Israel and Hamas agree to first phase of Gaza plan

Good morning and welcome back. In today’s newsletter:

• Israel and Hamas agree to first phase of Trump plan

• Nato weighs armed response to Putin’s hybrid war

• First Brands creditor claims $2.3bn ‘simply vanished’

• HSBC proposes to delist Hong Kong unit

We begin in the Middle East, where Israel and Hamas have agreed a deal to release all the remaining hostages held in Gaza as part of the first phase of US President Donald Trump’s plan to end the devastating two-year war in the strip.

What happened: Trump wrote on Truth Social last night: “ALL of the Hostages will be released very soon, and Israel will withdraw their Troops to an agreed upon line as the first steps toward a Strong, Durable, and Everlasting Peace.”

The agreement marks a breakthrough in the US president’s push to end the conflict, which has killed tens of thousands of people, devastated Gaza and triggered a wave of conflict across the Middle East.

What lies ahead: Israeli Prime Minister Benjamin Netanyahu said he would convene his government today “to approve the agreement and bring all our beloved hostages home”.

Hamas is expected to release all of the 48 hostages — 20 of whom are believed to be alive — about 72 hours after the Israeli government approves the deal, people briefed on the talks said. Read the full story.

• Littered with explosives: Syrians are returning home to a land peppered with mines, which have killed hundreds since the civil war ended.

Here’s what else we’re keeping tabs on today:

• Nobel Prize: The award for Literature will be announced by the Swedish Academy in Stockholm.

• India-UK ties: Prime Minister Narendra Modi is due to address a fintech summit in Mumbai with British counterpart Keir Starmer, who hailed the country’s digital ID programme as a “massive success”.

• UK: FT Live two-day Metals and Mining Summit begins in London. Register here.

• Results: Delta Air Lines, Levi Strauss, PepsiCo and Volution Group report earnings.

Five more top stories

1. Exclusive: Nato allies are discussing wider countermeasures to Vladimir Putin’s hybrid war, including deploying armed drones along the border with Russia and easing restrictions on pilots to allow them to open fire on Russian aircraft. Henry Foy has more from Brussels.

2. One of First Brands’ largest creditors has alleged that as much as $2.3bn in assets “simply vanished” before the bankrupt auto supplier failed, as Raistone called for an independent examiner to probe its downfall. Read the full story.

3. HSBC has proposed a $13.6bn transaction to delist Hang Seng Bank. The lender’s offer to take its local Hong Kong unit fully private comes as Europe’s largest bank presses ahead with its restructuring plan. Read more for details.

4. China has unveiled sweeping new export controls on rare earths and related technologies, as Beijing seeks to protect its dominant position in critical minerals. The restrictions will for the first time create a Chinese version of the US foreign direct product rule. Read details of the new rules.

5. US Treasury secretary Scott Bessent grilled contenders to lead the Federal Reserve about their stance on interest rates and the unwinding of crisis-era stimulus, as the Trump administration seeks to replace chair Jay Powell. Find out who went through the first round of interviews.

Can the global economy withstand new shocks? Take part in a live Ask an Expert Q&A with the Financial Times’ Tej Parikh and Martin Sandbu today at 1pm BST. Submit your questions here.

The Big Read

The World Economic Forum’s annual meeting in Davos has been a magnet for heads of government, tech titans and cultural figures, shaping global capitalism’s agenda for decades. But an internal scandal involving its founder has battered the Swiss organisation. Can the WEF save itself?

We’re also reading . . . 

• UK council tax: An FT analysis shows the arbitrary nature of the levy system. Discover how your bill compares in your area and if it is fair.

• Japan shortages: The lack of workers is affecting various professions, exacerbating the sense of affliction caused by price rises, writes Leo Lewis.

• Red tape snafu: Europeans may face taking cold showers after material in hot water tanks were excluded in a regulation list.

• Discord at La Fenice: The Venice opera house’s orchestra has objected to the appointment of a conductor aligned with Prime Minister Giorgia Meloni’s party.

Chart of the day

The UK food industry says domestic policies, not global pressures, are propelling grocery bills higher, as food inflation outstrips that of other wealthy economies. The annual rate of price rises in the UK was 5.1 per cent in August, higher than in Germany, France and the US.

Take a break from the news . . . 

The National Portrait Gallery in London today opens a homage to Cecil Beaton as a big fashion personality. With more than 200 objects — photographs, sketches, costumes and other ephemera — the exhibition, which will end on January 11, explores how he shaped fashion.