Why Twitter still rules (seriously)

Around March 10 2020, I was puzzling over the strange new virus, when someone on Twitter posted an essay by a guy I’d never heard of: Tomas Pueyo, who works in tech in Silicon Valley. I read it twice. “The coronavirus is coming to you,” wrote Pueyo. “It’s coming at an exponential speed: gradually, and then suddenly . . . When it does, your healthcare system will be overwhelmed. Your fellow citizens will be treated in the hallways. Exhausted healthcare workers will break down. Some will die. They will have to decide which patient gets the oxygen and which one dies. The only way to prevent this is social distancing today.”

Pueyo’s essay, which swiftly notched up 40 million views and his follow-up, “The Hammer and The Dance”, which correctly predicted a vaccine within months, foretold what was coming. And I encountered both, thanks to my addiction to Twitter. With Elon Musk seemingly about to buy the social-media platform for $44bn, let me say something unpopular: Twitter is the best global information and ideas exchange ever. It’s also very funny.

It gets a terrible press. Even “the platform’s most prolific users often refer to it as ‘this hellsite’”, notes Michelle Goldberg in The New York Times. That’s fair enough. Twitter is swarming with bots, disinformation and fake accounts (Mitt Romney used to tweet under the pseudonym “Pierre Delecto”). Worst, as Donald Trump himself told the FT while he was president: “Without the tweets, I wouldn’t be here . . . I don’t have to go to the fake media.”

But as the author Sarah Jackson argues, technologies aren’t inherently good or evil. They are just tools. To condemn Twitter because of trolls is like condemning the printing press because of Mein Kampf. The trick is to filter out the rubbish.

When a stupid person, troll or Kanye West pops up on my feed, I just mute them. Pow! It’s cathartic, like popping a pimple. (I now receive much less abuse on Twitter than from FT commenters.) Twitter has also got better at weeding out trolls and bots: the history of technology is that the invention arrives unregulated and is slowly tamed. Musk, a self-proclaimed “free speech absolutist”, may set things back by rehabilitating trolls, including Trump but, even then, ideas exchange would continue on the best bits of the site.

My policy on Twitter is to follow beautiful minds, specialists or both. Whereas Facebook and Instagram confront you with horrifying images of your friends’ perfect kids and perfect breakfasts, Twitter has zones of substance. I’m very 2015 in my faith in experts, and I want climate scientists, trade specialists et al to explain the world to me. Recently, a friend tweeted a fascinating, optimistic essay by the historian Timothy Snyder titled, “How does the Russo-Ukrainian war end”, while someone else riposted with erudite gloom from the scholar Tatiana Stanovaya.

Even a one-line tweet can contain a better idea than a 600-page book. If Socrates returned to earth, I like to think he’d start dialoguing on Twitter, probably in English for global reach:

@Socrates: With what is rhetoric concerned?

@Gorgias: With discourse.

@Socrates: What sort of discourse, @Gorgias — such discourse as would teach the sick under what treatment they might get well?

@Gorgias: No.

Today, beautiful minds around the world, from Harry Potter’s creator @jk_rowling to a local librarian, could join the dialogue. Twitter opens silos. And though it’s only about a sixth the size of Facebook, what happens on Twitter percolates beyond Twitter, partly because journalists are listening.

Twitter hasn’t achieved equality. A large majority of users are male and generally from rich countries. But Twitter is surely the most equal version to date of what German philosopher Jürgen Habermas dubbed “the public sphere”. Ordinary people’s tweets helped fuel #MeToo, #BlackLivesMatter and now the Iranian uprising. Meanwhile, we’re living through the first war in history in which lowly participants tweet videos. Watching Russian soldiers surrender to Ukrainians felt like seeing live footage from the first world war.

Twitter has helped improve language. The 140-character tweet is a literary form, like the haiku, and it trains experts to speak human. There’s also the nascent art of Twitter montages: combining words with the perfect image. Then there are the running gags, like the ritual retweeting of @David_Cameron’s message from just before the UK’s 2015 election: “Britain faces a simple and inescapable choice — stability and strong Government with me, or chaos with Ed Miliband.” No wonder Musk craves this financially disappointing platform. After all, Jeff Bezos only has a newspaper.

Follow Simon on Twitter @KuperSimon and email him at [email protected]

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LME’s Russian metal dilemma threatens market turmoil

Traders are pushing the London Metal Exchange to stop accepting Russian metal, fearing its warehouses will become a stockpile for unwanted material that distorts global prices for commodities like aluminium and copper.

The push has pitted users of the world’s largest metals exchange against each other and comes at a critical time, as metal producers and buyers gather in London next week to finalise their contracts for supplies for the year ahead.

For the exchange, the dilemma constitutes another problem in a challenging year in which it has enraged some of its biggest users. It is already facing lawsuits from hedge fund Elliott Management and market maker Jane Street over its decision to cancel several hours’ worth of nickel contracts during a historic surge in prices in March.

Its latest difficulty comes as large trading houses like Glencore are deciding whether to renew their long-term contracts with Russian producers. With the industry preparing for next week’s annual LME Week get-together, the uncertainty over a ban means that many purchasers are deliberately staying away from deals that may involve Russian metals.

“Consumers are saying to the LME, ‘Your contract is not fit for us at the moment, we are self-sanctioning Russian material, we don’t want to dip into the LME warrant pool and pull out a warrant for Russian material’,” said Colin Hamilton, commodities analyst at BMO Capital Markets.

Traders said that puts the LME into a difficult position that needs urgent resolution. It plays a critical role in the daily functioning of the market, supplying metals when there is a shortfall or accepting it into its warehouses when there is an excess. Russia produces 6 per cent of the world’s aluminium, 5 per cent of copper, and 7 per cent of nickel.

If it continues to accept unwanted Russian material into its warehouses but many of its users shun it, it will create a stockpile.

The exchange is worried that the price on its market would reflect the glut of cheap, unwanted Russian metal it holds and not the price charged in deals that are cut directly between producers and consumers.

Many of the private deals are already including a premium on the price for transactions that do not include metal supplied from Russia. Chile’s Codelco, the world’s top producer of copper, has offered to sell its metal for $235 per tonne above the LME benchmark three-month contract, which trades at almost $7,450 per tonne, according to a person familiar with the matter.

A mismatch would undermine the LME’s role as a marketplace that set a fair and accurate market price.

Moreover there are signs that Russian producers are trying to get ahead of any future restrictions by increasing their deliveries to LME warehouses.

Since Friday about 200,000 tonnes of aluminium have entered LME warehouses — an unusually high level. While much of the material appeared to come from India, it has stoked fears about a build-up of Russian material.

“The market is clearly nervous that there is a big delivery of Russian material coming,” said Hamilton.

In an effort to resolve the problem, the LME set out three options for its users in a discussion paper this month, after it became apparent to the exchange that more users might be shunning Russian metal than it had previously believed.

According to the LME’s three possible scenarios, it can continue as usual, implement a ban or set volume limits on the amount of Russian material that can be accepted into warehouses. Traders conceded that the third route would technically be the most difficult to implement. Market participants have been given until October 28 to provide feedback.

Companies like US aluminium producer Alcoa have led calls for a ban but Russian rival Rusal has warned the move would fuel volatility in the market.

An LME ban could jeopardise Russian producers’ supply contracts with buyers and their financing arrangements with lenders, given that both often require metal to be able to be deposited to LME warehouses.

Other LME users bristle at the principle of a private company moving ahead of any formal government sanctions.

“The pattern of sanctions should be owned by governments. It would be wrong personally for an institution to decide,” said one trading executive.

The LME declined to comment but noted in its discussion paper that finding the appropriate balance of action is “paramount”.

To date western governments have avoided comprehensive sanctions on Russian metal, in part because its supply of crucial industrial metals would be difficult to replace and the effect would spill over into western economies.

Two market sources said Joe Biden’s administration was considering whether to target Russian aluminium through a US ban, raising tariffs, or putting sanctions on Rusal, the largest producer of the metal in Russia. But a US official cautioned that no decision was close. “We are always considering options but nothing is moving on this imminently,” a US official said.

Any US sanction on Russian exports of aluminium, which is used in aircraft, weaponry, cars and drink cans, would have far-reaching implications for global metals trading.

The price of the benchmark aluminium contract on the LME gained sharply last week on reports of the US considering sanctions before paring back to $2,171 per tonne. That is well above its average price over the previous decade but down by almost half from its peak in March.

“The LME discussion paper sends the ball back into governments’ side of the court,” said Tommy Bain, Marex’s head warrant trader and chair of the LME warehousing committee. “Without sanctions by the US, the LME is caught between a rock and a hard place.”

Tory MPs round on Liz Truss

Liz Truss’s premiership is on the brink, with senior Conservative MPs predicting her time in office has entered its final stage after scenes of chaos in parliament and warnings of further cabinet resignations.

The prime minister’s authority was shredded in a turbulent session in Westminster on Wednesday, with reports of MPs being “manhandled” during a contentious vote on fracking, hours after home secretary Suella Braverman quit office.

Anne-Marie Trevelyan, transport secretary, was unable to say on Thursday morning whether Truss would still lead the Conservative party into the next general election. “That’s what we will be working towards and I hope we will be able to do that,” she told the BBC.

Trevelyan added that the prime minister would not be quitting. “She’s a prime minister and we continue to support her.”

Less than two months into office, Truss has had to reverse the central policies on which she won the Conservative leadership after currency and bond markets rebelled against unfunded tax cuts.

Senior Conservatives maintain she has lost the ability to govern and several MPs are expected to submit letters of no confidence in the prime minister. At least two ministers are privately contemplating whether to resign. One said: “The government has become a total farce.”

Senior MPs warned that Truss could be forced out as soon as Thursday. Simon Hoare, chair of the Northern Ireland select committee, suggested that the prime minister might be removed within hours. “There’s about 12 hours to do it,” he told the BBC.

Crispin Blunt, a former justice minister, urged MPs to act. “We need to effect change today in order to stop this shambles and give our country that governance it needs under our constitution.”

But, with the Tories more than 30 points behind the opposition Labour party in the polls and with over two years to go before the scheduled end of parliament, there is no clear mechanism to eject Truss from the premiership and no unity candidate to replace her in the deeply divided party.

Sir Gary Streeter, a veteran MP and former party whip, called on Truss to quit, warning the Conservative party had reached its “last chance” to avoid electoral disaster.

“Sadly, it seems we must change leader . . . The Parliamentary Party has to urgently rediscover discipline, mutual respect and teamwork if we are to (i) govern the UK well and (ii) avoid slaughter at the next election,” he tweeted.

Steve Double, a former environment minister, became the eighth MP to say Truss should quit. He told the BBC that the prime minister had “absolutely lost control of the government”.

One former cabinet minister predicted that “she will be out in days” but warned that “things will be very uncertain” about who or what would happen. It is unclear how quickly MPs could select a new leader.

Truss’s authority was badly hit on Wednesday by Braverman’s resignation letter, which suggested the prime minister was “pretending we haven’t made mistakes”.

It was further undermined by the chaos of that evening’s fracking vote, although some government ministers disputed the Labour claims that at least one Tory MP had been physically pushed to vote with the government.

Initial reports suggested that chief whip Wendy Morton had resigned along with her deputy Craig Whittaker due to the confusion surrounding the vote.

But in a message sent at 1:33am, Downing Street insisted the two officials remained in place and said the fracking motion had been a confidence vote in the government, even though one minister — Graham Stuart, climate minister — had suggested the contrary at the despatch box minutes before the vote.

Confidence votes imply the highest level of discipline for MPs because the authority of the government is at stake. Number 10 said that any Conservative MPs who had voted against the government on Wednesday night “without a reasonable excuse” will face “proportionate disciplinary action”.

Downing Street said that the prime minister had “full confidence” in her chief and deputy chief whip, adding: “Throughout the day, the whips had treated the vote as a confidence motion. The minister at the despatch box was told, mistakenly, by Downing Street to say that it was not.”

But that position was undermined by Trevelyan, who told Sky News that the vote was not a confidence issue.

Schroders’ LDI division lost £20bn in assets after ‘mini’ Budget

Schroders lost £20.2bn in assets from the division that houses its liability-driven investing business after the “mini” Budget, an early sign of the impact wrought on asset managers by volatility in the UK government bonds market.

The FTSE 100 asset manager said in a trading update on Thursday that assets at Schroders Solutions, which builds LDI, multi-asset and derivatives strategies for pension fund clients, dropped from £225.7bn at June 30 to £205.5bn at September 30.

This period includes the week following former chancellor Kwasi Kwarteng’s September 23 announcement of a £45bn package of unfunded tax cuts, which sent UK gilt prices tumbling and yields soaring on the prospect of higher borrowing.

Schroders expanded its LDI business this year with the acquisition of River and Mercantile Group’s UK solutions division. Alongside Insight Investment, BlackRock and Legal and General Investment Management, Schroders is one of a handful of dominant players in the LDI market. These strategies use derivatives to help UK defined benefit pension schemes match their assets with liabilities.

The speed of the sell-off in UK gilts in the aftermath of the “mini” Budget led to a rush of cash calls that wrongfooted many LDI managers. As bond prices fell, counterparties demanded more cash as collateral to keep the hedging arrangements in place. To raise the money, funds were forced to sell assets, including gilts, depressing prices further and risking a “doom loop”.

Overall total group assets at Schroders, excluding joint ventures, dropped from £637.5bn to £614.6bn during the quarter. The asset manager’s shares dropped 0.2 per cent in early trading on Thursday.

Meanwhile elsewhere in the City of London, the pace of fund outflows slowed at Jupiter Fund Management, as the company announced a new share buyback programme under recently appointed chief executive Matt Beesley.

Net outflows slowed to £600mn in the third quarter, Jupiter said, bolstered by a new mandate from a sovereign wealth fund bringing total assets under management to £47.4bn.

The London-based manager has suffered from chronic outflows in recent years, largely driven by its retail investor base. As of September, the fund group has suffered net outflows in 17 of the past 18 quarters, according to analysts at Panmure Gordon.

The company said it would buy back up to £10mn of shares by the end of December, leaving open the possibility of further capital return announcements in the new year. From January, the dividend policy will also be reset at 50 per cent of pre-performance fee earnings, but will no longer have a minimum set at the prior year’s amount.

“While we saw net outflows overall, retail outflows have slowed as we continue to focus on delivering a differentiated product set, which both meets our clients’ increasingly complex needs and demonstrates the value of high-conviction, active investment management,” said Beesley.

Since his appointment, Beesley has said he will set out plans to cut costs and to rationalise underperforming funds in a bid to stem outflows.

“The [third-quarter] numbers and outlook were slightly better than we expected, but clearly significant improvement is still needed. We think the new capital policy will divide opinion. We see it as sensible and more sustainable, [but] it may result in lower returns than some may have expected . . . for in the short term,” said David McCann at Numis.

Jupiter shares rose 2.25 per cent in early trading, providing a small boost to a decline so far this year of about two-thirds.

Yen breaks past ¥150 against the dollar to lowest levels since 1990

The yen has slipped past ¥150 against the dollar for the first time in more than three decades as investors remained on alert for another intervention by Japanese authorities to prop up the currency.

The yen fell as much as 0.1 per cent to ¥150.08 per dollar on Thursday, pushing the Japanese currency to its lowest level since August 1990.

The latest decline came as the Bank of Japan said it would launch an emergency bond-buying operation, offering to purchase ¥250bn ($1.7bn) of government debt as it works to pin down yields even as long-term interest rates rise globally.

Despite a $20bn intervention in September, the yen has lost more than 23 per cent of its value against the dollar year to date due to the widening gulf between the Bank of Japan’s ultra-loose monetary policy and tightening by most other big central banks.

Traders have speculated that authorities subtly stepped in last week to strengthen the yen but there has been no announced intervention following the September action.

Comments from Bank of Japan governor Haruhiko Kuroda last month that signalled that interest rates would remain low helped push the yen past the ¥145.90 per dollar level and prompted the first intervention by Japanese authorities since 1998.

Analysts have warned that interventions will not be effective in stemming the depreciation so long as the interest rate differential between Japan and the rest of the world continues to widen.

Despite a surge in imported food and energy prices, inflation in Japan has remained relatively mild compared with the US and Europe. The BoJ has argued that core inflation will slow to less than 2 per cent next year and underlying demand in the economy remains too weak for the central bank to shift to policy tightening.

In a recent interview with the Financial Times, Japan’s prime minister Fumio Kishida said the central bank needed to maintain its policy until price increases led to rising wage.

Strategists at multiple investment banks have downgraded their short-term forecasts for the yen as it has plunged. Last week, JPMorgan raised its fourth-quarter estimate for Japan’s currency to ¥155 against the dollar, up from ¥147 previously, while Goldman Sachs pushed its three-month forecast to the same level, up from ¥145.

On Wednesday, analysts at Goldman Sachs led by Naohiko Baba said they expected the BoJ to “maintain the status quo across all monetary policy parameters” at its upcoming meeting next week.

The analysts added that “the key here in our view is the effectiveness of intervention with the apparently conflicting policy goals”, with the BoJ still committed to ultra-loose monetary policy and Japan’s Ministry of Finance seeking to keep depreciation in check.

Truss grasps for strength from Tory party left as infighting persists

This article is an on-site version of our Inside Politics newsletter. Sign up here to get the newsletter sent straight to your inbox every weekday.

Good morning. What a dreadful day Liz Truss had yesterday. She lost her home secretary, had to suspend a key aide and almost lost her chief whip and her deputy whip. She can’t go on like this, can she? Some thoughts on that and on the Conservative party’s divides in today’s note.

Inside Politics is edited by Georgina Quach. Follow Stephen on Twitter @stephenkb and please send gossip, thoughts and feedback to [email protected].

Jumping before she was putsched

Suella Braverman has resigned as home secretary following what she described as a “technical” breach of the ministerial code. Depending on who you believe, it was either a calculated act on Liz Truss’s part to push Braverman out of the Home Office, or a way for Braverman to exit a failing government while burnishing her own credentials for the next leadership election.

In many ways, Braverman’s exit suits everyone involved down to the ground. It means that Truss can have a pro-immigration home secretary who will be aligned with her on the importance of getting growth up and easing restrictions on immigration. As a secondary bonus, it acts to bolster her government against a challenge from its left flank by bringing Grant Shapps back from the backbenches.

For Braverman’s part, well, it entrenches her status as the darling of the party’s right and puts her in good standing for the next leadership contest, whenever it may be. As Robert Shrimsley notes in a smart column on the various futures available to the Conservative party, that matters in part because she may end up leading the Tories one day. But in the present, it matters for another reason as well. Here’s Robert (emphasis mine):

Her views have a solid constituency in the party and her resignation letter, stressing especially the failure to reduce immigration, makes clear her wing will fight for them. Whatever the precise details of her departure, Braverman’s letter screams of someone burnishing their credentials for a future contest.

One of the comforting delusions doing the rounds among Conservatives at Westminster is that Truss’s election as leader is some horrible unfortunate event thrust upon them by Tory members in the country. But that isn’t true: the reason why Truss got as far as the party-in-the-country is that there is a sizeable constituency for what we now call Trussonomics in the parliamentary party. Many of its adherents aren’t ready to give up the dream and won’t do so without a fight.

In addition to losing her home secretary and almost having to part with her chief whip Wendy Morton yesterday, Truss had to back away from plans to scrap the UK’s state pensions triple lock. But another fight is looming over tax rises, with one rightwing MP telling Seb Payne, George Parker and Jim Pickard:

We won’t vote for them, it will split the party.

This is the big problem: the Conservative party isn’t bitterly divided and unable to reliably pull together parliamentary majorities because it is led by Truss. It is led by Truss because it is bitterly divided. Its rows over tax and spend have not been quelled by the market panic caused by Trussonomics and its adherents will be a challenge for the next Conservative leader, whoever they may be.

Frack off

How badly did yesterday go for Liz Truss? Let our lobby team help you with that one:

Liz Truss last Friday sacked her chancellor because he could not run the economy; on Wednesday she lost her home secretary, ostensibly because she could not keep secrets. By the end of another chaotic day, the prime minister’s government was on life support.

My prediction that Truss will not lead the Conservatives into the next election remains stable at 95 per cent. Yesterday, I said there was a 50 per cent chance of her being ousted by September next year. Given the ongoing and multiplying political crises in the government, I think it is just about more likely than not that Truss will be gone before September 2023 (55 per cent). Why do I still think that there is a decent chance of a prolonged period of drift at the top of the Conservative party?

In the aftermath of Theresa May’s Chequers summit, in which she decided to seek a soft Brexit, a host of ministers, MPs and junior bag-carriers quit. In response to a resignation letter from the Bolton West MP Chris Green, Simon Hart, a loyalist MP, responded with the following tweet:

Your a pps Chris. It is not relevant and nobody gives a fuck. Apart from me obviously.

That the usually affable Hart — considered one of the party’s quietly influential power brokers because of his decades-long relationship with the Countryside Alliance — would use such intemperate language towards a colleague was taken as a sign that the Conservative party’s internal cohesion under May had entirely broken down. It signalled that the then-prime minister’s leadership was irretrievably doomed.

And those conclusions were right! Relations within the party were at a low ebb and May’s leadership had passed the point of no return. Nonetheless, May remained in post for almost a year after Hart’s tweet.

Leadership changes precipitate when MPs move from going “someone has to do something” to “and that someone is me”. And it’s true to say that some of the party’s power brokers are in that phase. But we should remember that the Conservative party has made a meal of its transitions before. The case for getting rid of Truss was watertight last week, watertight on Monday and yet, at the time of writing, she is still here. She is living hour to hour, that is true. But don’t forget that the Conservative party has let leaders live hour to hour for an awfully long time in the past and it might yet do the same with Truss.

Now try this

Last night I watched a defeat for the ages: Arsenal Women smashed Lyon 5-1, the biggest defeat for the European club champions, who had not conceded more than four goals in a competitive match for 17 years and hadn’t lost by more than one goal in the Women’s Champions League for more than a decade.

Arsenal’s Frida Maanum celebrates scoring their second goal with Stina Blackstenius in the Women’s Champions League match last night © Eric Gaillard/Reuters

Top stories today

  • About last night | The vote on fracking was being treated as a confidence issue despite reports otherwise, and Tory MPs who did not back the government will face disciplinary action, according to Pippa Crerar of the Guardian who shared No 10’s statement this morning. Liz Truss, who was originally listed as having “no vote recorded”, did vote, but failed to swipe her pass in the chaos, she added.

  • Fresh curbs | Ministers will seek to hamstring trade unions’ ability to bring the UK’s transport network to a halt with new legislation today enforcing a “minimum service level”, even during industrial action.

  • Schools under strain | Amid a rising number of children going to school hungry as food inflation reaches 14.6 per cent, school provisions are becoming a lifeline for many families. But with budgets already overstretched, teachers are warning there is only so much they can do to support pupils.

  • ‘Dodgy deals’ | Thurrock council has been ordered to reveal exactly how it borrowed and invested £1bn of taxpayers’ money in a tribunal ruling, the Bureau of Investigative Journalism reports. The ruling may make it harder for public bodies across the UK to use commercial sensitivity as a reason to keep details of financial dealings secret.

Stocks slip back on Tesla caution over consumer demand

Stocks turned lower on Thursday as investors grew wary that rising inflation would curb corporate profits, following cautionary comments on demand from electric carmaker Tesla.

The regional Stoxx 600 fell 0.4 per cent, while the FTSE 100 and Germany’s Dax index lost 0.2 per cent and 0.7 per cent respectively.

In Asia, Hong Kong’s Hang Seng index slipped 1.8 per cent, falling to its lowest level in more than 13 years, after the city’s leader John Lee unveiled measures to attract international business to Hong Kong but did not scrap inbound travel or social distancing restrictions.

Discussing the company’s third-quarter earnings, Elon Musk, Tesla’s chief executive, said demand was high. However he warned that deflationary forces in the economy were gathering strength, with China and Europe experiencing “a recession of sorts”. Shares in Tesla, one of the world’s biggest companies by market capitalisation, fell more than 6 per cent in after-market trading.

The declines in Europe and Asia came after declines in the previous session for US stocks, as bellwether consumer companies reported on the effects of inflation in third-quarter earnings on Wednesday.

The S&P 500 closed down 0.7 per cent, while the tech-heavy Nasdaq Composite lost 0.9 per cent. Stock futures trading pointed to further declines on Thursday.

Investors have been watching corporate earnings season closely for signs that inflation is hitting business activity and consumer confidence. On Wednesday, consumer goods groups Nestlé and Procter & Gamble reported falling sales volumes, and Nestlé chief executive Mark Schneider warned of higher prices.

Central banks including the US Federal Reserve have raised interest rates aggressively to tame rising prices this year. The speed and size of the rises have sparked concerns that central banks will push the global economy into an economic downturn.

“The honeymoon rally of the last few days petered out yesterday . . . as investors turned their focus back to central banks and how fast they’ll hike rates,” wrote Jim Reid, a strategist at Deutsche Bank.

Investors will look for further clues on the health of the US economy when groups including American Airlines and cigarette maker Philip Morris International report on Thursday.

In currency markets, the yen briefly traded above ¥150 against the dollar, a fresh 32-year low.

The Bank of Japan’s ultra-loose approach to monetary policy and the contrasting interest rate rises from other global central banks has led the Japanese currency to fall more than 20 per cent this year. The dollar slipped 0.1 per cent against a basket of six peers, with the pound up 0.2 per cent against the greenback.

Elsewhere, UK government bonds slipped back on Thursday, with the yield on the 10-year gilt rising 0.1 percentage points to 3.96 per cent as the price of the asset fell. Thirty-year gilt yields also rose 0.07 percentage points to 4.06 per cent, having fallen in the previous session after the Bank of England decided to exclude longer dated debt when it begins bond sales next month.

Philip Morris increases offer for Swedish Match

Philip Morris International has increased its offer for smokeless tobacco specialist Swedish Match, pushing the price it is prepared to pay up by just under 10 per cent as it seeks to expand in cigarette alternatives.

The increased offer comes after hedge funds built a stake in Swedish Match. US group Elliott Management has built a 7.25 per cent stake in the Swedish company, according to Bloomberg data.

PMI offered SKr106 per share for Swedish Match in May, but on Thursday increased that to SKr116 per share, valuing the target’s equity at about SKr176bn ($15.7bn).

PMI said it would not increase the offer further. It added that the new offer was a 52.5 per cent premium to the group’s share price before the original offer was made in May. Swedish Match shares closed at SKr110.3 on Wednesday.

PMI chief executive Jacek Olczak said that the new price “primarily reflects the higher net value to PMI . . . given currency movements since the initial offer was announced in May.”

“We believe that the deterioration in the global economic outlook, equity markets and the interest rate environment since the time of the initial offer strengthens yet further the attractiveness of the revised offer,” he added.

Swedish Match produces snus, a popular tobacco product in Scandinavia, and oral nicotine pouches, which are the fastest growing alternative nicotine category.

The Stockholm-based company’s Zyn product is the largest nicotine pouch brand in the US. Sales of Swedish Match’s pouches increased more than 50 per cent last year in the US and Scandinavia.

Separately, PMI agreed on Wednesday to pay tobacco group Altria about $2.7bn for the US commercialisation rights for IQOS, a line of ecigarettes.

US Navy chief warns China could invade Taiwan before 2024

The head of the US Navy has warned that the American military must be prepared for the possibility of a Chinese invasion of Taiwan before 2024, as Washington grows increasingly alarmed about the threat to the island.

Admiral Mike Gilday, the chief of naval operations, said the US had to consider that China could take action against Taiwan much sooner than even the more pessimistic warnings.

The debate in the US about when China might invade Taiwan has intensified since Admiral Philip Davidson, then-head of Indo-Pacific Command, told Congress last year that the Chinese military could take action against Taiwan before 2027. Davidson’s warning was partly downplayed at the time, but officials have intensified their warnings over the past year.

“When we talk about the 2027 window, in my mind that has to be a 2022 window or potentially a 2023 window,” Gilday told the Atlantic Council on Wednesday. “I don’t mean at all to be alarmist . . . it’s just that we can’t wish that away.”

Gilday’s comments came two days after US secretary of state Antony Blinken said China was “determined to pursue reunification on a much faster timeline” after deciding that the status quo was “no longer acceptable”. China claims sovereignty over Taiwan and has warned Washington not to encourage pro-independence forces in the country.

At the opening of the Chinese Communist party’s 20th congress on Sunday, President Xi Jinping admonished the US for supporting Taiwan as he accused “external forces” of exacerbating tensions across the Taiwan Strait and suggested outside actors would shoulder the blame if China felt compelled to attack the country.

Underscoring the mounting concern about Chinese military activity near Taiwan, which has increased in the wake of US House Speaker Nancy Pelosi’s visit to Taipei in August, Joe Biden has on four occasions as president warned China that the US would intervene to defend Taiwan from an unprovoked attack.

Bonnie Glaser, a China expert at the German Marshall Fund, said the 2027 timeline was “baked into US thinking”, particularly in the Pentagon and the intelligence community. But she said it seemed to be based on an assessment of when China would have the capability to invade Taiwan rather than on intelligence.

“We can’t rule out anything, but stating that there is a 2022 or 2023 window is sheer speculation. I think it’s irresponsible,” said Glaser, who was sceptical of the view that China had set a goal to invade by 2027.

However, as US officials sound alarms, Congress will soon vote on legislation that would fund weapons allocation for Taipei. The defence spending bill authorises $10bn over 5 years in what would be the first case of the US funding weapons sales to Taiwan. Taipei has previously paid for American weapons that have been approved for sale by Washington.

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Don’t listen to the ‘smug sleepers’

As I slump wearily over my living room table, clutching my third cup of coffee and feeling distinctly nauseous and fuzzy-headed due to the lack of sleep I am suffering from — I got “just” six-and-a-half-hours last night — I am pondering a particular breed of pest that my life seems to be filled with: the smug sleeper.

These are the people who seem to be able to survive — thrive, even — on precious little sleep; the people who don’t seem to find exhaustion an endlessly interesting and relatable conversation topic; people for whom mornings are apparently just as energising and joyful as any other part of the day (see also smug early risers). I resent these people. If they’re not making me feel bad for being so slothful, they’re tempting me into late-night escapades when I know I have to get up early the next day. Unlike them, I am guaranteed to wake up feeling hideous.

But alas, I know many such types. There’s the colleague who writes witty newsletters every night at 2am, dozes off within “a couple of minutes”, sets his alarm for 8am and arrives in the office positively brimming with beans. There’s the new-mother fashion CEO friend who’s never out of the pages of Vogue and has the most active social life I know, on four hours’ sleep a night, maximum. And then there’s the Cambridge academic father of another friend who, during a meditation, asked God to grant him the miracle of needing less than the seven-to-eight hours of sleep he had been getting up until then. He has leapt happily out of bed after six hours’ sleep ever since (true story).

I am not of this ilk. In an ideal world, I would be a nine-hours-a-night kind of gal, possibly even nine-and-a-half. Come the weekend, if I am underslept, as I often am, I have been known to sleep in for teenagerish amounts of time (one recent and lovely slumber lasted over 12 hours). Am I doing something wrong? Should I feel ashamed? Should I, too, be asking for divine intervention, or at least be trying to train myself to sleep less?

As if to taunt me further, a new study on Tuesday suggested five hours is the “tipping point for bad health”. Was I to infer from this that I should therefore feel just fine on six of seven hours’ worth of sleep a night? Thankfully, Russell Foster, professor of circadian neuroscience at Oxford university, tells me not. He stresses that “there is huge individual variability in sleep” and that for some people, therefore, this tipping point could actually be six hours or seven, or more.

There’s no magic number for the amount of sleep we should be getting, Foster says. Instead, we should be figuring this out ourselves, based on whether or not we feel we’re firing on all cylinders. An easy litmus test for this is whether or not we wake up before our alarm goes off in the morning — if we don’t, we’re probably underslept.

And not only does not getting enough sleep lead to poor physical health because of the increase in cortisol level it creates, which in turn suppresses the immune system; it also leads to bad mental health. Foster cites a 2006 study by a pair of Harvard researchers, for instance, who found that people who had not had enough sleep were more likely to hold on to negative memories and less likely to remember positive ones. “Your worldview is being biased [by] negative experiences, which means you can end up making some quite seriously bad mistakes about how you run your life,” he says.

The scientific research on sleep can be confusing, though. And multiple studies have suggested that long sleep duration — more than seven or eight hours a night — is associated with higher mortality.

But just because sleeping a lot is “associated” with a higher death rate, that doesn’t make it sleep’s fault. “We’ve got causal evidence that short sleep is bad for you — we don’t have causal evidence that long sleep is bad for you,” Matthew Walker, a neuroscience professor at the University of California, Berkeley, and author of Why We Sleep, tells me. Walker says evidence suggests the reason studies have made this link is that those who are sick tend to sleep more to compensate for this and that, furthermore, the quality of sleep — which is crucial — is not taken into account in these studies.

So yes, the smug sleepers might have some kind of strange, peppy social high ground, but they can keep it. I don’t wish to train myself to need less sleep — those aren’t wasted hours as far as I’m concerned; quite the opposite. I want to savour sleep; luxuriate in it. Because whatever Bon Jovi might say, if you’re gonna live while you’re alive then you can’t afford to put off sleep till you are dead.

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