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EXPLAINED: Why the US Denies ‘Enabling’ Ukrainian Strikes Inside Russia

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A series of daring drone strikes against targets deep inside Russian territory is sparking some delicate and very carefully worded diplomatic posturing on the part of Ukraine’s western allies.

Which strikes are we talking about?

On Dec. 6, a drone strike at an airfield in Kursk, Russia set an oil storage tank on fire. It was the third such attack in three days.

Prior to that on Dec. 5, explosions rocked two Russian air bases killing three people and damaging long range bombers, with local social media quick to blame kamikaze drones.

Who carried them out?

Officially, we don’t’ know. Unofficially, almost certainly the Armed Forces of Ukraine (AFU).

Kyiv never publicly acknowledges carrying out attacks inside Russia, but neither does it criticize or condemn them.

Asked about the latest attacks, Defense Minister Oleskiy Reznikov repeated a longstanding joke blaming such fires and blasts on the irresponsible smoking of cigarettes.

“Very often Russians smoke in places where it’s forbidden to smoke,” he said.

How did it carry them out?

This is the big question – Ukraine’s western partners have made a point of not supplying the country with long-range weapons that could attack targets deep inside Russia for fear of antagonizing the Kremlin.

This is why the U.S. is so keen to stress that the latest strikes were nothing to do with them, while at the same time, making clear it thinks Ukraine should be able to develop its own methods of striking inside Russia.

“We have neither encouraged nor enabled the Ukrainians to strike inside of Russia,” Secretary of State Antony Blinken told reporters on Dec. 6.

“But the important thing is to understand what Ukrainians are living through every day with the ongoing Russian aggression,” he said, accusing Russia of “weaponizing winter” through attacks on civilian infrastructure.

Blinken vowed “our determination to make sure that they have in their hands – along with many other partners around the world – the equipment that they need to defend themselves, to defend their territory, to defend their freedom.”

Experts believe Ukraine penetrated Russian airspace with simple Soviet-era drones.

Speaking next to Blinken after talks with their Australian counterparts, U.S. Defense Secretary Lloyd Austin said Washington was not stopping Ukraine from developing long-range missiles on its own.

“The short answer is no. We’re absolutely not doing that,” Austin said. “We are not working to prevent Ukraine from developing their own capability,” he said.

The U.S. declined to comment on a Wall Street Journal report that it had altered HIMARS sent to Ukraine – a rocket system seen as a game-changer on the battlefield – to prevent firing into Russia.

Why would Ukraine carry out these strikes?

Ukraine appears to be targeting Russia’s ability to carry out long-range missile attacks.

One of the strikes on Dec. 5 struck the key Engels airfield in the Saratov region, where Russia keeps some of its strategic nuclear bombers.

Ukraine says aircraft based at Engels are used to launch missiles at it from outside its territory.

For weeks, Moscow has rained missiles down onto Ukraine’s electricity and water supply infrastructure, ratcheting up pressure on the country’s civilian population as winter looms and power cuts leave vulnerable people exposed to the cold.

How has Russia reacted?

Russia is in a bit of a tricky situation – officials will be absolutely fuming that attacks are being carried out on its territory but will not want to make too much of a deal about it publicly as it tries convince the Russian public that everything is totally fine.

The Kremlin said that Russian President Vladimir Putin met senior officials on Dec. 6 to discuss “domestic security” and said that Russia was taking “necessary” measures to fend off more Ukrainian attacks.

Despite being the ones who launched the unprovoked invasion, Russian officials have repeatedly warned Ukraine’s western allies that they risk escalating the war by supplying weapons.

Earlier this month Russia’s Foreign Minister Sergei Lavrov, said: “You shouldn’t say that the U.S. and NATO aren’t taking part in this war, you are directly participating in it.”

What happens next?

Expect more strikes from Ukraine and more indignant bluster from Russia.

The post EXPLAINED: Why the US Denies ‘Enabling’ Ukrainian Strikes Inside Russia appeared first on Kyiv Post.

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China cheers as government loosens anti-COVID rules in major policy shift

2022-12-07T07:33:40Z

China announced on Wednesday the most sweeping changes to its tough anti-COVID regime since the pandemic began three years ago, loosening rules that curbed the spread of the virus but had hobbled the world’s second largest economy and sparked protests.

The relaxation of rules, which include allowing infected people with mild or no symptoms to quarantine at home and dropping testing for people travelling within the country, are the strongest sign yet that Beijing is preparing its 1.4 billion people to live with the disease.

Even though its borders remain mostly shut, citizens cheered the prospect of a shift that could see China slowly emerging back into a world three years after the virus erupted in the central city of Wuhan.

The announcement quickly soared to the top most viewed topic on China’s Weibo platform, with many people cheering the prospect of travelling, though some expressed worries about the greater potential for infections.

“It’s time for our lives to return to normal, and for China to return to the world,” wrote one Weibo user.

Analysts too, welcomed the shift that could reinvigorate China’s sagging economy and currency and bolster global growth.

“This change of policy is a big step forward,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “I expect China will fully reopen its border no later than mid 2023.”

The announcement came after President Xi Jinping, who regards China’s relentless fight against COVID as one of his main achievements, chaired a meeting of the Communist Party’s Politburo on Tuesday.

Cities across China were gripped by protests over tough COVID policies late last month, in what was the biggest show of public discontent since Xi came to power in 2012.

While those protests petered out in days amid a heavy police presence, cities and regions around the country started announcing a mish-mash of easing measures that fed expectations for Wednesday’s announcement.

Many of the steps taken by individual cities or regions were reflected in the list of policy changes issued by the National Health Authority on Wednesday.

Officials have also been softening their tone on the health risks of the virus – bringing China closer to what other countries have been saying for more than a year as they dropped restrictions, and shifted towards living with the virus.

Gu Xiaohong, a top traditional Chinese medicine official, was quoted in the state-run Beijing Daily on Wednesday as saying China should change its official name for COVID-19 to reflect the virus’ mutation and that patients with light symptoms could recuperate at home.

But the looser approach has set off a rush for preventative drugs as some residents, particularly the unvaccinated elderly, feel more vulnerable to the virus.

Authorities across the country have warned of tight supplies and price gouging from retailers in recent days.

“Please buy rationally, buy on demand, and do not blindly stock up,” the Beijing Municipal Food and Drug Administration was quoted as saying in the state-owned Beijing Evening News.

In Beijing’s upmarket Chaoyang district, home to most foreign embassies as well entertainment venues and corporate headquarters, shops were fast running out of some those drugs, according to a resident.

“Last night the medicines were already in stock, and now many of them are out of stock,” said Zhang, a 33-year-old educationist, who only gave his surname.

“Epidemic preventions have been lifted…COVID-19 testing sites are mostly being dismantled… So, because right now in Chaoyang district cases are quite high, it is better to stock up on some medicines,” he said.

The surge in demand has driven up share prices in medicine manufacturers including cough syrup producer Guizhou Bailing (002424.SZ), and Xinhua Pharmaceutical (000756.SZ), which makes 40% of all Ibuprofen sold in China.

China’s yuan has seen a recent resurgence against the dollar, buoyed by the prospects that government would relax its “zero-COVID” policy.

But the currency remains set for its worst year since China unified official and market exchange rates in 1994, as its economy has been battered by COVID curbs.

In further evidence of that, China’s exports and imports shrank at a much steeper-than-expected pace in November, data on Wednesday showed.

Related Galleries:

A woman gets swabbed to be tested for the coronavirus disease (COVID-19) at a nucleic acid testing site in Shanghai, China December 7, 2022. REUTERS/Aly Song

A delivery driver picks up medicine from a pharmacy as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

People line up at a pharmacy to buy medicine as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

People wearing face masks wait at a traffic light to cross a street, as coronavirus disease (COVID-19) outbreaks continue in Shanghai, China, December 7, 2022. REUTERS/Aly Song

A street cleaner wears a protective suit as she picks up litter next to a bus stop as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

A delivery driver picks up medicine from a pharmacy as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

People wearing masks line up outside a pharmacy to buy products as coronavirus disease (COVID-19) outbreaks continue in Beijing, China December 6, 2022. REUTERS/Alessandro Diviggiano

People line up at a nucleic acid testing site to get tested for the coronavirus disease (COVID-19) in Beijing, China December 6, 2022. REUTERS/Florence Lo

People wearing masks cross a street, as coronavirus disease (COVID-19) outbreaks continue in Shanghai, China, December 6, 2022. REUTERS/Aly Song
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Analysis: South Africa“s Ramaphosa still ANC“s best hope despite scandal

2022-12-07T07:03:12Z

South Africa’s Cyril Ramaphosa is weathering the worst scandal of his presidency thanks to the backing of his party, which is keenly aware its best hope of retaining power at 2024 elections is to keep him as leader.

Battered as his reputation may be by the “Farmgate” affair, Ramaphosa remains the most popular figure in the African National Congress (ANC) and the best placed to reverse last year’s municipal polls that saw the party’s share of the vote drop below half for the first time.

Ramaphosa’s job had been hanging in the balance after an inquiry panel appointed by the speaker of parliament looked into accusations that thieves had stolen large amounts of cash stuffed into furniture at his private game farm in 2020, and that he had failed to report the crime.

The theft raised questions about how Ramaphosa acquired the money and whether he had declared it.

Ramaphosa has denied wrongdoing and has not been charged. He has said the money was much less than the $4 million to $8 million reported, and that it was the proceeds of game sales at the farm.

At one stage local media said the president was close to quitting due to the allegations, claims his office denied.

The scandal has shaken the credibility of a man who narrowly won the presidential post in the African National Congress (ANC) party in 2017 on a promise to clean up endemic graft after a decade of corruption scandals under former president Jacob Zuma.

Zuma has denied any wrongdoing.

In a show of support for Ramaphosa, the ANC said on Monday it would tell its lawmakers to vote against adopting the report alleging misconduct when it comes up for debate on Dec. 13.

Before his ouster, Zuma had survived several no confidence votes in parliament after ANC’s lawmakers were told to rally behind him. His resignation come only after he lost support within the ANC.

Ramaphosa has the party’s backing, for now. ANC Treasurer-General Paul Mashatile said on Monday the decision was made in the best interests of the country and to secure stability, without elaborating.

A show of unity was needed ahead of the ANC’s elective conference starting on Dec. 16 to pick new party leaders in preparation for general elections in 2024.

Ramaphosa, seeking a second five-year term, received the most votes from branches of the ANC heading into the elective conference.

Trade union group COSATU, an alliance partner of the ANC, said calls for Ramaphosa to step aside were “premature”.

“It is only fair and just for him to be given an opportunity to read and dissect the report with his legal team to ensure that in the end justice prevails,” COSATU said.

Ramaphosa has challenged the panel’s findings in court.

The rand currency and government bonds weakened sharply last week after the report was made public and rumours that Ramaphosa was to resign followed. Markets have since stabilised.

“The market is still willing to give him benefit of the doubt,” Yvette Babb, an emerging market fixed income investor at William Babb, said, while independent Johannesburg-based analyst Marisa Lourenco said the bigger concern was that “someone could come in from the (Zuma) faction … and derail some of the progress that Ramaphosa has made.”

It seems likely Ramaphosa will contest the leadership of the ANC in national elections in 2024, which for the past three decades has decided who leads the country.

But he faces an uphill battle.

“Whatever happens to Ramaphosa … he will find it increasingly difficult to retain that corruption-busting credibility,” said Daniel Silke, director of Political Futures Consultancy. “Even if he escapes the worst.”

South Africa’s main opposition party, the liberal Democratic Alliance, has called for an early election while the far-left Economic Freedom Fighters (EFF) party has said Ramaphosa should stand down.

“Ramaphosa is fighting as if he has not done anything wrong,” EFF leader Julius Malema said on Monday.

Some analysts say Farmgate raises concerns only over his private business dealings: there has been no suspicion of the kind of public sector corruption that tainted Zuma.

The investigation into Ramaphosa’s conduct began after Arthur Fraser, a former spy chief in Zuma’s administration, asked police to probe alleged money laundering and corruption over the cash kept at his farm.

Political analyst Ralph Mathekga said the scandal had left many people confused as the probe is seen to have been orchestrated by Ramaphosa’s critics within the ANC, which has members who belong to a faction loyal to Zuma.

Civil society has also been quiet, in contrast to public efforts to push for Zuma’s ouster. This is “because by pushing for his resignation they will be completing the job started by a faction within the ANC”, said Mathekga.

Political analyst Ongama Mtimka said while there were rumblings of discontent on social media platforms, Ramaphosa had yet to push South Africans’ patience to the limit.

“It takes more than the existence of grievances, discontent, for South Africans to take to the streets,” said Mtimka.

“It always takes politicians who have their own agendas to mobilise people to take action.”

Related Galleries:

South Africa’s President Cyril Ramaphosa speaks with delegates ahead of his keynote address at the opening session of the World Science Forum in Cape Town where he is to make his first public appearance since the publication of a report that found he may have committed misconduct over cash at his private game farm, in Cape Town, South Africa, December 6, 2022. REUTERS/Esa Alexander

South Africa’s President Cyril Ramaphosa arrives ahead of his keynote address at the opening session of the World Science Forum in Cape Town where he is to make his first public appearance since the publication of a report that found he may have committed misconduct over cash at his private game farm, in Cape Town, South Africa, December 6, 2022. REUTERS/Esa Alexander
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Hawaii remembrance to draw handful of Pearl Harbor survivors

PEARL HARBOR, Hawaii (AP) — A handful of centenarian survivors of the attack on Pearl Harbor are expected to gather at the scene of the Japanese bombing on Wednesday to commemorate those who perished 81 years ago.

That’s fewer than in recent years, when a dozen or more traveled to Hawaii from across the country to pay their respects at the annual remembrance ceremony.

Part of the decline reflects the dwindling number of survivors as they age. The youngest active-duty military personnel on Dec. 7, 1941, would have been about 17, making them 98 today. Many of those still alive are at least 100.

About 2,400 servicemen were killed in the bombing, which launched the U.S. into World War II. The USS Arizona alone lost 1,177 sailors and Marines, nearly half the death toll.

Robert John Lee recalls being a 20-year-old civilian living at his parent’s home on the naval base where his father ran the water pumping station. The home was just about 1 mile (1.6 kilometers) across the harbor from where the USS Arizona was moored on battleship row.

The first explosions before 8 a.m. woke him up, making him think a door was slamming in the wind. He got up to yell for someone to shut the door only to look out the window at Japanese planes dropping torpedo bombs from the sky.

He saw the hull of the USS Arizona turn a deep orange-red after an aerial bomb hit it.

“Within a few seconds, that explosion then came out with huge tongues of flame right straight up over the ship itself — but hundreds of feet up,” Lee said in an interview Monday after a boat tour of the harbor.

He still remembers the hissing sound of the fire.

Sailors jumped into the water to escape their burning ships and swam to the landing near Lee’s house. Many were covered in the thick, heavy oil that coated the harbor. Lee and his mother used Fels-Naptha soap to help wash them. Sailors who were able to boarded small boats that shuttled them back to their vessels.

“Very heroic, I thought,” Lee said of them.

Lee joined the Hawaii Territorial Guard the next day, and later the U.S. Navy. He worked for Pan American World Airways for 30 years after the war.

The U.S. Department of Veterans Affairs doesn’t have statistics for how many Pearl Harbor survivors are still living. But department data show that of the 16 million who served in World War II, only about 240,000 were alive as of August and some 230 die each day.

There were about 87,000 military personnel on Oahu at the time of the attack, according to a rough estimate compiled by military historian J. Michael Wenger.

The ceremony sponsored by the Navy and the National Park Service will feature a moment of silence at 7:55 a.m., the minute the attack began, and a missing-man-formation flyover.

Navy and park service officials are due to deliver remarks.

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Sophos fixed a critical flaw in its Sophos Firewall version 19.5

Sophos addressed several vulnerabilities affecting its Sophos Firewall version 19.5, including arbitrary code execution issues.

Sophos has released security patches to address seven vulnerabilities in Sophos Firewall version 19.5, including some arbitrary code execution bugs.

The most severe issue addressed by the security vendor is a critical code injection vulnerability tracked as CVE-2022-3236.

“A code injection vulnerability allowing remote code execution was discovered in the User Portal and Webadmin.” reads the advisory.

In September Sophos warned of this critical code injection security vulnerability (CVE-2022-3236) affecting its Firewall product which is being exploited in the wild. Sophos confirmed that this vulnerability was being used to target a small set of specific organizations, primarily in the South Asia region.

Sophos Firewall User Portal interface

The security vendor also addressed three vulnerabilities rated as ‘high’ severity, below is the list of these issues:

  • CVE-2022-3226 – An OS command injection vulnerability allowing admins to execute code via SSL VPN configuration uploads was discovered by Sophos during internal security testing.
  • CVE-2022-3713 – A code injection vulnerability allowing adjacent attackers to execute code in the Wifi controller was discovered by Sophos during internal security testing. It requires attackers to be connected to an interface with the Wireless Protection service enabled.
  • CVE-2022-3696 – A post-auth code injection vulnerability allowing admins to execute code in Webadmin was discovered and responsibly disclosed to Sophos by an external security researcher. It was reported via the Sophos bug bounty program.

The company also fixed two flaws, rated as medium severity, respectively a stored XSS vulnerability (CVE-2022-3709) and a post-auth read-only SQL injection flaw (CVE-2022-3711).

The seventh issue addressed by the company is a post-auth read-only SQL injection vulnerability, tracked as CVE-2022-3710, rated as low severity.

Follow me on Twitter: @securityaffairs and Facebook and Mastodon

Pierluigi Paganini

(SecurityAffairs – hacking, code execution flaws)

The post Sophos fixed a critical flaw in its Sophos Firewall version 19.5 appeared first on Security Affairs.

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China loosens anti-COVID restrictions in policy shift

2022-12-07T06:25:14Z

China said on Wednesday it would allow COVID patients with mild symptoms to isolate at home as part of a set of new measures that marked a major shift in a tough anti-virus policy that has battered its economy and sparked historic protests.

The relaxation of rules, which also include dropping a requirement for people to show negative tests when they travel between regions, came as top officials toned down warnings about the dangers posed by COVID-19.

That has raised prospects that Beijing may slowly look to align with the rest of the world and start re-opening its economy three years into a pandemic, which erupted in the central Chinese city of Wuhan in late 2019.

Investors were quick to cheer the prospect of a reprieve for the world’s second largest economy and the possibility of a shift towards a lifting of border controls next year.

“This change of policy is a big step forward,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

“I expect China will fully reopen its border no later than mid 2023.”

China is due to hold a press conference at 3.00 pm (0700 GMT) on “optimising” its COVID control measures, state media reported, after President Xi Jinping chaired a meeting of the Communist Party’s Politburo on Tuesday.

Cities across China were gripped by protests over tough COVID policies late last month, in what was the biggest show of public discontent since Xi came to power in 2012.

While those protests petered out in days amid a heavy police presence, cities and regions around the country started announcing a mish-mash of easing measures that fed expectations for Wednesday’s announcement.

Many of the steps taken by individual cities or regions were reflected in the list of policy changes issued by the National Health Authority on Wednesday.

But the looser curbs have set off a rush for preventative drugs as some residents, particularly the unvaccinated elderly, feel more vulnerable to the virus.

Authorities across the country have warned of tight supplies and price gouging from retailers in recent days.

“Please buy rationally, buy on demand, and do not blindly stock up,” the Beijing Municipal Food and Drug Administration was quoted as saying in the state-owned Beijing Evening News.

In Beijing’s upmarket Chaoyang district, home to most foreign embassies as well entertainment venues and corporate headquarters, shops were fast running out of some those drugs, according to a resident.

“Last night the medicines were already in stock, and now many of them are out of stock,” said Zhang, a 33-year-old educationist, who only gave his surname.

“Epidemic preventions have been lifted…COVID-19 testing sites are mostly being dismantled… So, because right now in Chaoyang district cases are quite high, it is better to stock up on some medicines,” he said.

Related Galleries:

A delivery driver picks up medicine from a pharmacy as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

People line up at a pharmacy to buy medicine as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

A delivery driver picks up medicine from a pharmacy as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

People wearing face masks wait at a traffic light to cross a street, as coronavirus disease (COVID-19) outbreaks continue in Shanghai, China, December 7, 2022. REUTERS/Aly Song

A street cleaner wears a protective suit as she picks up litter next to a bus stop as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter

People wearing masks line up outside a pharmacy to buy products as coronavirus disease (COVID-19) outbreaks continue in Beijing, China December 6, 2022. REUTERS/Alessandro Diviggiano

People line up at a nucleic acid testing site to get tested for the coronavirus disease (COVID-19) in Beijing, China December 6, 2022. REUTERS/Florence Lo

People wearing masks cross a street, as coronavirus disease (COVID-19) outbreaks continue in Shanghai, China, December 6, 2022. REUTERS/Aly Song
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Stocks sputter as growth fears deepen despite China COVID shift

2022-12-07T06:45:49Z

A view of a giant display of stock indexes, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China October 24, 2022. REUTERS/Aly Song/File Photo

Asia’s stock markets slipped on Wednesday as reality bit on hopes for a soft economic landing in the United States, curbing investors’ enthusiasm about China’s major shift in its tough zero-COVID policy.

Warnings from big U.S. banks about a likely recession next year pushed the S&P 500 (.SPX) lower for a fourth straight session on Tuesday and the brakes have come on a rally that has lasted almost two months.

Oil also fell sharply and, with Brent futures at $79.50 a barrel, is back where it began the year.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.2% and Japan’s Nikkei (.N225) fell 0.7%.

“Some of the optimism that had driven the rally is being put to the test,” said Shane Oliver, head of investment strategy at Australia’s AMP.

“We might be transitioning from a situation of worrying about inflation and interest rates, to one where the negatives become weakening growth and falling profits.”

S&P 500 futures were flat by mid-afternoon in Asia, while European futures rose 0.1%.

China’s national health authority said on Wednesday that asymptomatic COVID-19 cases and those with mild symptoms can self-treat while in quarantine at home.

While some of the changes announced echoed similar easing moves made by other countries many months ago, the announcement was the strongest sign so far that China is preparing its people to live with the disease after nearly three years of crippling restrictions that have battered the economy.

Market reaction, however, was muted as the focus shifts to how well China can execute its policy shift, especially if new COVID cases surge over winter. Analysts say the path to fully reopening the economy will be long and bumpy, and not without risk.

The Shanghai Composite Index (.SSEC) fell 0.6%, Hong Kong’s Hang Seng (.HSI) fell 1% and the yuan was broadly steady, giving up early gains.

“The reality on the ground is still one of continued pressure, even as the outlook is improving somewhat,” said Mitul Kotecha, head of emerging markets’ strategy at TD Securities in Singapore.

Adding to the darkening demand outlook globally, China earlier in the day reported grim trade data for November, with both imports and exports suffering their biggest monthly falls since 2020 – auguring badly for recovery prospects. read more

India on Wednesday was the latest central bank to start slowing the pace of rate increases, with a hike of its key lending rate by 35 basis points to 6.25%, smaller than the three 50 bp hikes it delivered previously. Canada is the next cab off the rank with a rates decision expected at 1500 GMT.

In the United States, big banks are bracing for a worsening economy next year as inflation and rate rises threaten consumer demand, with top executives at Goldman Sachs, J.P. Morgan and Bank of America all sounding downbeat in remarks on Tuesday.

“Economic growth is slowing,” said Goldman Sachs CEO David Solomon. “When I talk to our clients, they sound extremely cautious.”

The growth fears rallied longer-dated bonds and helped the safe-haven U.S. dollar to pause its recent retreat.

The yield on benchmark 10-year U.S. Treasuries fell 8.6 basis points to 3.513% overnight and was last at 3.5460%. That is more than 80 bps below the two-year yield as investors reckon on high rates hurting growth.

Oil prices have also been sliding with declining demand expectations and now sit more than 40% below a high of nearly $140 a barrel made shortly after Russia’s invasion of Ukraine on Feb. 24.

In foreign exchange markets, the dollar was seeking to steady after excitement about a slowdown in U.S. rate hikes recently knocked it from the year’s highs.

It was firm at 137.28 yen in Asia on Wednesday and traded at $1.0467 per euro . The Australian dollar was broadly steady at $0.6680 despite Australian third-quarter growth coming in a bit below forecasts.

The Canadian dollar hovered at 1.3644 per dollar ahead of an expected rate hike from the Bank of Canada later on Wednesday. The U.S. dollar index sat at 105.5.

Spot gold was steady at $1,773 an ounce and bitcoin , at $17,000, was going nowhere with cryptocurrency sentiment fragile as the fallout from the collapse of FTX ripples through the sector.


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Suspected suicide blast at Indonesian police station kills two

2022-12-07T05:54:58Z

Two people were killed and eight wounded in the Indonesian city of Bandung on Wednesday when a suspected Islamic militant who may have been angered by the country’s new criminal code blew himself up at a police station, authorities said.

Ahmad Ramadhan, head of the public information bureau for the National Police, said authorities were coordinating with the counter-terrorism unit to investigate the incident, which killed the suspected attacker and one police officer.

The Islamic State-inspired Jamaah Ansharut Daulah (JAD) group may have been behind the attack, Ibnu Suhendra of Indonesia’s counterterrorism agency (BNPT) told Metro TV. He said JAD had carried out similar attacks in Indonesia.

West Java police chief Suntana told Metro TV that authorities were investigating a blue motorbike found at the scene, which they believed was used by the attacker. Attached to the bike was a note carrying a message rejecting Indonesia’s new criminal code, which parliament ratified on Tuesday.

“There was a note on the motorbike saying the criminal code is an infidel product, let’s eradicate the law enforcers,” Suntana said.

Some religious extremists reject the laws of the state, perceiving Islam as the only legitimate authority, analysts say.

The attacker brought two bombs to the scene, Suntana said, but only had time to detonate one.

Footage from the scene on Wednesay showed damage to the police station, with some debris from the building on the ground and smoke rising from the area.

Islamic militants have in recent years carried out attacks in the world’s largest Muslim-majority nation, including at churches, police stations and venues frequented by foreigners.

In an efforts to crack down on militants, Indonesia created a tough new anti-terrorism law after suicide bombings linked to JAD.

Members of the extremist group were responsible for a series of suicide church bombings in the city of Surabaya in 2018. Those attacks were perpetrated by three families, including young children, and killed at least 30 people.

In 2021, a pair of JAD newlyweds carried out a suicide bomb attack at a cathedral in Makassar, killing only themselves.

Related Galleries:

Armed police officers stand guard following a blast at a district police station, that according to authorities was a suspected suicide bombing, in Bandung, West Java province, Indonesia, December 7, 2022. REUTERS/Willy Kurniawan

An armed police officer stands guard following a blast at a district police station, that according to authorities was a suspected suicide bombing, in Bandung, West Java province, Indonesia, December 7, 2022. REUTERS/Willy Kurniawan

Policemen stand guard at the site of a blast at a police station in Bandung, West Java, Indonesia, December 7, 2022, in this photo taken by Antara Foto. Antara Foto/Raisan Al Farisi/ via REUTERS

Policemen stand guard at the site of a blast at a police station in Bandung, West Java, Indonesia, December 7, 2022, in this photo taken by Antara Foto. Antara Foto/Raisan Al Farisi/ via REUTERS

Policeman stands guard at the site of a blast at a police station in Bandung, West Java, Indonesia, December 7, 2022, in this photo taken by Antara Foto. Antara Foto/Raisan Al Farisi/ via REUTERS


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Stocks rally sputters as growth fears deepen

2022-12-07T05:30:43Z

A view of a giant display of stock indexes, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China October 24, 2022. REUTERS/Aly Song/File Photo

Asia’s stockmarkets wobbled lower on Wednesday as reality bit on hopes for a soft economic landing in the United States, and investors curbed further enthusiasm about China’s reopening.

The S&P 500 (.SPX) had dropped for a fourth straight session on Tuesday and the brakes have come on a rally that has lasted almost two months. Oil also fell sharply and, with Brent futures at $79.50 a barrel, is back where it began the year.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.1% and Japan’s Nikkei (.N225) fell 0.7%.

“Some of the optimism that had driven the rally is being put to the test,” said Shane Oliver, head of investment strategy at Australia’s AMP.

“We might be transitioning from a situation of worrying about inflation and interest rates, to one where the negatives become weakening growth and falling profits.”

S&P 500 futures rose 0.2%. European futures rose 0.3%. China posted far weaker than expected trade data, with both imports and exports suffering their biggest monthly falls since 2020 – auguring badly for recovery prospects.

India on Wednesday was the latest central bank to start slowing the pace of rate increases, with a hike of its key lending rate by 35 basis points to 6.25%, smaller than the three 50 bp hikes it delivered previously. Canada is the next cab off the rank with a rates decision expected at 1500 GMT.

In the United States, big banks are bracing for a worsening economy next year as inflation and rate rises threaten consumer demand, with top executives at Goldman Sachs, J.P. Morgan and Bank of America all sounding downbeat in remarks on Tuesday.

“Economic growth is slowing,” said Goldman Sachs CEO David Solomon. “When I talk to our clients, they sound extremely cautious.”

The growth fears rallied longer-dated bonds and helped the safe-haven U.S. dollar to pause its recent retreat.

The yield on benchmark 10-year U.S. Treasuries fell 8.6 basis points to 3.513% overnight and was last at 3.5460%. That is more than 80 bps below the two-year yield as investors reckon on high rates hurting growth.

Traders in Asia are intently weighing prospects for loosening in China’s COVID-19 controls and what that means for the world’s second-biggest economy and regional demand.

Beijing on Tuesday allowed residents into parks, supermarkets, offices and airports without tests.

“This alone will start to make a difference to consumption figures if replicated across the country,” said BNY Mellon strategist Geoff Yu.

“But execution matters,” he added.

“And there are very few precedents for what the country is looking to achieve … the world will need to be braced for the inflation implications, which have accompanied every major re-opening.”

Oil prices have been sliding with declining demand expectations and now sit more than 40% below a high of nearly $140 a barrel made shortly after Russia’s invasion of Ukraine.

In foreign exchange markets the dollar was seeking to steady after excitement about a slowdown in U.S. rate hikes have knocked it from the year’s highs.

It was firm at 137.28 yen in Asia on Wednesday and traded at $1.0467 per euro . The Australian dollar was broadly steady at $0.6696 despite Australian third-quarter growth coming in a bit below forecasts.

The Canadian dollar hovered at 1.3644 per dollar ahead of an expected rate hike from the Bank of Canada later on Wednesday. The U.S. dollar index sat at 105.5.

Spot gold was steady at $1,773 an ounce and bitcoin , at $17,000, was going nowhere with cryptocurrency sentiment fragile as the fallout from the collapse of FTX ripples through the sector.

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Ukraine appears to show ability to strike deep in Russia

2022-12-07T05:37:59Z

A third Russian airfield was set ablaze by a drone strike a day after Ukraine demonstrated an apparent new ability to penetrate hundreds of kilometres into Russia with attacks on two air bases.

Officials in the Russian city of Kursk, about 90 km (60 miles) north of the Ukraine border, released pictures of black smoke above an airfield after the latest strike on Tuesday. The governor said an oil storage tank had gone up in flames but there were no casualties.

On Monday, Russia said it had been hit hundreds of kilometres from Ukraine by what it said were Soviet-era drones – at Engels air base, home to Russia’s strategic bomber fleet, and in Ryazan, a few hours’ drive from Moscow.

Ukraine did not directly claim responsibility for the strikes but nonetheless celebrated them.

Late on Tuesday, sirens sounded at the airfield in Engels, Russian state-run news agencies reported, citing the first deputy of the district administration.

In Washington, U.S. Secretary of State Antony Blinken repeated his country’s determination to provide Ukraine with equipment it needs to defend itself while saying it had neither encouraged nor enabled the Ukrainians to strike inside Russia.

U.S. lawmakers agreed to provide Ukraine at least $800 million in additional security aid next year.

Russia’s defence ministry said three service members were killed in the attack at Ryazan. Although the attacks struck military targets, it characterised them as terrorism and said the aim was to disable its long-range aircraft.

Ukraine never publicly acknowledges responsibility for attacks inside Russia. Asked about the strikes, Defence Minister Oleskiy Reznikov repeated a longstanding joke blaming carelessness with cigarettes. “Very often Russians smoke in places where it’s forbidden to smoke,” he said.

Neighbouring Belarus, a close Russian ally, plans to move military equipment and forces on Wednesday and Thursday to check its response to terrorism, the BelTA state news agency reported, adding that imitation weapons would be used for training.

Ukraine has for months voiced fears that Belarus and Russia could be planning a joint incursion across Ukraine’s northern border, although Belarus has said it will not enter the war.

At least 20 oil tankers queuing off Turkey face more delays to cross from Russia’s Black Sea ports to the Mediterranean as operators race to adhere to new Turkish insurance rules added ahead of a G7 price cap on Russian oil, industry sources said.

The disruption in tanker traffic was not the result of the price cap on Russian oil agreed by a coalition of G7 countries and Australia, a group official said.

The price cap of $60 a barrel was imposed on Monday at a level above the current price for Urals crude from Russia, the world’s second largest oil exporter.

G7 countries and Australia would be busy in coming weeks determining two more price cap levels on Russian refined oil products slated to be in place by Feb. 5, a U.S. Treasury official told Reuters.

“I think the point is that we have all the leverage and all the control now that we’ve been able to set the ceiling at $60,” the official said. “Any adjustments will be in the interest of the G7 and will be in the interest of Ukraine, it will be in the interest of the world economy and will not be in the interest of Russia.”

On the battlefields of eastern, northeastern and southern Ukraine, Russian forces kept up their shelling of towns and villages, the Ukrainian military said late on Tuesday.

Six people were killed as Donetsk came under rocket and artillery fire, the Russian-installed city mayor, Alexander Kulemzin, reported in his Telegram channel.

“Look what they have done,” said a resident named Irina, gesturing towards the building where her flat had been destroyed. “There are people living over there … Go in the fields and fight each other over there, not here.”

Dmytro Zhyvytsky, the governor of Sumy region on the Russian border, said several people were wounded when Russian forces fired 226 shells on seven communities during the day.

War crimes investigators are looking into the deaths of hundreds of civilians since the beginning of the near 10-month conflict. Russia denies targeting civilians during what it calls a special operation to rid Ukraine of dangerous nationalists.

Ukrainian President Volodymyr Zelenskiy visited troops close to front lines in eastern Ukraine on Tuesday.

Addressing servicemen later in Kyiv, Zelenskiy said he had spent the day with troops in Donbas, theatre of the heaviest battles, and in Kharkiv region, where Ukrainians have retaken swaths of territory from Russian forces.

“Thousands of Ukrainians have given their lives so that the day might come when not a single occupying soldier will remain in our land and when all our people will be free,” Zelenskiy, clad in his trademark khaki green, told the gathering.

Related Galleries:

A satellite image shows bomber in flight at northeast of Engels Air Base in Saratov, Russia, December 3, 2022. Satellite image 2022 Maxar Technologies/Handout via REUTERS

Russian media footage shows the aftermath of an alleged drone attack on an airfield in the Russian region of Kursk, December 6, 2022, a day after drone strikes were reported in two other locations in Russia. Ostorozhno Novosti via REUTERS