(ZH) China Used NATO Airspace To Deliver Missiles To Serbia

China Used NATO Airspace To Deliver Missiles To Serbia

By Andrew Thornebrooke of The Epoch Times
Six Chinese military aircraft transited the airspace of Turkey and Bulgaria, both of which are NATO members, on April 11 to deliver missiles to Serbia, a key ally of Vladimir Putin’s regime in Russia.
A Xian Y-20 heavy transport aircraft flies past during the Zhuhai Air Show in Zhuhai, southern China's Guangdong province on Nov. 1, 2016
The move is likely to be regarded as a display of force, as Serbian President Aleksandar Vucic previously had said that NATO refused to let the shipments of Chinese weapons cross through the airspace of its member nations.
The Y-20 cargo planes delivered the anti-aircraft weapons systems to Serbia via the civilian Nikola Tesla airport in Belgrade.
The FK-3, which is the export version of China’s domestic HQ-22, is a ground-to-air missile system that is frequently compared to the United States’ Patriot missile system. It can reach speeds of about six times that of sound (Mach 6) and has a range of about 93 miles. One system includes 12 missiles dispersed among three launch vehicles and a separate radar vehicle.
Notably, the Chinese aircraft flew together in mass formation rather than one at a time, and used state-of-the-art MLat (multilateration) tracking systems instead of the more traditional radar. Open-source intelligence analysts also noted that at least some of the aircraft had removed the coverings for their flare and chaff countermeasures—defensive systems to help evade missile attacks—possibly signaling that the Chinese aircraft either anticipated meeting some resistance or wanted to be seen as anticipating resistance.
The shipment will allow Serbia to become the first user of Chinese missiles in Europe, and will augment an already expanding arsenal of Chinese and Russian drones, tanks, and warplanes purchased by the nation in recent years.
The incident underscored Western fears that further arms buildup in the region could erupt into conflict as Russia continues to wage its war on Ukraine, and both Chinese and Russian leaders promote their own forms of authoritarian expansionism.
Serbia is currently seeking membership into the European Union, amid concern by some to be preparing for war with its neighbors in the Balkans, particularly Kosovo.
Serbia and its neighbors were locked in a number of bitter wars throughout most of the 1990s, during which reports of ethnic cleansing were rampant. The wars reached a bloody crescendo with the 1999 NATO bombardment of Serbia (then Yugoslavia), which resulted in the deaths of some 500 civilians and the destruction of vital infrastructure and cultural monuments.
In 2008, Kosovo declared its independence from Serbia, and subsequently expressed a desire to join NATO. However, China, Russia, and Serbia have refused to acknowledge Kosovo as a legitimate nation.
With that history in mind, Kosovo’s former President Hashim Thaci accused Serbia of plotting a Crimea-like annexation of parts of the territory in 2017, before stepping down to face a war crimes tribunal for acts he allegedly committed during the Yugoslav Wars.
Serbia’s relationship with China and Russia remains somewhat uneven, however. On one hand, the nation voted in the U.N. to condemn Russia’s invasion of Ukraine, while refusing to join international sanctions against Moscow or to issue any further criticism of the Russian troops there.

>>> Europe : Brokers Upgrades & Downgrades - 13th of April 2022 V2(+)

>>> Up
* Derwent London Raised to Overweight at JPMorgan; PT 4,200 pence
* Deutsche Bank PT Raised to 9.90 euros at Bankhaus Metzler (+)
* Great Portland Raised to Overweight at JPMorgan; PT 900 pence
* ITM Power Raised to Outperform at RBC; PT 500 pence
* Sartorius Raised to Buy at Berenberg; PT 490 euros

>>> Down
* Adecco Cut to Hold at Deutsche Bank; PT 41 Swiss francs
* Adidas Cut to Reduce at Baader Helvea; PT 190 euros
* Alfa Laval Cut to Underperform at Credit Suisse; PT 270 kronor
* Aurubis Cut to Add at Baader Helvea; PT 110 euros
* BASF Cut to Hold at Stifel; PT 63 euros (+)
* Covestro Cut to Hold at Stifel; PT 53 euros (+)
* Credit Agricole Cut to Underweight at Morgan Stanley
* Credit Agricole Cut to Equal-Weight at Barclays; PT 14.10 euros
* E.On Cut to Hold at Stifel; PT 11.20 euros (+)
* Ferguson Cut to Hold at Deutsche Bank; PT 9,960 pence
* FLSmidth Cut to Sell at Handelsbanken
* Hammerson Cut to Underweight at JPMorgan; PT 28.60 pence
* Land Sec. Cut to Neutral at JPMorgan; PT 900 pence
* MTU Aero Cut to Neutral at Oddo BHF (+)
* nCino Rated New Overweight at Morgan Stanley; PT $60
* Polytec Holding Cut to Reduce at Baader Helvea; PT 6.70 euros
* Randstad Cut to Hold at Deutsche Bank; PT 54 euros
* Reynolds Cut to Hold at Stifel; PT $31
* Solaria Energia Cut to Sell at Citi; PT 17.20 euros
* Sparebanken Sor Cut to Sell at Nordea; PT 137 kroner
* WDP Cut to Equal-Weight at Barclays; PT 39 euros

>>> Initiation
* Traton Rated New Buy at M.M. Warburg; PT 31 euros (+)
* Onward Medical Rated New Buy at Bryan Garnier; PT 17 euros (+)

>>> Call
* Adidas Cut to Reduce at Baader as Outlook Becomes More ‘Cloudy’
* Barclays Strategists See 1Q Earnings Season as ‘Make or Break’ (+)
* Credit Agricole Cut to Equal-Weight by Barclays on AM Challenges (+)
* Derwent London, Great Portland Up to Overweight at JPMorgan (+)
* France/Benelux Banks Face Volatile 1Q, Credit Agricole Cut: MS
* Hammerson Cut at JPMorgan on Deteriorating Consumer Outlook (+)
* ITM Power Upgraded at RBC With Growth Significantly De-Risked (+)
* Sartorius Has ‘Unfairly’ De-Rated, Raised to Buy at Berenberg (+)
* Solaria Energia Cut to Sell as Citi Cites Market Saturation
* Tesco Results Show Market Share Growth Ambitions, Citi Says (+)
* WDP Cut at Barclays on Lowest Upside in Warehouse Coverage (+)

FT : Fed official: It’s ‘fantasy’ to think modest rate rises will tame inflation

Fed official: It’s ‘fantasy’ to think modest rate rises will tame inflation
James Bullard says US central bank must put brakes on economic activity to tackle surging prices

A top Federal Reserve official has warned it is a “fantasy” to think the US central bank can bring inflation down sufficiently without raising interest rates to a level where they constrain the economy.

James Bullard, president of the St Louis branch of the Fed, said the central bank needed to be more aggressive in its efforts to root out the highest inflation in four decades as he called for rates to rise to a point where they actively curtail growth.

The comments from Bullard, a voting member of the policy-setting Federal Open Market Committee and one of its foremost hawks, run counter to other officials, who are broadly aligned on the need to push rates closer to a “neutral” level this year.

That is the level at which rates neither fuel nor restrict economic activity and is estimated to be around 2.4 per cent. Bullard said the central bank would need to get beyond that threshold as quickly as possible this year if it wanted to bring inflation closer to the Fed’s longstanding 2 per cent target.

“There’s a bit of a fantasy, I think, in current policy in central banks,” Bullard said in an interview with the Financial Times. “Neutral is not putting downward pressure on inflation. It’s just ceasing to put upward pressure on inflation.”

“We have to put downward pressure on the component of inflation that we think is persistent,” he added. “Getting to neutral isn’t going to be enough it doesn’t look like, because while some of the inflation may moderate naturally . . . there will be a component of it which won’t.”

His comments come on the heels of new inflation data that showed consumer prices increased at an annual rate of 8.5 per cent in March following a surge in energy and fuel costs fuelled by Russia’s invasion of Ukraine.

“Core” inflation, which strips out volatile items such as food and energy, came in slightly lower than expected, but Bullard warned it would not come down without a concerted effort from the Fed and that the US was vulnerable to unforeseen shocks that could further stoke prices.

“This [inflation] report just underscores the urgency that the Fed is behind the curve and needs to get moving,” he said.

Bullard supports the Fed raising rates by half a percentage point at the next policy meeting in May, something he urged the FOMC to do at its gathering in March, when it raised them by a quarter-point.

More officials now back such a move, as well as a reduction in the size of Fed’s $9tn balance sheet soon.

He argued the Fed’s benchmark policy rate should move up “sharply” after the May meeting and endorsed a 3 percentage point increase in the federal funds rate from its current range of 0.25 to 0.50 per cent by the third quarter.

Bullard acknowledged that such a level is “aspirational” in such a short period of time, but warned the Fed’s credibility is on the line if it does not take action.

“If markets and households get the idea that the Fed’s not going to do the right thing and not going to keep inflation under control, then you have to gain credibility by actually doing things that show them that you are serious,” he said.

Bullard pointed to former Fed chair Paul Volcker’s decision to raise rates to 20 per cent at one point in the early 1980s, which did contain inflation but resulted in a sharp economic contraction that resulted in millions of job losses. Volcker had no choice other than implementing such a large increase “because the committee didn’t have enough credibility”, Bullard added.

“So far I think we’re holding on to our credibility, but if it slips away, then it’s going to be much more difficult to keep inflation under control going forward.”

Still, Bullard said he was optimistic the Fed would be able to cool down the economy without causing a recession — as it did in 1994.

>>> Stoxx 600 Pre-Market Indications

  • LVMH (MOH TH) +2.3%
    • Watch Luxury Stocks After ‘Impressive’ LVMH 1Q as China in Focus
  • Kering (PPX TH) +2.1%
  • TUI (TUI1 TH) +1.8%
  • Glencore (8GC TH) +1.6%
    • Zinc Flashes Warning Signs as LME Inventories Shrink
  • Rio Tinto (RIO1 TH) +1.2%
    • Watch European Miners as Iron Ore Falls as Zinc, Aluminum Gain
  • AstraZeneca (ZEG TH) +0.9%
  • Endesa (ENA TH) +0.8%
  • Nibe (NJB TH) +0.8%
  • SocGen (SGE TH) +0.8%
  • Lufthansa (LHA TH) +0.7%
    • Delay to Airlines Takeoff Is Unlikely to End Soon: Taking Stock
  • SAP (SAP TH) -0.6%
  • Fresenius SE (FRE TH) -0.6%
  • Deutsche Telekom (DTE TH) -0.6%
  • United Internet (UTDI TH) -0.6%
  • Covestro (1COV TH) -0.6%
  • Fresenius Medical (FME TH) -0.7%
  • ASML (ASME TH) -0.8%
  • E.On (EOAN TH) -0.8%
  • Adyen (1N8 TH) -0.8%
  • Adidas (ADS TH) -1.1%
    • Adidas Cut to Reduce at Baader as Outlook Becomes More ‘Cloudy’

>>> TradeGate Pre-Market Indications

DAX:
  • Sartorius (SRT3 TH) +2%
    • Sartorius Has ‘Unfairly’ De-Rated, Raised to Buy at Berenberg
  • Adidas (ADS TH) -0.6%
    • Adidas Cut to Reduce at Baader as Outlook Becomes More ‘Cloudy’
MDAX:
  • Evotec SE (EVT TH) +1.4%
  • Lufthansa (LHA TH) +1%
  • Deutsche Wohnen (DWNI TH) +1%
  • United Internet (UTDI TH) -0.6%
  • Aixtron (AIXA TH) -0.8%
SDAX:
  • Jenoptik (JEN TH) +2.4%
  • LPKF (LPK TH) +1.7%
  • Deutz (DEZ TH) +1.5%
  • Kloeckner (KCO TH) +1.1%
  • AUTO1 (AG1 TH) +1%
  • Bilfinger (GBF TH) -0.9%
  • Deutsche PBB (PBB TH) -1%

>>> What to look at today - 13th of April 2022

Treasuries slipped and Asian stockswere mixed Wednesday as investors calibrated economic risks from elevated inflation. New Zealand implemented its biggest interest-rate hike in 22 years to quell price pressures. Japan shares gained but Hong Kong and China wavered. Signals from futures were muddy: S&P 500 and Nasdaq 100 contracts rose but Europe’s dipped. New Zealand’s dollar was among the best performers in the Group-of-10 currency basketfollowing a half-point rate rise that again highlights the trend of sharp monetary tightening across a range of economies. The U.S. session Tuesday was shaped by inflation data, which came in at 8.5% for the headline number -- the highest in four decades -- but was better-than-expected at the core level, which excludes volatile food and energy prices. Treasuries trimmed an advance that was sparked by the core reading. While the latter prompted traders to pare back expectations on how aggressively the Federal Reserve will raise interest rates, cost pressures remain a big risk. A dollar gauge was steady. In commodities, oil topped $100 a barrel after Russian President Vladimir Putin vowed to continue the war in Ukraine and China partially eased Covid curbs. US After Hours NSTG -30.2% falls on weak guidance; PYPL -1.6% CFO to become Walmart CFO; AFMD +5.3% trades higher

Nikkei +1.94% Hang Seng +0.89% CSI +0.20% Shanghai +0.27% Shenzen -0.29%

Eur$ 1.0835 CNH 6.3753 CNY 6.3658 JPY 125.53 GBP 1.3010 CHF 0.9325 RUB 85.3360 TRY 14.5862 WTI$ 100.37 -0.23% Gold 1969.54 +0.14% BTC 40,032 +1.25% ETH 3047.72 +2%

S&P +0.74% Nasdaq +1.02% EuroStoxx 0.08% FTSE +0.03% Dax -0.21% SMI -0.03%

Macro :
- London’s Singing Rainmaker Robey Has No Plans to Slow Down, Sell
- U.S. Prepares Massive New Surge of Military Aid to Ukraine
- Top Oil Merchant Vitol Will Stop Trading Russian Crude
- *CHINA MARCH TRADE BALANCE $47.38 BLN; EST. $21.70 BLN

Keep an eye on :
- AI FP : Air Liquide Sells Industrial Merchant Business in UAE, Bahrain
- ATL IM : Benettons, Blackstone Bid for Atlantia Said to Exceed EU22/Shr
- BALN SW : Baloise Hit by Cyber Attack, Primarily Affecting Basler
- BPM IM : JPMorgan Has 6.5% Stake in Banco BPM: Consob
- BARN SW : Barry Callebaut First-Half Sales Beat Estimates in Rebound
- RBOS GY : Bosch beats out other bidders to acquire Five.ai: It was a match made in self-driving car heaven: Five was looking for a buyer and Bosch is a big player in the space.
- CSGN SW : Credit Suisse Investors Told Not to Clear Board of Liability
- GSF LN : Gore Street Energy Storage Fund Offering Prices at GBp110/Share
- HOFI SS : Hoist Finance Divests U.K. Credit Management Subsidiary
- IBE SM : Iberdrola Seeks Partners for German Wind Assets: Expansion
- IMPN SW : Implenia’s Arge Gubri JV Gets CHF184M Zurich Tunnel Contract
- TKWY NA : Just Eat France to Cut 269 Permanent Delivery Jobs: Le Figaro
- SDF GY : EU Fertilizers Face Higher Carbon Costs as Prices Surge on War
- MC FP : LVMH Overcomes China Lockdown on Leather, Key Sector Jump: React
- MOWI NO : Mowi Preliminary 1Q Ebit Rises to About EU207M
- OCI LN : Oakley Plans to Sell German Cloud Computing Firm Contabo: Rtrs
- TECN SW : Tecan Group Fails to Get AGM Nod for Renewal Authorized Capital
- TIT IM : Apax, Iliad May Bid for Telecom Italia’s ConsumerCo: Messaggero
- YARA NO : EU Fertilizers Face Higher Carbon Costs as Prices Surge on War
- FHZN SW : Zurich Airport March Passenger Traffic +478.4%

>>> Europe : Brokers Upgrades & Downgrades - 13th of April 2022

>>> Up
* Derwent London Raised to Overweight at JPMorgan; PT 4,200 pence
* Great Portland Raised to Overweight at JPMorgan; PT 900 pence
* ITM Power Raised to Outperform at RBC; PT 500 pence
* Sartorius Raised to Buy at Berenberg; PT 490 euros

>>> Down
* Adecco Cut to Hold at Deutsche Bank; PT 41 Swiss francs
* Adidas Cut to Reduce at Baader Helvea; PT 190 euros
* Alfa Laval Cut to Underperform at Credit Suisse; PT 270 kronor
* Aurubis Cut to Add at Baader Helvea; PT 110 euros
* Credit Agricole Cut to Underweight at Morgan Stanley
* Credit Agricole Cut to Equal-Weight at Barclays; PT 14.10 euros
* Ferguson Cut to Hold at Deutsche Bank; PT 9,960 pence
* FLSmidth Cut to Sell at Handelsbanken
* Hammerson Cut to Underweight at JPMorgan; PT 28.60 pence
* Land Sec. Cut to Neutral at JPMorgan; PT 900 pence
* nCino Rated New Overweight at Morgan Stanley; PT $60
* Polytec Holding Cut to Reduce at Baader Helvea; PT 6.70 euros
* Randstad Cut to Hold at Deutsche Bank; PT 54 euros
* Reynolds Cut to Hold at Stifel; PT $31
* Solaria Energia Cut to Sell at Citi; PT 17.20 euros
* Sparebanken Sor Cut to Sell at Nordea; PT 137 kroner
* WDP Cut to Equal-Weight at Barclays; PT 39 euros

>>> Initiation


>>> Call
* Adidas Cut to Reduce at Baader as Outlook Becomes More ‘Cloudy’
* France/Benelux Banks Face Volatile 1Q, Credit Agricole Cut: MS
* Solaria Energia Cut to Sell as Citi Cites Market Saturation

FT : Shanghai lockdown stokes global supply chains anxiety

Shanghai lockdown stokes global supply chains anxiety
Electronic manufacturers halt production after restrictions extended beyond China’s biggest city

One of the world’s largest electronics manufacturing hubs near Shanghai is grinding to a halt, aggravating China’s economic worries and exacerbating disruption to global supply chains.

Dozens of producers of crucial electronic components on Wednesday halted production at their factories in Kunshan, a city close to Shanghai. Companies and analysts said the shutdown was unavoidable after lockdown rules initially applied only in Shanghai were extended to Kunshan.

“The situation in Kunshan changed overnight. While factories there could previously operate under so-called ‘static management’, they are now switching to a system like in Shanghai, where individual areas are categorised as closed, restricted or protected depending on when they registered infections for the last time,” said Patrick Chen, head of research at CLSA, a brokerage, in Taipei.

The production disruptions have heightened risks for China’s slowing economy. On Monday, Premier Li Keqiang warned for the third time in a week of the dangers that pandemic control measures posed to the economy.

Official data showed new cases reached a record high in Shanghai on Tuesday after falling a day earlier. There were 26,330 positive cases in the city, which is under a vast lockdown in a bid to halt China’s worst outbreak of the virus in two years.

Authorities laid out a blueprint for easing some measures by allowing residential compounds with no cases over the previous fortnight to reopen. But lockdown restrictions remain in place across large portions of China’s largest city, where residents have complained of difficulties in ordering food online. The US state department this week ordered non-essential consular staff to leave Shanghai.

The lockdown has also affected trucking companies, sparking warnings of a deeper impact on global trade. Shanghai port, however, has remained operational through a so-called closed-loop system, where workers remain on site.

Economists at Nomura estimated that 45 cities and 373mn people in China were under full or partial lockdown, compared with 23 cities and 193mn people a week ago.

In a sign of growing pressures on trade, imports into China fell in dollar terms in March on a year-on-year basis for the first time since August 2020. Exports rose 15 per cent.

Production delays in the electronics industry make it just the latest sector to be hit by the restrictions. Electric carmaker Nio said over the weekend that suppliers in Shanghai and elsewhere had halted production and that it would suspend deliveries.

On Wednesday, more than 30 Taiwanese electronics manufacturers announced closures of factories close to Shanghai.

WUS, a leading printed circuit maker, said two of its Kunshan-based subsidiaries had suspended production. LCD backlight manufacturer Coretronic announced a week-long production stop at its Kunshan plant, while Wise Pioneer, a supplier of machinery for making electronics products such as flat screens and lenses, said it was extending a production halt for another week.

Contract electronics manufacturer Pegatron, which assembles some iPhone models for Apple, suspended production at two plants in Shanghai and Kunshan on Tuesday.

Analysts said the stoppages risked worsening component shortages.

“Even if some companies are allowed to continue production, their utilisation rates have fallen to between 40 and 60 per cent. Raw materials can’t be moved in and finished products can’t be moved out,” Chen said.

Analysts expected supplies of printed circuit boards, a component used in almost every electronics gadget, as well as of casings for smartphones and laptops, would be affected most by the factory shutdowns.

The impact on Apple was expected to be limited because demand for the iPhone models Pegatron assembles, the 13 mini and the SE3, have been sluggish and production for the iPhone 14 was only set to rise late in the third quarter.

WSJ : Merger Insurance Getting Cheaper Amid Cooling Deals Market, Experts Say

Merger Insurance Getting Cheaper Amid Cooling Deals Market, Experts Say
Record acquisition activity seen at the end of 2021 has given way to deal flow more in keeping with recent years

The market for mergers-and-acquisitions insurance, which overheated during a busy acquisition season at the end of last year, has started to cool down, deals experts said.

Companies seeking insurance help to guard against the risks inherent in deal making can expect lower prices and more insurance company staff capacity to handle their requests, Jodi Rosensaft, a managing director in the transactional risk practice at professional services firm Marsh LLC, said Tuesday.

“We’re not seeing that type of pressure, both on pricing and availability, that we were,” Ms. Rosensaft said, speaking on a panel at the RIMS Riskworld conference in San Francisco, a gathering of risk managers and insurance industry professionals.

Deal activity in 2021 hit record levels for a variety of reasons, including low interest rates and growth in private-equity fundraising. Total global M&A activity in 2021 jumped 64% from the previous year to around $5.9 trillion, according to data provider Refinitiv.

The surge exhausted insurance industry capacity to fund all the deal-related policies companies sought and, in some cases, overworked staff were unable to field all the demand, Ms. Rosensaft said.

That frenzy has slowed, she said.

Last year “was just such an aberration in M&A deal flow in every sector, in every deal category and every size of transaction,” Ms. Rosensaft said. “There was a lot of pressure that was just making getting the deals done more difficult across the board. We’ve returned to regular levels.”

Anna Geml, a deals lawyer at law firm Kirkland & Ellis LLP, said that companies are now able to find more insurance that fits their needs.

“Coverage parameters are much more in line with what we saw in early 2021,” Ms. Geml said. “Carriers are willing to work with us—we have time to come up with creative solutions versus trying to handle 15 deals in one day.”

Insurers also are expressing more interest in taking on deals outside the middle-market sweet spot that had defined so-called representations and warranties insurance, showing a willingness to cover both smaller deals and the large deals they typically shied away from, Ms. Rosensaft said.

With a somewhat more relaxed pace of acquisitions, insurers are also more comfortable with backing deals in industries such as financial services and healthcare, which typically pose more risk, she said.

“We’ve been able to slow down and really look at everything,” Ms. Rosensaft said.