Welcome to Markets Desk, your midday read on what's moving markets and policy.
Friedrich Merz is digging in after a bruising night in Germany's regional elections, where his CDU party barely cleared the five percent threshold needed for parliamentary representation in Mecklenburg-Vorpommern. The chancellor is vowing to stay on, but thin margins in the east signal real fractures in his governing coalition's political foundation.
Shifting to Washington, the Trump administration's posture toward Beijing is drawing sharp scrutiny. Despite longstanding rhetoric about China as an economic adversary, President Trump is now speaking warmly about Xi Jinping ahead of a formal state dinner, even as reports surface suggesting Beijing has been assisting Tehran. Critics argue the president is trading strategic leverage for diplomatic optics at a sensitive moment.
And closer to home, fuel prices are biting hard into household budgets, with working Americans increasingly forced to choose between gas and groceries. Trump has called the cost, quote, a very inexpensive price to pay, in the context of the Iran conflict, but that framing is landing poorly with consumers already stretched thin by persistent inflation and elevated energy costs.
That's the tape. Markets Desk, signing off the floor.
