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The World
Saudi Arabia has indicated to western allies that it is prepared to raise oil production should Russia’s output fall substantially under the weight of sanctions, according to five people familiar with the discussions. The kingdom has so far resisted calls from the White House to accelerate production increases despite oil prices trading near $120 a barrel, the highest level in a decade, arguing that it fears the energy crunch could get significantly worse later this year. Saudi Arabia believes it needs to keep spare production capacity in reserve. But fears of outright supply shortages have risen after the EU launched another round of sanctions against Moscow, including a ban on importing seaborne cargoes of Russian oil into the bloc. (Financial Times)
Members of the OPEC oil cartel are considering suspending Russian participation in a deal that sets oil production targets to maintain global price levels. Booting Moscow could potentially allow other countries to increase their production, which could ease the financial pain of embargoing Russian petroleum for European countries. (Wall Street Journal)
The European Union is prepared to implement tariffs on Russian oil imports in case any member states refuse to implement the recently agreed embargo. The tariffs would only require a majority vote among the 27 member states rather than total consensus, meaning Hungary would not be able to soften or delay the measures, as it did on the oil embargo. (Financial Times)
Russia’s failure to pay a slice of interest on one of its bonds will trigger $2.5bn of insurance-like contracts used to protect against debt defaults, according to a panel of derivatives dealers and investors. The ruling by the Credit Derivatives Determinations Committee that a “failure to pay” event has occurred pushes Moscow one step closer to a historic debt default, as western sanctions that followed Putin’s invasion of Ukraine choke off its ability to make payments to US and European investors. (Financial Times)
Voters are slightly more likely than not to see a U.S. obligation to Taiwan: American voters are nearly split as to whether Washington has a responsibility to defend Taiwan in the event of an invasion from mainland China, according to Morning Consult survey data, with the confusing nature of the cross-strait relationship not helping. But there is clear support for formal recognition of Taiwan’s independence, which is if anything a more provocative diplomatic position. (Morning Consult)
UK Conservatives growing restive over Johnson’s leadership: British Prime Minister Boris Johnson says it’s time for the government to “move on” after months of scandal. Some of his Conservative Party colleagues think it’s time he moved on instead. A dozen Conservative lawmakers have called for a vote on Johnson’s leadership since last week, when an investigator’s report blamed “failures of leadership and judgment” by the prime minister and senior officials for allowing boozy government parties that broke the U.K.’s COVID-19 lockdown rules. Under Tory party rules, a no-confidence vote in the leader will be triggered if 15% of party lawmakers — currently 54 — write letters calling for one. (Associated Press)
The U.S. said it will push for additional sanctions on North Korea if it conducts a new nuclear test explosion. U.S., South Korean and Japanese officials have said North Korea could soon conduct its first nuclear test in nearly five years. (Associated Press)
The WHO has cast doubts on North Korea's claims of progress in the fight against a COVID-19 outbreak, saying it believes the situation is getting worse, not better, amid an absence of independent data. North Korean state media has said the COVID wave has abated, after daily numbers of people with fever topped 390,000 about two weeks ago. (Reuters)
Remote work persists, forcing cities, companies to adapt: While many firms expect workers to be remote about 30 percent of the time after the pandemic, the rate has “stalled” around 40 percent since last fall. Cities will have to adjust as less workers commute into downtown spaces. (Governing)
Economy
JPMorgan Chase chief executive Jamie Dimon warned investors to brace themselves for an economic “hurricane” as the war in Ukraine and policy tightening by the Federal Reserve roil markets. Dimon struck a gloomier tone on the economic outlook than in remarks he made just last week during JPMorgan’s first investor day in two years, when he referred to the threats as “storm clouds”. “I said they’re storm clouds, they’re big storm clouds here. It’s a hurricane,” the CEO of the largest US bank by assets said. “That hurricane is right out there down the road coming our way. We just don’t know if it’s a minor one or Superstorm Sandy . . . And you better brace yourself.” (Financial Times)
Mortgage rates rose sharply this week, after pulling back over the last three weeks. The 30-year fixed hit 5.36% Monday and then moved higher again Tuesday to 5.47%. (CNBC)
U.S. firms show first hints of impact of Fed's policy tightening, survey shows. (Reuters)
Federal Reserve officials from both the hawkish and dovish wings of the US central bank confirmed their determination to raise interest rates, even as business contacts report US economic growth shifting into a lower gear. (Bloomberg)
Despite recent headlines of high-profile staff cuts and a looming recession, the job market continues to be ‘burning hot’ for workers calling their own shots, says Julia Pollak, chief economist at the job-search site ZipRecruiter. The labor market posted 11.4 million job openings in April, according to the Labor Department’s latest Job Openings and Labor Turnover Summary — almost twice as many as the number of unemployed job-seekers. And the Great Resignation is as strong as ever at the one-year mark, with 4.4 million people voluntarily quitting their job within the month. Layoffs, meanwhile, reached a record-low of 1.2 million in April, whereas before the pandemic, employers let go of roughly 2 million workers each month. (CNBC)
Economic pessimism growing in U.S.: Gallup's Economic Confidence Index measured -45 in May, down from -39 in each of the previous two months. It is the lowest reading in Gallup's trend during the coronavirus pandemic, and likely the lowest confidence has been since the tail end of the Great Recession in early 2009. (Gallup)
Institutional investors are still failing to implement stringent environmental, social, and governance (ESG) policies, according to a report from Clearwater Analytics, which polled 190 institutional investors representing $12 trillion in assets. According to the report, 45% of asset managers, pension funds and insurers still lack clear strategies when it comes to responsible investment. It also found a third of respondents citing there was a lack of available and credible data needed to evaluate investments through an ESG lens. (Funds Europe)
While electric vehicles proliferate, charging stations lag behind: The White House prepares to give states more money to develop EV chargers, but many still haven’t used their past funding. (Wall Street Journal)
Britain risks falling behind in the race to establish an electric car industry if it can't build more battery factories - and quickly. Ambitious plans from automakers to ramp up production of battery-powered electric vehicles (EV) and a looming change in post-Brexit trading rules that will limit options to import cheap Asian batteries mean there is no time to waste. But a shortage of suitable sites for "gigafactories", and the decision by some local manufacturers to import EV batteries from mainland Europe, are creating challenges that executives and politicians say the government must do more to address. (Reuters)
Technology
When Mark Zuckerberg, the founder of Facebook, recruited a Google executive named Sheryl Sandberg to his social network in 2008, he said he had hired her because “she has just about the most relevant industry experience for Facebook, especially since we need to scale our operations and scale them globally.” Ms. Sandberg answered in kind. “The opportunity to help another young company to grow into a global leader is the opportunity of a lifetime,” she said at the time. Zuckerberg was 23, and Sandberg was 38. Today Zuckerberg is the same age that Sandberg was when he brought her on board, and Facebook has ballooned into a behemoth. Yesterday, Sandberg said she was leaving Meta. (New York Times)
Javier Olivan, who’s replacing Sheryl Sandberg at Meta, built his career on international expansion. (CNBC)
What Sheryl Sandberg’s replacements are up against. (The Information)
The world’s richest man has had it with this whole working-from-home business. Tesla Inc. Chief Executive Officer Elon Musk sent an email to “Everybody” at his electric-car company, elaborating on an earlier missive to executive staff about the need to be in the office. Employees at numerous companies, used to working from home or hybrid policies, have revolted against “RTO” policies and long commutes. (Bloomberg)
For the first time ever Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions. (Nikkei Asia Review)
Smart Links
Mexico central bank cuts growth forecast to 2.2% for 2022. (Bloomberg)
VC funding for crypto fell 38% from $6.8B in April to $4.2B in May; blockchain infrastructure got the most capital at 21% and DAOs the least at 2%. (TechCrunch)
Researchers investigate the links between facial recognition and Alzheimer's disease. (Science Daily)
Drones may have attacked humans fully autonomously for the first time. (New Scientist)
Toshiba agrees ceasefire with investors but fight is far from over. (Financial Times)
Brady, Rodgers win Capital One's The Match 6 vs. Mahomes, Allen. (Bleacher Report)