Comments and measures from the Chinese top chipmaker on how to deal with US curbs are in focus as the Biden administration announced sweeping regulations that limit the sale of semiconductors and chip-making equipment to Chinese customers in October. The US is also exploring further export controls to limit China’s access to some emerging computing technologies, stoking concerns that the industry’s downturn is far from over. In the longer term, SMIC’s revenue could grow 50% slower than the original expectations for 2023-224, according to Bloomberg Intelligence. BI said that nearly half of the firm’s new capacity to be installed by end-2023 is in 28- or smaller nanometer node advanced chip manufacturing, which would require supplies from US tool makers like Lam Research and Applied Materials which could potentially be barred by US restrictions.

Friday: SoftBank Group (9984 JP) is set to announce second-quarter earnings after market close. All eyes are on whether the Tokyo-based conglomerate has been able to course-correct after suffering a record $23.4 billion loss in the preceding three months on a sharp fall in the value of its investment portfolio and foreign currency losses. Bloomberg Intelligence said SoftBank may turn profitable helped by the sale of forward contracts on Alibaba Group Holding, though the outlook for the tech sector, where many of its investments are, remains lackluster. Meanwhile, founder Masayoshi Son has pledged sweeping cost cuts, and the company is said to be shrinking staff at its Vision Fund by at least 30%. Son’s earnings briefing later in the afternoon is usually closely watched, but he won’t be leading the proceedings this time, taking a back seat to focus on the planned listing of chip designer unit Arm.

–With assistance from Saket Sundria.

(Updates lede with market move)

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©2022 Bloomberg L.P.

Hong Kong Journalist Loses Appeal Over Database Search

(Bloomberg) — A Hong Kong court has upheld the conviction of a journalist who investigated the police response to a 2019 mob attack on pro-democracy protesters, a decision likely to fan concerns about press freedom.

Judge Alex Lee ruled Bao Choy’s reason for searching an official car ownership database was “too far-fetched and unreasonable” in the High Court on Monday. He upheld the previous ruling that journalism was no defense for searching such a directory under false pretenses.

Choy was convicted and fined in April 2021 for knowingly making a false statement when listing reasons for wanting to search an official database as part of investigation into a gang attack. 

READ: Hong Kong Bashes Global Media With Hundreds of Complaint Letters

Choy, then a producer for public broadcaster Radio Television Hong Kong, was trying to identify the owners of vehicles believed to have been involved in an attack on protesters in the northern area of Yuen Long in July 2019. There was no option for declaring media work when searching the database. 

The Independent Police Complaints Council later cleared officers of misconduct in a report, but said there had been failures in collecting intelligence in a timely manner.

Her work alleged a police delay in responding to the attack on dozens of protesters, which took place at the height of that year’s anti-government protests. The incident contributed to growing mistrust toward the authorities at the time. 

The prosecution of a reporter for journalistic work is rare in Hong Kong and will likely exacerbate concerns others could face a similar punishment for searches once considered routine.  

The court’s decision is also likely to add to growing concerns over deteriorating press freedom in the city. At least three pro-democracy newspaper have shuttered under police pressure campaigns since Beijing imposed a national security law on Hong Kong in 2020, while several journalists have been charged under the legislation that carries sentences as long as life in prison.  

Hong Kong’s press freedom ranking has plummeted in recent years. The city came 148 in the Reporters Without Borders 2022 World Press Freedom Index, representing a fall of 68 places from last year. Twenty years ago, the city sat in 18th place.  

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©2022 Bloomberg L.P.

Buffett, Son India IPO Stakes Watched as $14 Billion Lockups End

(Bloomberg) — India’s fledgling technology sector faces a key test this month as lock-up periods on $14 billion worth of shares sold in initial public offerings expire, allowing billionaire backers including Warren Buffett and Masayoshi Son to sell.

Lock-ups end in November for four consumer-focused tech stocks, which have all slumped in the past month. Included are One 97 Communications Ltd., operator of payments service Paytm, and FSN E-Commerce Ventures Ltd., owner of beauty e-retailer Nykaa.

A relatively new phenomenon in India, high-profile tech IPOs have met with strong demand from the nation’s growing herd of retail investors, and seen by some as proving success for the Indian government’s efforts to foster startups. Market pros have been more neutral on the stocks, however, and regulators have sought clarity over valuations and fundamentals.

“Investors have become more demanding when it comes to expectations of future profitability from these businesses,” Tom Masi and Nuno Fernandes, co-portfolio managers at GW&K Investment Management LLC, said in an email. 

India’s market for first time share sales boomed in 2021, raising a record $18 billion in proceeds amid high demand for tech issues in the low-rate early days of reopening after the pandemic. Overall offerings have slowed this year amid slumping tech stock prices, increasing rates and recession fears.

Paytm has lost the most among the recent tech debutants, now down 70% since its IPO, which was backed by global investors including Son’s SoftBank Group Corp., Buffett’s Berkshire Hathaway Inc. and Jack Ma’s Ant Group Co. The stock may face additional pressure after Nov. 15, when about $4.3 billion worth of shares is unlocked.

“There is a possibility that Softbank could take some profit since it was an early investor” in Paytm, Delhivery and PolicyBazaar owner PB Fintech, said Brian Freitas, an analyst who publishes on Smartkarma. Softbank has been selling down stakes in investments to fund its ongoing multibillion-dollar share buybacks, he added.

Another Indian tech unicorn Zomato Ltd. has already survived a similar challenge, with early investor Uber Technologies Inc. exiting the online food-delivery firm in August soon after expiry of the lock-up. The stock has gained 13% since then, though it is still down 17% since its IPO.

India’s stocks have outperformed most global peers this year, with the benchmark S&P BSE Sensex up more than 4% compared with a loss of more than 20% in the MSCI World Index. GW&K Investment’s Masi and Nuno note that investors looking to exit the disappointing tech stocks have other opportunities in equities as well as bonds, which are offering high yields. 

–With assistance from Younlim Lee.

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©2022 Bloomberg L.P.

Week Two of Musk’s Twitter Brings Reversals on Check Marks, Jobs

(Bloomberg) — Twitter Inc. is heading into its second full workweek under Elon Musk with half its workforce, mounting losses and a couple of unexpected reversals to its plans.

The social-media company laid off close to 3,700 people on Friday, only to reach out soon thereafter to dozens of employees who it decided were either fired in error or too essential to the changes the billionaire businessman wants to make. Another of Musk’s key early goals — adding verification check marks for members of its monthly subscription service — is being delayed until Wednesday to avoid potential chaos during the US midterm elections.

The whiplash events, as described by people familiar with the situation or in an internal company memo posted on slack, follow Musk’s own acknowledgment in a tweet that the company he and well-heeled partners bought for $44 billion is losing $4 million a day.

Twitter lopped its workforce as a way to trim costs following Musk’s acquisition, which closed in late October. Many employees learned they lost their job after their access to companywide systems, like email and Slack, were suddenly suspended. The requests for employees to return demonstrate how rushed and chaotic the process was.

A Twitter spokesperson didn’t reply to a request for comment. Twitter’s plan to hire back workers was previously reported by Platformer.

“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day,” Musk tweeted on Friday.

Twitter has close to 3,700 employees remaining, according to people familiar with the matter. Musk is pushing those who remain at the company to move quickly in shipping new features, and in some cases, employees have even slept at the office to meet new deadlines.

Twitter has said it’s rolling out new features to its Twitter Blue subscription plan, offering a verification check mark for any user who pays the monthly fee. The company also said it will soon be launching other features, including half the ads, the ability to post longer videos and get priority ranking in replies, mentions and searches.

Twitter will issue the new blue verification check marks to users who pay $7.99 a month for the service starting on Nov. 9, according to an internal company message that was posted on Slack. The company had previously planned to roll out the subscription feature Nov. 7, the day before the election. 

The company received internal and external feedback that the verification process for its Twitter Blue program could be ripe for abuse, according to one of the people, who asked not to be identified. That raised concerns that candidates and other political actors might be impersonated on the site in the days before the US election. 

Late Sunday, Musk said Twitter would ban accounts that impersonate others, after several high-profile users changed their names and pictures to match the billionaire. Any name change at all will cause a temporary loss of a verified check mark.

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©2022 Bloomberg L.P.

UK Minister Visits Taiwan for Talks to ‘Future-Proof’ Economy

(Bloomberg) — UK Trade Minister Greg Hands is holding talks with Taiwanese officials to “future-proof” Britain’s economy in the coming decades, as Rishi Sunak’s administration looks to take a harder stance on China.

The in-person trip to Taipei, aimed at boosting economic ties between the countries, comes as the UK takes an increasingly protectionist approach to Chinese investment. Prime Minister Sunak has described China as “biggest long-term threat to Britain,” and during his summer leadership race against Liz Truss said China is “attempting to bully their neighbors, including Taiwan.”

The talks will focus on industries like financial technology, renewable energy and pharmaceuticals, according to a statement Monday. The UK noted that Taiwan is a leading manufacturer of semiconductors — a key component in electric devices — and crucial because Britain is close to making a decision on a probe into a Chinese-led takeover of Newport Wafer Fab, which owns the country’s largest semiconductor plant.

China Relationship Is Casualty of Truss-Sunak Battle to Lead UK

“Boosting trade with this vital partner is part of the UK’s post-Brexit tilt towards the Indo-Pacific and closer collaboration will help us future-proof our economy in the decades to come,” Hands said in the statement. 

 

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©2022 Bloomberg L.P.

Apple Cuts Outlook for iPhone Shipments on China Lockdowns

(Bloomberg) — Apple Inc. said shipments of its newest premium iPhones will be lower than previously expected after China lockdowns affected operations at a supplier’s factory. 

The company continues to see strong demand for the iPhone 14 Pro and iPhone 14 Pro Max models but the lockdowns mean “customers will experience longer wait times to receive their new products,” Apple said in a statement Sunday. Deliveries of iPhone 14 Pro handsets are currently listed for late November or early December, according to Apple’s website. 

Read more: Asian Apple Suppliers May Move as iPhone Outlook Cut on Lockdown

The abrupt move by the Chinese government last Wednesday to lock down the Zhengzhou area that includes a Hon Hai Precision Industry Co. iPhone assembly plant until Nov. 9 is expected to further disrupt a factory already grappling with an on-site coronavirus outbreak, worker exodus and enforced quarantine. 

Apple said the facility is operating at “significantly reduced capacity,” while Hon Hai, the main listed arm of Taiwan’s Foxconn Technology Group, noted in a separate statement that it’s lowering its fourth-quarter outlook to factor in the lockdown.

“Foxconn is now working with the government in concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible,” the Taiwanese company said in a statement.

Holiday Season

The local government has ordered people and vehicles off the streets except for medical or other essential reasons, a prohibition that threatens to cut off the flow of additional workers and components needed to rev up production ahead of the holiday-season crush.

The disruption comes at a crucial time for Apple, which launched the iPhone 14 during an unprecedented slump in global electronics demand. While faring better than other smartphone makers, it’s backed off plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize, Bloomberg has reported. Apple has reported better-than-expected results but warned of a holiday slowdown.

The measures may further compound the headaches Foxconn and Apple are already facing as iPhones’ sales slow in China. Apple, the world’s most valuable company, said last month it expects growth to decelerate in the current period. 

The Cupertino, California-based company didn’t provide a specific revenue forecast for the current quarter, continuing an approach it adopted at the start of the Covid-19 pandemic. But analysts estimate sales of about $128 billion, which would be an all-time record.

In the face of slowing growth, Apple has paused hiring for many jobs outside of research and development, an escalation of an existing plan to reduce budgets heading into next year, Bloomberg reported last week, citing people with knowledge of the matter.

Read more: Apple Adds New IPhone 14 Maker in India in Shift From China 

Meanwhile, Foxconn’s plant continues to operate within a “closed loop,” or a self-contained bubble that limits contact with the outside world. That is keeping some production going. 

Apple said on Sunday it is working closely with its supplier to return to “normal production levels while ensuring the health and safety of every worker.”

(Updates with Foxconn’s statement in the fifth paragraph)

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©2022 Bloomberg L.P.

Ukraine Latest: US and Russia Discussed Containing War, WSJ Says

(Bloomberg) —

President Joe Biden’s national security adviser and senior Kremlin aides have held private talks in recent months to reduce the risk of a broader conflict over Ukraine, the Wall Street Journal reported. A peace settlement wasn’t a goal of the discussions, according to the report.

Russian media said Ukraine struck the Kakhovka dam north of Kherson with a missile on Sunday, without causing major damage. There was no comment from Kyiv. Ukraine for weeks has accused Russian forces of planning to blow up the dam and flood the surrounding region to slow a Ukrainian counteroffensive around Kherson.  

The White House is privately suggesting Ukraine’s president indicate an openness to talks with Russia as a way to help Volodymyr Zelenskiy’s government address war support fatigue among some allies, the Washington Post reported.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • US Announces $400 Million in Tanks and Missiles for Ukraine 
  • The Latest Russia Oil Mystery: Vostok Sale Announced Then Denied
  • US National Security Adviser Visits Kyiv in Show of Support
  • Sweden to Dissociate From Kurdish Groups in NATO Bid, SVT Says

On the Ground

Russian troops, after months of setbacks, intensified their efforts to capture territory near Bakhmut in the Donetsk region. The strategic value of the heavily-bombarded town is unclear. Kremlin forces continued to set up defensive positions along the left bank of the Dnipro River, according to the Institute for the Study of War, as the situation in Kherson remains in the balance. Kyiv’s troops continue to target Russian logistics and transportation equipment in the Kherson region. Ukraine’s southern operational command said Russian forces have destroyed dozens of civilian ships as part of their retreat to prevent Kyiv’s military from potentially using them. Separately, Russian occupying forces continue to forcibly evacuate the population from the temporarily occupied territories of the Kherson region to Crimea and beyond, Ukrainian officials said. Russian media reported ten towns and villages in the Kherson region, including Kherson itself, were left without electricity after “sabotage.” 

(All times CET) 

US and Russia Have Discussed Avoiding Escalation, WSJ Says (10:15 p.m.)

US National Security Adviser Jake Sullivan and senior Russian counterparts have held talks in recent months on guarding against the risk of escalation and warn Moscow against using nuclear or other weapons of mass destruction, the Wall Street Journal reported, citing US and allied officials.

A settlement of the war in Ukraine wasn’t an aim of the discussions, according to the report. 

Sullivan alluded to US-Russian contacts after Russian leaders suggested that nuclear weapons might be an option in its war against Ukraine. “We do have the capacity to speak directly at senior levels and to be clear about our messages to them and to receive their messages,” Sullivan said on NBC’s “Meet the Press” on Sept. 25. “That has happened frequently over the course of the past few months.” 

Power Out for Millions in Capital Area (9 p.m.)

More than 4.5 million consumers are without power, most of them in Kyiv and the Kyiv region, President Volodymyr Zelenskiy said Sunday in his nightly video address.

Ukraine’s power generation has been severely damaged by weeks of Russian missile and drone attacks. “It is indeed difficult,” Zelenskiy said.

Seven Ships Pass Grain Corridor Over Weekend (7:30 p.m.)

Seven inbound vessels transited the Ukraine crop corridor over the weekend, according to a statement from the Joint Coordination Centre, which facilitates the Black Sea Grain Initiative. Only two vessels under the initiative are currently at Ukrainian ports, it said.

On Sunday, the Istanbul-based center cleared two outbound vessels and seven inbound vessels for transit to Ukraine, while inspections on two more outbound vessels were halted on “various grounds.” Inspections on three outbound vessels were also suspended on Saturday due to fumigation issues, while eight inbound ships were cleared, it said.

Biden, Scholz Reaffirm Support for Ukraine (7:15 p.m.)

US President Joe Biden and German Chancellor Olaf Scholz reaffirmed support for Ukraine during a call on Sunday, according to both governments. 

“The leaders agreed that Russia’s recent nuclear threats are irresponsible,” the White House said in a statement. “They underscored the continued commitment of the United States and Germany to provide Ukraine with the economic, humanitarian, and security support it needs to defend against Russia’s aggression.”

They agreed that Ukrainian President Volodymyr Zelenskiy’s “demand for a just peace deserves full support,” according to readout by German deputy government spokesman Wolfgang Buechner. 

Kyiv Can’t Be Forced on Talks, German President Says (4 p.m.)

Germany can’t “decide on Ukraine’s behalf” if or when to start negotiations with Russia, President Frank-Walter Steinmeier said. “Ukraine must say when it wants to hold such negotiations, when it considers them promising,” Steinmeier told ARD public television.

Diplomatic efforts shouldn’t have the purpose of endorsing Russia’s “violation of borders,” said Steinmeier, a former foreign minister who also served as chief of staff under former Chancellor Gerhard Schroeder. 

No Grounds for Evacuation, Kyiv’s Mayoral Office Says (3 p.m.) 

The situation in Kyiv is under control, the mayoral office said on its website, hours after a New York Times report that contingency plans are being made for a possible mass evacuation if power fails completely following recent repeated Russian missile strikes on key infrastructure. 

“There are no grounds to talk about evacuation now,” said Roman Tkachuk, Kyiv’s municipal security chief. “Yes, we work on different plans, we train people to act and be prepared. It is important to avoid chaos and minimize risks for people.” 

Zelenskiy, Von Der Leyen Discuss Financial Support (2:46 p.m.)

European Commission President Ursula von der Leyen spoke on Sunday with Volodymyr Zelenskiy, focused on ensuring financial support for Ukraine in the months ahead, on the Black Sea grain initiative, and on sanctions. 

Von der Leyen said she would propose an EU financial package this week of as much as €1.5 billion a month to a maximum of €18 billion, to help cover Ukraine’s financing needs for 2023, according to a readout. 

The highly concessional long-term loans, with coverage of interest, would also support Ukraine’s reforms and its path toward EU membership, according to the readout. 

Kakhovka Dam Above Kherson Hit by Ukraine, Russian Media Say (12:30 p.m.)

The Kakhovka dam on the Dnipro River was hit Sunday by a Ukrainian strike from US-donated HIMARS rockets, according to Russia’s the state-run Tass news agency. The damage was termed non-critical. 

There was no comment from Ukraine on the claim, which couldn’t be verified. 

Ukraine’s president has accused Russian forces, which captured the Kakhovka hydroelectric plant in February, of mining the dam and preparing to blow it up to create catastrophic flooding and slow down a Ukrainian counteroffensive. 

Ukraine’s Environmental Losses Estimated at $37 Billion (12 p.m.)

“Even this insane amount does not reflect the real picture,” the Accounting Chamber, an audit body of the Ukrainian parliament, said on Facebook as it estimated environmental losses at 1.35 trillion hryvnia ($37 billion).

The amount of harmful emissions from forest fires, fuel burning and blazes at at industrial companies has exceeded 67 million tons this year, compared with annual 2.2 million tons in two previous years, the chamber said. 

The total of 3 million hectares or one third of Ukraine’s total forested areas have been effected, and losses were termed irreversible. in some cases. about one third of Ukrainian territory requires mine clearing, which may take at least ten years. 

Kyiv Mayor Urges Residents to Stock Up on Essentials (11 a.m.)

Speaking on television Saturday night, Kyiv Mayor Vitali Klitschko said he was “asking everyone to stock up on drinking water, technical water, power banks, food, warm clothes,” and that the city is “making calculations for different scenarios.”  

The former heavyweight boxing champion spoke as the New York Times reported that Ukraine’s capital is planning for a potential total evacuation if power and water supplies are cut off. 

“I am asking people to prepare for a bad scenario in case of total cut off of water and power supply,” he said, adding that Russia, through its ongoing airstrikes on key infrastructure, is “doing everything to deprive the city of electricity and water.” 

Ukraine Deputy PM Vows to ‘Keep Fighting’ (8:41 a.m.)

Ukraine’s deputy prime minister told an Italian newspaper that “there is no peace because Russians do not want it,” and that if Europe should “betray”its support for Ukraine, the entire Western world would be at risk.

“The only way to reach peace in this phase is to keep fighting,” Iryna Vereshchuk told Corriere della Sera in an interview published on Sunday. “If we stop fighting, we will disappear as people and as a nation.”

Her comments came as the Washington Post reported the US is privately pressing Kyiv to show an openness to talks with Russia as “Ukraine fatigue” sets in among some allies.

Kyiv Considers Total Evacuation If It Loses Electricity: NYT (8 a.m.)

Officials in Ukraine’s capital have begun planning for a possible complete evacuation of its 3 million remaining residents if it loses electricity supplies, blackout that would require the New York Times reported. 

For now, rolling blackouts continue in Kyiv and in seven other regions in a bid to keep the electricity grid somewhat stable.  

US Seeks Ukraine Signal on Negotiations: Washington Post (11:40 p.m.)

The Biden administration is prodding Ukrainian leaders to signal openness to negotiations with Russia as a way to help the government in Kyiv address war support fatigue among some of its allies, the Washington Post reported, citing people familiar with the discussions.

The people described it as a calculated attempt to maintain international support for Ukraine’s war effort, rather than pressure for Ukraine to negotiate, according to the Post.

One official told the newspaper that “Ukraine fatigue is a real thing” for some allies. 

Ukraine to Boost Maritime Drone Power, Zelenskiy Says (6:45 p.m.)

Ukraine’s government is seeking to replenish its maritime drone fleet to boost its defenses in the Black Sea, President Volodymyr Zelenskiy said, a week after a drone strike on Russia’s new Black Sea fleet, possibly including the frigate Admiral Makarov.

“Next week, we will launch another fund-raising direction — we will raise funds for a fleet of marine drones,” Zelenskiy said in his nightly video address. He didn’t elaborate on the proposed source of funding. 

Addressing the Iranian foreign minister’s earlier comment that Tehran “gave a limited number of drones to Russia months before” the war, Zelenskiy said Ukraine shoots down “at least 10 Iranian drones every day.”  

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Australian Health Insurer Hack Far Bigger Than Initially Thought

(Bloomberg) — A hack on an Australian health insurer appears to be far larger than initially suspected, with the company saying it will refuse to pay a ransom for the theft of data. 

The attack on Medibank Private Ltd. exposed the data of around 9.7 million current and former customers and some of their authorized representatives, the Melbourne-based company said in a statement Monday. Accessed data included the victim’s name, date of birth, address, phone number and email address. Initially, Medibank said the attack had exposed data on its almost 4 million customers. 

The extent of the hack puts it in the realm of a vast data leak at Singapore Telecommunications Ltd.’s Optus unit in September, which exposed the details of as many as 10 million customers. Other recent hacks on pathology services provider Australian Clinical Labs Ltd. and Woolworths Ltd. subsidiary MyDeal have raised concern Australian companies aren’t doing enough to protect customer data. 

Read More: Great Australian Hack Sends Wakeup Call to Complacent Companies

“Based on the extensive advice we have received from cybercrime experts we believe there is only a limited chance paying a ransom would ensure the return of our customers’ data and prevent it from being published,” Chief Executive Officer David Koczkar said in the statement. “In fact, paying could have the opposite effect and encourage the criminal to directly extort our customers, and there is a strong chance that paying puts more people in harm’s way by making Australia a bigger target.” 

According to the latest update from Medibank, the hacker accessed information on about 5.1 million Medibank customers, around 2.8 million customers of subsidiary AHM and some 1.8 million international customers. Among the information obtained was:

  • Medicare numbers (but not expiry dates) for AHM customers
  • Passport numbers (but not expiry dates) and visa details for international students
  • Health claims data for around 160,000 Medibank customers, around 300,000 AHM customers and around 20,000 international customers
  • Around 5,200 My Home Hospital patients had personal and health claims data accessed and around 2,900 next of kin of these patients
  • Health provider details, including names, provider numbers and addresses

Medibank will also commission an external review of the incident. It says no further suspicious activity has been detected since Oct. 12. 

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Meta to Start Laying Off Thousands of Staff This Week, WSJ Says

(Bloomberg) — Meta Platforms Inc. is planning to begin layoffs that will affect thousands of workers from this week, Wall Street Journal reported, citing people with knowledge of the matter. 

The job cuts could come as early as Wednesday, the newspaper said. The company has already told employees to cancel non-essential travel from this week, according to the report.

Chief Executive Officer Mark Zuckerberg in September outlined plans to reorganize teams and reduce headcount for the first time, following a sharp slowdown in growth at the parent of Facebook and Instagram. Zuckerberg said then that Meta will likely be smaller in 2023 than it was this year. 

The layoffs come as Meta struggles with growing losses and as it invests heavily in developing its metaverse business. Its shares have fallen 73% this year.

The cuts will add to already mounting job losses in Silicon Valley. Twitter Inc. last week slashed nearly 3,700 positions after Elon Musk completed his $44 billion takeover of the social media platform. Other companies that have also reduced their workforce or announced plans to include ridehailing firm Lyft Inc. and hard drive maker Seagate Technology Holdings Plc. 

A spokesman for Meta declined to comment to the WSJ. 

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