Today’s agenda: Netanyahu plans to sack Shin Bet chief; tariffs complicate Fed’s job; Europe’s “peace dividend” ends; Alibaba’s AI pivot; and young people lose trust in the state
Good morning and welcome back to FirstFT. We start the working week with a look at the sanctions-proof bets investors are using as they seek profits from Donald Trump’s rapprochement with Vladimir Putin.
What’s happening: Hedge funds and brokers have been scoping out how to trade Russian assets that have been shunned by the west but which they believe could rally sharply if the US president relaxes sanctions as part of a deal to broker a ceasefire in Russia’s war against Ukraine. Some are hunting for bonds of Russian companies that were considered almost worthless following the 2022 invasion of Ukraine, but which are now being marked up in some investors’ internal valuations. Others have been using Kazakhstan’s tenge as a proxy for the rouble because of the country’s economic ties with Russia, although such trades are hard to do in size.
Why it matters: International markets for Russian assets evaporated following the invasion of Ukraine, as sanctions severed banks from the global financial plumbing and the country suffered a huge flight of capital. Russia’s central bank raised interest rates as import costs surged and labour shortages mounted, particularly as the Kremlin began a crash programme of war production. The rouble trade is a bet that this dynamic will reverse, particularly if Russians who fled the country in fear of being mobilised come back with savings that they stashed in Georgia, Armenia and other nearby nations.
Here’s more on the significant risks these trades face, and we have more updates on the war and regional security below:
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Peace talks: Trump said he would be speaking to Putin tomorrow, as the US tries to broker a ceasefire deal.
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European defence: Trump’s threats have pushed neutral Switzerland to call for closer ties to Nato and the EU, its new defence minister has said.
Here’s what else we’re keeping tabs on today:
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Economic data: The OECD publishes its interim economic outlook while Rightmove issues its UK house index.
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Nvidia: The chip giant’s five-day artificial intelligence conference starts in San Jose, California.
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UK regulation: Chancellor Rachel Reeves will discuss plans to restrict merger investigations by the competition watchdog when she meets regulators at Downing Street today.
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St Patrick’s Day: The feast day of Ireland’s patron saint is celebrated around the world. Joseph Kennedy III, former US special envoy to Northern Ireland, reflects on the region and its lessons for transatlantic ties.
Join FT experts next Thursday for a subscriber-only webinar, as they discuss Ukraine’s future with Russia’s full-scale invasion entering its fourth year. Register for free.
Five more top stories
1. Benjamin Netanyahu said he would sack his domestic spy chief, one of the last security officials still in post since Hamas’s October 7 attack. The Israeli prime minister said he had “a continuing lack of confidence” in Ronen Bar, head of the Shin Bet intelligence agency, that “only grew with time”. Here’s why the move could spark more political turmoil.
2. Uncertainty about Trump’s tariffs is complicating the Federal Reserve’s job, with the US central bank weighing fears they could stoke inflation or trigger an economic slowdown — or both. Economists warn that rate-setters risk relying too much on backward-looking data when they should be depending more on a “forecast framework”.
3. Exclusive: European companies that have added a US listing often do not see an uplift to their valuations, the Financial Times has found, challenging claims made by some executives. But two-thirds of the 12 companies surveyed did enjoy greater liquidity in their shares after the move. Here’s more from the FT analysis.
4. GE Aerospace chief Larry Culp received $89mn in pay last year, making him one of the highest-paid executives among US companies that have reported remuneration so far this year. Following GE’s break-up of its corporate enterprises, completed last April, the share price of GE Aerospace has risen 45 per cent. Read the full story.
5. The US should use fees imposed on Chinese-built vessels to invest in its own shipbuilders, the new head of America’s maritime regulator has said. Louis Sola, who was appointed chair of the Federal Maritime Commission in January, told the FT that the US needed to offset China’s subsidies for its own shipbuilding industry and “fight fire with fire”.
News in-depth
European countries have collectively saved hundreds of billions of euros a year in recent decades — a postwar “peace dividend” — as they drove down defence spending and freed up resources for other priorities including their welfare states. But after Trump’s threat to scale back US support for Europe, the continent now faces a brutal reckoning as it embarks on a dash for re-militarisation.
We’re also reading . . .
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Alibaba’s AI pivot: The Chinese tech giant is establishing a lead in a fiercely competitive sector and its billionaire founder Jack Ma is back in favour.
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Starmer and Reeves: The prime minister and his chancellor need to view the hard times coming upon Britain as an opportunity as well as a crisis, writes Martin Wolf.
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Democrats’ choice: The party needs to come up with a coherent policy stance if it wants to fight Trump, writes Rana Foroohar.
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UK’s welfare problem: Some 3.5mn working-age adults are trapped on health-related benefits with neither the incentive nor the support they need to enter employment.
Chart of the day
Young people in Greece and Italy are among the most dissatisfied with public services and confidence in institutions, according to an FT analysis of Gallup data. Experts have pinned the growing unhappiness on factors such as political polarisation, stagnating quality of life and difficulties in getting on the property ladder.
Take a break from the news . . .
Fancy a honeybun latte, or a spiced cold brew with cinnamon and chilli? Put down your americano and spice up your coffee orders with these kooky caffeine hits.
Read the full article here