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U.S. Jobs Data shows Modest Gains – Top 10 Global News

1. Stocks Hit Record as Small Caps Jump; Dollar Gains

Stocks extended their rally into a fourth day as investors parsed through a flurry of corporate results amid signs the U.S. labour market may be gradually improving. The dollar rose. The S&P 500 climbed to a record, led by banks and tech shares, as the Russell 2000 Index jumped 2%. The bull market in U.S. stocks remains on “solid footing” as the rebound in activity and corporate profits alongside an accommodative Federal Reserve create a supportive environment for equities, according to UBS Group. Selected high-frequency data, such as weekly consumer-confidence readings, also point to some strengthening.

The S&P 500 climbed 0.4% as of 9:47 a.m. New York time.

The Stoxx Europe 600 Index advanced 0.2%.

The MSCI Asia Pacific Index increased 0.8%.

2. U.S. Payrolls Rise Less Than Forecasted After Big Dec. Drop

The recovery in the U.S. labour market disappointed for a second month in January with only modest job growth that highlights persistently difficult prospects for millions of unemployed and bolsters calls for more stimulus. Nonfarm payrolls increased by 49,000 from the prior month after a downwardly revised 227,000 December decrease, while the unemployment rate fell to 6.3%, according to a Labor Department report Friday. The labor force participation rate declined as more people left the workforce. The January data may elicit more urgent calls for another pandemic relief package. 

3. Senate Adopts Blueprint for Stimulus as Harris Breaks Tie

The Senate voted 51-50, after Vice President Kamala Harris broke her first tie, to adopt a budget blueprint for President Joe Biden’s $1.9 trillion virus relief package — following nearly 15 hours of wading through amendments from both parties. The House had already adopted its budget resolution but will likely have to vote again Friday to agree on the Senate’s language. Once that’s done, Democrats will be able to craft a relief bill in the coming weeks that can pass without any Republican votes under special budget rules. Budget Chairman Bernie Sanders said adoption means help is on the way to those suffering from an “economic collapse.”

4. U.K. Plans With CureVac; Russia-China Talks: Virus Update

The U.K. has entered into a collaboration accord with CureVac, under which the company will deliver an initial supply of 50 million doses of vaccines against Covid-19 variants. Britain will require travellers arriving from coronavirus hot spots to quarantine in hotels starting Feb. 15, almost three weeks after the plan was announced by Prime Minister Boris Johnson. Russian vaccine developers are in discussions with China’s CanSino Biologics Inc. to test a combination of their shots aimed at better results. Hungary, the first European Union country to approve Russian and Chinese coronavirus vaccines, could gradually start returning to normality this spring by inoculating the most exposed people by March 15.

5. Brace Yourself: Long-Haul Travel May Not Get Going Until 2023

It isn’t clear that vaccines actually stop travellers spreading the disease, even if they’re less likely to catch it themselves. Neither are the shots proven against the more-infectious mutant strains that have startled governments from Australia to the U.K. into closing, rather than opening, borders. An ambitious push by carriers for digital health passports to replace the mandatory quarantines killing travel demand is also fraught with challenges and has yet to win over the World Health Organization. This bleak reality has pushed back expectations of any meaningful recovery in global travel to 2022. Rather than a return to worldwide connectivity – one of the economic miracles of the jet era – prolonged international isolation appears unavoidable.

6. Banks Still Moving $970 Billion of Assets From U.K., ECB Says

Big banks still had 810 billion euros ($970 billion) of capital markets-related assets to move from the U.K. to the European Union at the end of September, underlining the extent of the moves ahead as they adjust to operating after Brexit. International banks have agreed to shift a total of about 1.2 trillion euros of assets to European units, said Andrea Enria, who leads the European Central Bank’s oversight arm. European banks “also planned to move a substantial amount of their capital market business” from the U.K., he said. The ECB and other regulators are prodding the world’s top investment banks to complete their plans to beef up operations in the EU to make sure they can service clients in the region.

7. Astra Vaccine Equally Effective Against New Variant: Study

AstraZeneca’s Covid vaccine is equally effective against the new strain of the virus that emerged in the U.K., according to a study by its co-developer, the University of Oxford. Protection against symptomatic infection was similar for the new variant as well as the original strain, according to the study, which analyzed swabs taken from volunteers from October through mid-January. The results should ease concerns about the effectiveness of existing vaccines against the mutated form of the virus, which health officials have said may be more infectious than the initial one.BioNTech, the developer of another coronavirus vaccine with Pfizer, has also said its shot appears to maintain effectiveness against the new strain.

8. Canada Loses 213,000 Jobs, Unemployment Jumps to 9.4%

Employment in Canada fell more than expected in January as a fresh wave of lockdowns weighs on the nation’s economy. The country lost 212,800 positions in the month, Statistics Canada said Friday in Ottawa. That’s on top of 52,700 jobs lost in December. The unemployment rate jumped to 9.4%, versus 8.8% previously and a forecast of 8.9%. A new round of restrictions over the last couple of months in some regions — including stay-at-home orders and curfews — have triggered fresh lay-offs that have stalled the recovery. Still, Canada’s labour market is faring better now than it did during the first wave of restrictions in March and April when employment fell by 3 million. Losses were entirely in part-time positions, with full-time jobs increasing.

9. World’s Largest Pension Fund Posts $100 Billion Quarterly Gain

The world’s biggest pension fund posted a 10.4 trillion yen ($98 billion) gain in the three months ended December, lifting assets to a record as global equity markets extended their recovery from the pandemic. Japan’s Government Pension Investment Fund gained 6.3%, with assets reaching 177.7 trillion yen, the fund said in a statement. Overseas stocks were its best-performing investment, returning 11.9%, followed by an 11.3% return in domestic stocks. Overseas debt gained 1.2%, while Japanese debt added 0.02%.

10. UBS Boosts Middle East Expansion Drive With New Qatari Hub

UBS Group is setting up a second Middle Eastern hub in Qatar that will eventually add investment banking and asset management services to its wealth-management business as part of an expansion in the region. The new Doha wealth office will open within weeks and UBS intends to hire about 20 people by the end of the year. Appointments will include back office and support staff, as well as relationship managers to build a business with Qatari clients. The wealth management business will be tapping into a market where per-capita income is almost six times that of the world average, according to World Bank data. Having a presence on the ground also opens UBS to the opportunity of potentially managing assets on behalf of one of the world’s largest sovereign wealth funds, the Qatar Investment Authority.

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Democrats win Senate; Biden gets Full Govt. Support – Top 10 Global News

1. Stocks Climb Toward Record With Stimulus in Focus

Stocks rose toward a record a day after violence rocked the U.S. Capitol, with investors firmly focused on the prospect for more economic stimulus and the likelihood that calm will prevail as Joe Biden takes the presidency. The S&P 500 extended gains into a third day, led by financial companies. Treasury yields held above 1%, while the dollar advanced. Democrats are set to take control of the U.S. Senate, House and presidency, paving the way for Biden to bring his legislative agenda to life and reshape the American economy. He was recognized by Congress as the next president early Thursday.

The S&P 500 rose 0.7% as of early morning New York time.

The Stoxx Europe 600 Index gained 0.4%.

The MSCI Asia Pacific Index climbed 0.8%.

2. Biden Reaps Best Georgia Prize: Democrats Get Senate

Joe Biden won a huge boost with Democrats securing control of the Senate by the narrowest of margins, giving the president-elect a smoother path for advancing his nominees and legislative agenda. But the wins in two Georgia runoff elections came on a day when rioters backing President Donald Trump stormed the U.S. Capitol during the joint session of Congress that certified Biden’s Electoral College win. Lawmakers sheltered under their desks as security officers drew weapons and barricaded the members in the chamber with whatever furniture they could find.

3. Global Food Prices at Six-Year High and Climbing

Global food prices reached a six-year high in December and are likely to keep rising into 2021, adding to pressure on household budgets while hunger surges around the world. Food prices has jumped 18% since May, as adverse weather, government measures to safeguard supplies and robust demand helped fuel rallies across agricultural commodities. Prices will likely climb further, the UN’s Food & Agriculture Organization said. The spike threatens to push up broader inflation, making it harder for central banks to provide more stimulus to shore up economies. It’s bad news for consumers whose incomes have been hurt by the Covid-19 crisis and adds to concerns about global food security that’s being affected by conflicts and weather shocks.

4. U.S. Vaccine Rollout Hindered by Faulty Coordination, Messaging

As the U.S. grapples with record hospitalizations and deaths from the Covid-19 pandemic, a crucial vaccination rollout campaign is being impeded by inconsistent messaging and myriad state strategies as a new variant of the virus drive up infection rates, according to public health experts. The missteps have put the number of vaccinations well behind targets set by the Trump administration’s U.S. Operation Warp Speed effort. Only 5.46 million doses have been administered in the U.S. since mid-December against a goal of 20 million by the end of 2020. Vaccination rates have ranged significantly across states, with South Dakota using 69% of the doses sent to it and Georgia just 22%.

5. U.S. Trade Gap Widened to Second-Biggest Record in November

The U.S. trade deficit widened to the second-largest on record in November as merchandise imports reached a more than one-year high in the midst of the holiday shopping season, causing the shortfall in goods to climb to the highest yet. The gap in the trade of goods and services expanded to $68.1 billion in November from $63.1 billion in October. Total imports increased 2.9% to $252.3 billion, with inward-bound shipments of goods climbing to $214.1 billion, the highest value since May 2019. The merchandise-trade deficit increased 6.2% to $86.4 billion, the biggest on record, while the nation’s surplus in services to $18.2 billion, the lowest since August 2012.

6. Tokyo in State of Emergency; China Locks Down City: Virus Update

Japan’s Prime Minister Yoshihide Suga declared a state of emergency for Tokyo and the surrounding areas, trying to stem infections that hit a daily record in the capital. China banned all vehicles and people from leaving the city of Shijiazhuang to the south of Beijing after confirming almost 200 coronavirus infections. More than 10 million people will now be tested for the virus. Accelerating caseloads across Europe prompted a call from the World Health Organization for stricter measures across the continent. The U.S. reported a record 3,844 deaths from Covid-19, while confirmed cases globally climbed by an all-time high of 776,435 to more than 87 million.

7. Alibaba, Tencent Shares Drop as U.S. Weighs Investment Ban

Alibaba and Tencent led a technology stocks selloff as the Trump administration considers barring investments in China’s two most valuable companies. Alibaba fell 3.9% and Tencent dropped 4.7% in Hong Kong trading on Thursday, tracking losses in their New York-listed securities. Imposing a ban on the two companies would mark the most dramatic escalation yet by President Donald Trump’s administration, given the sheer size of the two firms and the difficulty unwinding positions. At $1.3 trillion, the combined market value of their primary listings together accounts for about 11% of the weighting for MSCI emerging markets benchmark.

8. Abu Dhabi’s Mubadala Wants to Take Crack at Top 10 Sovereign Wealth Funds

Abu Dhabi’s Mubadala Investment is overhauling its structure and deploying capital to double in size to nearly half a trillion dollars in the next decade, a plan that will vault it into the top ranks of the world’s sovereign wealth funds. With stakes in businesses from Reliance Industries Ltd.’s retail unit to private equity firm Silver Lake, Mubadala was among a few sovereign investors that last year seized on opportunities from a dislocation in markets caused by the coronavirus pandemic. The focus will be on technology, infrastructure, life sciences and other “future-oriented asset classes,” alongside continued investment in renewables and other clean technologies.

9. India’s GDP Set to Drop 7.7%, Biggest Contraction Since 1952

India’s economy is set for its biggest annual contraction in records going back to 1952 as the rapid spread of coronavirus cases and measures to contain them hurt businesses and households. The gross domestic product will shrink 7.7% in the financial year ending March 2021, the statistics ministry said in its first advance estimate published on Thursday. That’s steeper than a 7.5% drop forecast by the Reserve Bank of India. The estimates may undergo sharp revisions due to disruptions caused by steps to contain the pandemic, said the statistics office, which had suspended data collection coinciding with a nationwide lockdown.

10. U.S. Initial Jobless Claims Remain Elevated Heading Into 2021

Applications for U.S. state unemployment benefits were little changed at elevated levels in the final week of 2020, indicating the labour market remains battered with the pandemic dragging on. Initial jobless claims in regular state programs fell by 3,000 to 787,000 in the week ended Jan. 2, Labor Department data showed Thursday. Continuing claims for state programs — a rough approximation of the number of people receiving those benefits — declined by 126,000 to 5.07 million in the week ended Dec. 26. While initial claims dropped for a third consecutive week, the figures underscore a labour-market rebound that remains fragile, with Friday’s jobs report forecast to show a sharp slowdown in December hiring. The surge in Covid-19 cases sparked a wave of renewed restrictions on businesses and activity, spurring businesses to cut jobs.

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Global Markets Rally on Vaccine and Aid Hopes – Top 10 Global News

1. Stocks Hold Gains as Lawmakers Debate Over Economic Aid

U.S. stocks held a modest gain that put them at all-time highs after data showing a further slowdown in the labour market stoked bets Congressional leaders will clinch a deal on federal spending. The S&P 500 climbed for a third day as lawmakers continued to negotiate details of almost $900 billion in coronavirus aid. The dollar slumped as weekly jobless claims rose to 885,000 versus an estimate of 818,000. Bitcoin breached $23,000 for the first time. In Europe, cyclical shares such as miners and retailers rose on news that the rollout of a Covid vaccine would begin this month.

The S&P 500 Index advanced 0.5% as of afternoon New York time, the highest on record.

The Dow Jones Industrial Average gained 0.4%.

The Nasdaq Composite Index climbed 0.5%.

2. U.S. Congress Struggles to Finish Economic Stimulus Details

Congressional leaders are working through the final sticking points of a coronavirus relief deal, although the agreement probably won’t come together in time for both chambers to vote before Friday. People briefed on the talks say the draft of the roughly $900 billion proposal includes $600 in payments for individuals, $300-per-week in supplemental unemployment insurance payments and aid for small businesses, as well as about $17 billion for airlines. But it omits aid to state and local governments and lawsuit liability protection, the two issues that stalled earlier attempts at an agreement.

3. India Rejoins US Watchlist in Possible Boost For Rupee & Bonds

India’s addition to the U.S. watchlist for currency manipulation is a trial for its central bank, and a possible boon for local currency- and bond markets. The U.S. Treasury Department’s latest foreign-exchange report cited India’s “significant” goods trade surplus with the U.S. and “sustained” net currency purchases through the year to June. Authorities should limit such intervention to periods of excessive volatility while allowing the rupee to adjust based on economic fundamentals. The central bank’s headache — which comes on top of above-target inflation and struggling growth — looks like a boost for the rupee. The currency has been Asia’s worst performer this year, as the Reserve Bank of India has countered relentless foreign investment inflows with dollar purchases that have pushed the country’s reserves to a record $579 billion.

4. London’s Economy Shaken With Covid Curbs and Brexit Fears

London enters the final days of 2020 with its position as the U.K.’s economic growth engine being whittled away by Brexit and the struggle to contain the coronavirus. The decision to place the capital under the toughest Covid-19 curbs caps a year that saw the virus inflict a bigger hit on London’s job market than other regions. The city, which accounts for more than one-fifth of the U.K. economy, is also seeing global banks shift some people and assets to other European countries. Figures published Thursday by the Institute for Fiscal Studies showed that consumer spending in London was still 10% below its pre-crisis level in November.

5. U.S. Jobless Claims Jump to Highest Levels in Three Months

Applications for U.S. state unemployment benefits unexpectedly jumped to the highest level in three months, suggesting the labour market’s recovery is faltering amid the surge in Covid-19 cases and widening business restrictions. Initial jobless claims in regular state programs rose by 23,000 to 885,000 in the week ended Dec. 12, Labor Department data showed Thursday. Continuing claims for state programs declined by 273,000 to 5.51 million in the week ended Dec. 5. That figure roughly approximates the number of people receiving state unemployment benefits but doesn’t include the millions of people who have already exhausted those benefits or are receiving assistance through federal pandemic jobless aid programs.

6. Credit Suisse Charged Over Money Laundering in Cocaine Ring

Credit Suisse Group and one of its former bank managers have been indicted by Swiss prosecutors over the lender’s alleged failure to prevent money laundering by a Bulgarian drug ring. The Zurich-based bank failed to take all the organizational measures that were “reasonable and required” to guard against the laundering of cash made from the sale of cocaine that was then used to buy real estate in Switzerland and Bulgaria. Swiss prosecutors can target banks criminally if they believe institutions didn’t do enough to screen clients for obvious ties to illicit activity.

7. China Lags as Thailand, Russia Rank Top Emerging Market Picks

Thailand and Russia are well placed to be among the emerging-market standouts that could beat expectations next year. That’s according to a Bloomberg study of 17 developing markets gauging their outlook for 2021 based on 11 indicators of economic and financial performance. Thailand topped the list, owing to its solid reserves and a high potential for portfolio inflows, while Russia scored No. 2 thanks to robust external accounts and a strong fiscal profile, in addition to an undervalued ruble. China scores fairly poorly given that high expectations are already baked in.

8. DoorDash Sinks After Citron Calls IPO ‘Most Ridiculous’ of 2020

DoorDash‘s shares fell on Thursday after short-seller Citron Research called its initial public offering the “most ridiculous” of the year and said the stock is worth a fraction of its current price. The stock is worth $40 a share, Citron said in a research report, citing intense competition in the market for food delivery, lack of brand loyalty from customers and potential government regulation. That would represent a 75% decline from Wednesday’s closing price. The stock fell as much as 5.1% following Citron’s comments.

9. Goldman Trading Bonus May Jump Nearly 20% This Year

Goldman Sachs is planning to boost bonuses for the trading division by up to 20% after the business reclaimed its stature as the firm’s golden goose. The fatter paychecks come on the back of a 49% jump in revenue following a sluggish decade for a group that was once the envy of Wall Street. Corners of trading, particularly in fixed income, could expect much bigger payouts. There will be a greater divergence in payouts than in previous years, with some people potentially getting pay cuts despite generating more revenue. Goldman’s bonus decisions have been a touchy topic ever since the firm’s success through the 2008 financial crisis drew public attention. But this year, banks all along Wall Street saw staggering gains, giving powerhouses more cover to share spoils.

10. U.S. to Limit Use of Chinese Power Equipment on Military Bases

The Trump administration is issuing new prohibitions on the use of Chinese power equipment on military bases, citing the need to protect the U.S. facilities from foreign adversaries. Utilities that supply military bases and other critical defence facilities will be barred from using high-voltage transformers and other so-called bulk power equipment from China under an order being issued Thursday by Energy Secretary Dan Brouillette. The order is another step in the Trump administration’s wide-ranging effort to restrict access by Huawei and other Chinese companies to Western networks and technology.

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Biden takes Lead in Key Swing States – Top 10 Global News

1. U.S. Futures Pare Losses; Treasury Yields Rise

U.S. futures pared losses and Treasury yields rose for the first time in three days after a report showed the labor market improved in October. Contracts on the S&P 500 had retreated after the underlying index climbed almost 2% Thursday, heading for its best week since April. Futures on the tech-heavy Nasdaq 100, which is up over 9% this week, also dropped. The global equity rally had stalled as investors unwound some of this week’s surge as the presidential election count continued. Technology and travel stocks were among decliners in the Stoxx Europe 600 Index.

Futures on the S&P 500 Index declined 0.2% early morning New York Time, the first retreat in a week.

Nasdaq 100 Index futures fell 0.6%, the first retreat in a week.

The Stoxx Europe 600 Index dipped 0.2%, the first retreat in more than a week.

2. Joe Biden gets closer to a U.S. Presidency bid as more votes are being counted

Joe Biden stood on the threshold of the U.S. presidency in the early hours of Friday, seizing a slim lead over President Donald Trump in Georgia and drawing closer to overtaking him in Pennsylvania. Those victories would secure the 270 electoral votes needed to lay claim to the White House. Biden had already begun to project the image of a man preparing to assume the mantle of office, meeting on Thursday with his economic and health advisers to be briefed on the coronavirus pandemic.

3. US economy adds 638,000 jobs in October as recovery slows

As the world awaits a winner to emerge from the United States presidential election, a snapshot of the country’s labour market on Friday showed just what a daunting economic recovery task awaits either President Donald Trump or his Democratic rival Joe Biden. The US economy added 638,000 jobs in October, the US Bureau of Labor Statistics reported on Friday – 34,000 fewer than September’s revised number – while the unemployment rate ticked down to 6.9%. Notable gains were made in leisure and hospitality, professional businesses services retail trade and construction. A little over 1.2 crore of the 2.2 crore jobs lost in March and April as lockdowns swept the nation have been recovered.

4. Trump’s Vote Count Lawsuits Fail in Court

The flood of lawsuits unleashed by President Donald Trump over vote counts in the swing states struggled to gain traction on Thursday, with two cases thrown out and other rulings in his favor failing to alter the race’s trajectory toward Joe Biden. A Michigan judge rejected the campaign’s request to halt the count of mail-in ballots, ruling the claims were pointless because the tally was almost over in a state where Biden has already been declared the winner. In Georgia, a judge dismissed another suit, saying there was no evidence to back the Trump campaign’s claims. A federal judge denied within hours its emergency request to halt the ballot count in Pennsylvania.

5. Huawei Launches Legal Appeal Against Sweden’s ‘Draconic’ 5G Ban

Huawei is launching a legal challenge against Sweden’s decision to exclude it from 5G spectrum and says the move will create a monopoly for Ericsson. The Chinese company has filed an appeal with an administrative court in Stockholm, arguing that the “draconic measure” violates European Union and national laws by effectively barring it from the Swedish market. The Swedish Post and Telecom Authority last month ruled that operators participating in the country’s upcoming 5G spectrum auction can’t use equipment from Huawei or its much smaller rival ZTE Corp.

6. Sudan’s $140 Million Port to ship Camels to China

A Chinese-built port for shipping livestock from Sudan’s Red Sea coast will be completed by year-end, the latest African component of Beijing’s Belt and Road Initiative. Constructed by China Harbour Engineering Co. and located in Haidob, 60 kilometers south of Port Sudan, the facility is being primed to help transport cattle, camels and sheep for mainly Asian markets. Livestock exports are a potential growth area for economically ravaged Sudan, which has invested a total of $142 million (INR 1500 cr) in the port. China Harbour, which worked for three years on the project before suspending in 2017, has since renewed its agreement with Sudan’s transitional government. 

7. Denmark Covid-19 Virus Mutation Leads to New Restrictions

A new Covid-19 mutation that started in Denmark’s mink population has spread beyond the region in which it was first discovered to the eastern part of the country. Health officials made the announcement as a lockdown was imposed on much of Denmark’s western peninsula of Jutland, home to most of the country’s mink production. Denmark is now in talks with the World Health Organization amid concerns the mutant strain found in the animals may derail efforts to develop a vaccine against Covid-19. The mutation affects the spike protein, which could make it particularly hard to fight. Denmark is now taking the drastic step of culling its entire mink population — up to 1.7 crore animals — in order to halt the outbreak.

8. Goldman Moving $60 Billion of Assets to Germany after Brexit

Goldman Sachs is shifting as much as $60 billion (INR 4.5 lakh cr) of assets from the U.K. to Frankfurt, the latest sign that banks are beefing up their European Union operations ahead of Brexit. The Wall Street bank plans to move between its assets to its German subsidiary by the end of the year. With fewer than 40 working days until the U.K.’s transition period expires, international banks are accelerating plans to beef up in Europe to handle the increase in client activity from Jan 1. Even if U.K. Prime Minister Boris Johnson secures a EU trade deal, finance houses with London headquarters will lose their passporting rights. JPMorgan Chase & Co. is also moving $230 billion to Frankfurt.

9. StanChart Unveils Permanent Move to Flexible Working From 2021

Standard Chartered plans to offer flexible work options to more than 90% of its 85,000 staff over three years, a sign of how pandemic crisis management is leading to long-term change in the role of the office. The bank said about half its staff will be able to apply for some form of hybrid work from early 2021. Standard Chartered expects the program to apply to about 75,000 workers in 55 markets by 2023. The London-based company is also in talks with a third-party firm to provide “near-home” workspaces for staff. Standard Chartered has said it’s looking at office leases carefully in an environment where lenders are under pressure to control costs, even before Covid-19’s disruption to the world economy.

10. Trump administration advances $2.9 billion drone sale to UAE

The U.S. State Department gave Congress notification it plans to sell 18 sophisticated armed MQ-9B aerial drones to the United Arab Emirates in a deal worth as much as $2.9 billion (INR 21,500 cr). The move comes on the heels of last week’s notification of a potential sale of F-35 fighter jets to the middle-eastern country. This would mark the first armed drone export since the Trump administration reinterpreted a Cold War-era arms agreement between 34 nations to allow U.S. defence contractors to sell more drones to allies.