Starting in late September, Russia had unveiled its expanded nuclear doctrine which proposed a lowered threshold for Russian strategic forces’ use of nukes. This was due to the “emergence of new sources of military threats and risks for Russia and our allies” – amid fiercer drone and missile attacks coming across the border from Ukraine. This change in nuclear doctrine has now been formally signed into effect by President Vladimir Putin on Tuesday, two days after President Biden authorized Ukraine to begin conducting long-range strikes inside Russia with US-made missiles.

Ukraine has already taken advantage of that, also on Tuesday, using a MGM-140 Army Tactical Missile System to strike a military installation in the western Bryansk region. “For the first time, Ukraine’s Defense Forces struck Russian territory with ATACMS ballistic missiles,” RBC Ukraine news agency reported Tuesday. 

RBC Ukraine said the military facility near the city of Karachev in the Bryansk region was successfully hit with ATACMS after six missile were fired (with Russia saying it intercepted five of them). This location was about 115 kilometers (71 miles) from the border with Ukraine.

Kremlin spokesperson Dmitry Peskov has described that the nuclear doctrine changes mean that “the Russian Federation reserves the right to use nuclear weapons in the event of aggression using conventional weapons against it and/or the Republic of Belarus.” 

“An important element of this document is that nuclear deterrence is aimed at ensuring that a potential adversary understands the inevitability of retaliation in the event of aggression against the Russian Federation or its allies,” Peskov said.

Thus this is the key change and lowering of the threshold – that even conventional weapons used by an enemy could trigger nuclear retaliation if deemed enough of a threat against Russia and its sovereignty.

The Associated Press also spells out, “The new doctrine allows for a potential nuclear response by Moscow even to a conventional attack on Russia by any nation that is supported by a nuclear power.”

Alarmingly, Peskov has already said that a Ukrainian attack like today’s could potentially trigger it:

Asked Tuesday if a Ukrainian attack with longer-range U.S. missiles could potentially trigger a nuclear response, Kremlin spokesman Dmitry Peskov answered affirmatively, pointing to the doctrine’s provision that holds the door open for it after a conventional strike that raises critical threats for the “sovereignty and territorial integrity: of Russia and its ally, Belarus.”

Also according to the newly expanded doctrine, in the event Western powers assist another nation in a major attack on Russian soil, those same Western powers will also be held responsible. This can trigger Russian nuclear launch. This appears to be why Peskov answered in the affirmative.

Russian Foreign Minister Sergey Lavrov has addressed the nuclear doctrine change from Brazil’s Rio de Janeiro on the sidelines of the G20 Summit.

He asserted that Russia’s position is that nuclear war won’t happen, and that fundamentally Russian nuclear doctrine doesn’t differ from the United States’. But still, he added, Russia will “react accordingly” to Ukraine firing a US long-range missile.

⚡️ They want escalation – Lavrov on Ukraine’s use of ATACMS in Bryansk#G20 pic.twitter.com/I4BUFtwfSu

— RT (@RT_com) November 19, 2024

He expressed hope that the West will study the update in Russia’s nuclear doctrine. “The West appears to be working towards escalating the Ukraine conflict,” he said. Meanwhile the US has indicated it won’t respond to Russia’s nuclear doctrine move.

MAGA or MIGA?

Will Trump and his new cadre of appointees succeed in ending the wars, closing the border, slashing bureaucracy, and ridding our food/medicine of poison? Or will he get rolled by the Deep State again?

Revolver News founder Darren Beattie and Grayzone Editor-in-chief Max Blumenthal dove deep into Trump’s cabinet in last night’s debate, hosted by friend of ZeroHedge Adam Taggart (who was kind enough to fill in for Judge Napolitano due to a last minute issue — please subscribe to Taggart’s YouTube channel to thank him).

Here were the highlights:

Battle of the Billionaires: Miriam Adelson & Elon Musk

Zionist mega-donor Miriam Adelson has called for full annexation of the West Bank in Palestine, a move that would surely stir the already-boiling Middle East. Could Space X founder Elon Musk act as a counterbalance? Beattie thinks so.

Beattie: “Elon Musk is not an interventionist by any means… Elon Musk matters a thousand times more than Miriam Adelson or any other, you know, person who’s donated this time around.”

“The one billionaire that matters most — other than Donald Trump — is Elon Musk.”

Giving credit to Musk for reportedly engaging in peace talk with Iran last week, Blumenthal nonetheless pointed out that even the world’s richest man has bent the knee to “the lobby” in the past.

Blumenthal: “[Ben Shapiro] took Elon Musk to Auschwitz after Elon Musk took on the ADL and realized there was actually a force more powerful than the so-called richest man in America.”

“[Musk] had to bow to the power of the Israel lobby and the Zionist movement, and that should really tell us something about the danger that is faced in this Trump administration.”

pic.twitter.com/4QmUsCn7Sl

— ZeroHedge Debates (@zerohedgeDebate) November 19, 2024

Little Marco

Iran, China, Nicaragua, Cuba, Venezuela… these are just a few countries where Marco Rubio would like to see the governments toppled, as Blumenthal noted.

Blumenthal: “[Rubio is] going to escalate with this Monroeist foreign policy that John Bolton also articulated with coups, color revolutions, all kinds of sabotage and sanctions, and it will create more migrant pressure.”

“Many of the weapons companies that are also fueling the Taiwan lobby in Washington have supported Marco Rubio.”

Lending a ‘White Pill”, Beattie offered analysis of Rubio that could indicate his hawkish inclinations have tempered (or at least that he will respect the Trump agenda more so than first-term hardliners).

Beattie: “We shouldn’t have this ossified picture of things from 2015… you have people who are pathologically committed and ideological, whereas I don’t think that Rubio is of that sort.”

“He is not the sort — I think — like a Pompeo or like a Bolton who would be a driving force in opposition stated Trump preferences of bringing peace and resolution to the variety of global conflicts.”

“If Trump could avoid war with Pompeo, he can certainly avoid war with Rubio.”

pic.twitter.com/spqReHpaHN

— ZeroHedge Debates (@zerohedgeDebate) November 19, 2024

Gabbard: “She’s an enigmatic figure”

Former Hawaiian Congresswoman Tulsi Gabbard has repeated the standard pro-Israel mantras over the years, but — as Blumenthal conceded — her foreign policy ran contrary to much of the Jewish state’s agenda, like regime change in Syria which she opposed. Is Gabbard playing politics?

Blumenthal: “[Tulsi] has actually gone against the grain of the most malevolent force in the United States, which is really admirable… Tulsi Gabbard is someone who has the potential to really reform the intelligence services.”

“The reason she’s hated so much is because… she targeted the real source of the war machine, which was sending over a billion dollars in weapons and aid to fanatical jihadist proxies of al-Qaeda, which were tearing Syria to shreds.”

On Gabbard, Blumenthal and Beattie saw eye-to-eye.

Beattie: “She knows about the malicious activities of these groups like the [Syrian] White Helmets and people like Victoria Nuland and all of these scam organizations whose sole purpose is to dupe the United States into conflicts that it shouldn’t be in.

pic.twitter.com/c2PShbBLa4

— ZeroHedge Debates (@zerohedgeDebate) November 19, 2024

Pistol Pete

According to Blumenthal, Hegseth is both a jarhead and religiously fanatical zionist… not a great combo. 

Blumenthal: “[Hegseth] fought — not to make peace and prevent new Wars from happening — but he fought knowing that his sons Gunner, Boon, and Rex would have to fight a war to defend Israel and that Israel’s interests and the interests of the US are fundamentally intertwined and form the bedrock of western civilization.”

“Fundamentally intertwined with a country that’s been at perpetual war with all its neighbors. That’s currently engaged in ethnic cleansing of 400,000 people that it’s trying to starve out of the Gaza Strip so it can take their land.”

The Grayzone editor-in-chief highlighted Hegseth’s defense of soldiers who committed war crimes, like Eddie Ghallager who “shot little girls for fun in Afghanistan”, a story corroborated by the New York Post. Hegseth then advocated for Ghallager’s release.

While Blumenthal admitted it could be entertaining to see Hegseth clash with woke warmongers, that is ultimately a side-show and Fox News talking point that distracts from the bigger picture:

“The real issue isn’t whether the military is too gay… The issue is whether it’s going to continue to go to war to defend the strategic depth of a tiny little apartheid state thousands of miles away.”

pic.twitter.com/MWCifGp5rD

— ZeroHedge Debates (@zerohedgeDebate) November 19, 2024

Full Debate

Beattie and Blumenthal dissected most of the major cabinet appointments over the course of their 2-hour debate, so we suggest all readers enjoy the full discussion below:

US Housing Starts and Building Permits disappointed in October with the former dropping 3.1% MoM (-1.5% exp) and -0.6% MoM (+0.7% exp) respectively. This is the second straight month of declines for both measures of housing activity…

Source: Bloomberg

That pulled the SAAR totals down to four month lows – hovering just above COVID lockdown levels…

Source: Bloomberg

Under the hood, it was very mixed with Single-family permits rising and multifamily permits dropped. Single-family Starts plunged while multi-family Starts jumped…

Source: Bloomberg

As rate-cut expectations have fallen, so have homebuilders actions it seems…

Source: Bloomberg

But homebuilder ‘hope’ remains high…

Source: Bloomberg

With trump back in charge, how much will Powell and his pals really want to cut rates now?

Stocks fell, with European equities shedding almost 1%, and global bonds and the dollar climbing on worries over the latest escalation in the Ukraine. Sentiment was spooked after Vladimir Putin signed a decree lowering Russia’s threshold for a nuclear strike in the event of a massive conventional attack on its soil. The warning came just minutes before Ukrainian forces carried out their first strike within Russian territory with a Western-supplied ATACMS missile, although the tepid Russian response indicated that Putin is in no rush to retaliate to this provocation by the deep state. As of 8:00am S&P 500 futures dipped 0.3%, but were well off their session lows; Nasdaq futures dropped 0.2% with TSLA down 1.5% and NVDA up +0.8% pre-market. The yield on 10-year Treasuries fell three basis points to 4.38% after earlier dropping to 4.33%. The moves were steeper in Europe, with German bond yields dropping to the lowest since October. The euro retreated 0.3%. Poland’s main stock index sank more than 3%. However, bunds then pared gains and their outperformance over Treasuries as traders unwind haven buying after Russia reports limited damage following Ukraine’s missile attack using US weapons, a move seen as Putin’s unwillingness to push the world into WW3. Commodities are mixed: oil is flat, base metals are mixed with copper and iron ore higher, and Precious Metals are higher. Today, the key focus will be LOW and WMT earnings pre-market. On macro data, we will receive Housing Starts and Building Permits.

In premarket trading, Walmart rose 4% after the company boosted its outlook for the year on strong demand from US consumers searching for value. Alphabet dropped 0.5% on reports that top Justice Department antitrust officials decided to ask a judge to force Google to sell off its Chrome browser to break its monopoly search. Bakkt jumped another 18% after the Financial Times reported that Trump Media and Technology Group is in advanced talks to buy the crypto trading firm, citing people familiar with the matter. Here are some other notable premarket movers:

• Incyte drops 11% after the company announced it will pause enrollment in a Phase 2 study of MRGPRX2, which is aimed at a chronic skin condition.
• Super Micro Computer jumps 23% after the company hired a new auditor and filed a plan to come into compliance with Nasdaq listing requirements.
• Symbotic soars 30% after the robotics warehouse automation company provided a 1Q revenue outlook that beat estimates.
• XPeng ADRs gains 5% after the electric-vehicle maker’s fourth-quarter forecast beat estimates, with the company forecasting sales of 87,000 to 91,000 units — higher than the average estimate of 73,960.

Markets were rattled by reports that Ukrainian forces reportedly carried out their first strike on a border region in Russia using Western-supplied missiles. Earlier, President Vladimir Putin had approved an updated nuclear doctrine that expanded the conditions for Russia to use atomic weapons, including in response to a massive conventional attack on its soil. Putin had pledged in September to revise the doctrine.

“The market reaction is logical, one could feel already yesterday that the tension was rising,” said Andrea Tueni, head of sales trading at Saxo Banque France. “For the moment the market reaction is contained, some are still in a wait-and see-mode.”

Traditional haven assets including the Japanese yen, Swiss franc and gold gained. Ukraine’s sovereign dollar bonds – which had risen sharply in recent days on hopes for a Trump-led ceasefire, fell the most among emerging-market peers, with a note due February 2029 losing 1.6 cent on the dollar.

Also on Tuesday, traders were discussing how Trump’s nomination of Treasury secretary could shape policy. The transition team is considering pairing Kevin Warsh, a former Fed official, in the Treasury secretary role, with hedge fund manager Scott Bessent as director of the White House’s National Economic Council, according to people familiar with the matter. “Kevin Warsh was in the FOMC, so the likelihood of political interference into the Fed policy making is certainly diminishing if he were to become the Treasury secretary,” said Gero Jung, chief economist of Mirabaud Asset Management in Geneva.

Europe’s Stoxx 600 fell as much as 1% on concerns Russia’s war in Ukraine is escalating. The turbulence boosted the region’s defense stocks, several of which are among the top gainers alongside Aeroports de Paris and Imperial Brands. At the other end of the index, Siemens and Husqvarna fall on respective broker downgrades. Here are the biggest movers Tuesday:

• European defense stocks rise while airlines slide after RBC Ukraine says Ukrainian armed forces carried out their first strike in a border region within Russian territory
• Imperial Brands shares rise as much as 3.5%, briefly hitting their highest level since 2019, after the tobacco giant reported annual results that were broadly in-line with its pre-close update
• Aéroports de Paris rises as much as 6.2% after Bank of America and Stifel upgrade the stock to buy, predicting that earnings momentum and the group’s strong international platforms will provide upside
• Bodycote shares rise as much as 7.8%, marking its biggest jump in 20 months, after the heat treatment specialist said its full-year performance should meet market expectations
• Avon Technologies gains as much as 9.9% to a three-year high, after the respiratory-protection equipment maker reported preliminary full-year earnings, with mid-term targets a key positive
• Vesuvius shares rise as much as 8%, the most in almost 16 months, after the molten metal flow engineering firm delivered a resilient trading update despite tough conditions in its end markets
• Siemens falls as much as 4.1% after being downgraded to neutral at Bank of America, with the broker quoting “limited” 2025 momentum and a slow recovery for its key Digital Industries division
• Husqvarna drops as much as 6.8% after the Swedish gardening equipment manufacturer was cut to sell at SEB, with the broker no longer seeing any major recovery from 2024 lows
• Italian shares declined, with the FTSE MIB being the second-worst performer in the world. Large domestic lenders dragged the index down as investors took profit following YTD gains
• CaixaBank shares drop as much as 5.1% after the Spanish bank unveiled a new strategic plan. KBW noted that the capital distribution targets are now less clear
• Novo Nordisk shares erased what was left of this year’s once lofty gains as concerns around the impact of competition and supply constraints cool excitement around the Danish drugmaker’s obesity drugs
• Spie drops as much as 4.5%, briefly hitting their lowest level since January, after one of the company’s investors offered to sell shares at a discount compared to Monday’s close

Earlier in the session, Asian stocks rose, extending a rebound from recent losses, led by Taiwan and Australia after gains in US peers overnight. The MSCI Asia Pacific Index climbed 1.1%, with TSMC and Commonwealth Bank of Australia among the biggest boosts. Tech and financials were among the largest drivers amid broad advances across sectors. US and European stock futures rose as a decline in Treasury yields bolstered the appeal of holding equities. The rally follows a decline of 3.9% in the Asian benchmark last week, its worst in seven months. Investors remain focused on US President-elect Donald Trumps’ plans including the heavy tariffs he has vowed on China, as well as the response planned by the latter as it continues to try and revive its economy.

In FX, the Bloomberg Dollar index rose 0.1%, while USDJPY dropped as much as 0.9% to 153.29, before paring losses; one-week volatility spiked by 60 basis points to 10.34% after the Russia headlines hit the wires; the Swiss franc also inches higher.

In rates, treasuries held flight-to-quality gains garnered during London morning following report Ukraine had carried out its first strike on Russian territory with Western-supplied missiles. Yields, off session lows, remain 4bp-5bp richer across the curve. Scant US economic data and Fed speeches are slated. Treasury 10-year yields are around 4.37% vs session low 4.343%; gilts in the sector lag by around 1bp while bunds trade broadly in line; curve spreads are within 1pm of Monday’s closing levels

In commodities, natural-gas futures gained as much as 1.1%, trading near their highest levels in a year. Oil traders, meanwhile, appeared unfazed by the latest developments, with WTI falling 0.8% to $68.60 a barrel after Europe’s largest oil field gradually restarted following a power outage. Spot gold climbed 0.9% or $23 to around $2,634/oz.

Bitcoin is back in the vicinity of an all-time high, climbing above $92,000. The digital asset has been supported by a series of developments highlighting the deepening embrace of the digital-asset industry by Trump.

Today’s economic data calendar includes October building starts and housing permits at 8:30am. Fed speaker slate includes Kansas City’s Schmid at 1:10pm

Market Snapshot

• S&P 500 futures down 0.6% to 5,885.75
• STOXX Europe 600 down 0.9% to 498.07
• MXAP up 1.0% to 183.95
• MXAPJ up 0.7% to 581.32
• Nikkei up 0.5% to 38,414.43
• Topix up 0.7% to 2,710.03
• Hang Seng Index up 0.4% to 19,663.67
• Shanghai Composite up 0.7% to 3,346.01
• Sensex up 0.5% to 77,692.91
• Australia S&P/ASX 200 up 0.9% to 8,374.03
• Kospi up 0.1% to 2,471.95
• German 10Y yield little changed at 2.29%
• Euro down 0.6% to $1.0535
• Brent Futures down 0.8% to $72.74/bbl
• Gold spot up 0.8% to $2,631.64
• US Dollar Index up 0.28% to 106.57

Top Overnight News

• Haven assets gained as Vladimir Putin signed a decree allowing Russia to use nuclear weapons in the event of a massive conventional attack on its soil. It will also view aggression against itself or allies by a non-nuclear state backed by other nuclear powers as a joint attack. Adding to the tension, Ukrainian forces carried out their first strike within Russian territory with a Western-supplied ATACMS missile. BBG
• Japan and China sold Treasuries last quarter ahead of the US election. Japanese investors sold a record $61.9 billion, while funds in China offloaded $51.3 billion, the second biggest sum on record. BBG
• China is “scrambling” to secure meetings w/members of the incoming Trump administration. FT
• The BOJ may raise policy rates to “a neutral rate” of 1% by March 2026, MUFG Chairman Kanetsugu Mike said. BBG
• Lebanon and Hezbollah agreed to a US proposal for a cease-fire with Israel with some comments on the content. Reuters
• NATO’s 15 largest European members may have to double defense spending to $720 billion annually to meet the challenge of Russia’s war in Ukraine and the possibility of less American support. BBG
• Trump is leaning towards Warsh as Treasury Sec with Bessent as head of the White House’s National Economic Council. BBG
• Trump is said to be pressuring senators to confirm Matt Gaetz as Attorney General, according to Axios. However, it was also reported that Trump admitted Gaetz may not be confirmed by the Senate, according to NYT.
• Trump’s cabinet picks could face obstacles from as many as 9 Republican Senators. The Hill
• Alphabet shares down ~70bps premarket after people familiar said the DOJ will push for Google to sell its Chrome browser to break its monopoly. Officials are also seeking action on data licensing and AI. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly in the green following the similar performance stateside although gains were capped amid relatively quiet newsflow with no major fresh macro catalysts to drive price action. ASX 200 outperformed and notched a fresh record high with all sectors in the green and the advances led by a tech resurgence and strength in gold miners, while there were recent amiable Xi-Albanese comments and Morgan Stanley raised its ASX 200 target. Nikkei 225 traded higher and shrugged off a firmer currency as Japan aims for cabinet approval of an economic package soon. Hang Seng and Shanghai Comp swung between gains and losses despite better-than-expected earnings from Xiaomi which failed to lift shares in the smartphone/EV maker, while support pledges by regulators did little to boost sentiment and the EU is also reportedly to demand tech transfers from Chinese companies in return for EU subsidies which would apply to batteries but could be expanded to other green sectors.

Top Asian News

• PBoC asks financial institutions to stop buying offshore Local Government Financing Vehicle (LGFV) bond under southbound connect scheme, via Reuters citing sources
• PBoC’s Zhu said China will deepen Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor reforms, while it will support Hong Kong to develop the offshore yuan market.
• Chinese Vice Premier He Lifeng said they will support more quality enterprises to list and issue bonds in Hong Kong, as well as support Chinese financial institutions in Hong Kong to expand their business.
• China’s NFRA chief said Chinese banks have sufficient buffers for risk and they will implement the new CNY 60bln limit on local government debt and support financial institutions in debt restructuring to ease pressure on local governments. Furthermore, efforts will focus on improving financial service facilitation in the Greater Bay Area through interoperability of regulatory mechanisms and targeted policy issuance, while there are encouraging Chinese-funded banks and insurance institutions to set up their regional headquarters in Hong Kong to support its economic development.
• China CSRC Chairman Wu Qing said they will support listings inside and outside of the mainland.
• EU is reportedly to demand technology transfers from Chinese companies in return for EU subsidies, while the requirements would apply to batteries but could be expanded to other green sectors, according to FT.
• Hong Kong jailed all 45 Hong Kong pro-democracy campaigners in the city’s largest security trial with legal scholar Benny Tai sentenced to 10 years in prison for subversion and student leader Joshua Wong sentenced to 4 years and 8 months, while it was later reported that the US strongly condemned the jailing of the democracy activists, according to AFP.
• Japanese Economic Revitalisation Minister Akazawa said they are aiming for cabinet approval of the economic package soon and it is crucial to boost pay for all generations with the package, while DPP head Tamaki also said that they aim for cabinet approval of economic measures by Friday.
• Japanese Finance Minister Kato said it is important for currencies to move in a stable manner reflecting fundamentals and they will continue to take appropriate action against excessive forex moves. Kato stated there is absolutely no change to their stance on forex and they have been seeing somewhat one-sided, sharp moves in the forex market since late September, while he reiterated they are closely watching FX moves with the utmost sense of urgency.
• RBA Minutes from the November 5th meeting stated the Board is vigilant to upside inflation risks and policy is needed to remain restrictive, while it saw no immediate need to change the Cash Rate and reiterated it is not possible to rule anything in or out on future changes in the Cash Rate. RBA Minutes noted their forecasts were based on the technical assumption for the Cash Rate to stay steady until mid-2025 and the Board considered what might warrant future change in cash rate or prolonged steady period, as well as discussed scenarios where policy would need to stay restrictive for longer or tighten further but also considered scenarios where a rate cut would be justified, including weak consumption. Furthermore, RBA noted the supply gap might be wider than assumed, necessitating tighter policy and rates might need to rise if the Board judged policy was not as restrictive as assumed, while it also stated that the Board had “minimal tolerance” for inflation above forecasts and would need more than one good quarterly inflation report to justify rate cut.
• Xpeng (XPEV/ 9868 HK) Q3 (RMB): adj eps -1.62 (prev. -1.61), revenue 10.1bln (prev. 9.91bln), vehicle deliveries 87-91k (+44.6-51.3% Y/Y).
• China’s chip advances stall as US curbs hit Huawei AI products, via Bloomberg.

European bourses opened on a mixed/modestly firmer footing. Thereafter, Russia’s Kremlin said “Russia reserves the right to use nuclear weapons in an event of aggression”. This sparked a safe-haven bid, with equities selling-off to session lows, whilst the JPY and bonds soared to highs. This move has since stabilised, with equities currently residing at lows. European sectors opened entirely in the green, but sentiment has since slipped and now shows a mostly negative picture in  Europe. A clear defensive bias is seen in Europe; Utilities top, whilst Autos and Consumer Products lags. US equity futures are entirely in the red, with sentiment hit following comments via Russian Kremlin that noted it could respond to aggression in a nuclear manner. Goldman Sachs lowers its 12 month Stoxx 600 target to 530 from 540 (currently 502). Cuts FTSE 100 target to 8500 from 8800 (currently 8138)

Top European News

• UK PM Starmer announced the relaunch of UK-India free trade talks, while it was also reported that Starmer met with Japanese PM Ishiba and agreed to start “2 + 2” economic and trade cooperation talks between the UK and Japan.
• ECB’s Panetta says the ECB should move to a neutral monetary stance, or expansionary if necessary; forthcoming change in the US govt adds uncertainty to the inflation outlook. Still a long way from the neutral rate. ECB needs to give more explicit indications of its policy rate intention.
• BoE Governor Bailey says services inflation is still above level that is compatible with on-target inflation. Says BoE must watch services inflation carefully. Says a gradual approach to removing monpol restraint will help observe risks to the inflation outlook.
• BoE Deputy Governor Lombardelli says we have seen a fall in services inflation and wage settlements; sees risks to inflation on both sides.
• BoE’s Taylor says disinflation is unfolding as we should expect.
• BoE’s Mann says forward-looking price and wage indicators have been flat and above target for four months, raises risk of inflation persistence. Says financial market inflation expectations suggest BoE will not get to 2% inflation in the forecast horizon. Latest Budget offers opportunity for firms to realise price increases that are inconsistent with 2% inflation target. Even before the Budget, higher minimum wage was causing firms problems in maintaining wage differentials.
• Moody’s says total industry costs from Britain’s review into motor finance commissions could reach GBP 30bln

FX

• DXY is firmer vs. peers (ex-JPY) after a sluggish start to the session which appeared to be a signal of USD consolidation from its post-election run of gains. However, the risk-off move prompted by Russian Kremlin comments managed to provide some reprieve.
• EUR/USD has been swept up in the broader risk-averse move which provided the USD some reprieve. Today’s EZ HICP (Final) metrics were unrevised, and as such had little impact on the Single-currency. EUR/USD briefly slipped below the bottom end of yesterday’s 1.0529-1.0607 range.
• JPY attempting to claw back some of yesterday’s lost ground vs. the USD with Japanese Finance Minister Kato attempting to lend a helping hand, with familiar jawboning overnight. USD/JPY selling exacerbated with the pair breaking below the bottom end of yesterday’s 153.84-155.35 range due to risk-aversion prompted by comments from the Russian Kremlin.
• GBP struggling against the USD, pulling back below the 1.2650 level and hovers just above yesterday’s trough at 1.2611. The TSC Hearing is currently ongoing at time of publish; so far, BoE’s Mann has repeated her familiar hawkish rhetoric, whilst Governor Bailey largely reiterated comments made at the last BoE meeting.
• Antipodeans are both softer vs. the USD with both currencies hampered by the current risk environment and scaling back some of yesterday’s gains. AUD/USD managed to advance to a high of 0.6523 earlier but has since pulled back below 0.65 (vs. yesterday’s trough at 0.6447).
• PBoC set USD/CNY mid-point at 7.1911 vs exp. 7.2305 (prev. 7.1907).

Fixed Income

• USTs have marched higher in early trade with a safe-haven bid emerging from comments by the Russian Kremlin that it could respond to aggression in a nuclear manner. Fresh US-specific macro drivers are currently lacking in what is set to be a week that contains a light data slate. Dec’24 UST cleared a slew of highs from last week as well as the 110 mark and matched the 12th November high at 110.04.
• Bunds are higher in-fitting with global counterparts as macro updates from the Eurozone remain light for today’s session thus far; focus ultimately lies on Flash PMIs on Friday. Bunds have taken out a slew of highs from last week with the next upside target coming via the 133 mark with the 30th October high just above at 133.02.
• Ahead of the BoE TSC Hearing, the 2038 Gilt auction was fairly weak vs the prior outing (pre-Budget). Gilts topped 94.50, but has since edged back below that level to a current 94.25. The TSC Hearing is currently ongoing at time of publish; so far, BoE’s Mann has repeated her familiar hawkish rhetoric, whilst Governor Bailey largely reiterated comments made at the last BoE meeting.
• UK sells GBP 3.25bln 3.75% 2038 Gilt: b/c 2.74x (prev. 3.28x), average yield 4.558% (prev. 4.131%) & tail 0.6bps (prev. 0.1bps)

Commodities

• WTI and Brent are on the back foot, having initially started the European session with incremental losses. Pressure in the complex accelerated following commentary from Russia’s Kremlin which noted that, “Russia reserves the right to use nuclear weapons in an event of aggression”. On the supply front, Equinor said production has restarted at its Johan Sverdrup oilfield. Brent’Jan 25 sits towards the bottom end of a USD 72.72-73.53/bbl range.
• Precious metals are on a firmer footing continuing the price action seen overnight. XAU specifically caught a bid owing to its safe-haven status, following the aforementioned geopolitical updates via Russia’s Kremlin.
• Base metals began the European session entirely in the green, benefiting from the positive risk tone overnight and amid support pledges by Chinese officials. Some pressure, with sentiment hit following the above geopolitical related headlines.
• Equinor (EQNR NO) says production has restarted at its Johan Sverdrup oilfield; expects the oilfield to produce at 2/3 of normal capacity during morning hours today. Still working to restore full output capacity.
• Chinese October crude iron ore output -4.1% Y/Y at 86.45mln tonnes, according to stats bureau. Alumina output +5.4% Y/Y at 7.43mln metric tons. Lead output -5.3% Y/Y at 661k tons. Zinc output -9.5% at 565k tons.

Geopolitics: Middle East

• Against the backdrop of Amos Hochstein’s visit to Beirut – the US administration is warning “not to read too much” his visit as a sign that a deal may be imminent – as negotiations are ongoing, via Kann News’s Stein
• Iranian Foreign Minister says “We consider the recent Israeli aggression on our territory a new attack and deserves a response from our side”
• Lebanon and Hezbollah agreed to the US proposal for a ceasefire with Israel with ‘some comments’ on content, according to a senior Lebanese politician who stated the US ceasefire proposal is the most serious attempt yet to end the fighting.
• Hezbollah said it bombarded a gathering of Israeli enemy forces south of the town of Khiam, according to Al Jazeera.
• Israeli Foreign Minister urged the UN to pressure Iraq after attacks by pro-Iran factions and said the government of Iraq is responsible for any actions that occur within or from its territory, according to Sky News Arabia and Asharq News.
• Iran’s Foreign Ministry said new EU and UK sanctions against Iran are unjustified, baseless and contradict international law.
• Iranian Ambassador to Russia said there are no obstacles to concluding a strategic cooperation agreement between Russia and Iran, according to Asharq News.

Geopolitics: Ukraine

• Russia’s Kremlin says the updated nuclear doctrine signed by Putin is a “very important text”, “Russia reserves the right to use nuclear weapons in an event of aggression”
• Ukraine reportedly makes first ATACMS strike inside Russia, according to Ukraine press.
• US Ambassador to the UN said on Monday that the US will announce additional security assistance for Ukraine in the coming days, according to Reuters.
• French President Macron said US President Biden’s decision to allow Ukraine the use of US-provided weapons to strike inside of Russia is a good decision, according to Reuters.
• Kremlin spokesperson said Russia is ready to normalise ties with the US but will not tango alone, while a spokesperson also said that Russia’s amendments to its nuclear doctrine have been formulated but not formalised yet, according to TASS.
• Russia and Chinese foreign ministers discussed ‘unprecedented’ strategic bilateral relations on the sidelines of the G20 meeting in Brazil, according to Russian agencies cited by Reuters.
• EU foreign chief Borrell said the role of China is becoming bigger and bigger in the Ukraine war and without Iran and China, Russia could not support its military effort.

US Event Calendar

• 08:30: Oct. Housing Starts MoM, est. -1.5%, prior -0.5%
• 08:30: Oct. Housing Starts, est. 1.33m, prior 1.35m
• 08:30: Oct. Building Permits MoM, est. 0.7%, prior -2.9%, revised -3.1%
• 08:30: Oct. Building Permits, est. 1.44m, prior 1.43m, revised 1.43m

Central Bank Speakers

• 13:10: Fed’s Schmid Speaks on Economic Outlook , Policy

DB’s Jim Reid concludes the overnight wrap

One thing we pointed out in our LT Study was how this era has some uncanny parallels to the end of the last quarter-century 25 years ago. For instance, equities have surged over the last couple of years, with a narrow rally that’s been driven by tech stocks, just like in the dot com bubble. Moreover, the Fed are easing policy in that environment, just like they did in 1998, whilst valuation metrics like the CAPE are currently sitting at historic highs. In light of that, Henry took a look at how the current situation resembles three other periods when valuations were historically high: the dot com bubble, the pre-GFC era, and 2021. You can see the report here.

Risk assets began to stabilise yesterday, with the S&P 500 (+0.39%) picking up again after its decline of more than -2% last week. There wasn’t really a major catalyst behind the moves and it was a fairly quiet day on the whole. But the Magnificent 7 (+1.22%) saw a sizeable outperformance thanks to a +5.62% surge in Tesla’s share price, so that helped to drag up equities more broadly. Those moves for Tesla followed a Bloomberg report that the Trump transition team had said to advisers they’d make a federal framework for self-driving cars a priority for the Transportation Department, so that was very good news from their perspective. The equity gains were reasonably broad beyond tech, with nearly two thirds of the S&P 500 higher on the day, although the Dow Jones (-0.13%) lost ground amid underperformance for industrials. Over in Europe the story was one of small declines, with the STOXX 600 down -0.06%.

Government yields had a topsy-turvy day in the US. At the close 10yr Treasury yields (-2.5bps) and 30yr yields (-0.7bps) were lower and 6-8bps down from their intra-day highs, which saw 30yr yields touch their highest levels since May. The reversal was driven by a decline in real yields, with breakevens higher on the day and the US 2yr inflation swap up +3.1bps to a 7-month high of 2.66%. Overnight, yields on 10yr USTs have slipped -0.8bps lower trading at 4.406%.

This dialing up of investors’ inflation expectations came amid a strong day for oil prices with Brent crude up +3.18% to $73.30/bbl, which in large part reflected an increased focus on geopolitical tensions after the weekend’s news that President Biden authorised Ukraine to use US long-range missiles for strikes inside Russia. Gold (+1.84%) posted its best day in three months, with a stronger day for commodities also facilitated by a decline for the dollar index (-0.39%) for the first time in seven sessions.
Over in Europe, markets closed before the US bond rally took hold, with yields on 10yr bunds (+1.6bps), OATs (+1.1bps) and BTPs (+1.5bps) all inching higher. That came against the backdrop of several ECB speakers yesterday, but there wasn’t much deviation from expectations. For instance, Greece’s Stournaras said that for the December meeting, he thought “25 basis points is an optimal reduction.” And Ireland’s Makhlouf said that he believed “in a prudent and cautious approach”. So that seemed to steer away from speculation about a larger 50bps cut from the ECB in December, and investors moved to dial back the chance of a 50bp cut to just 17% yesterday, down from 23% on Friday.

Elsewhere, the question of appointments to the Trump administration remains a key focus, and we’re still waiting to see who’ll be nominated as the new Treasury Secretary. Interestingly, there was growing speculation about Kevin Warsh yesterday after an initial push over the weekend. He is a former Fed governor during the financial crisis from 2006-11, who previously served in the George W. Bush administration. The other names in the frame recently have been Scott Bessent and Howard Lutnick. A Bloomberg report yesterday evening said that Trump’s transition team is considering pairing Warsh as Treasury Secretary with Bessent as the director of the National Economic Council. Warsh is seen as more hawkish on monetary policy and less protectionist than the other candidates so on the former point the surge on Polymarket.com for the likelihood of him getting the Treasury job (45% as I type) may have been a big factor in the intra-day Treasury rally yeaterday.

Asian equity markets are higher outside of China this this morning with the S&P/ASX 200 (+0.89%) leading the gains with the Nikkei (+0.64%), the KOSPI (+0.14%), the Hang Seng (+0.12%) also higher. On the other hand, mainland Chinese stocks are lagging with the Shanghai Composite (-0.54%) edging lower ahead of the PBOC’s decision on its benchmark loan prime rate later this week. Outside of Asia, US stock futures are indicating a positive start with those on the S&P 500 (+0.13%) and NASDAQ 100 (+0.15%) trading slightly higher.

In central bank news, the minutes from the RBA’s recent policy meeting indicated that the board remains vigilant to upside inflation risks and believes policy needs to remain restrictive as it sees no “immediate need” to change the cash rate.
In FX, the Japanese yen (+0.14%) is has been edging higher (154.42) amid concern of possible government intervention given the current levels. Looking forward, the focus this week is on CPI data for October, due on Friday.

There was very little data to speak of yesterday, although we did get the NAHB’s housing market index from the US. That ticked up to 46 (vs. 42 expected), marking its third consecutive monthly increase, which took the index up to a 7-month high.

To the day ahead now, and data releases include US housing starts and building permits for October. Central bank speakers include BoE Governor Bailey, the BoE’s Lombardelli, Mann and Taylor, the ECB’s Elderson, Muller and Panetta, and the Fed’s Schmid. Finally, earnings releases include Walmart and Lowe’s.

By Russell Clark of the Capital Flows and Asset Markets substack

I started as an emerging market analyst in 2002, and one of the biggest best stocks at the time was Petrochina. It was listed in Hong Kong in 2000, and had done nothing for years, before stating to move in 2003, and rising 1,000% by 2007, before entering a prolonged bear market.

In 2003, Warren Buffett bought 7% of Petrochina, and then slowly began exiting in 2007. The final spike happened after Berkshire Hathaway had sold out fully, and the market believed the overhang was gone. Markets were getting very bullish on emerging markets as the Federal Reserve was beginning to cut interest rates as this was seen as the catalyst for emerging markets in 2002.

The problem with this view was that in 2002, Emerging market bond spreads were very wide, and commodity prices low. By 2007, emerging market spreads were tight, and commodity prices high. Even though the Fed cut rates, emerging markets and Petrochina were not the place to be anymore. However, by early 2009, Emerging market bond spread were attractive again, but as of today, look unappealing.

I was reminded of this by seeing Warren Buffett continuing to reduce his stake in Apple. Buffett has done very well out of Apple. He started building a stake in 2016, and kept increasing. Average cost in USD 37, versus a price today of 225.

Is there any similarity between Apple and Petrochina?

In 2016, US corporate credit spreads were relatively wide as fears of a China devaluation and recession took hold of the market. Today we are plumbing new all time lows in US corporate spreads.

To make this more germane to the analysis, we can look at Apple’s earning yield compared to 5 year treasuries. You can see that 5 year treasury is more attractively priced for the first time since 2007. With tariff threats on all imports, it would also possible to see Apple earnings fall.

But I can see other ways things go wrong from here. US equities tend to do best when commodity markets are weak to falling. Using the CRB Raw Industrial Index, a spike in commodities bodes ill for US equities.

As you should be aware, gold has done well this year, although with a small selloff recently. So why has gold done well, and other commodities poorly?

The key here is that China has so far restrained from stimulus. Using the 12mth Shanghai Interbank Rate which has high correlation to activity, China remains in a funk.

However there is talk of stimulus. The bellwether stock for the Chinese economy are property stocks. Recently The Shanghai Property Sector Index has popped. What I find most interesting about the above and below graph is that in my mind China stimulated when Trump was in power, while they took austerity measures while Biden was in power. It seems to me the China takes the view that you need to negotiate with Trump from a position of strength– which makes sense to me. Did they use the period of Biden in power to husband resources?

Do we have a complete bearish story? Well valuations for US equities are very rich. We have Warren Buffett selling down, and raising cash. China economy is at lows, but with potential to stimulate, and investors remembering the last Trump stint in power and are all in. Its close to a complete story – the mystery, as always, is China.

Can and will they stimulate? I would be watching Chinese equities more than US equities these days.

On Monday the government of Sweden began issuing pamphlets advising its population on how to survive an unexpected disastrous war scenario, at a moment tensions are on edge with Russia, and after weekend reports saying the Biden administration has authorized Ukraine to conduct long-range missile strikes on Russian territory using US-supplied weapon systesm.

Millions of Swedes are receiving the directives, entitled “in case of crisis of war” – which is an updated version of something the Swedish government issued six years ago. But now things are very different, given there is a hot war in Eastern Europe, and given Sweden is NATO’s newest member state. It’s all about being able to survive for a few days or a week, and imagines something like a shock invasion by a foreign hostile power.

The newly updated booklet is said to be twice the size as the one that was issued in the last decade. The other new NATO member, Finland, has also issued its own guidelines to the Finnish population on “preparing for incidents and crisis”. The warnings document how to cope with not just war-time situations where basic services and infrastructure may go offline, but how to survive extreme weather events as well.

According to the BBC, the Swedish pamphlet reflects the new realities of Stockholm having abandoned its historic post-WW2 neutrality: 

For Swedes, the idea of a civil emergency booklet is nothing new. The first edition of “If War Comes” was produced during World War Two and it was updated during the Cold War.

But one message has been moved up from the middle of the booklet: “If Sweden is attacked by another country, we will never give up. All information to the effect that resistance is to cease is false.”

“We live in uncertain times. Armed conflicts are currently being waged in our corner of the world. Terrorism, cyber attacks, and disinformation campaigns are being used to undermine and influence us,” the booklet’s introduction section reads.

“To resist these threats, we must stand united. If Sweden is attacked, everyone must do their part to defend Sweden’s independence — and our democracy. We build resilience every day,” the pamphlet continues. “You are part of Sweden’s overall emergency preparedness.”

The booklet even addresses local collective preparedness, such as citizens banding together to form volunteer defense units, and giving blood, or giving classes on CPR and survival skills.

in the case of Finland, its digital booklet states that the country which shares a border with Russia “has always been prepared for the worst possible threat, war.”

🚨🇸🇪 SWEDEN TELLS CITIZENS TO PREPARE FOR WAR

Sweden is sending 5.2 million “If Crisis or War Comes” pamphlets to households, urging people to stockpile food, water.

The booklet, updated for modern threats, declares, “We will never give up.”

Finland has launched a similar… pic.twitter.com/6COEVILUZ6

— Mario Nawfal (@MarioNawfal) November 18, 2024

Such instructions from Nordic governments, envisioning the worst-case scenarios that could befall the region, have only stepped up since the start of the Ukraine war. 

One 24-year old Finnish student, Melissa Eve Ajosmaki, has told BBC: “Now I feel less worried but I still have the thought at the back of my head on what I should do if there was a war. Especially as I have my family back in Finland.”

Via Middle East Eye

Turkey effectively stopped the Israeli president from attending the COP29 summit in Baku earlier this week by denying permission for his aircraft to enter Turkish airspace, according to several reports citing Azerbaijani and Turkish officials.

On Saturday Israeli President Isaac Herzog’s office announced he was cancelling his planned visit to the climate conference in Baku, Azerbaijan.

The president’s office cited “security considerations” as the reason, without elaborating further. But Ynet cited officials in Azerbaijan on Sunday saying the trip was cancelled because Turkey refused to allow the president’s plane to enter its airspace.

An unnamed Azerbaijani official reportedly said that Israel and Turkey engaged in “intensive negotiations through diplomatic channels that lasted for several days but did not yield results.”

The rest of the Israeli delegation to the conference arrived in Baku on November 11, having travelled there on commercial flights through Georgia.

Al-Monitor reported that Turkish officials confirmed that the government denied an official Israeli request for Herzog’s aircraft to fly through Turkish airspace.

Deteriorating relations

This comes after Turkish President Recep Tayyip Erdogan announced on Wednesday that Turkey has severed all ties to Israel.

“The government of the Republic of Turkey, under the leadership of Tayyip Erdogan, will not continue or develop relations with Israel,” Erdogan said. “[Our ruling coalition] is resolute in its decision to cut ties with Israel, and we will maintain this stance in the future as well.”

“We, as the Republic of Turkey and its government, have currently severed all relations with Israel.”

BREAKING🚨

Israeli President Herzog did not attend #COP29 because 🇹🇷 prohibited his plane to enter its airspace.
Turkey also prohibits Cyprus to operate flights across, into and within its airspace, hence violating the 9 freedoms:
▪️Right to overfly a foreign country without… pic.twitter.com/OO3VnfHZ8E

— Harry Theocharous (@TheocharousH) November 17, 2024

Turkish-Israeli relations have deteriorated significantly since the Hamas-led attack on Israel on October 7, 2023 and Israel’s ensuing war on Gaza, which has killed more than 43,000 Palestinians.

Earlier this year, Turkey intervened in a genocide case against Israel at the International Court of Justice (ICJ) in support of Palestine and advocated for an arms embargo against Tel Aviv. Now it seems relations have reached their lowest point yet.

Where’s John Legere in a pink t-shirt when you need him?

Among the multiple stories over the last few weeks about Chinese intelligence and hackers either attempting to, or outright gaining access, to U.S. cell phone networks (with reports stating President Trump and his team were targeted), comes news of a hack of T-Mobile’s network. 

T-Mobile’s network was reportedly breached in a Chinese cyber-espionage campaign targeting multiple U.S. and international telecom companies, according to the NY Post, citing the Wall Street Journal.

Hackers tied to a Chinese intelligence agency accessed the network to spy on high-value intelligence targets, though the timing of the attack was not disclosed.

The NY Post, citing WSJ, wrote that the extent of data taken from T-Mobile customers remains unclear. 

The FBI and CISA recently revealed that China-linked hackers intercepted surveillance data meant for U.S. law enforcement after breaching several telecom firms.

Earlier reports indicated that Chinese hackers accessed networks of broadband providers, including Verizon, AT&T, and Lumen, extracting data from systems used for court-approved wiretapping.

“T-Mobile is closely monitoring this industry-wide attack,” a spokesperson for the company said. “At this time, T-Mobile systems and data have not been impacted in any significant way, and we have no evidence of impacts to customer information.”

Sure. 

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

Hundreds of millions of people globally have become diabetic over the past 30 years, leading the World Health Organization (WHO) to call for “urgent action” to deal with the health crisis.

The number of adults living with diabetes worldwide has more than quadrupled since 1990, the WHO said in a Nov. 13 statement citing the results of a recent study it supported. An estimated 828 million adults were living with the condition worldwide in 2022, an increase of 630 million from 1990.

The lowest prevalence of diabetes was in “Western Europe and East Africa for both sexes, and in Japan and Canada for women.” The highest prevalence was in Polynesia and Micronesia, certain nations in the Caribbean, North Africa, and the Middle East, as well as Pakistan and Malaysia.

In total, 14 percent of the world’s adults had diabetes in 2022, double the seven percent 30 years back.

“We have seen an alarming rise in diabetes over the past three decades, which reflects the increase in obesity, compounded by the impacts of the marketing of unhealthy food, a lack of physical activity, and economic hardship,” said WHO Director-General Dr. Tedros Adhanom Ghebreyesus.

“To bring the global diabetes epidemic under control, countries must urgently take action. This starts with enacting policies that support healthy diets and physical activity, and, most importantly, health systems that provide prevention, early detection, and treatment.”

Nearly 450 million adults aged 30 and above with diabetes remained untreated in 2022. This represented 59 percent of all adults who have the condition, a 3.5-fold jump. Ninety percent of untreated adults were living in low- and middle-income countries.

According to data from the U.S. Centers for Disease Control and Prevention (CDC), around 38 million Americans were living with diabetes in 2021, which was roughly one in 10 individuals. One in five didn’t know they had the condition. Nearly 100 million, or more than one in three Americans, suffered from pre-diabetes.

A bipartisan group of senators in June announced legislation aimed at improving the early detection and screening of type 1 diabetes, titled “Strengthening Collective Resources for Encouraging Education Needed (SCREEN) for Type 1 Diabetes Act.”

Early identification “can prevent life-threatening conditions like diabetic ketoacidosis and potentially allow for the use of therapeutics to delay the clinical onset of the condition, helping to improve patients’ quality of life and reliance on insulin,” said Sen. Susan Collins (R-Maine).

Diabetes Burden in America

A report from the American Diabetes Association last year found that the country’s annual cost of the illness was nearly $413 billion in 2022, which included more than $306 billion in direct medical costs.

Out of every $4 in health care spending in the United States, $1 was used for people diagnosed with diabetes, it said.

“In addition to its enormous physical and health burden, diabetes also carries an untenable cost burden that is often disproportionately borne by vulnerable and underserved communities,” said Charles Henderson, CEO of the organization.

He pointed out that the medical costs for such people have risen by 35 percent over the previous decade. “Reducing the cost of diabetes is essential to improving the lives of all people with diabetes.”

Several studies have shown that certain lifestyle adjustments can go a long way in managing the condition. For instance, a large-scale study involving around 103,000 adults who were followed up for over a seven-year period found that the time of eating breakfast could influence diabetes risk.

Individuals who ate their breakfast after 9 a.m. were found to have a 59 percent higher risk of developing type 2 diabetes compared to those who regularly ate breakfast before 8 a.m.

Another study found that intermittent fasting may help control blood sugar better than popular diabetes medications.

This month, a group of senators wrote a letter to senate leaders, seeking reauthorization for the Special Diabetes Program (SDP). Funding for the nearly three-decade-old program is set to expire by the end of the year.

SDP funds research on the prevention and cure of type 1 diabetes. “Research funded by the SDP is leading directly to the development of new insights and therapies that are improving the lives of those with diabetes and accelerating progress toward curing and preventing the disease,” the lawmakers wrote.

Early last week several media reports and sources saud that the government of Qatar ordered the leaders of Hamas to leave the country, following pressure from Washington, kicking off speculation over where Hamas leadership would go.

A fresh Israeli media report alleged that Turkey is now hosting them. “Senior members of Hamas’s abroad leadership left Qatar last week for Turkey, an Arab diplomat told The Times of Israel on Sunday, after Doha said it was walking away from efforts to mediate an end to the war in Gaza,” the report said.

“The Arab diplomat, who spoke on condition of anonymity, downplayed the significance of the move for the terror group, stressing that Hamas’s leadership abroad already spends much of its time in Turkey when they are not holding meetings in Qatar,” the report continued.

If accurate it would shine a spotlight on NATO member Turkey and its dealings with a group designated by the US and Europe, and many countries internationally, as a terrorist organization.

But this is a charge which Turkey is vehemently denying on Monday, per Reuters:

A Turkish diplomatic source dismissed on Monday reports that Hamas had moved its political office to Turkey from Qatar, adding that members of the Palestinian militant group only visited the country from time to time.

The diplomatic source said: “Hamas Political Bureau members visit Turkey from time to time. Claims that indicate the Hamas Political Bureau has moved to Turkey do not reflect the truth.”

Hamas also rejected the reports that its offices are being set up in Turkey as “rumors the (Israeli) occupation is trying to publish from time to time.”

But if the reports are true, Turkey and Hamas would have every incentive to lie about it – given Israeli spies have long waged a surveillance and assassination campaign targeting Hamas operatives living and working abroad.

Just days ago President Erdogan announced that Turkey has cut all ties with Israel. “We, as the State and Government of the Republic of Turkey, have cut off relations with Israel. We do not have any relationship with Israel at this point. Period,” he said.

He and other top Turkish officials have decried genocide of Palestinians by the Israeli military. Erdogan said further, “As you know, intense efforts are being made to keep the pressure on Israel alive and to take coercive measures against this country on the basis of international law We show it.”

Turkey even recently blocked an Israeli airplane carrying the Israeli president from traversing over its airspace, and so he wasn’t able to attend the COP29 summit in Baku, Azerbaijan. Erdogan has long been known to cozy up to Hamas leaders, even in photographed, well-publicized events.