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Russia has stockpiled missiles for winter attack on Ukraine, says Nato

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Russia has stockpiled missiles for winter attack on Ukraine, says Nato

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Russia has built up a large stockpile of missiles and intends to use them in a bid to destroy Ukraine’s power and heating infrastructure in the coming months, Nato’s secretary-general has warned.

With the front line largely frozen after Ukraine’s autumn counteroffensive failed to make significant gains, Kyiv has stepped up calls for more air defence supplies from its western allies as it girds for another winter bombardment.

“Russia has amassed a large missile stockpile ahead of winter, and we see new attempts to strike Ukraine’s power grid and energy infrastructure, trying to leave Ukraine in the dark and cold,” Nato secretary-general Jens Stoltenberg told reporters in Brussels on Wednesday.

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“We must not underestimate Russia. Russia’s economy is on a war footing,” he said following a meeting of allied foreign ministers and their Ukrainian counterpart.

The warning from the head of the US-led military alliance, which Ukraine has applied to join, comes as EU countries and US lawmakers continue to squabble over respective new financial support packages for Kyiv proposed by Brussels and the White House, raising questions on the longevity of western backing as Russia’s invasion grinds on.

Antony Blinken, US secretary of state, said he saw “no sense of fatigue” among Nato members regarding support for Ukraine.

Russia is planning to spend Rbs10.8tn ($122bn) on defence next year, three times the amount allocated in 2021, the year before the invasion, and 70 per cent more than was planned for 2022, according to a bill on Russia’s budget that President Vladimir Putin signed on. The enormous sums in Russia’s record Rbs36.6tn budget for next year will take defence spending to 6 per cent of gross domestic product.

Arms manufacturers are working three shifts a day to meet the defence ministry’s orders. Several civilian factories have shifted to defence production, as well as some non-industrial sites including a bakery that now makes drones.

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Putin told arms makers in September to “raise production capacity in the shortest possible time, keep facilities as busy as possible, optimise technological cycles, and cut down production time without lowering quality”.

Russia’s intelligence agencies have also stepped up their operations to import western dual-use technology — goods that have both potential civilian and military applications — for the defence industry.

The rush for parts has forced Russia to seek ways around western sanctions and export controls by smuggling western-made technology through third countries such as Turkey, according to western officials.

Despite Putin’s orders, Russia is not putting an emphasis on quality, accepting whatever parts arms manufacturers can get their hands on to increase missile production, western officials say — even if that makes them less accurate.

A senior Ukrainian intelligence official told the Financial Times that Russia was now receiving frequent shipments of munitions from Iran and North Korea, including Iranian one-way attack drones and North Korean artillery shells and rockets.

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The artillery is arriving in quantities that will ensure Russian troops can at least continue fighting at a level consistent with the hostilities in recent months, while the drones are likely to be used along with long-range missiles in Russia’s attacks on Ukraine’s critical infrastructure over the winter months.

Stoltenberg’s remarks come after Russia launched its biggest drone attack of the war on November 25, targeting Kyiv’s energy infrastructure and signalling what Ukrainian officials fear marked the start of a winter air campaign.

Ukrainian President Volodymyr Zelenskyy on Tuesday said his country’s air defences have had a success rate of more than 90 per cent in intercepting Russian missiles and drones in the latest wave of attacks. But he said Kyiv still needed more help from the west to get through the tough winter ahead.

“There is a clear need to develop and reinforce our mobile firing groups, as well as to get all highly effective air defence systems [from western partners],” Zelenskyy said.

Stoltenberg said Russia was “now weaker politically, militarily and economically” than before the February 2022 invasion and had “lost a substantial part of its conventional forces. Hundreds of aircraft. Thousands of tanks. And more than 300,000 casualties.”

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Oleksandr Lytvynenko, Ukraine’s chief of foreign intelligence, wrote in a rare public report on the war last week that Russia’s military had been weakened but that Putin had set his economy on a war footing, significantly increasing its arms production which is likely to continue at least until 2026.

“The Kremlin believes that it has enough resources for hostilities with Ukraine at the current level for a long period,” he said. “At the same time, Moscow is convinced that Ukraine’s internal resources are allegedly ‘approaching complete exhaustion’.”

Russia’s goals in Ukraine, to gain as much territory as possible, remain unchanged, he added. Going into winter, the conflict had now fully attained the “stage of a war of attrition”, Lytvynenko said.

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Trump Can Retain Control Of National Guard In LA, Appeals Court Rules

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Trump Can Retain Control Of National Guard In LA, Appeals Court Rules

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A federal appeals court on Thursday night ruled that the California National Guard troops—deployed in Los Angeles last week amid protests against the federal government’s crackdown on immigrants—can remain under President Donald Trump’s control while the state’s legal challenge against the deployment moves forward.

Key Facts

The Ninth Circuit Court of Appeals ruled that on matters such as federalizing the California National Guard, any decision must be “highly deferential” towards the president, and the court concluded that “it is likely that the President lawfully exercised his statutory authority.”

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However, the ruling disagreed with the White House’s primary argument that such a matter “is completely insulated from judicial review.”

The appellate court ruling blocks an already paused ruling issued by U.S. District Judge Charles Breyer that ordered the president to “return control of the California National Guard to the Governor of the State of California forthwith.”

The ruling only focused on the issue of presidential authority and did not address the claim made in Trump’s order that the protests amounted to a “form of rebellion against the authority of the Government of the United States.”

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How Have California Officials Reacted To The Ruling?

California Attorney General Rob Bonta issued a statement saying, “While it is disappointing that our temporary restraining order has been stayed pending the federal government’s appeal, this case is far from over…our state and local law enforcement officers responded effectively to isolated episodes of violence at otherwise peaceful protests and the President deliberately sought to create the very chaos and crises he claimed to be addressing.” Gov. Gavin Newsom wrote on X: “The court rightly rejected Trump’s claim that he can do whatever he wants with the National Guard and not have to explain himself to a court. The President is not a king and is not above the law. We will press forward with our challenge to President Trump’s authoritarian use of U.S. military soldiers against citizens.”

How Did Trump React To The Ruling?

In a post on his Truth Social platform, the president hailed the ruling as a “BIG WIN,” and attacked the California Governor, saying: “The Judges obviously realized that Gavin Newscum is incompetent and ill prepared.” Trump then signaled he could deploy forces to tackle protests in other states, saying: “this is much bigger than Gavin, because all over the United States, if our Cities, and our people, need protection, we are the ones to give it to them should State and Local Police be unable, for whatever reason, to get the job done.”

Crucial Quote

The appeals court ruling noted that precedent from earlier rulings cited by the Trump administration, “does not compel us to accept the federal government’s position that the President could federalize the National Guard based on no evidence whatsoever, and that courts would be unable to review a decision that was obviously absurd or made in bad faith.”

Further Reading

Trump Keeps Control Of National Guard In Los Angeles After Appeals Court Pauses Ruling (Forbes)

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Video: How the L.A. Port got hit by Trump’s Tariffs

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Video: How the L.A. Port got hit by Trump’s Tariffs

New York Times reporter Ana Swanson reports from the Los Angeles Port, the largest port in the Western Hemisphere as well as the place that first saw the signs of Trump’s tariff war. The Port of Los Angeles is significant because of our trade relationship with China in particular, which is why The Trump administration’s 145% tariffs on the country resulted in lower volume at the port. Ana Swanson explains what the port illustrates about U.S. trade and how what’s felt at the Port of Los Angeles will soon be felt by U.S. consumers.

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Swiss central bank cuts interest rates to zero

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Swiss central bank cuts interest rates to zero

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The Swiss National Bank has cut interest rates by a quarter point to zero but did not go so far as negative rates, as it battles to restrain its currency, which has surged on global trade tensions. 

It is the first time that the Alpine country, which is one of the few globally to experiment with negative rates, has an interest rate of zero as it tackles lagging inflation and a surging Swiss franc, a haven currency that investors have bought up amid US President Donald Trump’s trade war.

The cut comes after annual inflation in Switzerland dipped to minus 0.1 per cent in May, the first negative reading in four years. The appreciating Swiss franc — up 10 per cent against the dollar this year — has slashed the cost of imports, dragging down consumer prices.

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The Swiss franc strengthened after Thursday’s expected cut, with the dollar down 0.2 per cent against the franc by afternoon trading at SFr0.817.

A minority of traders had been betting on a larger, half-point cut, according to levels implied by the swaps markets. The franc’s rally after Thursday’s decision was prompted by those bets being “unwound”, said analysts at BBH.

SNB chair Martin Schlegel said at a press conference that the bank would “not take a decision to go negative lightly”. The central bank would also have to take into account the interests of savers, pension funds and others, he said.

Traders slightly trimmed their bets on further rate cuts after Schlegel’s remarks, and were putting a roughly 60 per cent chance that the SNB will cut again to minus 0.25 per cent by March next year.

Switzerland’s two-year government bond yields, which are sensitive to movements in rate expectations, rose 0.09 percentage points to minus 0.10 per cent.

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The SNB has also repeatedly flagged financial stability risks from soaring valuations for Swiss property in a lower interest rate environment.

Schlegel did not, however, rule out a move into negative territory, with global trade turmoil possibly forcing the bank down that path in the months ahead.

“It sounds like they are going to play it by ear, which slightly dents market conviction on negative rates,” said Francesco Pesole, an FX strategist at ING.

The so-called Swissie’s sharp rise this year has complicated policymaking. The SNB is attempting to ease pressure without triggering accusations of currency manipulation from the US, which placed Switzerland on a watchlist during Trump’s first term. Analysts say rate cuts are a diplomatically safer route than direct FX intervention. 

The SNB’s decision contrasts with the Federal Reserve’s continued wait-and-see approach. The Bank of England also held rates at 4.25 per cent at its latest meeting.

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However, Norway’s central bank unexpectedly cut borrowing costs on Thursday, loosening monetary policy for the first time since the start of the Covid-19 pandemic. The strength of the economy in western Europe’s largest oil and gas producer had led it to keep rates higher than nearly all its neighbours, including Sweden’s Riksbank and the European Central Bank. But Norges Bank decided that the inflation outlook was subdued enough that it could cut rates by a quarter point to 4.25 per cent. 

Switzerland first introduced negative interest rates in December 2014, when the SNB set the deposit rate at minus 0.25 per cent to stem the franc’s appreciation amid safe-haven inflows.

The SNB at one stage pushed the rate down to minus 0.75 per cent, the lowest level in the world. The policy remained in place for more than seven years, also making it one of the world’s longest negative rate periods until it exited it in 2022. 

Thursday’s cut creates a potentially tricky situation for Swiss banks. They no longer earn interest on their reserves with the SNB but theoretically have less justification to pass that cost on to customers.

Daniel Kalt, chief economist at UBS, the country’s largest bank, said zero per cent was probably the most difficult scenario for banks.

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“In terms of pressure on net interest margins, it couldn’t be worse than with the situation we have today. With this, it is hard for banks to justify charging customers fees like they did during the previous period of negative interest rates,” Kalt said.

Video: Why governments are ‘addicted’ to debt | FT Film
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