Russian bombing will intensify the refugee crisis, Abenomics takes a hit and what Einstein got wrong

HSBC has decided to keep its headquarters in London, ending 10 months of uncertainty with a decision that reflects how the UK political climate has shifted back in favour of the banking sector.

The decision by the board of the UK’s biggest bank is a Valentine’s day gift for the City of London and the government, as the bank’s review of its domicile had become a litmus test for the country’s attractiveness as a financial centre.

Hong Kong had been seen as the most likely destination if HSBC decided to move. However, there was alarm over China’s political response to recent market volatility, as well as thedetention of three Hong Kong booksellers by mainland authorities. “There is no board that will allow a big bank to become Chinese and that is what a move would have meant for HSBC,” said one investor. (FT)

In the news:

Russia ‘weaponising’ refugee crisis

Western diplomats and politicians accused Russia of deliberately attacking civilians in northern Syria in an attempt to intensify the refugee crisis, in the latest sign that a fragile ceasefire agreement is crumbling before it begins. Moscow was “weaponising” the refugee crisis for leverage, one senior politician from a close US ally warned. (FT)

Abenomics takes a hit

Japan’s economy shrank at an annualised rate of 1.4 per cent in the fourth quarter of 2015 in a further blow to Prime Minister Shinzo Abe and his Abenomics stimulus. (FT)

The robots are coming (for your job)

Everyone from lorry drivers to prostitutes is at risk oflosing their job to an automaton, according to scientists who are warning that rapid advances in the development of artificial intelligence and robotics threaten the prospect of mass unemployment. (FT)

How Scalia’s death changes everything

The news that Supreme Court Justice Antonin Scalia died on Saturday raised the stakes in an already contentious presidential election. Republicans say the next president should nominate his successor while Democrats argue that the constitution clearly gives Barack Obama the right to name a justice. Jonathan Chait writes that the implications of the influential jurist’s death could be even further reaching — it may mean that a Republican challenge to the Paris climate deal fails — “The immediate and easily foreseeable impact is staggering.” Sign up for our daily US politics email here. (FT, NYT, NYMag)

Citi finds a loophole

The bank has found a novel way of sparing its top London executivesfrom tough new accountability rules. The US financial group believes it has convinced regulators that a handful of its most senior executives should not be captured by the new regulations because they run global business operations from the UK. (FT)

PBoC chair: speculators caused renminbi drop

Zhou Xiaochuan accused “ speculative forces” of targeting the country’s currency, arguing that there was no reason for it to continue depreciating in value. He said China would not let international speculators dominate market sentiment. (BBC)

It's a big day for:

Chinese trade

The country’s exports and imports suffered larger-than-expected drops in thefirst month of this year in both renminbi- and dollar-denominated terms. Exports fell 6.6 per cent year on year in January to Rmb1.14tn, following a 2.3 per cent gain in December. (FT)

Food for thought:

Big oil: under pressure

The crude price rout is ravaging the industry, and forcing companies to walk a fine line between paying dividends and investing in operations. With US crude hitting 12-year-lows last week, some in the industry are asking whether the sector’s business model isfundamentally flawed. (FT)

What Einstein got wrong

With the announcement last week of the discovery of gravitational waves, one of Albert Einstein’s wildest theories was validated. It was also further proof of his genius. But being a genius did not prevent the scientist from making mistakes. Here are four of his most notable blunders — including gravitational waves. (NYT)

Lying in the C-suite

Lucy Kellaway on the four basic truths chief executives must never give voice to: never admit you’re not enjoying the job, never disparage anyone at the company, never bad-mouth your firm and never express anything but absolute certitude. “Any sign of non-enjoyment, or doubt, or lack of faith in the company or individuals is taken as tantamount to admitting that you are unfit for the job.” (FT)

The latest in travel: smart bags

The dreaded missing luggage drama could soon be a thing of the past thanks to the advent of electronic suitcases. This type of hi-tech bag not only tracks its own location, it can also charge your gadgets and even call itself an Uber when it gets lost. (FT)

The masters (and disasters) of love

By observing some very simple interactions, US scientists were about to predict with up to 94 per cent certainty whether couples would be broken up, together and unhappy or together and happy after several years. And for the masters of love, there was one shared trait: they purposefully looked for things to appreciate. (The Atlantic)

Return of the toxic twins

The FT’s Wolfgang Münchau argues that last week’s rout in European markets was not the beginnings of a bear market, or an uncertain harbinger of a future recession: “what we saw — at least here in Europe — is a return of the financial crisis”. The market’s most important message? “The return of the toxic twins: the interaction between banks and their sovereigns.” (FT)

Video of the day:

Do bear markets bring recessions?

Robert Armstrong and Giles Wilkes explore a history of down markets and ask whether a rout always leads to a recession. (FT)