US Business

Meta said Tuesday it derailed a campaign out of China to influence upcoming US elections by posing as people in the United States taking sides on “hot button” issues.

It was the first Chinese network Meta has disrupted that focused on US politics ahead of crucial midterm elections in November, global threat intelligence lead Ben Nimmo said during a press briefing.

“The operation was small, but it is a significant change,” Nimmo said.

“Which is why it’s important to stay on high alert.”

Meta said it was unable to determine whether the Chinese government was linked to the campaign, only that it originated in China.

The campaign used fake accounts at Facebook, Instagram and Twitter, posting on both sides of politically divisive topics such as abortion and gun control, Meta said in a report.

“It looks like they were using hot button issues in the US as a window into discourse on politics, pretending to be Americans,” Nimmo said.

The China-based network also targeted Czech internet users with criticism of their government’s support for Ukraine and its policy toward China, and more generally attempted to spread information on geopolitical issues critical of the United States.

The campaign involved 81 Facebook accounts and a pair of Instagram accounts but only prompted scant engagement before being blocked, according to the California-based social media titan.

“These accounts largely stuck to a shift pattern that coincided with a nine-to-five, Monday-to-Friday work schedule during working hours in China,” Meta said.

“This meant that the operation was mostly posting when Americans were sleeping.”

– Sophisticated and brutish –

Meta said it also dismantled what appeared to be the largest yet deceptive social media campaign run from Russia about the war in Ukraine.

The operation began in May and targeted primarily Germany, but also France, Italy, Ukraine and Britain, Meta threat disruption director David Agranovich said during the briefing.

At the center of the operation were about 60 websites imitating well-known media, including the German newspapers Der Spiegel and Bild, Meta said.

The Russian network created articles criticizing Ukraine and supporting Russia, sharing them on YouTube, Facebook, Instagram, Telegram, Twitter or online petition sites.

Meta decided to investigate after journalists in Germany exposed the deception, the tech firm said.

“This is the largest and most complex Russian-origin operation that we’ve disrupted since the beginning of the war in Ukraine,” Meta said in the security report.

“It presented an unusual combination of sophistication and brute force.”

Imitating real news websites in multiple languages required significant technical and linguistic investment, the report noted.

The fake articles were promoted crudely, using paid ads or fake accounts, often getting caught by the social media platform’s automated defenses, Meta said.

“They were throwing everything at the wall and not a lot was sticking,” Agranovich said of the Russia-based campaign.

“We have seen a lot of operations since February, and those operations continue to target Ukraine.”

The deceptive campaign out of Russia involved 1,633 accounts, 703 pages and one group on Facebook, as well as 29 accounts on Instagram, Meta said.

Italian far-right leader Giorgia Meloni and her allies began Tuesday what is likely to be a weeks-long process of forming a new government, with crises looming on several fronts.

Meloni’s post-fascist Brothers of Italy party, which triumphed in Sunday’s elections, has no experience of power but must assemble a cross-party team to tackle sky-high inflation and energy prices, and relations with a wary Europe.

The 45-year-old is hoping to be the first woman to lead Italy as prime minister, but needs her allies, Matteo Salvini’s far-right League party and former Silvio Berlusconi’s Forza Italia, for a majority in parliament.

The division of the top jobs — notably economy, foreign affairs, the defence and interior ministries — will always be political but now, more than ever, “will have to reflect areas of expertise”, the Stampa daily noted.

In the past, it has taken anything between four and 12 weeks for a new administration to take office.

But the first deadline for action is coming up fast, with debt-laden Italy due to submit its draft plan for next year’s budget to Brussels by October 15.

President Sergio Mattarella will begin consultations on who should lead the new government only once the Senate and Chamber presidents have been elected by parliament, which meets on October 13.

With families and businesses struggling with huge bills aggravated by the Ukraine war, sorting out the budget will be “like scaling Everest without oxygen tanks for the new cabinet”, the Corriere della Sera daily said.

Meloni sought to reassure investors during the election campaign that, despite her radical past, she will be a safe pair of hands.

But the Italian ten-year bond rate increased to its highest level since October 2013 on Tuesday morning.

And the gap between German and Italian interest rates, the closely watched spread, rose above 250 points for the first time since the depths of the coronavirus pandemic in spring 2020.

– Non-controversial, credible –

The European Commission was set to approve Tuesday the second instalment of post-pandemic recovery funds to Italy, worth 21 billion euros, a government source said.

But Meloni has said she wants to renegotiate the deal with Brussels, potentially putting the rest of the fund — worth a total of almost 200 billion euros — at risk.

Agnese Ortolani, senior Europe analyst at the Economist Intelligence Unit, said she expected Meloni “to continue to reassure the markets by picking a non-controversial figure for the role of finance minister”.

“She will also want to avoid reputational damage by nominating someone who is not perceived as credible by the markets,” she said in a note.

Meloni’s allies have been pitching for heavy-weight positions, Salvini wanting his old job as interior minister back, and Berlusconi eyeing president of the Senate.

Their disappointing performance in the polls, however, with neither reaching 10 percent while Brothers of Italy’s secured 26 percent, means Meloni may already be planning to sideline them.

– Friction –

Salvini and Berlusconi do not see eye-to-eye with Meloni on several fronts, including on sending weapons to Ukraine.

With all the potential friction ahead, winning the elections “was almost the easy part”, commented Luciano Fontana, chief editor of the Corriere della Sera daily.

Berlusconi downplayed concerns he would rock the boat Tuesday, saying his party was ready to make compromises “in the country’s interests”.

His ally Antonio Tajani, a former European parliament president, is tipped as possible foreign minister, an appointment which could both appease Berlusconi and assuage international fears that Meloni’s Eurosceptic populist party plans to pick fights with Brussels.

Salvini, 49, may prove more difficult. He is currently on trial for allegedly abusing his powers as interior minister in 2019 to block migrants at sea, which could rule him out returning to the job.

“Defusing Salvini” without sparking a backlash that could seriously weaken the nascent executive is “Meloni’s first test”, the Repubblica daily said.

The dollar weakened slightly against major rivals Tuesday, helping the pound to rebound from a record low, while equity markets stabilised after recent volatility.

The world is heading towards a global recession as multiple crises collide, World Trade Organization’s chief Ngozi Okonjo-Iweala told the global trade body’s annual public forum in Geneva.

Recession prospects have risen in recent weeks as central banks keep hiking interest rates to try and cool decades-high inflation, boosting in particular the dollar.

The Federal Reserve has carried out three successive bumper US hikes and is warning of more to come.

That has seen investors pile into the dollar, sending it to record or multi-decade peaks, in turn rattling governments from Tokyo to Beijing and London.

On Monday, the pound hit an all-time low at $1.0350, with traders spooked by a UK tax giveaway they warned could further fuel inflation and significantly ramp up British state borrowing.

“Dollar strength remains the driving force — or wrecking ball — in financial markets at the moment,” said Markets.com analyst Neil Wilson.

Sterling staged a small recovery Tuesday after the Bank of England said it would “not hesitate to change interest rates by as much as needed”.

With the pound showing record weakness against the dollar this week, analysts are forecasting a big rate increase when the BoE holds its next regular policy meeting on November 3.

“A rate hike of over 150 basis points is currently priced in for the coming meeting,” Commerzbank analyst Esther Reichelt noted Tuesday, questioning if that would even be enough. 

The Bank of England’s statement “is unlikely to calm all those who had already questioned the BoE’s determination to fight inflation even prior to these events”, she added.

Elsewhere, European natural gas prices surged nearly ten percent to 190.50 euros following news that the two Nord Stream gas pipelines linking Russia and Europe have been hit by unexplained leaks, raising suspicions of sabotage.

The pipelines have been at the centre of geopolitical tensions in recent months as Russia cut gas supplies to Europe in suspected retaliation against Western sanctions following its invasion of Ukraine.

A major new pipeline that will bring in Norwegian gas via Denmark was inaugurated in Poland on Tuesday in a move aimed at helping strengthen Europe’s energy security.

Oil prices jumped almost two percent, helped by a weaker dollar.

– Key figures at around 1100 GMT –

London – FTSE 100: DOWN 0.1 percent at 7,016.35 points

Frankfurt – DAX: UP 0.7 percent at 12,315.34

Paris – CAC 40: UP 0.7 percent at 5,811.35

EURO STOXX 50: UP 0.7 percent at 3,367.42

Tokyo – Nikkei 225: UP 0.5 percent at 26,571.87 (close)

Hong Kong – Hang Seng Index: FLAT at 17,860.31 (close)

Shanghai – Composite: UP 1.4 percent at 3,093.86 (close)

New York – Dow: DOWN 1.1 percent at 29,260.81 (close)

Pound/dollar: UP at $1.0821 from $1.0689 on Monday

Euro/dollar: UP at $0.9642 from $0.9611

Euro/pound: DOWN at 89.11 pence from 89.87 pence 

Dollar/yen: DOWN at 144.28 yen from 144.72 yen

Brent North Sea crude: UP 1.7 percent at $85.47 per barrel

West Texas Intermediate: UP 1.9 percent at $78.11 per barrel

The two Nord Stream gas pipelines linking Russia and Europe have been hit by unexplained leaks, Scandinavian authorities said Tuesday, raising suspicions of sabotage.

The pipelines have been at the centre of geopolitical tensions in recent months as Russia cut gas supplies to Europe in suspected retaliation against Western sanctions following its invasion of Ukraine.

While the pipelines, which are operated by a consortium majority-owned by Russian gas giant Gazprom, are not currently in operation, they both still contain gas but the environmental impact appeared limited so far.

One of the leaks on Nord Stream 1 occurred in the Danish economic zone and the other in the Swedish economic zone, while the Nord Stream 2 leak was in the Danish economic zone.

A leak was first reported on Nord Stream 2 on Monday.

“Authorities have now been informed that there have been another two leaks on Nord Stream 1, which likewise is not in operation but contains gas,” Danish climate and energy minister Dan Jorgensen told AFP in a statement on Tuesday.

“It is too early to say anything about the causes of the incidents,” the Danish Ministry of Climate, Energy and Utilities said in a statement.

Denmark’s energy agency has, however, called for “higher levels of preparedness in the electricity and gas sector” in the country, Jorgensen said.

Russia said it was “extremely concerned” about the situation.

Asked by reporters whether it could be an act of sabotage, Kremlin spokesman Dmitry Peskov said that at the moment “it is impossible to exclude any options”.

– ‘Extremely rare’ –

The Danish energy agency said only the area where the gas plume is located will be affected by the leak, but methane escaping into the atmosphere has a “climate-damaging effect”, according to the Ritzau news agency.

“Gas pipeline leaks are extremely rare and we therefore see a reason to increase the level of preparedness following the incidents we have witnessed over the past 24 hours,” director of the Danish Energy Agency Kristoffer Bottzauw said in a statement.

“We want to ensure thorough monitoring of Denmark’s critical infrastructure in order to strengthen security of supply in the future,” he added.

Ola Westberg, spokesman for the Swedish Energy Agency, told AFP on Tuesday that no decision had been taken yet and that they “were in dialogue with Denmark.”

Built in parallel to the Nord Stream 1 pipeline, Nord Stream 2 was intended to double the capacity for Russian gas imports to Germany.

But Berlin blocked newly-completed Nord Stream 2 in the days before the war.

Germany, which has been highly dependent on imports of fossil fuels from Russia to meet its energy needs, has since come under acute stress as Moscow has dwindled supplies.

Russian energy giant Gazprom progressively reduced the volumes of gas being delivered via Nord Stream 1 until it shut the pipeline completely at the end of August, blaming Western sanctions for the delay of necessary repairs to the pipeline. 

– ‘Targeted attack’ –

Germany has rebuffed Gazprom’s technical explanation for the cut, instead accusing Moscow of wielding energy as a weapon amid tensions over the war in Ukraine.

Meanwhile, German daily Tagesspiegel reported that “the Nord Stream pipelines may have been damaged by targeted attacks and leaked as a result”. 

According to a source close to the government and relevant authorities, quoted in the newspaper, “everything speaks against a coincidence”. 

“We cannot imagine a scenario that is not a targeted attack,” the source said.

The Nord Stream 1 leaks were first spotted Monday evening, hours after a drop in pressure was reported in Nord Stream 2, according to the Swedish Maritime Administration (SMA).

“Around 8:00 pm (1800 GMT) we received a report from a passing ship saying they saw something on their radar a little further north of the island of Bornholm,” Fredrik Stromback, spokesman for the SMA, told AFP.

As a result of the leaks, navigational warnings have been issued for a distance of five nautical miles and a flight height of 1,000 metres (3,280 feet).

“The incidents on the two pipelines have no impact on the supply to Denmark,” Jorgensen said. 

The dollar lost a little of its strength Tuesday after starting the week by surging against major peers, including a record high versus the pound, but while equity markets stabilised, sentiment remained dampened by recession fears.

While central banks around the world are ramping up interest rates to fight inflation, the main focus is on the US Federal Reserve’s increasingly hawkish tone that has seen it unveil three successive bumper hikes with a warning of more to come.

That has seen investors pile into the dollar, sending it to record or multi-decade peaks, which has rattled governments from Tokyo to Beijing and London.

On Monday, it hit its highest-ever level against the pound — touching $1.0350 after traders were spooked by a massive tax giveaway mini-budget by new UK finance minister Kwasi Kwarteng.

Sterling staged a small recovery but fell back again after traders were left disappointed by a lack of solid action from the Bank of England, with Governor Andrew Bailey saying only it would not hesitate to increase rates by as much as needed.

However, speculation is rife that officials will announce a huge 1.5 percentage point hike at their next meeting in November.

The dollar’s rally against the pound was matched by advances across forex markets, with the euro hitting a new 20-year low and the yen pushing back to the level it hit when the government intervened to support the currency last week.

But the greenback surge ran out of steam Tuesday as a little stability returned to markets, though analysts warned that volatility would remain high as more global rate hikes were in the pipeline and geopolitical crises remained unresolved.

Added to that were concerns that inflation remained stubbornly high.

“The market is pricing in some Fed increases, but we’re a bit worried that it might not be pricing in everything,” Laila Pence, of Pence Wealth Management, told Bloomberg Television.

“We got whipsawed in August when inflation was up not down — everyone is nervous.”

– ‘Wrecking ball’ –

Another selloff in Wall Street stocks saw the S&P 500 suffer its lowest close since December 2020, though Asia was mixed.

Tokyo, Shanghai, Sydney, Seoul, Taipei and Mumbai all rose while Hong Kong eked out marginal gains but Singapore, Wellington, Bangkok, Manila and Jakarta were in the red.

London, Paris and Frankfurt were in positive territory in early business.

“Dollar strength remains the driving force — or wrecking ball — in financial markets at the moment,” said Markets.com analyst Neil Wilson. “It’s not only wrecking relative currency stability but is a major factor in the weakness for equities.”

And OANDA’s Edward Moya added: “Right now, financial markets are a mess.

“Wall Street is realising that we won’t be seeing a significant sign that inflation is easing fast enough in the next couple of months and that should make it tough to buy the dip just yet.”

Oil prices rallied around two percent as news filtered through that the two leaks have been identified on the Nord Stream 1 Russia-Europe gas pipeline in the Baltic Sea, hours after a similar incident on its twin pipeline.

However, both contracts remain wedged around their lowest levels since January owing to the stronger dollar and worries about demand caused by the expected recession.

And Moya added there appeared little chance the commodity will stage a near-term recovery, despite speculation that major producers could announce a fresh output cut.

“Chaos in the forex markets could keep crude prices heavy no matter what OPEC+ does over the short-term,” he wrote. “Forex volatility won’t let up anytime soon and that will send oil on a very long roller-coaster ride.”

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: UP 0.5 percent at 26,571.87 (close)

Hong Kong – Hang Seng Index: FLAT at 17,860.31 (close)

Shanghai – Composite: UP 1.4 percent at 3,093.86 (close)

London – FTSE 100: UP 0.7 percent at 7,069.40

Pound/dollar: UP at $1.0809 from $1.0689 on Monday

Euro/dollar: UP at $0.9647 from $0.9611

Euro/pound: DOWN at 89.26 pence from 89.87 pence 

Dollar/yen: DOWN at 144.30 yen from 144.72 yen

West Texas Intermediate: UP 2.0 percent at $78.23 per barrel

Brent North Sea crude: UP 1.9 percent at $85.67 per barrel

New York – Dow: DOWN 1.1 percent at 29,260.81 (close)