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Poland arrests three Poles accused of spying for Russia
Authorities said that on Wednesday, Poland had detained three citizens who were suspected of spying, planning sabotage, and spreading disinformation for Russia. Poland claims that its role as a 'hub' for military and other supplies to Ukraine makes it a target of Russian spies who are trying to gather intelligence on Kyiv’s efforts to repel Russia’s invasion as well as commit acts of sabotage. Officers from the (Internal Security Agency ABW )?detained three persons suspected of espionage on behalf of Russian Federation. "The?detainees? are Polish men between the ages of 48 and 62," Polish Special Service Minister Tomasz Siemoniak posted on social media. They are accused of spying activities, including reconnaissance of NATO forces deployed on the territory of the Republic of Poland as well as the production and dissemination of 'propaganda materials and disinformation. He added that a court had ordered their temporary detention for three months. In a press release, the ABW stated that the arrest took place on 12 May. It said that the men were also accused of producing and sharing disinformation and propaganda materials, planning sabotage, subversion and promoting symbols in support of?Russian aggression against Ukraine' and publically praising war. "The detainees, commissioned by an identified Russian citizen associated with the ?Federal Security Service of the Russian Federation, also carried out intelligence-gathering activities, ?including identifying ?the location of NATO troops stationed in Poland," it said. The group was trained in firearms and battlefield tactics to carry out subversive acts. The?Russian embassy in Poland has yet to respond to a comment request. Poland is one of many 'European' countries that have arrested individuals suspected of spying, cyber-attacks or planning sabotage. They say this is part of a hybrid warfare waged by Moscow against them for supporting Ukraine's fight to stop Russia's invasion.
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Lithuania closes airport and issues an 'air-danger' warning over drone fears
Lithuania issued an "air danger" alert on Wednesday, asking people to take cover and suspending traffic at the airport in the capital amid fears that drones could violate Lithuania's airspace. Lithuanian army sent a message to the people of the capital saying, "Immediately seek shelter in a secure place. Take care of those you love and wait for new recommendations." The extent of the distribution was not immediately apparent. The Vilnius Parliament building was also issued with a warning. An announcement was made on the intercom of the parliament. The Lithuanian national crisis management center earlier said it had issued an alarm in response to a?neighboring Belarus drone that was seen flying toward Lithuania. NATO jets shot down a suspected Ukrainian drone over Estonia on Tuesday, according to the Baltic nation. This is the latest of a series?of airspace violations in the region amid frequent Ukrainian attacks against neighbouring Russia. (Reporting and writing by Andrius Sytas; editing by Gwladys Fouche).
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Andrew Abbott and the Reds' shoot to end Phillies' winning streak
Andrew Abbott, who is currently enjoying one of the most successful stretches in his career hopes to continue the momentum when he pitches for the Cincinnati Reds on Wednesday afternoon against the Philadelphia Phillies. Abbott (3-2, a 4.21 ERA), in three starts during this month, has only allowed?one?run?in 16 2/3 inning,?which is a 0.54 ERA. He gave up a 'run' in five or more frames against the Cleveland Guardians on Friday to remain unbeaten over his last six starts. Terry Francona, the manager of the team, said that Francona had been "pitching" much like himself. "I thought it was too many pitches early and that wore him out a bit. He made pitches when it was really needed. "He competed like hell." Abbott has not defeated the Phillies during his four previous starts. He is 0-1 against Philadelphia with a lifetime 4.35 ERA. If Kyle Schwarber is not able to play Wednesday for the third straight game (illness), then the left-hander might get a break. The Philadelphia slugger is the leader in home runs with 20. Philadelphia only managed eight hits in its first two games of the series without Schwarber. Bryson Stott's home run with two outs at the bottom of the eighth inning gave Philadelphia a 5-4 win on Monday. Trea Turner's home run in the first inning of Tuesday's game was not enough to prevent Philadelphia from losing 4-1. The Phillies had won eight of nine games before the game, and five in a row, prior to their three-hit performance against Chase Burns. Burns was a victim of a lack of attention from the Philadelphia interim manager Don Mattingly. Burns and a trio relievers combined to strike out 14 batters in one night. Burns has a 0.72 ERA and is 3-0 this month. But the 23-year-old right-hander is aware that baseball is a marathon not a sprint. Burns advised, "Ride the waves and stay as level as possible." We'll have good and bad times. "It's all about surviving the storm." Reds had lost five of their seven previous games prior to Tuesday. They also lost 11 of their 12 previous road matches. Aaron Nola, who has a record of 2-3 and a 5.91 ERA, will be the next man up for Philadelphia. He had a tough start in his last outing. The veteran right-hander gave up six runs in three and a half innings against the Pittsburgh Pirates on Friday. He allowed six hits -- including two home runs -- and three walks. "He couldn't control himself" ... Mattingly told Nola that he needed to pitch, but he was not able to get the breaking ball out, use his changeup, and then miss some places. It's the least command that he has had all year. Nola started 10 times against the Reds in his career, and he was 5-2 with a ERA of 3.57. Field Level Media
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Mike Dolan: ROI-Bond yields could finally be baked in an AI world
The rise in borrowing costs and the artificial intelligence investment frenzy are closely related. A long-term productivity boom is boosting estimates of neutral rates, even though workers' share of GDP is declining. Some of the bond market volatility this month can be attributed to the Iran-related oil crisis and its immediate inflation impact. Stock markets are at record highs, but it's harder to explain them during an energy crisis. Goldman Sachs estimates that AI?capex will be $7.6 trillion in the next five-year period. This is the biggest driver for both bonds and stocks. Some circles remain opposed to the idea. The idea is controversial in some circles, but there's a growing consensus that the shift away from saving to investing, along with the potential boost to GDP growth due to AI productivity gains will increase R-star, the neutral real interest rate where the economy is at equilibrium. The Institute of International Finance stated last week that a successful AI cycle would raise R-star, because expected returns are higher and capital formation is stronger. The AI boom is not a reason to assume that the markets will return to the low-real-rate world from the 2010s. Barclays annual Equity-Gilt Study reached a similar conclusion on Tuesday. It said that "rising productivity combined with large capital spending needs points to a higher real neutral interest rate." The move was exacerbated by the oil-fueled inflation, and its impact on interest rates. However, the long-term bond market may be finally repricing in order to take into account the latest wave upgraded AI spending plans as well as the economic fallout. As inflation-adjusted policy rates of central banks turn negative, even as massive investment booms unfold and estimates for long-term neutral rates rise, policymakers risk falling behind in tightening their monetary policy. Bond markets could be leading the policy adjustment. It explains at least in part why AI-led stock indexes, such as the S&P 500 or Nasdaq, and long-term bonds yields have been rising simultaneously. Labor SHARE What could go wrong? What generative AI, and AI-infused robots could mean for wages and jobs across the rest the economy is the other side of AI "futurology". This may ultimately put further pressure on the labor share of GDP in comparison to capital, and, by extension, on inequality within countries. Dario Perkins, TS Lombard's economist, analyzed this issue on Monday. He concluded that he believes the AI boom will augment existing jobs and not replace them. He demonstrated how the wage-share of GDP, which has been in steep decline since 1990 after a brief recovery following the pandemic, is closely related to R-star estimates. He argues that the wage share will rise as workers demand more through populist politics and fiscal activism, while deglobalization is also a factor. He wrote: "Either wage share has to recover or this talk of a new regime with structurally higher yields on bonds is probably wrong." The labor share continues to fall despite the administration of Donald Trump, who promised the opposite. The Barclays Equity-Gilt study, which did a deep dive into AI's macro-effects, suggested that the labor share would remain under pressure because AI and AI-enhanced robots will affect a wider range of workers and sectors. Humanoid robots could boost the economy's productivity more than previous AI predictions suggest, but they will also impact more jobs. Christian Keller and AkashUtsav of Barclays wrote: "To the degree that AI + humanoid robots?accelerates automation compared to augmentation, this will likely skew distribution of national income even further away from labor toward capital." This has already happened over the past decades. The aggregate share of income that labor generates could continue to shrink, as it is more easily replaced. Perkins of TS Lombard suggests that if the labor share of the pie continues to decline and has an impact on demand, it may be able to limit bond yields. The Barclays economists believe that even if wage growth is unclear, there is one thing they are certain of: electricity and commodities required to build and maintain the AI and robots world may stoke inflation pressures over the long term through power, raw materials and energy. Bond markets are hoping for a downturn to cool the market. A downturn is a distant prospect for most investors, thanks to the AI boom. Only 4% of global asset managers surveyed by Bank of America in this month's survey see a "hard landing". More than 60% of investors expect the 30-year U.S. Treasury to top 6% in the next year, despite the uncertainty. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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INSTANT VIEW - Indonesia will set up a state-owned firm to manage sales of its key resource exports
On Wednesday, Prabowo Subito, the president of Indonesia, told the parliament that Indonesia would set up a firm to handle exports of natural resource, including palm oil and coal. The President said that the policy is aimed at maximizing government revenue and strengthening monitoring, as well as combating under-invoicing. COMMENTS: EDDY MARTONO (the chairman of GAPKI, the Indonesian palm oil producers 'association) Not all exporters have processing industries. Many of these companies are also traders or trading firms that deal with relatively small volumes in certain countries. What will happen to these companies with the creation of this body?" Even within the same industry the orders might not be the exact same. "Can requirements such as this be accommodated?" Exporters typically have their own markets. We must make sure that we don't lose these markets because of poor management. B.V. MEHTA - EXECUTIVE Director of the SOLVENTEXTRACTORS’ ASSOCIATION INDIA We are waiting to see the details of Indonesian export policy in order to assess its impact on Indian imports. Indonesia is India's largest supplier of palm oils, and any change could affect imports to India. GITA MAHYARANI, EXECUTIVE DIRECTOR OF THE INDONESIAN COAL MINING ?ASSOCIATION: "We think this plan needs further explanations from the government. Especially because the export mechanism via a state-owned company is a relatively novel approach for the coal sector." This plan?also needs to?be reviewed carefully. "This plan?also needs to be reviewed carefully." H KRISTIONO is the CEO of Indonesia's UCOAL Resources: The potential positives include: GOI's (the government of Indonesia) ability to align its exports to national interests, greater bargaining power because of the larger scale, revenue optimisation, if properly managed, improved data and planning. "Potential Negatives: Lower prices for producers, reduced investor attraction, innovation and efficiency may slow down, high concentration risks due to a central entity." RIZKI SIREGAR ECONOMIST UNIVERSITY?INDONESIA In the current setup, it is clear that the agency will have a monopoly on Indonesian exports and Indonesian producers. Its strategy will be to lower its purchasing price and raise its selling price. "The first is easier, since producers' only option will be to sell their products?domestically. (And selling their produce on the?black market would be less probable or at least more risky). The second option is more difficult because the commodities chosen are homogeneous and have a limited ability to affect world prices. This setup will result in a price drop, which is exactly what President Obama "doesn't want to happen." "This new setup is also blind to the challenges that Indonesian exporters face. According to the World Bank's survey of enterprise, Indonesian exporters are more likely to be bribed than their peers and average Indonesian companies. Indonesia's exporters "also face higher costs of trade for both importing and exporting." Exporters already face severe distortions. The agency could create even more.
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Asian stocks continue to lose ground as higher yields bite and Nvidia results are in focus
Asian stocks continued to fall on Wednesday, as inflation fears caused by war hammered bonds. Investors awaited Nvidia's earnings in order to see if the world's largest?company could help markets cope with higher borrowing costs. Investors bet that the Federal Reserve might need to raise interest rates in this year. Overnight, the benchmark 10-year Treasury yield reached a 16-month peak of 4,687%, while 30-year Treasury yields climbed to 5,198%, a level not seen since 2007. Stock futures for the entire region are down by 0.7%. Nasdaq's futures fell 0.1%, while S&P 500's futures were down 0.2%. Brent crude futures fell 0.5% on Wednesday but remained above $100 a barrel, at $110.7. The Strait of Hormuz remains effectively closed, and U.S. president Donald Trump has said that he may need to strike Iran once again. Xi Jinping, the Chinese leader, met with Vladimir Putin in?Beijing less than a fortnight after Trump's high profile visit. He said it was essential to end the Middle East war. MSCI's broadest index of Asia-Pacific stocks outside Japan dropped 0.7% on Tuesday, for the fourth consecutive day. Japan's Nikkei fell 1.5% for the fifth straight session. South Korea's KOSPI dropped 1.7%. Samsung Electronics fell 1.4% after the union announced that it would continue with an 18-day walkout starting on Thursday. This could threaten global semiconductor supply. Hong Kong's Hang Seng index fell 0.6%, while China's blue chip CSI300 index remained flat. Tony Sycamore is an analyst at IG. He said, "At this time, I still believe that we're seeing a correction after a phenomenal rally." The U.S. yields are causing some rumblings in the markets and now attracting lots of attention. "Nvidia might come out and absolutely surpass expectations... but I doubt it." "I don't believe that Nvidia can do what it did, which was to shock everyone with its sheer power and brightness." The giant chipmaker will release its first quarter earnings on Wednesday after the close of the markets. As always, expectations are high. According to the median forecast of an LSEG analyst survey, revenue is expected to increase by nearly 80%. Treasuries suffered losses in Asia. The yield on the benchmark 10-year U.S. notes remained at 4.6613% after a 21 basis point jump in the last three sessions. The 30-year yield remained flat at 5.1795%, after a 17 basis-point jump since last Thursday. The dollar was near its six-week high compared to other major currencies. The yen was stable at 158.95, after gaining for seven consecutive sessions. This helped to reverse the majority of the losses caused by the Japanese authorities' intervention on April 30th when they stepped in the market to protect the yen around the 160 mark. Last night, the euro bought $1.1597 after reaching its lowest price since April 8. The British pound is at $1.3391 - not far off the six-week high it reached earlier in the week. The U.S. Dollar gained, and gold prices fell 0.4% to $4.463 per ounce. This is the lowest price since March.
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President says Indonesia will bring all commodity exports under centralised management.
Indonesian President Prabowo said that his government would centralise the exports of certain commodities in order to increase state revenues. In a fiery address to the parliament, Prabowo claimed that Indonesia had lost as much as $900 billion in revenue in the past 34 years due to the low prices of its commodities. He also said that in the future, key exports such as palm oil and coal will be sold through a government-run central enterprise. Indonesia is the largest exporter in the world of palm oil and thermal coal. Prabowo stated, "Today Indonesian government which I lead will release a regulation regarding the management of commodity exports." "The publication of this regulation is an important step in strengthening management of commodity exports,"? he said. He added that "all sales of our resources - palm oil, coal - must go through an SOE chosen by the government...as exclusive exporters". Prabowo’s remarks confirm previous accounts from sources who were familiar with the issue, who claimed that Indonesia was planning to move in order to strengthen the government’s oversight of its natural resources. Rumours of the plan have caused the stock market to panic, as it is feared that the changes could affect pricing mechanisms and reduce trader margins. Jakarta's main index fell 3.5% on Monday and almost 2% on Tuesday. Sources said that Prabowo's move, which aims to address concerns over exporters' under-invoicing, and transfer pricing, was a response to the concern about the issue. They declined to name the sources because they were not authorized to speak in public. Prabowo claimed that Indonesia's natural resource could provide enough welfare for the entire country, if managed in accordance with the constitution. He said: "In the view of the government, and I'm sure that every patriot would?support it - earth, water, and all resources contained within must be enjoyed by all Indonesians." He added that despite being a G20 member and a country rich in natural resources, Indonesia has not managed its economy well enough to increase state revenues. One source said that the regulations needed to bring the plan into effect had not been finalised.
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Europe's EV sales surge as Iran War pushes up petrol prices
Data exclusively shared with shows that demand for electric vehicles has risen in Europe as fuel prices linked to the 'Iran War' have pushed sales of second-hand and new EVs. This is a boost for the auto industry. While?sales for fully electric cars in Europe are expected to grow 30% by 2025, the adoption of EVs on the continent is still behind industry expectations. 'Carmakers - from Fiat-owned Stellantis to Volkswagen, who had invested heavily to meet the expectation of a much higher EV market, have booked multi-billion dollar charges in the past year to cover asset writedowns. The rise in oil prices has changed the calculations of buyers. Since U.S. airstrikes and Israeli strikes on Iran, at the end February, a wider conflict was triggered and an unprecedented disruption to energy supplies occurred. This isn't a blip. It's an inflection. Gurjeet Grewal said. Octopus Electric Vehicles in the UK registered a 95% increase year-on-year in demand for new EVs - and a 160% increase for used EVs. Britain is particularly vulnerable to inflation and rising food prices as it is a net energy importer. Data from the industry group E-Mobility Europe and the?research group New Automotive showed that in Europe, registrations of EVs increased 34% year-on-year. Data covers 16 markets, which account for over 80% of European Union car sales and European Free Trade Association (EFTA) car sales. Electric cars have seen a strong growth in Denmark, the Netherlands and other markets. However, in Italy, EVs are still lagging behind. Erik Severinson, Volvo Cars Chief Commercial Officer, said that the Swedish automaker has seen an increase in orders. This is especially true for its small EX30 entry-level electric SUV. "This is where customers are most sensitive to increases in oil prices." "We also see increased customer inquiries in our fully electric cars - even in markets in southern Europe where EV penetration rates are lower," Severinsson stated. CARMAKERS CONSIDER MORE EVS PRODUCTION Renault France said that 50% of its registrations were EVs in Britain during April. EV-related inquiries on Renault's UK website have increased by 48% since the Iran War began. Registrations in April, which are behind orders, are the first to reflect the full impact of the Iran War. Adam Wood, managing director of Renault UK, said that the interest in Renault's electric vehicle range had changed dramatically. Unnamed sources at the automaker said that the company is working to increase production. Markus Haupt, CEO Seat/Cupra – both Volkswagen brands – said in a statement in early May that his sales team reported in Germany that EVs accounted for nearly 60% of orders - well above their quota. Haupt stated, "We have set a budget for production this year." "But we may need to increase our EVs." CHINESE BRANDS APPEAL TO AFFORDABILITY The online?marketplaces also saw an increase in searches for new or used EVs. Chinese brands, which offer more affordable models, experienced a pronounced rise. Since the start of the war, German online marketplace Carwow reported that its share of electric vehicle enquiries had risen from 40% to 75%, and conventional gasoline engines have dropped from 33% to 16%. Carwow Germany's Managing Director Philipp Sayler said: "What is striking about the Chinese manufacturers is their strong momentum." BYD has gone from a "niche brand" to one of the most popular names. Carwow reported that BYD purchase inquiries on its website grew by a staggering 25,000% during the first quarter. OLX, a rival online marketplace, said that customer inquiries for EVs were up 80% on its French site since the start of the war. When fuel prices spiked in the past, dating back to the 1970s and beyond, consumers switched to fuel-efficient vehicles but then returned to less efficient cars when the price of fuel dropped. Industry players have said that this time it could be different. Christian Gisy, CEO of OLX, said that the Iran conflict had fundamentally changed how people thought about energy security. "Europeans are moving from a'maybe someday to 'right away' attitude towards electric vehicles."
Russia demonstrates troops moving nuclear weapons in major exercise
As part of an important nuclear exercise, Russia showed footage on Wednesday of troops loading mobile launch systems 'Iskander M' with a nuclear warhead and then moving it undetected from the launch site.
The Defence Ministry released a statement to the state media in which it said that its forces have "practiced" bringing their units to the highest level of combat readiness for the use of nuclear weaponry.
The three-day military exercise that began on Tuesday is being held in Russia and Belarus. It comes as Russia is engaged in what it calls an "existential battle" with the West regarding Ukraine, and tensions are high with NATO and Europe.
The Defence Ministry announced on Tuesday that part of the drills, which will involve 64,000 military personnel and 200 missile launchers as well as 140 aircraft, 73 surface vessels, and 13 submarines, would be a rehearsing of launch procedures for Russian tactical nuclear weapons located in Belarus.
The video of the Russian nuclear element shows the forces in a convoy moving through a densely forested area. They are camouflaging vehicles and raising launch tubes into firing position.
The Iskander M can be equipped with both conventional and nuclear warheads. Its range is up to 500 km (310 miles). Reporting by Andrew Osborn, Writing by Mark Trevelyan.
(source: Reuters)