Inflation across the Eurozone surged to 5.1% in January from 5% in the previous month, despite optimistic expectations for a sharp drop to 4.4%, data from Eurostat showed on Wednesday. Inflation is now more than twice the ECB’s 2% target.

The latest growth reportedly reflects the hottest rate of inflation across the 19 countries that have shared the euro since the records began.

Meanwhile, the single currency jumped by 0.3% to $1.13050, touching a one-week high to the US dollar, on the expectation that the ECB would signal a faster path for policy tightening as early as Thursday.

READ MORE: Eurozone inflation soaring ‘significantly higher’ – ECB

The ECB’s Governing Council is scheduled to gather this week, with an announcement due on Thursday afternoon. The soaring cost of living in Europe is putting pressure on the regulator to tighten money printing.

The ECB is expected to decide whether to keep implementing extremely loose monetary policy or keep running against signals from the US Federal Reserve and the Bank of England that they are planning to launch a rapid rate hike cycle this year to tame the inflation growth.

ECB President Christine Lagarde had previously signaled that a rate hike was unlikely in 2022. Interest rates in the Eurozone are currently at historic lows, however, markets are pricing in around two hikes from the regulator this year.

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US Commerce Department data shows the nation’s economy grew by 5.7% last year – its best performance since 1984 – as it roared back from the pandemic lockdowns. However, analysts expect the growth to slow this year, as the government scales back stimulus spending and the Federal Reserve raises interest rates. Other risks include high inflation and threats from new Covid variants, including Omicron, they say.

“The economy is decelerating and downshifting,” the chief economist for the Americas at Natixis and ex-chief economist for the National Economic Council under former President Donald Trump, Joseph LaVorgna, told CNBC. “It’s not a recession, but it will be if the Fed tries to get too aggressive,” he said.

Statistics show that GDP surged by an impressive 6.9% in the fourth quarter of 2021, while the measure of all goods and services produced in the country grew 5.7% on an annualized basis.

Much of that end-of-year gain was fueled by an inventory rebuild that “contributed 4.9 percentage points to the total, led primarily by the auto sector,” the chief international economist at ING, James Knightley, was quoted as saying by CNN. Inventories were responsible for almost all of the third quarter’s 2.3% GDP increase.

“Given ongoing supply disruption we can’t count on this continuing to support growth in coming quarters,” Knightley said.

Tuesday’s ISM Manufacturing survey showed that the pace of new orders, while still showing gains, is slowing substantially.

Meanwhile, Goldman Sachs has trimmed its first-quarter GDP outlook to 0.5%, down from 2%. The bank also cut its full-year view to 3.2%, well below the current 3.8% consensus.

“Growth is likely to slow abruptly in 2022, as fiscal support fades and, in the near term, virus spread weighs on services spending and prolongs supply chain disruptions,” Goldman economist Ronnie Walker said in a note for clients seen by CNBC. “Q1 growth is likely to be particularly soft because the fiscal drag will be accompanied by a hit from Omicron.”

Bank of America also downgraded first-quarter GDP growth to 1% from 4%, and cut its full-year forecast to 3.6% from 4%.

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Gazprom has resumed gas supplies to Europe through Ukraine, booking 109 million cubic meters of daily pipeline capacity, Bloomberg reported on Tuesday. Under the five-year contract, which expires in 2024, the company is expected to deliver 40 billion cubic meters of gas per year to Europe via Ukraine. The news triggered a long-anticipated decline in gas prices, with March futures dropping below $900 per thousand cubic meters.

January sales of Russian natural gas outside the former Soviet Union saw a massive drop of 41.3% year-on-year, while the country’s overall production has increased, Russian energy major Gazprom reported on Tuesday.

European inventory levels have reportedly sunk to historic lows over the past several months, sending energy prices in the region soaring, while some EU officials are accusing Gazprom of deliberately withholding supplies. However, Gazprom says additional supplies were not booked before February 2.

READ MORE: Can Europe survive without Russian gas?

“The Company’s gas deliveries are carried out as requested by consumers in full compliance with contractual obligations,” Gazprom said in a press release.

Gazprom said earlier this month it hadn’t booked any monthly transit capacity via the Yamal-Europe gas pipeline for February. However, the company may still book the route via daily auctions.

The pipeline, which usually accounts for about 15% of Russia’s annual gas exports to Europe and Turkey, has been working in reverse mode since late December, putting additional pressure on European energy prices.

Meanwhile, working gas inventories in Europe’s underground gas storage facilities were lagging behind last year’s level by 27.2% as of January 30, Gazprom said on Tuesday, citing data from Gas Infrastructure Europe.

Over 81% of the fuel delivered during the summer is already pumped out from the facilities, according to the company, while “the total amount of working gas inventories in European UGS facilities was as low as 38.1 billion cubic meters on January 30, falling by 2.7 billion cubic meters below the historical minimum for this date.”

READ MORE: Europe faces full-blown energy crisis

Separately, data of the booking platform seen by Reuters confirmed that Gazprom was set to resume westbound gas flows from Poland to Germany this week via the Yamal pipeline, restoring the normal flows after the route was reversed. Moreover, data from German network operator GASCADE reportedly confirmed the expectations for renewal of the westbound flows for eight hours initially.

Brussels and Washington have repeatedly raised concerns over potential disruptions in Russian energy supplies in response to sanctions the US and its allies are threatening to impose on the country in the event of a military assault on Ukraine. The Russian government denies having plans to invade the neighboring state, accusing the West of ramping up tensions through its provocative rhetoric.

European officials have protracted the certification of Russia’s Nord Stream 2 gas pipeline, which could have alleviated the energy shortages on the continent.

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Electric car maker Tesla will recall all 53,822 vehicles with the ‘full self-driving’ feature, as they do not always come to a complete stop at intersections under certain conditions.

The move will affect Model S, X, 3 and Y vehicles, which are fitted with the company’s Full Self-Driving Beta (FSD Beta) software, according to the National Highway Traffic Safety Administration (NHTSA).

The agency said the assist feature has resulted in the cars at times performing ‘rolling stops’ instead of coming to a complete stop at intersections, posing a safety risk.

Tesla agreed to disable the function following meetings with NHTSA representatives last month. ‘Rolling stops’ will be removed from the program as part of a software update planned for release online later in February.

The function is not a glitch – the FSD Beta has been able to slowly roll past stop signs since the release of the first version in October 2020. It was only activated in situations of good visibility with no moving cars, bicyclists, or pedestrians around.

“There were no safety issues” with the rolling stop function, Tesla CEO Elon Musk tweeted. “The car simply slowed to ~2 mph continued forward if clear view with no cars or pedestrians.”

Tesla said it was not aware of any warranty claims, crashes, injuries, or fatalities caused by the function.

The company has always insisted that its ‘full self-driving’ feature requires a human driver to be ready to take control of the vehicle at any point.
Tesla already recalled almost 12,000 in the US last November over a communication error that could cause a false forward-collision warning or unexpected emergency brake activation.

Last week, the NHTSA also requested additional information as part of an investigation into Tesla’s decision to enable passengers to play video games on the front center touchscreen, which could allegedly distract the driver. The massive probe affects around 580,000 vehicles.

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US national debt exceeded $30 trillion for the first time on Tuesday, spurred on by high borrowing during the Covid-19 pandemic, according to data from the US Treasury Department.

Japan and China remain the top foreign creditors, holding $1.3 trillion and $1.08 trillion in US Treasuries respectively, and are owed interest on all the money that has been borrowed. Nearly $8 trillion of the US’ debt is owed to foreign entities, which – aside from Japan and China – also include major creditors like the United Kingdom, Luxembourg, Ireland, Brazil, Canada, France, India, and Belgium, as well as Taiwan and Hong Kong.

A further $6.5 trillion is owed by the US federal government to itself, mostly to Social Security trusts and the Military Retirement fund. Over the course of the pandemic, the Federal Reserve also doubled its balance sheet to $8.9 trillion by aggressively buying trillions of dollars in Treasury bonds and securities.

The shocking number was reached far sooner than anticipated, with US officials and economists failing to predict the Covid-19 pandemic and subsequent response, which inflated government spending, and subsequently, national debt by as much as $7 trillion since the end of 2019.

The US budget deficit totaled $2.77 trillion for fiscal year 2021, falling just short of the previous year’s record-breaking numbers, but still in line with the massive Covid-era spending. For the fiscal year of 2020, the US posted an eye-watering deficit of $3.13 trillion.

READ MORE: Russia continues US debt dump-a-thon

The $30 trillion mark “arrived years earlier than previously projected,” according to the New York Times, due to government coronavirus programs which “funded expanded jobless benefits, financial support for small businesses and stimulus payments” – all of which was paid for with borrowed money.

David Kelly, the chief global strategist for JPMorgan Asset Management, told CNN that the debt means the US is “going to be poorer in the long term” and claimed “American taxpayers will be paying for the retirement of the people in China and Japan, who are our creditors.”

Peterson Foundation CEO Michael Peterson, however, explained that the “structural problems we face fiscally existed long before the pandemic” and that Covid-19 merely “exacerbated the problem.”

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Anglo-Australian mining multinational Rio Tinto released a shocking report on Tuesday, revealing that racism, sexism, harassment and sexual assault are rife among its global workforce of 47,500.

The report came as a result of an external review that the mining giant commissioned in 2021 after a string of complaints and scandals, including the blowing-up of an ancient Aboriginal site in Western Australia to expand an iron ore mine.

According to the report, nearly half of the company’s employees said they had been bullied, while racism was found to be common across a number of areas. The survey also revealed that “people working in a country different to their birth experienced high rates of racism, and that 39.8% of men and 31.8% of women who identify as Aboriginal or Torres Strait Islander in Australia experienced racism.”

The results were “disturbing,” according to Rio Tinto Chief Executive Jakob Stausholm, who said the company would implement all 26 recommendations from the report that was overseen by Australia’s former sex discrimination commissioner Elizabeth Broderick.

“The eye-opener for me was twofold,” Stausholm said, as quoted by Reuters. “I hadn’t realised how much bullying exists in the company and secondly that it’s quite systemic – the three issues of bullying, sexual harassment and racism… that’s extremely disturbing.”

Headquartered in London, Rio Tinto employs people in 35 countries. Its workplace review reportedly involved more than 10,000 respondents to an online survey, interactive group and individual sessions, and a call for written entries.

The findings are the latest blow to the corporation that has been trying to repair its image after it demolished a 46,000-year-old sacred Indigenous site in Australia to expand an iron ore mine. In 2020, the backlash over the destruction forced out former CEO Jean-Sebastien Jacques.

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From February 1, German car manufacturer Daimler AG is formally changing its name to Mercedes-Benz Group AG. The rebranding, announced last week, is the latest in a string of structural changes for the automaker.

Last year, the company announced that its truck and bus business would be spun off as Daimler Truck AG. The new company is now listed separately on the Frankfurt Stock Exchange. The move, approved by Daimler AG stockholders in October, resulted in creating two independent companies, each with their own management and chairman.

The step is expected to help the company to unlock shareholder value for both divisions and tap into the full potential of its business in a zero-emissions, software-driven future.

“We have a real chance to raise the multiple,” Daimler CEO Ola Kaellenius said last week, providing no details on a specific target valuation for the company, which is currently worth just under €77 billion ($87 billion).

READ MORE: Luxury car maker has no spare parts to fix fire-risk issue

Last year, the company reportedly sold over 2.4 million cars, CUVs, SUVs, and vans despite the supply crunch that led to major chip shortages across the industry. Moreover, Daimler reportedly set sales records for HEVs, PHEVS, and EVs, as well as high-end Maybach, AMG, and G-Class vehicles.

The automaker is now seeking to change its car line-up to one powered entirely by electric motors by 2030, and gradually shift toward a direct sales model to better control pricing, and increase net revenue per vehicle as well as from digital services. It is also planning to spend some $68 billion on its transformation between 2022 and 2026.

As part of the new strategy, the producer will keep developing electric vehicles, vans, SUVs, luxury cars, and self-driving cars. Meanwhile, Daimler is expected to focus on zero-emission drivelines for trucks and buses, and integration of autonomous driving technology into its heavy-duty vehicles.

The Daimler-Benz alliance traces its origins to Carl Benz, who founded Benz Cie in 1883, and to Gottlieb Daimler and Wilhelm Maybach, who launched Daimler Motoren Gesellschaft in 1890. Daimler first used the Mercedes name in 1902, and is named for the daughter of Daimler dealer Emil Jellinek. The first Mercedes-Benz branded vehicles were produced in 1926, shortly after the merger of the two companies into Daimler-Benz.

In 1998, Daimler-Benz AG merged with the Chrysler Corporation to become DaimlerChrysler. When Daimler sold Chrysler to Cerberus in 2007, the corporation changed its name to Daimler AG.

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The latest hysteria around the uneasy relationship between Russia and Ukraine has reportedly failed to scare global investors away from Russia’s debt. International investment majors like Goldman Sachs, BlackRock, Fidelity and Pimco are betting a diplomatic solution could boost interest earnings.

Yields on Russian government and corporate bonds have reportedly surged since the beginning of the year, with the spread between Treasuries and 10-year local-currency sovereign debt rising to 7.8 percentage points at the peak.

The total return on a local-currency 10-year sovereign bond was 6.3% in 2020 and 6% in 2021, versus 1.92% and 0.9% for the equivalent US Treasury note.

Meanwhile, the Russian ruble has depreciated 3.5% against the greenback so far this year and was trading at its weakest level in more than a year last week, before recovering moderately. The Central Bank of Russia suspended its planned foreign-exchange purchases on Monday in an attempt to support the domestic currency. The regulator has hiked interest rates seven times since March 2021, to tame the surging inflation due to the pandemic.

READ MORE: Is the plan to bankrupt Russia working?

Russian bonds reportedly make up 7% of a popular emerging-market debt index run by JPMorgan Chase Co. that is used as a benchmark by many fund managers.

“Russian assets could have a big rally back,” Abrdn PLC’s Viktor Szabo, who continues to hold some ruble-denominated Russian sovereign bonds, said, as quoted by WSJ. “It’s not so easy for investors to fully walk away.”

Russia’s current-account surplus increased by 3.5 times in 2021 through November, boosted by rallying crude prices. In January, the country’s international reserves rose to an all-time high of nearly $640 billion. Russia also enjoys a relatively small debt load, at 17% debt-to-GDP. Those factors keep luring investors, who see the underlying financial strength as very promising.

Some of the world’s biggest investors are still sticking to positions in Russian debt.

READ MORE: Will Ukraine crisis destroy Russian economy?

“My base case is that there likely won’t be a full invasion. We’re in a situation where you still have this frozen conflict, since 2014,” Uday Patnaik, head of emerging-market debt at Legal General Investment Management, who bought Russian sovereign bonds maturing in 2042 last week, told media.

A complete ban on trading Russia’s government debt was included in the debated list of potential sanctions that Washington and its allies have pledged to introduce against Moscow in case of a military assault in Ukraine. Russian authorities have rejected the idea of war with Ukraine, accusing Western officials of provocative rhetoric that just ramps up tensions.

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The world’s second-biggest producer of liquified natural gas (LNG), Qatar, has reportedly requested that the European Union restrict the reselling of its gas outside the bloc, if it is to provide emergency shipments in the event of a disruption of deliveries from Russia.

“Qatar’s supply wouldn’t be conditional on requests. But the issues need to be dealt with to ensure long-term and short-term solutions for Europe’s LNG crisis,” unnamed sources briefed on the talks said, as quoted by Reuters.

The news comes amid the continued speculation fueled by the US that Russia is preparing to invade Ukraine. In the event of a military conflict, Moscow has been threatened with severe economic sanctions that may target the country’s energy exports.

Russian gas supplies account for nearly 40% of Europe’s consumption. Any interruption will inevitably exacerbate the existing energy crunch amid the rapid recovery of major economies after the pandemic-related slowdown.

READ MORE: Can Europe survive without Russian gas?

Although Qatari producers lack enough spare gas, Doha has pledged to divert some volume from its Asian consumers with mediation from Washington. However, sources told Reuters that no such request has so far been made.

Qatar also wants the EU to conclude a 2018 investigation into the country’s long-term contracts, which the European Commission had said might be inhibiting the free flow of gas in Europe and its single gas market.

“That will ensure the EU can enter into long-term contracts with Qatar and others, instead of more costly spot contracts or searching for short-term solutions during a crisis,” the source said, as quoted by the agency.

Doha is also asking for guarantees that EU member states will divert any surplus LNG only within the bloc.

“If not implemented, emergency shipments to the EU could be resold as spot shipments for a profit out of the EU, basically prolonging the energy shortage in the EU,” the source said.

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Gas reserves in Europe nosedived to historically low levels this month. According to data by Gas Infrastructure Europe, consumption from storage facilities this January is one third more than the average for the previous five years.

Experts have been raising concerns about the risk of full supply disruption to the EU if tensions between Moscow and Kiev escalate. The European Union receives roughly 40% of its gas via Russian pipelines, several of which run through Ukraine.

Statistics showed that storage facilities were 39.65% full of gas as of January 27. This is the first time that inventories dropped below the 40% mark. The level is 15.6 percentage points below the five-year average.

Typically, Europe’s gas inventories don’t fall even to half until about early-to-mid February. During some mild winters, the inventories don’t sink below midpoint until early March.

This month, the weather was very mild in Europe, but stockholders decided to use reserves to protect against high prices. In many contracts with suppliers, an exchange index “for a month ahead” is used, and now the price of its execution is at an all-time high. On average, gas was traded at $1,310 per thousand cubic meters last month at the TTF hub, with a maximum value of up to $2,138. Under such conditions, buying gas on the spot market at $976 per thousand cubic meters on average looks like a good solution, experts say.

The defensive behavior of importers has also seriously reduced the physical import of gas to Europe. In the first half of January, Gazprom’s exports to non-CIS countries fell by 40%. However, analysts note that export volumes may change as early as February as prices stabilize.

According to the experts, the arrival of liquefied natural gas (LNG) cargos in Europe has alleviated the energy crunch. Last week, Europe’s gas transportation system received approximately 434 million cubic meters, a record for that date.

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