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More than four decades ago, French philosopher Gilles Deleuze argued that true art is inseparable from the physical and emotional struggle of humans confronting chaos.
According to him, what gives rise to genuine artistic expression begins with the artist’s direct experience of uncertainty—something an algorithm can never replicate.
“If someone devotes their entire life to painting and battling clichés, it’s not a classroom exercise,” Deleuze said in a rough translation of his 1981 lecture notes. “What matters is the act of struggle, the rejection of the cliché, the creation of something.”
Today, Deleuze’s warning feels more relevant than ever, as AI-generated art—often full of familiar patterns—floods online platforms. Powered by advanced algorithms, AI tools can now create images, music, and even writing with minimal human input based on just a simple prompt.

🔹 AI Under Fire: Copyrights and the Soul of Creativity
Controversy surrounding AI continues to grow. Recently, YouTuber MrBeast took down an AI-generated thumbnail tool after backlash over artist rights. In May, Elton John criticized the UK government’s AI copyright proposals as “deeply disturbing” for creators.
Tech giants like Meta, OpenAI, and Anthropic are facing lawsuits over AI-generated lyrics, training on copyrighted books, and the broader question of whether training AI qualifies as “fair use.”

🔹 The Limits of Artificial Intelligence: Fundamentally Human

Max Li, founder and CEO of the decentralized AI platform OORT, stated that AI capabilities remain fundamentally limited by their human origins. Even the most advanced models are still constrained by the architectures, datasets, and objectives initially defined by humans.
“AI may mimic patterns of thinking or behavior,” Li explained, “but it lacks the kind of internal cognitive foundation or emergent understanding.” While AI behavior may at times seem surprising, “it’s ultimately bounded by the knowledge and logic we’ve given it,” he added.

🔹 Deleuze Was Right: Art Is Born from Struggle, Not Calculation
Deleuze saw creativity as an act of exploration—a physical and emotional response to the unknown. “The painter is an eye, a hand, a nervous system searching, trying all combinations, hoping something appears,” he once said.
When a painter constantly fights against cliché and repetition, every brushstroke carries emotions, doubt, and lived experience. No AI can go through that process—and that’s precisely why it cannot create art that matches true human expression.

🔹 AI as a Tool, Not a Replacement

Philosophy professor Virgilio Rivas expressed a similar view, noting that creativity alone is insufficient without human context. While AI might be used to "restore and reinvent human memory," it can never truly replace it.
While AI might help humans expand the boundaries of what can be understood or visualized, it will never have the experience necessary to create something truly new and meaningful.

🌍 Summary:
As artificial intelligence dominates digital art spaces, philosophers and technologists alike remind us: real creativity doesn’t emerge from data but from chaos, doubt, and the deeply human need to express.

#AI , #ArtificialInteligence , #OpenAI , #worldnews , #Technology

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The European Union is facing mounting pressure from top industry leaders and tech executives, who are calling for a two-year delay of the upcoming AI Act. They argue that the strict and vague regulations could stifle innovation and give an edge to well-funded American tech giants.

🔹 Business Leaders Sound the Alarm
A group of 44 CEOs from major European corporations – including Airbus, BNP Paribas, Carrefour, and Philips – sent a letter to European Commission President Ursula von der Leyen. In it, they warn that the current version of the legislation could harm Europe's competitiveness in the field of artificial intelligence.
“Overly complex and ambiguous rules could discourage investors and prevent companies from deploying AI at the scale demanded by global competition,” the letter states. The CEOs are urging a two-year pause to allow for simplification and refinement of the rules.

🔹 A Fragile Compromise: Softened Draft and Code of Practice
In response, Brussels is revising the AI Act, which includes a proposed “code of practice” — a framework to guide companies on how to properly implement advanced AI models such as GPT-4, Gemini, and Llama.
Originally scheduled for release in May, the code is now expected to be published before the law comes into effect in August. EU Commissioner for Technology Henna Virkkunen stated that the aim is to especially support small and medium-sized businesses in complying with the new legislation.
Although the AI Act formally takes effect in August 2024, several key provisions will not become active until the end of the year or later. Officials within the European Commission are already exploring ways to phase in the law in multiple stages.

🔹 Startups Warn of Bureaucracy and Legal Chaos
Startups are raising red flags as well. Over 30 EU startup founders sent a separate letter this week, calling the legislation a “ticking time bomb.” They fear that unclear rules for general-purpose AI models could lead to a patchwork of national regulations, giving an advantage to American firms with deeper pockets.
Particular criticism is aimed at requirements around liability for AI-generated content and intellectual property rights. If smaller companies are held to the same standards as tech giants like Google and Microsoft, their growth could be severely hampered.

🔹 Commission Reassures: Safety and Clarity Are Still Key
The European Commission has responded by affirming its commitment to the core goals of the AI Act — introducing harmonized, risk-based rules and ensuring the safety of AI systems on the European market. At the same time, the Commission acknowledged its willingness to adapt digital regulations and consider all available options to ease implementation burdens.

#AI , #Artificiallnteligence , #Eu , #INNOVATION , #worldnews

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In June 2025, Tesla reported mixed global sales performance. While gains in China and select European markets gave some cause for optimism, steep declines in key Western European regions point to intensifying competition, geopolitical frictions, and reputational challenges. All this unfolds amid a renewed public feud between Elon Musk and Donald Trump.

Shanghai Factory Sees First Year-over-Year Growth in 2025
Tesla’s Shanghai factory delivered 71,599 vehicles in June, marking a 0.8% increase compared to June 2024 and a 16% rise from May. It’s the first YoY growth of the year, following China’s approval of Tesla’s upgraded driver assistance technologies.
The Shanghai facility remains a critical export hub, especially for Europe, where the company is navigating increasing pressure from local rivals like BYD and mounting political scrutiny.

Southern Europe Booms While the North Slumps
While Tesla registrations surged in Norway and Spain—mainly driven by demand for the updated Model Y—figures plummeted in Sweden and Denmark.
🔹 Norway saw a 115.3% YoY jump in Model Y sales and a 54% overall increase in Tesla registrations.

🔹 In Spain, Tesla deliveries rose by 60.7%, with Model Y sales skyrocketing 127.2%.

🔹 Portugal registered a modest 7.3% rise in total Tesla sales.
On the downside:
🔻 Sweden saw a sharp 64.4% drop in Tesla registrations.

🔻 Denmark reported a 61.6% decrease, with Model Y sales down 31.2%.

🔻 France saw a 10% dip, while Italy experienced a dramatic 66% plunge—even as EV registrations overall jumped 117%.
Analysts caution that logistics and product launch timing often skew monthly numbers in smaller European markets.

Tesla Under Pressure: Protests, Competition, and Image Issues
Elon Musk’s increasing political entanglements are stirring backlash in Europe. Protests against his ties to Donald Trump and far-right politics have led to acts of vandalism targeting Tesla showrooms and charging stations.
Moreover, Tesla hasn’t released a new mainstream model since 2020, while traditional automakers and Chinese EV brands roll out more affordable alternatives. The company has now posted six consecutive quarters of declining YoY registrations in Western Europe, with Q2 2025 expected to mark the seventh.

Musk vs. Trump: Old Rivalry Reignites
Amid these headwinds, Elon Musk publicly reignited his feud with Donald Trump, criticizing his sweeping tax cut and spending plans. The dispute rattled investors, sending TSLA shares down 5.3% on Wednesday.
Tesla is now gearing up to report quarterly results, which are widely expected to show another decline in global deliveries.

#Tesla , #ElonMusk , #stockmarket , #TRUMP , #worldnews

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Global markets are facing a new source of anxiety: growing uncertainty surrounding Iran’s stockpile of highly enriched uranium. According to intelligence reports, Iran likely moved over 400 kilograms of uranium enriched to 60% just before joint U.S.-Israeli airstrikes struck key nuclear sites. No one can confirm whether the material was destroyed, hidden, or is still waiting somewhere in the shadows—and the world is holding its breath.

Chaos After the Strikes: Uranium Missing or Simply Hidden?
U.S. and Israeli forces struck Iran’s main nuclear facilities—Fordow, Natanz, and Isfahan—on June 13. President Trump hailed the operation as successful, stating the sites were “completely destroyed.” However, the International Atomic Energy Agency (IAEA) warns that the true extent of the damage remains unknown. Even worse, there’s no evidence that the uranium stockpiles were hit.
According to IAEA Director Rafael Grossi, the centrifuges were likely severely damaged, but it remains unclear what happened to more than 400 kg of nearly weapons-grade uranium. If the material was moved, it may have disappeared before the first bombs dropped.

Satellite Evidence and Advance Warning
Satellite images show trucks lined up near the Fordow facility shortly before the airstrikes. Diplomatic sources suggest Iran may have received advance warning and relocated the sensitive material in time. Trump denies this, insisting “nothing was moved,” but experts argue that without forensic investigations, no one can know for sure where the uranium is now.

Economic Fallout: Fear Pushes Prices Higher
This uncertainty isn't just a security risk—it’s an economic one. The lack of clarity about Iran’s nuclear assets is shaking global markets. Oil prices are rising, governments are stockpiling, and traders are speculating. It’s not just geopolitics anymore—this could drive inflation.

Iran Pushes Back, Threatens to Cut Off Cooperation
Iran denies violating any international agreements. Still, the IAEA Board of Governors passed a resolution accusing Tehran of breaching the Non-Proliferation Treaty. In response, Iran’s parliament voted to suspend cooperation with the agency and accused it of diplomatically “justifying” the airstrikes. The IAEA firmly denies the accusation.

Unknown Uranium, Unknown Future
IAEA chief Rafael Grossi admits there is no evidence of an Iranian nuclear weapons program—but also cannot confirm the program is purely peaceful. With more than 400 kilograms of enriched uranium unaccounted for, governments are forced to act based on limited data. And that’s a dangerous scenario.

#iran , #Inflation , #MarketPanic , #Geopolitics , #worldnews

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Japan finds itself in an increasingly tense situation as President Donald Trump pushes for a new trade agreement before new U.S. tariffs take effect on July 9. Without a compelling offer to Washington, Tokyo risks losing a key trade deal with the United States.

🚗 Auto Industry at the Center of the Talks
A major point of contention is Japan’s auto industry, which makes up around 10% of the country’s GDP and employs nearly 8% of its workforce. Japan is trying to avoid Trump's harsh tariffs by offering U.S. investments, cooperation in shipbuilding, and increased purchases of American semiconductors and LNG. The goal is to reduce the planned 25% tariff to a more manageable 10%.
However, Tokyo faces tough choices – one potential offer includes opening up the Japanese rice market, a move that could cost the ruling party support among rural voters just ahead of national elections on July 20.

🛑 Japan’s Friendly Approach Meets U.S. Pressure
Chief negotiator Ryosei Akazawa has made seven trips to Washington in recent months to keep the talks alive. Yet, despite his efforts, he often returns without confirmed meetings. On his latest trip, he only managed two phone calls with Commerce Secretary Lutnick and couldn't meet with Treasury Secretary Bessent at all.
Meanwhile, President Trump has publicly criticized Japan for not buying enough American cars or importing U.S. rice, even claiming Japan has a “massive rice shortage.”

⚖️ Tokyo’s Strategy Faces Domestic Resistance
Japan’s government is caught between U.S. demands and pre-election domestic politics. According to analysts, the administration is in a bind – give in too much, and it risks alienating voters; push back too hard, and it could damage relations with a critical ally.
Agriculture Minister Shinjiro Koizumi supports a deal that maximizes Japan’s benefits but has made it clear that farmers won’t be sacrificed just to protect car exports.

📉 Business Mood Steady – For Now
According to a new Bank of Japan survey, business sentiment remains surprisingly stable. The index for large manufacturers rose to +13 in June, beating forecasts. Still, companies lowered their profit outlooks, anticipating that tariffs could take a toll in the near future.
Non-manufacturing sentiment dipped slightly from +35 to +34, with firms citing rising labor costs and weaker tourist spending as concerns. Some companies reported passing higher costs to consumers, while others said sluggish sales and wage hikes hurt revenues.

📦 Trump Ready to Act Alone
President Trump has indicated he’s ready to skip negotiations altogether and simply send countries a letter with new tariff rates. When asked if such a letter would be announced publicly, Akazawa smiled and said: “If it happens, I’m sure President Trump will post it on Truth Social.”

🔮 Economy Resilient, But the Clock Is Ticking
Despite uncertainty, Japan’s economy remains relatively strong. GDP contracted by 0.2% year-over-year in Q1, largely due to weak consumer spending. But businesses have held steady so far. Still, with tariffs set to rise to 25% on cars and 24% on other goods after July 9, exporters face serious new challenges.

#Japan , #TradeWars , #TRUMP , #TradingCommunity , #worldnews

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🔹 Joby Aviation, a U.S.-based company, has taken a major step toward the commercialization of urban air travel. It successfully launched piloted test flights in Dubai, where its electric vertical takeoff and landing (eVTOL) aircraft completed smooth transitions from vertical takeoff to horizontal flight and back to landing.
🔹 These tests are part of preparations for Joby’s first commercial air taxi service, which could begin by the end of this year or early 2026.

🚦 Certification, Infrastructure, and Enthusiasm: Dubai Prepares for Launch
Joby is currently working with both the Dubai Civil Aviation Authority and the U.S. Federal Aviation Administration (FAA) to obtain full certification for its aircraft. Construction of the first commercial vertiport is already underway at Dubai International Airport, setting the stage for a future global rollout.
Paul Sciarra, Executive Chairman of Joby, emphasized that the tests prove urban air mobility is close to becoming a reality:
“The question is no longer if, but when and how these services will reach people and begin offering real value.”

💰 Deep Pockets and Growing Competition
Founded in 2009, Joby has raised more than $2 billion in funding. Its eVTOL aircraft can carry one pilot and up to four passengers at speeds of up to 200 mph (320 km/h).
But Joby is not alone. Competitors are emerging fast: Chinese firm EHang has gained approval for pilotless flights, and U.S.-based Archer Aviation plans to launch its service in Los Angeles by 2026. However, Joby is ahead in both certification and infrastructure.

🌍 Dubai as a Global Launchpad
Dubai is seen as an ideal location for debuting new transport technologies. Joby’s leadership says the city's proactive approach to innovation gives it a major edge. If approval is secured here, global expansion becomes more likely.
“With a commercial foothold in Dubai and FAA certification, we’re in a strong position to scale globally,” said Sciarra.

✈️ Summary:
🔹 Joby begins piloted test flights in Dubai

🔹 Commercial launch expected by late 2025 or early 2026

🔹 Strong financial backing and global ambitions

🔹 Dubai is building the first infrastructure for air taxis

#FlyingCar , #worldnews , #Dubai. , #techinnovation , #Technology

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🔹 Wall Street's forecasts for 2025 have completely collapsed. Instead of a year of dollar strength, stock market gains, and stability, a series of political shocks have thrown the market into disarray — all thanks to Donald Trump.
🔹 The U.S. dollar saw its worst start since 2005, while U.S. stocks plunged and then surged again after Trump unexpectedly lifted some of his highest tariffs in April. Investors were caught off guard, and markets began to dance to the unpredictable rhythm of Trump’s policies.

🔍 When Forecasts Go Up in Smoke
2025 was supposed to be the year of American dominance — low taxes, high tariffs, controlled inflation, and a strong dollar. But reality turned out quite different. The dollar weakened sharply, something almost no one anticipated, especially after Trump launched his bold economic agenda.
The Bloomberg Dollar Index recorded its worst start to a year in two decades. And when Trump announced his “Liberation Day” — a sweeping wave of new tariffs — investor confidence plummeted. Some speculated he was deliberately trying to weaken the dollar to support U.S. manufacturers.
💬 JPMorgan analysts warned that a weakening dollar could scare off foreign capital and shake trust in U.S. assets. Their latest forecast expects another 2% drop in dollar strength by the end of the year.

📉 Stock Market Rollercoaster: From AI Euphoria to Tariff Panic
At the start of the year, Nasdaq was booming, driven by optimism around artificial intelligence. But the mood shifted when Chinese AI startup DeepSeek emerged as a serious competitor to U.S. tech giants. Then came Trump's tariff escalation.
Between February and April, nearly $7 trillion in market cap vanished from U.S. stocks. Fund managers withdrew from American equities in record numbers. But then Trump flipped the narrative — in April, he unexpectedly lifted some of the harshest tariffs, and markets erupted. The S&P 500 hit new highs, and tech stocks soared once more.
🌀 Trump’s unpredictable moves showed just how easily political rhetoric can overturn market behavior.

💴 Yen Rises While the Dollar Bleeds
Investors had already begun shifting toward Japan early in the year, as its central bank was one of the few expected to raise rates in 2025. When Trump’s trade shockwaves hit, the yen became a safe haven.
By June, the Japanese yen had surged nearly 9% against the dollar, making it one of the best-performing currencies of the year.

🧠 One-Minute Recap:
🔹 Wall Street underestimated the chaos of Trump’s policy

🔹 Dollar weakened despite forecasts of strength

🔹 Stock markets crashed, rebounded, and confused investors

🔹 Traders sought safety in the Japanese yen

🔹 Markets are hyper-sensitive to Trump’s unexpected interventions

#TRUMP , #usd , #WallStreet , #stockmarket , #worldnews

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High drama is unfolding in the U.S. Senate as Trump’s massive $4.5 trillion tax-and-spending bill teeters on the edge of collapse. A small group of Republican senators could kill the legislation just days before the critical July 4th deadline.

🔹 Two GOP Senators Already Voted “No” – One More Could End It
The Senate’s Republican majority holds 53 seats. Trump’s bill can survive only three defectors. Right now, two are already gone: Thom Tillis and Rand Paul. Both opposed the motion to proceed with debate and show no sign of backing down.
“This isn’t what I signed up for,” Paul said, citing the bill’s size and the $5 trillion debt ceiling increase it includes.

🔹 Trump Attacks, But Rebels Aren’t Backing Down
Following the vote, Trump launched aggressive attacks on social media, singling out Tillis: “You talk and complain, BUT YOU DON’T ACT!” he wrote. But Tillis announced he won’t seek reelection, freeing him from Trump’s political pressure. He made it clear he’s likely to vote “no” again.

🔹 Moderates Want Revisions, Hardliners Push for Deeper Cuts
Senators Lisa Murkowski and Susan Collins are demanding significant changes. They oppose steep Medicaid cuts in the bill, which could leave 11.8 million Americans uninsured, according to the Congressional Budget Office.
They’re also pushing to slow down the rollback of tax incentives for clean energy projects, which they say have driven job growth in their states.
Meanwhile, hardline conservatives aren’t budging. Senator Ron Johnson proposed an amendment to accelerate Medicaid cuts, not delay them. He claims support from Rick Scott, Mike Lee, and Cynthia Lummis.

🔹 All Eyes on Sunday Night: Make-or-Break Vote Approaches
A pivotal vote is expected late Sunday or early Monday. If Thune can’t secure the needed support, the bill could die in the Senate before even reaching the House of Representatives, where it faces further opposition.

🔹 Resistance Grows in the House
Some House Republicans say the tax cuts go too far, while others argue the proposed $1.2 trillion in spending cuts aren’t enough. The bill includes extended 2017 tax breaks plus new incentives for tipped workers, hourly employees, seniors, and EV buyers.
The internal divide over these provisions is tearing the GOP apart.

🔹 Public Opinion Is Lukewarm at Best
A Pew Research poll shows that 49% of Americans oppose the bill, only 29% support it, and 21% are undecided. These numbers are unsettling for moderate lawmakers seeking reelection in 2026, especially in swing states.

💬 Summary: Hours Before Independence Day – Will the Bill Pass or Collapse in Chaos?
Senators are staying overnight on Capitol Hill. If Thune can strike a last-minute deal and hold his party together, the Senate could pass the bill by Monday. But even then, it must clear the House – where the resistance is stronger.
Trump, now back in the White House, is growing increasingly impatient. “No excuses,” he warned last week. “Deliver it on time.” Whether there will be anything left to deliver remains uncertain.

#TRUMP , #USPolitics , #USGovernment , #worldnews , #TaxBill

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The high-profile case in Singapore involving alleged smuggling of Nvidia AI chips to China continues to unfold. On Friday, a local court postponed the hearing for three accused men to August 22, giving investigators more time to gather crucial information from foreign agencies and process new evidence.

🔹 What’s the case about?

Three men — two Singaporeans and one Chinese national — are accused of misrepresenting the end users of servers equipped with high-performance chips allegedly destined for Chinese AI firm DeepSeek. Prosecutors claim the men falsified information in purchase orders from 2023 and 2024 to bypass export controls.

🔹 A threat to international security

Singapore authorities treat the matter with utmost seriousness, citing the global risk posed by misleading end-user data. The Nvidia chips involved are banned from export to China since 2022 due to their potential military use. Yet the investigation suggests the hardware may have reached China via shell companies operating in Singapore.

🔹 Evidence builds up

Deputy Public Prosecutor Phoebe Tan told the court that since the last hearing in May, 10 new witnesses were interviewed and 35 out of 53 electronic devices have been analyzed. Authorities are still awaiting responses from overseas partners to trace the shipment’s path — it was allegedly rerouted through Malaysia, but the final destination remains unclear.

🔹 A broader criminal network

This incident is part of a larger crackdown targeting 22 individuals and companies suspected of engaging in similar schemes. Officials believe an organized smuggling network is exploiting Singapore as a logistical hub to secretly ship restricted AI processors to China, undermining global tech export laws.

🔹 Singapore under global spotlight

U.S. export restrictions aim to curb China's access to advanced AI chips due to national security concerns. If Singapore fails to deliver a strong response, other neutral trade jurisdictions could become vulnerable. The outcome of the August hearing may set an important precedent for tighter tech transfer enforcement across Asia.

#AI , #artificalintelligence , #Singapore , #Geopolitics , #worldnews

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Friday’s trading brought a strong wave of optimism to Asian markets. Regional indices surged to their highest levels in more than three years, driven by easing geopolitical tensions and renewed hopes for trade deals. At the same time, the U.S. dollar came under pressure, hitting its lowest point in over three and a half years and heading for its biggest half-year decline since the 1970s.

🔹 Asia Celebrates Records, Investor Sentiment Improves

The MSCI Asia-Pacific index (excluding Japan) climbed to its highest point since November 2021 and was on track for a weekly gain of around 3%. Japan’s Nikkei jumped 1.5%, briefly surpassing the psychological barrier of 40,000 points for the first time since January.
The optimism in Asia followed a strong Thursday on Wall Street, where U.S. stocks rallied on growing investor confidence in an imminent Fed rate cut. European index futures also gained – EUROSTOXX 50 and DAX rose over 0.6%, while the UK’s FTSE added 0.16%.

🔹 Dollar Under Pressure: Markets Expect Fed Shift and Possible Leadership Change

The U.S. dollar fell to its lowest level since 2021 on Friday. It has lost over 10% since the start of the year and is on course for its biggest half-year drop since the free-floating currency system began in the 1970s.
Behind the weakening dollar are growing speculations of political pressure on the Federal Reserve. According to the Wall Street Journal, President Trump may replace Fed Chair Jerome Powell – possibly as early as September. Markets are increasingly pricing in an imminent rate cut.
The euro rose to $1.1745 – its highest level since September 2021. The pound climbed to $1.3733. The U.S. dollar index stood at 97.378, heading for its sixth consecutive monthly loss.

🔹 Oil Plunges, Gold Slightly Down

On commodity markets, oil drew the most attention. While it rebounded slightly on Friday – Brent crude added 0.52% to $68.08 per barrel, and U.S. WTI rose 0.61% to $65.54 – both benchmarks were still down over 10% for the week. The ceasefire between Iran and Israel eased fears of supply disruptions.
Meanwhile, gold, which has recently hit record highs, corrected slightly – down 0.23% to $3,320.25 per ounce.

🔹 Tensions Easing, Trade Talks Accelerating

Investors welcomed diplomatic progress between the U.S. and China. The White House confirmed that both powers are accelerating the supply of strategic resources, including rare earths. A positive signal also came from German Chancellor Friedrich Merz, who called for “fast and simple” trade deals within the EU.
Bond markets remained stable – U.S. 10-year Treasury yields held at 4.2554%, and 2-year yields at 3.7418%.

Summary:
After a turbulent period, global investors are finally breathing a sigh of relief. A weakening dollar, calm in the Middle East, and improved trade outlooks have created a wave of positive sentiment in the markets. Whether this holds through the summer will largely depend on the Fed – and who leads it.

#Asia , #stockmarket , #dollar , #bond , #worldnews

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🔹 The Hong Kong Monetary Authority (HKMA) stepped back into the foreign exchange market to defend the city's long-standing currency peg to the U.S. dollar. The Hong Kong dollar slipped below the lower bound of HK$7.85 per USD, triggering immediate action from the central bank.
🔹 In response, HKMA sold HK$9.4 billion (approximately $1.2 billion USD) from its reserves to buy back the local currency and push its value up. This move also reduced liquidity in the banking system, pushing up interbank interest rates—significantly complicating the popular carry trade strategy, where investors borrow in low-interest Hong Kong dollars and convert them into higher-yielding U.S. dollars.

Cheap Hong Kong Dollar Bets Get More Expensive
📉 Until recently, traders could cheaply borrow Hong Kong dollars, convert them into U.S. dollars, and pocket the yield difference. But May and June’s extreme volatility brought this game to a halt. With tighter liquidity and rising interest rates, HKMA is rewriting the rules.
📌 During the previous intervention in May, HKMA faced the opposite issue—a strengthening Hong Kong dollar. Back then, they injected more HKD into the market, slashing lending rates close to zero and fueling a speculator’s dream. Now, the situation has reversed, and the environment is getting much tougher.

Peg Under Scrutiny, but No Changes for Now
📊 Hong Kong’s currency peg, in place since 1983, is a cornerstone of the city's financial system. But May 2025 saw the steepest drop in the HKD since the peg was established, raising questions about its long-term sustainability. Despite this, Chief Executive John Lee Ka-chiu made it clear in early June: the peg isn’t going anywhere.
💬 “Maintaining the peg is crucial to our financial credibility,” Lee stated, aiming to calm market speculation.

Hong Kong Has the Firepower, But the Pressure Remains
💰 With foreign currency reserves exceeding $431 billion, HKMA has ample ammunition to defend the peg. However, carry trades remain tempting—the gap between U.S. and Hong Kong one-month interest rates is currently around 3.4%, drawing global investors into the game.

🧭 While the Hong Kong dollar has returned to its target range, the real question is: How long can it stay there?

#HongKong , #dollar , #economy , #worldnews , #forex

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Foreign direct investment (FDI) in the United States dropped significantly in the first quarter of 2025. According to fresh data from the U.S. Department of Commerce, inflows amounted to just $52.8 billion, down from $79.9 billion in the final quarter of 2024.
🔹 This sharp decline in capital inflows coincides with growing uncertainty around President Donald Trump's tariff policies. As businesses reconsider their strategies in response to changing import rules, many are holding off on major investments until clearer guidelines are established.

Temporary Slowdown or Alarming Trend?
Despite the worrying numbers, analysts caution that this slowdown might be temporary. Several major foreign firms are launching new manufacturing projects across the U.S., which could soon turn the tide. One notable example is Japan’s Nippon Steel, which plans to acquire US Steel in a $15 billion deal — a move expected to lift investment figures in upcoming quarters.
The decline in FDI also coincided with a record current account deficit, which reached $450.2 billion in Q1 2025. Companies rushed to import goods in advance of Trump’s proposed tariffs, putting further pressure on the trade balance.

Tariffs Undermine Dollar and Inflate Deficit
In addition to weakened FDI, America’s external trade faces serious strain. Imports surged to an all-time high of $1 trillion, driven by non-monetary gold and pharmaceutical goods. In contrast, service imports dipped slightly due to lower payments for intellectual property licenses.
Economists warn that the combination of a ballooning current account deficit and federal budget shortfalls could undermine the long-term confidence in the U.S. dollar as a safe haven.

Trump: Tariffs Bring Jobs Back to America
President Trump views the situation differently. He argues that aggressive tariffs are motivating companies to bring manufacturing back to U.S. soil, aligning with his “America First” policy to boost domestic industry.
However, economists like Paul Ashworth from Capital Economics remain cautious. While he acknowledges that uncertainty may have affected some investment decisions, he believes the Q1 drop in FDI could be attributed to one-off deals or isolated business transactions, rather than a broader systemic problem.

Still, Ashworth warned: “Prolonged uncertainty over tariffs may cause firms to delay investment even further, potentially weighing on future economic growth.”

#US , #economy , #TRUMP , #Tariffs , #worldnews

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