The Israeli shekel, after rallying in November and December on signals the war would largely be contained to Gaza, has started weakening again. It fell by 0.6% to 3.7 per dollar as of 6.30pm on Monday in Tel Aviv, extending its loss this year to 2.3%, the worst performance among around 150 currencies tracked by Bloomberg. Some of that reverse came after an interest-rate cut on 1 January.

South Korea said North Korean weapons have been used by Hamas in its war with Israel, even as Pyongyang has denied the arms trade. 

Maersk and Hapag-Lloyd denied any pact with Yemen’s Houthi rebels to facilitate the safe movement of vessels through the Red Sea, after shares in shipping companies sunk on a report of deals being struck. 

Hezbollah says top commander killed as tensions with Israel grow

Hezbollah said a senior commander was killed in south Lebanon, amid rising concerns the war between Israel and Hamas will escalate into a wider Middle Eastern conflict.

The Iran-backed militant group said Wissam Taweel was killed in the fight against Israel, without giving further information. AFP said Israel struck the car he was in.

The death came as US Secretary of State Antony Blinken toured the region to calm tensions. On Sunday, he warned that “a moment of profound tension” in the Middle East could “easily” turn into a wider conflict.  

The Middle East and shipping markets have been roiled by attacks carried out by the Houthis — also backed by Iran — on vessels around the Red Sea, ostensibly in support of Hamas. Those have led the US and its allies to contemplate striking targets in Yemen, where the Houthi rebels are based.

Hezbollah and Israel have traded fire daily since the main conflict in Gaza began on 7 October. While those skirmishes on Israel’s northern border have yet to escalate into a full-blown conflict, senior Israeli political figures have become more bellicose in the past month. 

Taweel is the second Hezbollah commander Israel has targeted in Lebanon within a week.

Israeli Prime Minister Benjamin Netanyahu on Monday visited northern Israel, where about 100,000 people have been forced to evacuate from their homes. Hezbollah, which like Hamas is designated a terrorist group by the US, was making a mistake, he said.

“We will do everything to restore security to the north and allow your families — because many of you are from here — to return home,” Netanyahu said. “We will do whatever is necessary. Of course, we prefer that this be done without a wide-ranging campaign, but that will not stop us.”

Israeli officials have said time is running out for a diplomatic resolution with Hezbollah.

The US has been trying to prevent the conflict in Gaza turning into a regional war that could further drag in Washington. So far, it’s sent aircraft carriers to the area and intercepted missiles and drones fired at Israel by the Houthis. US bases in Syria and Iraq have come under attack more frequently from Iranian proxy groups since 7 October.

Hamas, another militant group supported by Iran, blamed Israel for the killing of a top leader in Beirut last week. Israel has said it will target Hamas leaders wherever they are and in recent weeks has been accused of killing Palestinian and Iranian commanders in the West Bank and Syria. 

Hamas killed around 1,200 people when it attacked Israel on 7 October. More than 22,000 have been killed in the Palestinian enclave since Israel responded with a bombardment and ground invasion, according to its Hamas-run health ministry.

South Korea confirms Hamas used North Korean weapons in war

South Korea said North Korean weapons have been used by Hamas in its war with Israel, even as Pyongyang has denied the arms trade. 

South Korea’s spy agency, the National Intelligence Service (NIS), released a photo of a North Korean rocket part on Monday to show Hamas fighters used an F-7 rocket-propelled grenade launcher manufactured in North Korea. 

The NIS was “collecting and accumulating specific evidence regarding the scale and timing of North Korea’s supply of weapons to Hamas and others, but currently it’s difficult to provide them, considering source protection and diplomatic relations”, it said in a statement. 

North Korea has denied its weapons were used by Hamas to attack Israel, saying it’s a “groundless and false rumour”. Korean Central News Agency, the state news agency, in October accused the US of seeking to divert the blame for the war from itself to a third country.  

Maersk, Hapag-Lloyd deny reported safe passage deal with Houthis

Maersk and Hapag-Lloyd AG denied any pact with Yemen’s Houthi rebels to facilitate the safe movement of vessels through the Red Sea, after shares in shipping companies sunk on a report of deals being struck.

Container company stocks were hit by a report in the Danish publication ShippingWatch that said meetings between Houthi rebels and shipowners had taken place, and that some safe passage accords had already been agreed upon. The publication didn’t name the companies that had purportedly made the pacts.

Maersk closed down 5.7% in Copenhagen, after earlier falling as much as 8.4%, while Hapag-Lloyd was down 8.2% in Frankfurt, after earlier sinking as much as 10.5%. Other companies to see declines included Kuehne & Nagel and Frontline. 

The Houthis have attacked at least 24 merchant ships over the past several weeks, forcing hundreds to instead sail the long way around Africa. Alongside the amount of cargo, voyage distance is another critical metric in ship demand, so the diversions helped to drive shipping costs much higher.

ShippingWatch said the pact would involve shipping companies agreeing to not go to Israel in return for being allowed through safely. 

Container shipping is set to face a crunch ahead of the Lunar New Year holiday as Houthi attacks in the Red Sea restrict capacity, a major industry consultant said. 

The coming weeks are likely to be very difficult as trade volumes ramp up before the Lunar New Year, which begins on 10 February, according to Philip Damas, managing director at Drewry Shipping.  

“There is something of a panic in China now about the availability of capacity,” Damas said. “The next five weeks leading to Chinese New Year on February 10 are going to be very difficult for shippers and for shipping,” though costs could ease after that, he added. 

Container giant Cosco to stop booking ships into Israel

Container shipping giant China Cosco Shipping is to stop delivering goods into Israel because of the threats and attacks that Houthi militias have made against vessels that sail there.

Amir Shani, deputy president at the Federation of Israeli Chambers of Commerce, an umbrella organisation for more than 5,000 businesses, said that Cosco informed his organisation’s member firms of the decision. A person with knowledge of the matter confirmed Cosco won’t take bookings into Israel from next week. 

Cosco’s decision goes a step further and means at least one huge shipping company is now unwilling to send boxloads of goods to Israel.   

Cosco has a fleet of at least 256 container ships on the water, according to data from Clarkson Research Services, a unit of the world’s largest shipbroker. That ranks it third in terms of in-service vessels. It’s fourth when including vessels on order.

Germany ready to lift veto on sale of Eurofighters to Saudi

German Chancellor Olaf Scholz’s government signalled it was prepared to reverse course and back the sale of additional Eurofighter aircraft to Saudi Arabia, though it said it might take several years for them to be delivered.

Scholz said as recently as July that his ruling coalition wouldn’t support exports of the aircraft to Saudi Arabia in the near future. The policy pushed by the Greens was part of an agreement between the three parties in the alliance in Berlin not to supply weapons to countries involved in the conflict in Yemen.

Foreign Minister Annalena Baerbock announced the policy reversal on Sunday during a visit to Jerusalem, potentially paving the way for a contract worth billions of euros. She said that the Saudi role in thwarting attacks on Israel by Yemen-based Houthi rebels means that Germany could no longer justify blocking Britain’s wish to supply the fighters — a joint project between the UK’s BAE Systems, Airbus and Italy’s Leonardo. 

Any eventual sale would require approval from Germany’s security Cabinet and it could then take several years for the aircraft to be built and delivered, Steffen Hebestreit, Scholz’s chief spokesperson, said. DM

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