FirstFT: America ‘will not walk away’ from Ukraine

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Good morning.

US president Joe Biden yesterday said America would “not walk away” from Ukraine after Congress jettisoned $6bn in aid to avert a government shutdown.

“I want to assure our American allies, the American people and the people in Ukraine that you can count on our support. We will not walk away.”

During a fraught weekend on Capitol Hill, lawmakers omitted additional money for Ukraine from the bipartisan bill that will fund the US government until November 17, in a surprise eleventh-hour compromise accepted by the White House.

Ukraine aid has been a flashpoint in US politics for months, but the move to strip it from the deal nonetheless shocked many of Kyiv’s allies.

There were growing signs of the pro-Ukraine consensus being challenged in Europe too. The anti-Ukraine former prime minister of Slovakia yesterday won the largest share of votes in his country’s general election.

But Josep Borrell, the EU’s foreign policy chief, insisted Europe would continue to back Kyiv. “Our support to Ukraine not only continues but increases,” he told the Financial Times.

Much of the opposition to helping Kyiv in Washington comes from radical House Republicans close to former president Donald Trump. Among those is Matt Gaetz, the hardline Republican from Florida, who yesterday said he would move to oust Kevin McCarthy as Speaker of the House of Representatives as soon as this week for working with Democrats to avoid the shutdown.

Is Congress right to cut military support for Ukraine? Vote in our latest poll.

Here’s what I’m keeping tabs on today:

Ukraine: EU foreign ministers will meet today in Kyiv, the first such gathering of all 27 member nations outside EU territory.
Economic data: The Institute for Supply Management’s manufacturing index is expected to show that activity remained in contractionary territory in September. The US Census Bureau is forecast to report that spending increases slowed in August compared with the previous month.
Monetary policy: Jay Powell participates in a roundtable discussion hosted by the Federal Reserve Bank of Philadelphia alongside Patrick Harker, chair of the regional bank. Federal Reserve Bank of New York President John Williams and Federal Reserve Bank of Cleveland President Loretta Mester also speak at public events today.
Donald Trump: The former president is expected to make an appearance in a New York courtroom today for the start of a civil trial brought by attorney-general Letitia James against the Trump Organization.

Five more top stories

1. A sell-off of US Treasuries has resumed this morning following the deal to avert a government shutdown. The yield on the 10-year Treasury rose 0.05 percentage points to 4.619 per cent, reflecting falling prices. US stock futures rose following relief an agreement had been reached by lawmakers in Washington to avoid a shutdown of the government. Here’s the latest market reaction.

2. Turkish authorities have detained 20 people with alleged links to the Kurdistan Workers’ party (PKK). Yesterday the group claimed responsibility for two suicide bombers who attacked Turkey’s interior ministry in a busy part of the capital Ankara. Overnight, Turkey’s military launched attacks on 20 PKK targets in northern Iraq, where the group is based. Read more on the rising tensions between Ankara and the PKK.

3. Asia faces one of its worst economic outlooks in 50 years, the World Bank has warned, as it downgraded its 2024 growth forecast for developing economies in east Asia and the Pacific. The bank also cut its forecast for China’s growth next year, citing a string of weak indicators for the world’s second-biggest economy. Here’s more from the World Bank’s latest forecasts.

4. Joe Biden appointed General CQ Brown his chief military adviser yesterday. Brown, a former F-16 pilot who earned the call sign “Swamp Thing” after he ejected into the Florida Everglades when his plane was struck by lightning, takes over as chairman of the Joint Chiefs of Staff from the high-profile and polarising Mark Milley. Read more on the appointment of CQ Brown.

5. UBS has settled with the government of Mozambique over Credit Suisse’s involvement in a £2bn alleged “tuna bond” fraud. Mozambique had been seeking damages of $1.5bn in a London trial that was due to start this week. The country is still suing Privinvest, a Gulf-based supplier of the boats and other kit under the 2013 deal. Here’s more on the settlement between UBS and Mozambique.

Today’s Big Read

Jury selection is due to start tomorrow in the trial of Sam Bankman-Fried, the one-time poster child of cryptocurrency. The disgraced tycoon, who was once welcomed by Washington lawmakers and Silicon Valley investors, was brought down by a scandal that has been described as worse than Enron. FT reporters outline the case for the prosecution and SBF’s defence.

We’re also reading . . .

Chart of the day

Wall Street bankers are eagerly anticipating a rebound in dealmaking activity that they hope will lift bonuses and morale after more than a year in the doldrums. Even by the standards of an industry like investment banking, which is marked by feast-to-famine swings, the past four years have been extreme.

Take a break from the news

Kuranosuke is the first child born in the small community of Ichinono, Japan, for more than two decades. The one-year-old boy is cherished by a cooing, tribute-bearing platoon of surrogate grandparents from around the village. His existence has made him a hero — and focused minds on Japan’s demographic crisis.