Crypto News: 5 things to start your day

Good morning. New inflation regime, NATO beefing up, London's ``dirty money'' habit, and EU quashes Ireland hard border idea. Here's what people are talking about.

Risks are mounting that the world is shifting to a regime of higher inflation, forcing central bankers to tear up their playbook of the last 20 years. That was a key message from Federal Reserve Chair Jerome Powell and his European counterparts on Wednesday as they debated how to tackle persistent price pressures and slower growth. "I don't think we are going to go back to that environment of low inflation," European Central Bank President Christine Lagarde told the ECB's annual forum in Portugal. Her comments, alongside those of Powell and Bank of England Governor Andrew Bailey, mean a potential upheaval of monetary policy practice.

NATO has agreed to the biggest upgrade of its military presence in Europe since the end of the Cold War, redrawing the continent's security in response to Russia's invasion of Ukraine. At a summit in Madrid, NATO leaders agreed to put more than 300,000 troops on high alert while beefing up its European defenses with extra forces, enhanced air power and new equipment. And the alliance is set to add two new members — Sweden and Finland. NATO also identified China's increasing military presence as a "challenge" for the first time and sought to deepen relations with democracies in the Asia-Pacific region.

Lawmakers have blasted the UK's sanctions regime as "underprepared and under-resourced," noting the war in Ukraine is also exposing the institutional decay inflicted by the City of London's decades-long welcome of "dirty money." There is little evidence that the UK had a clear plan of whom to sanction and how they would go about it following Russia's invasion, according to a report by the House of Commons' influential Foreign Affairs Committee. The UK also needs to move further and faster to introduce legislation to stem the flow of dirty money through the City of London, a decades-long trend.

The EU's chief Brexit negotiator Maros Sefcovic said he won't contemplate a hard border on the island of Ireland, while suggesting that the UK's plan to override the part of the Brexit deal governing trade in Northern Ireland may harm European cooperation with Britain on financial services. Sefcovic said the EU can't accept Britain's efforts to "unilaterally and illegally" dis-apply the arrangements in the Brexit deal that keep Northern Ireland in the bloc's single market while creating a customs border with the rest of the UK. But he stressed the importance of protecting the 1998 peace deal for the region by preventing the return of a hard border.

European futures declined and Asian stocks were mixed as investors weighed signs of gradual improvement in China's economy amid ongoing concerns about a US recession. OVH Groupe reports sales, while data include UK GDP, France inflation and Portugal retail sales. In the US, Micron Technology is due to report. Sweden's central bank sets policy rate.

This is what's caught our eye over the past 24 hours.

Inside Didi's $60 billion crash.
UBS's SEC penalty.
Venice tax on day trippers.
UK business confidence slumps.
How much the Royals cost.
Beer from recycled toilet paper.
Tropical island is new WFH.

Elevated profit expectations still hang like a sword of Damocles over the global stock market and the thread is beginning to fray. Citigroup Inc.'s Global Earnings Revision Index -- a worldwide measure of analyst upgrades minus downgrades of profit expectations -- has fallen to the lowest in more than two years. The measure collapsed to all-time lows at the height of pandemic fears in March 2020, although those levels are some way away. I pointed out earlier this month that forward estimates for the MSCI AC World Index were just a rounding error off this year's peak -- a gap which is just 0.3% today. The decline in the Citi gauge suggests that dip is going to deepen. Traders in the bond market are already upping their bets on a US recession, shifting to price in a half-percent rate cut by the Federal Reserve at some point next year. There is little sign of that recession being priced in to global profit forecasts and that should keep the pressure on stocks until it is.