Germany’s economy contracts for second straight year

Good morning and welcome again. Right here’s what we’re masking as we speak:

• Germany’s recession extends right into a second 12 months

• South Korea’s impeached president is arrested

• Argentina’s president unveils new foreign money controls

• Will there be a brand new commodities supercycle?

Germany’s economic system shrank for a second straight 12 months in 2024, underlining the severity of the downturn going through Europe’s manufacturing powerhouse.

The Federal Statistics Workplace mentioned Europe’s largest economic system contracted by 0.2 per cent final 12 months, after shrinking by 0.3 per cent in 2023.

Affirmation that Germany is struggling some of the protracted financial crises in many years comes six weeks forward of a vital snap election.

Friedrich Merz, head of the centre-right Christian Democratic Union who’s prone to be Germany’s subsequent chancellor, is campaigning on a reform agenda, promising to chop crimson tape and taxes and dial again welfare advantages for people who find themselves not working. Read more on Germany’s economic crisis.

And right here’s what else we’ll be watching as we speak:

• Firms: It’s a busy day forward for large banks within the US, with JPMorgan Chase, Citigroup, Goldman Sachs and Wells Fargo reporting fourth-quarter earnings. Here’s what to expect.

• Financial information: The US Bureau of Labor Statistics updates client worth inflation and releases actual earnings information. Additionally, the Federal Reserve Beige Guide is printed.

• Trump’s picks: Pam Bondi, Senator Marco Rubio, John Ratcliffe and Russell Vought all seem earlier than US lawmakers for nomination hearings, a day after Pete Hegseth was grilled in a testy Senate hearing.

• Venezuela: President Nicolás Maduro is ready to provide his annual tackle to lawmakers, the place he could share financial development figures or different information, simply days after he was inaugurated for a third term.

• Israel-Hamas warfare: Qatar, which has been serving to to mediate talks between Israel and Hamas, mentioned it was “especially optimistic” about agreeing a ceasefire in Gaza after handing drafts of a deal to each events.

5 extra high tales

1. South Korea’s suspended President Yoon Suk Yeol has been arrested following a predawn raid by police and investigators on his fortified hilltop compound. Yoon’s detention adopted a six-hour stand-off between legislation enforcement and members of the president’s safety element. Right here’s extra on the most recent twist within the political disaster gripping Asia’s fourth-largest economy.

2. Canada is open to purchasing extra US navy {hardware} and forging a deeper crucial minerals alliance with its southern neighbour, the nation’s power minister has informed the Monetary Occasions. However Jonathan Wilkinson warned that Canada would reply with “tit-for-tat” measures if the Trump administration imposed 25 per cent tariffs on all Canadian imports to the US. Read the full interview.

3. Traders are ditching rising market shares as they brace themselves for president-elect Donald Trump’s proposed commerce tariffs and cope with a hovering US greenback and rising bond yields. An MSCI index that tracks shares throughout China, India, Brazil, South Africa and different rising markets is down greater than 10 per cent since hitting a two-and-a-half-year excessive on October 2. Here’s more on why investors are shunning EM stocks.

4. Argentina’s libertarian President Javier Milei is slowing the month-to-month devaluation of the peso. Final 12 months Milei allowed the peso’s official trade price to weaken by simply 2 per cent a month, or 22.8 per cent over the 12 months, regardless of client costs rising 117 per cent in 2024 in contrast with 2023. This 12 months he plans to lower the so-called crawling peg devaluation.

5. OpenAI has appointed a billionaire investor and one among Wall Road’s strongest dealmakers to its board. Adebayo Ogunlesi, co-founder of World Infrastructure Companions, is thought on Wall Road as a talented investor who has counselled a number of the world’s most influential corporations, typically at crucial junctures. His appointment comes as OpenAI is going through a huge corporate restructuring and expansion.

At present’s huge learn

The size of China’s urge for food for metal has been epic. The nation consumed twice as a lot of the metallic within the twenty years from 2000 to 2020 because the US did throughout all the twentieth century, driving an enormous commodities supercycle. That supercycle is now over and a brand new part is taking form — one marked by competition for scarce resources.

We’re additionally studying . . . 

• JPMorgan: Jamie Dimon has shuffled his high executives, naming a brand new chief working officer and complicating the race for the following chief govt of the US’s largest financial institution.

• California fires: After strikes and the pandemic, Hollywood’s studios had hoped 2025 would mark a rebound — until the fires started.

• Local weather ‘whiplash’: We’re mounting 20th-century responses to Twenty first-century climate, writes Anjana Ahuja.

• Katie Martin: Bond market vigilantes are overexcited again, argues our markets columnist.

Chart of the day

Lots of the world’s richest economies might want to no less than double productivity growth to keep up historic enhancements in residing requirements amid sharp falls of their beginning charges, a McKinsey report has discovered.

Take a break from the information . . . 

Paris Déco Off, the citywide cloth and furnishings pageant, begins as we speak. Right here’s the place to go for inspiration and new unveilings.