FirstFT: Israeli army ‘encircles’ Gaza City in new phase of war

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Good morning. Israel’s military said it had surrounded Gaza City, Hamas’s political and military base, as its ground offensive against the militant group moved into a new phase.

Satellite images and reports on social media showed Israeli military advancing in three directions. As tanks gathered near the coast in the north of Gaza, reinforcements crossed from Israel into the strip from the north-east. Additional armoured columns headed towards the sea south of Gaza City.

Israel has intensified its air and ground operations against Hamas targets across Gaza — despite calls from allies, including US president Joe Biden — for a “pause” in hostilities to help free hostages held captive by Hamas.

US secretary of state Antony Blinken is expected to relay the message to Israeli leaders later today, as he begins his second diplomatic tour of the Middle East since Hamas’s bloody rampage through southern Israel on October 7. Here’s the latest on the Israel-Hamas war.

Here’s what else I’m keeping tabs on today and this weekend:

• US Secretary of State travels to Middle East, Asia: Following Antony Blinken’s visit to Israel, he will stop in Jordan before continuing on to Asia, with planned stops in Japan, South Korea and India.

• Australian PM in China: Prime minister Anthony Albanese’s visit to China this weekend will underline a dramatic turnaround in relations between the nations.

• Cricket World Cup: The group stage continues with the Netherlands playing Afghanistan today. Over the weekend matches include England vs Australia, New Zealand vs Pakistan, and India vs South Africa.

Join our 2024 Global Investment Outlook in Singapore on November 7. We will explore the short-term challenges currently creating price dislocations and the likely trends driving longer-term opportunities across the asset classes. Apply to attend here.

Five more top stories

1. The US has increased it sanctions against Russia, targeting companies and individuals in Turkey, China and the United Arab Emirates for supplying Moscow with goods that can be used for military purposes. Here’s what the measures include. They’ll affect more than 200 names around the world, the Treasury and state department said.

2. Leading artificial intelligence companies have agreed to allow governments including the UK, US and Singapore to test their latest models for national security and other risks before they are released to businesses and consumers. These are the companies that signed the “landmark”, but not legally binding, document.

3. The Bank of England has kept interest rates on hold at 5.25 per cent for the second successive meeting but warned monetary policy would need to stay tight for “an extended period of time” despite a bleak economic outlook. The central bank’s forecasts show it is treading a delicate line as it seeks to beat inflation while not pushing a weakening UK economy into an outright recession

4. Tens of thousands of Afghans streamed out of Pakistan back to Taliban-run Afghanistan as Islamabad’s security forces pursued up to 1.7mn undocumented migrants in a large crackdown. Aid groups warned that the Afghans were returning to dire conditions.

5. China’s biggest memory-chip maker has had to raise billions of dollars in fresh capital, after spending $7bn trying to adapt to tough US restrictions on its business. Yangtze Memory Technologies Corp, which last December was added to a trade blacklist and prohibited from procuring US equipment to manufacture chips, exceeded its target for a new round, according to four people familiar with the situation.

• More companies news: Apple’s services and iPhone growth bolstered the company’s latest quarterly earnings, according to figures released today.

How well did you keep up with the news this week? Take our quiz.

The Big Read

President Xi Jinping’s promise of “common prosperity” is starting to fade as the country’s economy falters. Graduates are struggling to find jobs, the middle class has lost money to a property meltdown and the rich are reeling from Beijing’s crackdowns on different sectors. A once optimistic society is worrying about its future as China’s social contract breaks down.

We’re also reading . . . 

• Spooky: What does an attempted Halloween ban in Shibuya have to do with Japan’s economic demons? Leo Lewis explains.

• Goldman Sachs: Will chief David Solomon’s big bet on the bank’s newly merged asset and wealth management unit help him close its valuation gap — and keep his job?

• Workplace diversity: Companies with more gender-balanced workforces outperformed their least-balanced peers, a BlackRock study of the MSCI World index has found.

Chart of the day

Against the backdrop of rising import costs, falling real wages and the Japanese yen sitting at a multi-decade low, Prime Minister Fumio Kishida is betting on a $113bn stimulus plan to tackle inflation pain. The future of his premiership could depend on it.

Take a break from the news

Billed as the Beatles last song, “Now and Then” has just been released — an odd notion for a band that broke up in 1970, half of whose members are no longer alive. But after the 1979 John Lennon demo was fleshed out by Paul McCartney, Ringo Starr and machine-learning technology, the song has new solidarity and emotional heft, writes pop critic Ludovic Hunter-Tilne.

Additional contributions from Gordon Smith and Tee Zhuo