Supporters hold up signs reading “Chancellor” and “Merz” during the final campaign event of Germany’s Christian Democratic Union party in Munich, on Feb. 22, 2025.
Alexandra Beier | Afp | Getty Images
The transatlantic relationship between Europe and the U.S. has been one of the world’s longest alliances, and yet it has never been more closely watched than the past month.
Over the weekend, exit polls showed Germany’s conservative CDU-CSU party secured the largest share of votes in the German federal election, with the far-right Alternative fuer Deutschland (AfD) party in second place.
The AfD, which counts Tesla CEO Elon Musk among its supporters, secured about 20% of the vote, up from around 10% in Germany’s last federal election. However, the party is unlikely to be part of the government, as no other parties have agreed to work with it.
Friedrich Merz, migration hard-liner and longtime rival of Angela Merkel, is expected to become Germany’s next chancellor. “I would never have thought that I would have to say something like this in a TV show but, after Donald Trump’s remarks last week…it is clear that this government does not care much about the fate of Europe,” Merz reportedly told German public broadcaster ARD on Sunday.
This comes as Ukraine president Volodymyr Zelenskyy said Sunday he would be ready to give up the presidency, if doing so would achieve a lasting peace for his country under the security umbrella of the NATO military alliance.
Support for Ukraine has been a flashpoint between the U.S. and Europe since U.S. president Donald Trump took office, with Trump blaming Ukraine for the Russian invasion in 2022 and largely aligning with Russia’s position for peace in the three-year war.
— Lim Hui Jie
What you need to know today
German conservatives win election, but far-right makes gains
The Christian Democratic Union and the allied Christian Social Union secured the largest share of votes in the German federal election on Sunday, according to exit polls. This puts the party’s lead candidate Friedrich Merz in prime position to take over from Olaf Scholz as chancellor. The far-right Alternative fuer Deutschland (AfD) party saw its best performance in its history, with about 20% of the vote and in second place.
Berkshire will continue to increase investment in Japan trading houses
Berkshire Hathaway is committed to its Japanese investments for the long term, and has reached an agreement with the companies to own beyond its initial 10% ceiling, Warren Buffett said in his annual letter to shareholders released Saturday. The Japanese names in Berkshire’s portfolio are Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo, which are the biggest “sogo shosha,” or trading houses in Japan that invest across diverse sectors domestically and abroad.
China trying to boost foreign investment amid geopolitical tensions
Chinese authorities have published a “2025 action plan for stabilizing foreign investment” to make it easier for foreign capital to invest in domestic telecommunication and biotechnology industries, according to a CNBC translation. The document called for clearer standards in government procurement — a major issue for foreign businesses in China — and for the development of a plan to gradually allow foreign investment in the education and culture sectors.
Wall Street sells off on sticky inflation numbers
U.S. stocks fell on Friday as new data raised concerns over inflation and recession fears, with the Dow Jones Industrial Average lost 748.63 points, or 1.69%, to record its worst day of 2025. The S&P 500 slid 1.71%, while the Nasdaq Composite dropped 2.2%. Over in Asia, markets mostly fell Monday, with India’s Nifty 50 down about 1% and leading losses in the region.
[PRO] What’s next for Alibaba after AI rally?
Alibaba is back in the spotlight — with U.S.-traded shares soaring nearly 70% so far in 2025 — as a favored play on Chinese artificial intelligence. Its Qwen AI model has proven itself a capable rival to DeepSeek, along with winning a deal for iPhones sold in China.
And finally…
U.S. Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on “The Semiannual Monetary Policy Report to the Congress,” at Capitol Hill in Washington, U.S., Feb. 11, 2025.
Craig Hudson | Reuters
The Fed is stuck in neutral as it watches how Trump’s policies play out.
The popular narrative among Federal Reserve policymakers these days is that policy is “well-positioned” to adjust to any upside or downside risks ahead. However, it might be more accurate to say that policy is stuck in position.
With an abundance of unknowns swirling through the economy and the halls of Washington, the only gear the central bank really can be in these days is neutral as it begins what could be a long wait for certainty on what’s actually ahead.
