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The energy war between Russia and the West is heating up after President Vladimir Putin demanded that natural gas sold to "unfriendly" countries be paid for in rubles. The Russian currency gained 7% against the dollar immediately after the announcement, paring its year-to-date losses to 23%, while Dutch gas futures, a European benchmark, reigniting a wild rally. "Unfriendly" nations accounted for 70%, or around $69B, of Gazprom's (OTCPK:GZPFY) export revenue in 2021, according to Dmitry Polevoy, economist at Moscow-based Locko Invest.

Fine print: Supply contracts will likely need to be reworded to allow a switch in payment to rubles, but once those are reopened, all types of negotiations could take place (shorter terms, less volumes, etc.). Supply deals often have provisions, like "significant market price changes," that can trigger renegotiations, but changing clauses of these agreements is often arduous and time-consuming. Putin has given the Russian central bank one week to come up with a way to shift to the new payment system and Gazprom was ordered to revise its contracts to accommodate the move.

While it's possible for Russia to devise new contracts that require ruble payments, it would demand that Western governments hold rubles in their central banks or buy them on the open market, which would be seen as skirting financial sanctions. Both sides would lose if the gas stops flowing, with Putin missing out on cash for his flailing domestic economy and the West needing to secure pricier supplies elsewhere. Putin may also be trying to chip away at dollar dominance in global trade, which could have long-term implications for American borrowing and financing costs.

The response: Ukraine President Volodymyr Zelenskyy is hoping that a series of NATO, G7 and EU summits taking place this week will lead to more aid for the country and additional sanctions against Russia. The U.S. and EU are already close to a deal aimed at slashing Europe's dependence on Russian energy sources and an agreement could be announced as early as Friday. "You can expect that the U.S. will look for ways to increase LNG supplies, surge LNG supplies to Europe, not just over the course of years, but over the course of months as well," said National Security Advisor Jake Sullivan. (9 comments)

Alternative app payments

Google (GOOGGOOGL) is moving to let app developers offer users a chance to use their own billing systems rather than the one in the Play Store. That starts with Spotify (SPOT), which has announced a multi-year agreement on "User Choice Billing." It's a small pilot for now, but could have profound effects across the app eco-system, and sent shares of Spotify up 3.5% in premarket trading.

Quote: "Users who've downloaded Spotify from the Google Play Store will be presented with a choice to pay with either Spotify’s payment system or with Google Play Billing," Spotify wrote in a blog post. "For the first time, these two options will live side by side in the app. This will give everyone the freedom to subscribe and make purchases using the payment option of their choice directly in the Spotify app."

Specifically, the changes involve Spotify sending Google some chunk of the subscription fees it collects, though something less than the well-publicized 30% cut. Google has noted previously that the vast majority of developers don't pay 30%, saying today 99% of developers qualify for a service fee of 15% or less.

Go deeper: The decision follows some controversy over the last couple of years, during which Google battled Epic Games over Fortnite, while the Play Store approach drew an antitrust lawsuit from state attorneys general. It also puts pressure on fellow tech giant Apple (AAPL), which has similarly fought against Epic and is firmly against third-party billing in its App Store. (8 comments)

Maskless skies

As more states continue to turn the page on COVID - from pandemic to endemic - the masks are coming off and many testing sites are shutting down. Most requirements are now rolled back, except for masking in airports and on public transportation, where federal mandates are binding for another month. Meanwhile, new COVID-19 infections in the U.S. are now at their lowest level since last July - despite an uptick in the BA.2 subvariant - and over 99% of Americans are living in "low" or "medium" risk areas.

Masks on a Plane: The largest U.S. airlines are urging the Biden administration to drop the federal mask mandate on jetliners, along with the pre-departure testing requirement for international travelers. Earlier this month, the CDC for the third time extended its mass transit mask mandate by 30 days, until mid-April, and masking guidelines for airlines remain in place. The federal mandate applies across airports and trains, as well as buses and car share services.

"Much has changed since these measures were imposed and they no longer make sense in the current public health context. Given that we have entered a different phase of dealing with this virus, we strongly support your view that 'COVID-19 need no longer control our lives,'" wrote CEOs of American Airlines (NASDAQ:AAL), Alaska Air (ALK), Atlas Air (AAWW), Delta (NYSE:DAL), FedEx (NYSE:FDX), Hawaiian Holdings (HA), JetBlue (JBLU), Southwest (LUV), United (NASDAQ:UAL) and UPS (UPS).

More from the letter: "It is critical to recognize that the burden of enforcing both the mask and predeparture testing requirements has fallen on our employees for two years now. This is not a function they are trained to perform and subjects them to daily challenges by frustrated customers. This in turn takes a toll on their own well-being. We are requesting this action not only for the benefit of the traveling public, but also for the thousands of airline employees charged with enforcing a patchwork of now-outdated regulations implemented in response to COVID-19." (11 comments)

Four-day workweek

Debates over the length of the workweek are nothing new, but recent calls for a new model in the U.S. are making headlines. Pennsylvania Representative Chris Rabb from Philadelphia is appealing for a four-day, 32-hour workweek, and is set to propose a bill that would conduct a cost-benefit study of the shorter schedule. Across the country, California Congressman Mark Takano is echoing the position, saying a four-day workweek should be enshrined in legislation.

Some history: In the United States, Henry Ford is largely credited for standardizing the five-day, 40-hour workweek. In 1926, he shortened the then-prevalent six-day work routine - without reducing employee pay - saying we "can get at least as great production and probably greater." Later in the 1930s, President Franklin Delano Roosevelt signed the Fair Labor Standards Act, which was subsequently amended to make the 40-hour workweek a standard (after which overtime pay applies).

Belgium just gave employees the option to choose a four-day week (with 10-hour days) under a series of labor market reforms, while Ireland and Scotland launched four-day pilot programs (same pay, less hours) in January. Last year, Spain similarly offered companies the chance to apply for subsidies to introduce a four-day workweek without salary reductions, and Iceland ran the world's largest trial of a shorter working week from 2015 to 2019 with measurable success. The UAE separately cut its official working week to four-and-a-half days in December 2021 (with a Saturday-Sunday weekend) to better align its economy with the global market.

Business-wise: Some individual corporations have been experimenting with shorter workweeks to boost employee efficiency and well-being. E-commerce software provider Bolt famously decided to offer its employees a 32-hour week this year, and back in 2019, Microsoft Japan revealed that a closely-watched trial of its four-day workweek boosted productivity by 40%. Flexible workweeks can also be a powerful recruiting tool, especially at a time when the U.S. is struggling to source and retain workers across the economy.

Today's Markets

In Asia, Japan +0.3%. Hong Kong -0.9%. China -0.6%. India -0.1%.
In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt -0.1%.
Futures at 6:20, Dow +0.5%. S&P +0.6%. Nasdaq +0.8%. Crude +0.5% to $115.48. Gold +0.2% to $1940.80. Bitcoin +1.8% to $42,952.
Ten-year Treasury Yield +4 bps to 2.36%

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Durable Goods
8:30 Current Account
9:10 Fed’s Kashkari Speech
9:45 PMI Composite Flash
9:50 Fed’s Evans Speech
10:30 EIA Natural Gas Inventory
11:00 Fed’s Bostic Speech
11:00 Kansas City Fed Mfg Survey
4:30 PM Fed Balance Sheet

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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