agriculture

Fears for crops as drought hits northern Europe

BY AMBRE BERTOCCHI WITH AFP BUREAUS

  • The dry spell in northern Europe contrasts with southern Europe, including Spain and Portugal, where rainfall has been up to twice the usual amount for the time of year. abe-bur/ico/fec/js
  • Parts of northern Europe have seen their worst drought in decades in recent weeks, with farmers from Scotland to the Netherlands fearing the dry spell will dent harvests if it continues.
  • The dry spell in northern Europe contrasts with southern Europe, including Spain and Portugal, where rainfall has been up to twice the usual amount for the time of year. abe-bur/ico/fec/js
Parts of northern Europe have seen their worst drought in decades in recent weeks, with farmers from Scotland to the Netherlands fearing the dry spell will dent harvests if it continues.
Water shortages can stunt the growth of crops such as wheat, corn, rapeseed and barley, Nicolas Guilpart, a lecturer in agronomy at the Agro Paris Tech research institute, told AFP.
Countries including France, Belgium, Britain and Germany have seen much lower levels of rainfall than usual in some areas this spring, leaving the soil parched and dusty.
The unusually dry weather has already delayed the life cycle of crops that would normally have sprouted by now.
Luke Abblitt, a farmer in eastern England, said he was "praying for the rain" as Britain suffers its driest spring in well over a century.
The weather is going from "one extreme to the other," he told AFP.
"We're having a lot of rain in the wintertime, not so much rain in the spring or summer time," he said. "We need to adapt our cultivation methods, look at different varieties, different cropping possibly to combat these adverse weather conditions."
According to the Environment Agency, levels in Britain's reservoirs have fallen to "exceptionally low".
Some farmers have begun irrigating their crops earlier than usual, the National Farmers' Union said, calling for investments to improve water storage and collection systems.

High sun levels

In the Netherlands, it has not been this dry since records began in 1906, and Germany's environment minister warned in April of a high risk of forest fires and poor harvests due to a "worrying" lack of rain.
From February 1 to April 13, Germany saw 40 litres of rainfall per square metre, the its lowest level since records began in 1931, according to the German Weather Service (DWD).
And in early May, the Danish Meteorological Institute (DMI) warned that the previous three months had been exceptionally dry, with just 63 millimetres of rainfall.
Since 1874, there have only been seven times when less rain fell during the period from February to April, it said.
Denmark has also seen above-average temperatures for the time of year.
The country's drought index, which runs on a scale of one to 10, has been above nine since May 15, the first time this has happened so early in the year since the index was established in 2005.
The Federation of Swedish Farmers said it was "too early to say what the impact on farming will be this summer" but advised farmers to go over their water planning.

Irrigation

In France, groundwater levels remain satisfactory but plants need surface water to grow -- and that means rain.
Northern France has been on drought alert since Monday after seeing the same rainfall between February and early May as it would normally see in a month.
Strong northeast winds have also dried out the soil, with farmers increasingly turning to irrigation.
Between March and May, the village of Beuvry-la-Foret saw eight times less rain than during the same period last year.
Chicory farmer Sebastien De Coninck told AFP that until five years ago, "irrigation was not even considered in the north" -- but these days it can as much as double crop production.
Irrigation can help compensate for low rainfall, Guilpart said, but "you need the resources to do it".
Water for irrigation is primarily obtained from surface water such as rivers, lakes and reservoirs or from groundwater using wells and aquifers.
In France, air temperatures have also been warmer than usual, meaning plants need more water from the soil.
The dry spell in northern Europe contrasts with southern Europe, including Spain and Portugal, where rainfall has been up to twice the usual amount for the time of year.
abe-bur/ico/fec/js

inflation

Japan core inflation tops forecasts as rice prices almost double

BY NATSUKO FUKUE

  • Underlying inflation has been above the BoJ's target rate of two percent for around three years and while the central bank began lifting interest rates last year it has paused them recently as it assesses the impact of Trump's tariffs.
  • Japanese inflation spiked at a two-year high in April, data showed Friday, as rice prices almost doubled, turning focus on the central bank as it mulls more interest rate hikes amid Donald Trump's trade war.
  • Underlying inflation has been above the BoJ's target rate of two percent for around three years and while the central bank began lifting interest rates last year it has paused them recently as it assesses the impact of Trump's tariffs.
Japanese inflation spiked at a two-year high in April, data showed Friday, as rice prices almost doubled, turning focus on the central bank as it mulls more interest rate hikes amid Donald Trump's trade war.
The news also puts pressure on Prime Minister Shigeru Ishiba ahead of elections in July and after a minister was forced to resign over a gaffe about the national food staple while officials were forced to dip into emergency stockpiles.
Core inflation excluding fresh food hit 3.5 percent last month, the internal affairs ministry said, its highest since January 2023 and well up from the 3.2 percent in March.
Rice prices soared an eye-watering 98.4 percent year-on-year, slightly more than the previous month's increase.
The rocketing cost of a key part of Japanese people's diet is growing into a crisis for the government, which was already struggling to win popularity having lost its parliamentary majority in an election last year.
Factors behind the shortfall include poor harvests due to hot weather in 2023 and panic-buying prompted by a "megaquake" warning last year.
Record numbers of tourists have also been blamed for a rise in consumption while some traders are believed to be hoarding the grain.
The government began auctioning its stockpile last month for the first time since it was started in 1995.
Excluding energy and fresh food, the consumer price index rose 3.0 percent, from to 2.9 percent in March, Friday's data showed, while the overall unadjusted figure was unchanged at 3.6 percent. 
Underlying inflation has been above the BoJ's target rate of two percent for around three years and while the central bank began lifting interest rates last year it has paused them recently as it assesses the impact of Trump's tariffs.
With Japanese officials heading to Washington for more talks on slashing the US president's tariffs, the Bank of Japan is holding off any more increases for now.
The BoJ warned at its last meeting this month that tariffs were fuelling global economic uncertainty and revised down its economic growth forecasts for the country.
"Consumer price inflation will slow very gradually," said Stefan Angrick at Moody's Analytics.
"US tariffs and tariff threats will dampen growth in Japan and globally, further weighing down demand-driven price pressures. The Bank of Japan isn't done hiking, but it's not moving just yet. Tariff haze will keep the central bank on hold for the time being. 
"We expect another rate hike in early 2026."
Adding to the problems for Ishiba, his farm minister resigned this week after controversial comments that caused public fury.
Taku Eto told a gathering over the weekend that he had "never bought rice myself because my supporters donate so much to me that I can practically sell it".
After Eto's resignation, the prime minister said: "I apologise to Japanese people" as "it is my responsibility that I appointed him".
"That rice prices are remaining high is not a one-time phenomenon but is a structural one, I think. We have to have thorough discussions on this and they (rice prices) have to fall, of course," he said.
Marcel Thieliant at Capital Economics said that "weekly rice prices are showing signs of stabilisation so rice inflation should start to soften again before long".
nf-cg-stu/dan/tym

tariffs

Japan PM presses Trump on tariffs ahead of new talks

  • The comments came as Japan's tariffs envoy, economic revitalisation minister Ryosei Akazawa, left for Washington for a third round of talks.
  • Japan's Prime Minister Shigeru Ishiba said Friday that he had again pressed US President Donald Trump on tariffs, in a phone call ahead of fresh talks on easing the levies.
  • The comments came as Japan's tariffs envoy, economic revitalisation minister Ryosei Akazawa, left for Washington for a third round of talks.
Japan's Prime Minister Shigeru Ishiba said Friday that he had again pressed US President Donald Trump on tariffs, in a phone call ahead of fresh talks on easing the levies.
Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.
Trump also announced 24 percent "reciprocal" tariffs on Japan in early April, but later paused them along with similar measures on other countries until early July.
Ishiba said he spoke with Trump for 45 minutes on Friday morning -- Thursday evening in Washington -- and that a "broad range of topics were discussed, including tariffs and economic security".
"I conveyed to him Japan's position on US tariffs," Ishiba told a news conference in Tokyo, adding that there was "no change to our calls for the removal of tariffs". 
"As I've said before, it's not just about tariffs but about investment. There will also be no change to our position that Japan and the US will cooperate on generating employment in the US," he said.
The comments came as Japan's tariffs envoy, economic revitalisation minister Ryosei Akazawa, left for Washington for a third round of talks.
"The series of tariff measures taken by the US are regrettable. We'll strongly demand a review of these measures," Akazawa told reporters at Tokyo's Haneda airport. 
"But we have to reach an agreement, so it has to be win-win for both sides. We'll listen carefully to the various proposals and ideas of the US side, and look for common ground between the two sides," he said.
Public broadcaster NHK and other Japanese media reported, citing government sources, that US Treasury Secretary Scott Bessent would not attend the talks this time. 
Akazawa would travel again to Washington on May 30, the reports said.
Trump's 25-percent auto tariffs are particularly painful for Tokyo, with roughly eight percent of all Japanese jobs tied to the sector.
Early this month, the Trump administration also slapped a new 25 percent import tax on auto parts including engines and transmissions.
At the White House in February, Ishiba had promised Trump that yearly Japanese investment would increase to $1 trillion.
"Although the recent US-China and US-UK trade deals indicate that Washington is aiming to de-escalate trade tensions, Japan-US negotiations have made little headway," said Stefan Angrick at Moody's Analytics.
"Japan's position as the world's largest foreign investor in the US hasn't shielded it from tariff threats, so promising more investment is an unconvincing bargaining chip," he added.
nf-cg-stu/tym

tech

Trump attends memecoin gala as protesters slam 'crypto corruption'

BY ALEX PIGMAN AND DANIEL STUBLEN

  • Protesters gathered outside the golf course despite rainy skies, some carrying signs reading "stop crypto corruption" and "no kings."
  • US President Donald Trump hosted a closed-door dinner for hundreds of top investors in his crypto memecoin Thursday, as sign-holding protesters outside and Democratic opponents decried the event as blatant "corruption."
  • Protesters gathered outside the golf course despite rainy skies, some carrying signs reading "stop crypto corruption" and "no kings."
US President Donald Trump hosted a closed-door dinner for hundreds of top investors in his crypto memecoin Thursday, as sign-holding protesters outside and Democratic opponents decried the event as blatant "corruption."
The unprecedented melding of US presidential power and personal business took place at Trump's golf club outside Washington, where Trump flew by helicopter to meet the 220 biggest purchasers of his $TRUMP memecoin.
The top 25 investors, according to an event website, were to get a private session with Trump beforehand and a White House tour.
Trump launched the memecoin three days before his inauguration in January, quickly increasing his net worth by billions and prompting major, first-of-their-kind ethics questions.
The White House downplayed those concerns Thursday, insisting Trump was attending in his "personal time."
The president posted on his Truth Social platform ahead of the event that "the U.S.A. is DOMINATING in Crypto, Bitcoin, etc." and pledged to "keep it that way."
Photos posted online by attendees to the dinner -- press were not allowed inside -- showed a lectern sporting the presidential seal, apparently for Trump to deliver remarks.
Protesters gathered outside the golf course despite rainy skies, some carrying signs reading "stop crypto corruption" and "no kings."
Earlier in the day, Democratic senators held a press conference to denounce the event and call for disclosure of who would be attending.
Calling the dinner "an orgy of corruption," Senator Elizabeth Warren slammed Trump for "using the presidency of the United States to make himself richer through crypto."
Data analytics firm Inca Digital has confirmed that many transactions occurred through international exchanges unavailable in the United States, suggesting foreign buyers.

'Slap in the face'

A site listing the "official winners" of $TRUMP coin holders included only usernames and digital wallet addresses, with the number-one spot held by "Sun."
Chinese-born crypto entrepreneur Justin Sun has touted a $20 million commitment to the memecoin as part of his $93 million total investment in Trump-linked crypto ventures.
Sun, founder of top 10 cryptocurrency TRON, was under investigation by US authorities for market manipulation, but regulators, now controlled by Trump appointees, agreed in February to a 60-day pause to seek a settlement.
"Apparently, I'm at the VIP lounge waiting for the President to come with everybody," a tuxedo-clad Sun said in a video posted on X Thursday evening. 
Trump departed the golf course just over an hour after his arrival.
Justin Unga of advocacy group End Citizens United described the crypto dinner as a blatant example of Trump profiting from the presidency while roiling the US economy.
"Some say this is a back door to corruption," Unga said.
"I would argue it's the front door with valet parking, and it's got a red carpet... and a slap in the face of hard working Americans."

Expanding empire

The dinner came as the US Senate is pushing through legislation to more clearly regulate cryptocurrencies, a long-sought request of the industry, and as Trump expands his business network into the field.
Senators on Monday advanced a landmark bill known as the GENIUS Act that proposes a regulatory framework for stablecoins -- a type of crypto token seen as more predictable for investors as its value is pegged to hard currencies like the dollar.
Bitcoin's price hit a new all-time high on Thursday, climbing above $111,000 before falling slightly.
Trump's newfound enthusiasm for digital currencies has expanded into multiple ventures led primarily by his eldest sons.
Their growing portfolio includes investments in Binance, a major crypto exchange whose founder seeks a presidential pardon to re-enter the US market.
This investment flows through World Liberty Financial, a Trump family-backed venture launched last September with significant Mideast deals. 
The company's founding team includes Donald Jr. and Eric Trump alongside Zach Witkoff, son of Trump's diplomatic adviser.
President Trump has taken concrete steps to reduce regulatory barriers, including an executive order establishing a "Strategic Bitcoin Reserve" for government holdings of the leading digital currency.
arp-gc/nl/des

Global Edition

Asian stocks bounce back after Treasury-led sell-off

  • Still, risk appetite returned in New York on Thursday, with yields pulling back after the Republican-led House narrowly passed Trump's "One Big, Beautiful Bill Act", which shrinks social safety net programmes to pay for a 10-year extension of his 2017 tax cuts.
  • Asian equities stabilised Friday following the previous day's US bond-fuelled sell-off with traders tracking a slight pullback in Treasury yields as Donald Trump's signature tax-cutting budget passed a key congressional vote.
  • Still, risk appetite returned in New York on Thursday, with yields pulling back after the Republican-led House narrowly passed Trump's "One Big, Beautiful Bill Act", which shrinks social safety net programmes to pay for a 10-year extension of his 2017 tax cuts.
Asian equities stabilised Friday following the previous day's US bond-fuelled sell-off with traders tracking a slight pullback in Treasury yields as Donald Trump's signature tax-cutting budget passed a key congressional vote.
Worries about the US budget deficit have returned to the fore this week after Moody's removed its top-tier credit rating and the president pushed ahead with a budget that some suggest will expand the country's ballooning debt.
A tepid auction of 20-year Treasuries on Wednesday ramped up those concerns, dealing a blow to stocks that had just recovered from the April fireworks of Trump's tariff blitz.
Still, risk appetite returned in New York on Thursday, with yields pulling back after the Republican-led House narrowly passed Trump's "One Big, Beautiful Bill Act", which shrinks social safety net programmes to pay for a 10-year extension of his 2017 tax cuts.
The package, which now goes to the Senate, had faced scepticism from fiscal hawks who fear the country is headed for bankruptcy, with independent analysts warning it would increase the deficit by as much as $4 trillion over a decade.
But the White House insists it will spur growth of up to 5.2 percent, ensuring it adds nothing to the $36 trillion national debt -- growth projections that are well outside the mainstream consensus.
There is a feeling that "perhaps the fiscal worries have gone a bit too far", said Pepperstone's Chris Weston.
"Many have crunched the numbers on the tax bill and see the raft of measures to not be overly stimulatory and to therefore result in a major blowout of the deficit in 2026 and 2027 and is, in fact, quite neutral in its effect."
The drop in Treasury yields -- suggesting improving demand for US debt -- was helped by upbeat data on the jobs market, home sales and factory activity that observers said indicated the economy remained healthy.
A mixed day on Wall Street was followed by a largely positive start in Asia.
Hong Kong, Shanghai, Tokyo, Sydney, Seoul and Manila all rose, though Singapore, Jakarta, Taipei and Wellington struggled.
There was a little cheer from comments by Federal Reserve governor Christopher Waller, who said interest rates could be cut in the second half of the year if Trump's tariffs come back down to around 10 percent.
"If we can get the tariffs down closer to 10 percent and then that's all sealed, done and delivered somewhere by July, then we're in good shape for the second half of the year," he told Fox Business.
The dollar slipped against the yen as figures showed Japanese inflation rose more than expected owing to a surge in food prices, particularly rice.
The reading turns the focus on the Bank of Japan as it considers its next move on monetary policy after a recent spate of interest rate hikes and in light of Trump's tariffs. 
Bitcoin pressed on with its latest rally, hitting a fresh record of $111,980.33, on hopes for a cryptocurrency bill on the regulation of so-called stablecoins, digital coins with value tied to the dollar. 
This has led to optimism for future regulatory clarity in the sector, including for bitcoin, which is not directly linked to the dollar.

Key figures at around 0230 GMT

Tokyo - Nikkei 225: UP 0.8 percent at 37,280.84 (break)
Hong Kong - Hang Seng Index: UP 0.3 percent at 23,624.64
Shanghai - Composite: UP 0.1 percent at 3,383.81
Dollar/yen: DOWN at 143.88 yen from 143.99 yen on Thursday
Euro/dollar: UP at $1.1295 from $1.1281 
Pound/dollar: UP at $1.3432 from $1.3419
Euro/pound: UP at 84.10 pence from 84.07 pence
West Texas Intermediate: DOWN 0.6 percent at $60.86 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $64.12 per barrel
New York - Dow: FLAT at 41,859.09 (close)
London - FTSE 100: DOWN 0.5 percent at 8,739.26 (close)
dan/sco

AI

Anthropic touts improved Claude AI models

  • "Claude Opus 4 is our most powerful model yet, and the best coding model in the world," Anthropic co-founder and chief executive Dario Amodei said as he opened the event.
  • Anthropic unveiled its latest Claude generative artificial intelligence (GenAI) models on Thursday, claiming to set new standards for reasoning, coding, and digital agent capabilities.
  • "Claude Opus 4 is our most powerful model yet, and the best coding model in the world," Anthropic co-founder and chief executive Dario Amodei said as he opened the event.
Anthropic unveiled its latest Claude generative artificial intelligence (GenAI) models on Thursday, claiming to set new standards for reasoning, coding, and digital agent capabilities.
The launch came as the San Francisco-based startup held its first developers conference.
"Claude Opus 4 is our most powerful model yet, and the best coding model in the world," Anthropic co-founder and chief executive Dario Amodei said as he opened the event.
Opus 4 and Sonnet 4 were described as "hybrid" models capable of quick responses as well as more thoughtful results that take a little time to handle well.
Anthropic's gathering came on the heels of annual developers conferences from Google and Microsoft at which the tech giants showcased their latest AI innovations.
Since OpenAI's ChatGPT burst onto the scene in late 2022, various generative GenAI models have been vying for supremacy.
GenAI tools answer questions or tend to tasks based on simple, conversational prompts.
The current focus in Silicon Valley is on AI "agents" tailored to independently handle computer or online tasks.
Anthropic was early to that trend, adding a "computer use" capability to its model late last year.
"Agents can actually turn human imagination into tangible reality at unprecedented scale," said Anthropic chief product officer Mike Krieger, a co-founder of Instagram.
AI agents can boost what engineers at small startups can accomplish when it comes to coding, helping them build products faster, Krieger told the gathering.
"I think back to Instagram's early days," Krieger said. "Our famously small team had to make a bunch of very painful either/or decisions."
GenAI can also provide startup founders with business strategy insights on par with those of veteran chief financial officers, according to Krieger.
Anthropic, founded by former OpenAI engineers, launched Claude in March 2023.
The startup stresses responsible development of AI, moving more cautiously than competitors as it innovates.
juj-gc/sst

environment

US Senate blocks California's electric vehicle mandate

  • "California got special permission from the Biden administration to ban gas-powered cars.
  • US senators on Thursday blocked California's landmark mandate phasing out gas-powered cars, dealing a blow to the state's move towards electric vehicles in a pointed rebuke of Democratic climate change policies.
  • "California got special permission from the Biden administration to ban gas-powered cars.
US senators on Thursday blocked California's landmark mandate phasing out gas-powered cars, dealing a blow to the state's move towards electric vehicles in a pointed rebuke of Democratic climate change policies.
The Republican-led Senate revoked a waiver instituted under then-president Joe Biden that allowed the state to set aside national pollution standards for cars and set its own more stringent regulations.
But the Senate's rubber stamp of a House-passed bill was immediately set for a challenge, with California's liberal government announcing it would sue President Donald Trump's administration.
California Governor Gavin Newsom said the vote was a "big day for big oil, big day for GM and Toyota, big day for China. 
"Terrible day for your kids, terrible day for air quality, terrible day for innovation and entrepreneurship."
The state, especially its biggest city, Los Angeles, historically tolerated the nation's worst smog before decades of efforts to clean up.
Part of that push was a mandate ensuring that a third of new 2026 model cars sold in the state must be zero-emission, rising to two-thirds in 2030 and 100 percent in 2035. 
Republicans in Washington argue that this is costly, unworkable and anathema to consumer choice.
"California got special permission from the Biden administration to ban gas-powered cars. Because of their market share, this would impact the entire nation," said right-wing Utah Senator Mike Lee.
"But Gavin Newsom doesn't get to ruin 49 other states."
Republicans argue that the Congressional Review Act gives them the right to overturn California's carve-out on a simple majority vote.
But Democrats say Thursday's move was illegal, as nonpartisan watchdogs including the Government Accountability Office and the Senate Parliamentarian said the CRA could not be applied to waivers.
California Attorney General Rob Bonta said he would sue over the Senate's move.
"The president and his administration are attempting to trample on our authority to maintain long-standing clean vehicle standards and keep our air breathable," he said.
"We're not going to let that happen... Our lawsuit will be about ensuring California can enforce its state laws."
The Senate has only overruled its parliamentarian a handful of times since the role was launched in the 1930s.
Trump harshly criticized electric vehicles (EVs) as he sought reelection, despite significant federal funding allocated to projects in Republican districts, where thousands of jobs are expected to be created.
He took aim at the sector as part of his flurry of executive orders on his first day in office in a bid to ensure what he called a "level" playing field for gasoline-powered motors.
But he has not been consistent in his opposition -- even taking time out of his schedule to promote his ally Elon Musk's prestige EV company Tesla at the White House.  
US EV sales reached 1.3 million units last year, up 7.3 percent from 2023, according to Cox Automotive's Kelley Blue Book, but automakers have recently scaled back investments, pointing to slowing demand growth. 
ft-hg/bfm

Ukraine

G7 finance talks end in show of unity despite tariff turmoil

BY BEIYI SEOW AND BEN SIMON

  • But in a final communique, the G7 -- comprising Britain, Canada, France, Germany, Italy, Japan and the United States -- said: "We acknowledge that economic policy uncertainty has declined from its peak, and we will work together to achieve further progress."
  • G7 finance ministers wrapped up talks in western Canada on Thursday with a show of unity, saying the economic policy uncertainty that has swept the globe was easing and vowing further progress towards stability.
  • But in a final communique, the G7 -- comprising Britain, Canada, France, Germany, Italy, Japan and the United States -- said: "We acknowledge that economic policy uncertainty has declined from its peak, and we will work together to achieve further progress."
G7 finance ministers wrapped up talks in western Canada on Thursday with a show of unity, saying the economic policy uncertainty that has swept the globe was easing and vowing further progress towards stability.
US President Donald Trump's wide-ranging tariffs have caused global economic turbulence, and this week's meeting was seen as a test of whether the Group of Seven advanced economies could overcome tensions since Trump's return to office.
Leaders at the talks, which included central bank governors, conceded the discussions faced challenges, including continuing disagreement over tariffs.
But in a final communique, the G7 -- comprising Britain, Canada, France, Germany, Italy, Japan and the United States -- said: "We acknowledge that economic policy uncertainty has declined from its peak, and we will work together to achieve further progress."
The meeting's host, Canadian Finance Minister Francois-Philippe Champagne, characterized the talks as "constructive and productive" and said that there was a need "to reduce uncertainty in order to increase growth."
US Treasury Secretary Scott Bessent, who attended the talks at Banff National Park in the Canadian Rocky Mountains, faced consistent pushback on Trump's tariffs, which many fear will drag down global economic growth.
"Obviously, tariffs are on all of our minds," Bank of Canada Governor Tiff Macklem told reporters at a closing press conference. 
"The communique highlights that we were pleased to see that uncertainty has come down, but we clearly have more work to do," he added.
Bessent told AFP as he left the summit: "I don't think there were any major disagreements, I thought the meeting went great."
German Finance Minister Lars Klingbeil told reporters Thursday it was crucial to "resolve the current trade disputes as quickly as possible," as tariffs had placed "a heavy burden on the global economy." 
"Our hand is extended," Klingbeil added.
French Finance Minister Eric Lombard told AFP: "The atmosphere was warm. We spoke as friends and allies."
"We don't agree on everything, but we talked about everything," he said.
Joshua Meltzer, a senior fellow at the Brookings Institution, called the joint communique "a very positive sign," setting the tone for a leaders summit in June that Trump is set to attend.
Meltzer told AFP that while it is unclear if peak uncertainty has passed, this is "a signal that (Bessent is) wanting to send to the globe and to markets."

'Maximize pressure'

Ukrainian Finance Minister Sergii Marchenko attended the talks and urged the G7 to maintain pressure on Russia.
In their communique, G7 finance leaders agreed Russia could face further sanctions if it resisted a push towards a ceasefire.  
"If such a ceasefire is not agreed, we will continue to explore all possible options, including options to maximize pressure such as further ramping up sanctions," the communique said.  
Diplomatic efforts to end the conflict have accelerated in recent weeks, with Russian and Ukrainian officials holding their first face-to-face talks in more than three years last week in Istanbul.
But the Kremlin said Thursday that new peace talks with Ukraine had "yet to be agreed," disputing reports the two nations would soon hold negotiations at the Vatican.
Trump spoke with Russian counterpart Vladimir Putin on Monday in a call aimed at ending the "bloodbath," but neither his contact nor the earlier talks in Istanbul resulted in Russia offering any concessions.
France's Lombard welcomed "clear progress" on support for Ukraine.
While Trump's return has rattled the G7, German finance minister Klingbeil told public broadcaster ARD that "there are always conflicting signals."
While there may be US statements that cast doubt on the extent of support towards Ukraine, "in the end, the United States has always been on Ukraine's side," he said.
In an additional step on Ukraine, the G7 communique condemned "Russia's continued brutal war" and said any entity that supported Russia during the conflict would be barred from Ukrainian reconstruction contracts.
"We agree to work together with Ukraine to ensure that no countries or entities, or entities from those countries that financed or supplied the Russian war machine will be eligible to profit from Ukraine's reconstruction," it said.
bys-bs/nl

Global Edition

Stock markets sluggish as Trump tax cuts clear House

  • Back in Washington, focus now turns to the Senate, which will consider parallel tax legislation after the House approved Trump's measure by a single vote.
  • Global equities were sluggish Thursday as US Treasury bond yields moderated following House passage of President Donald Trump's mammoth tax cut legislation.
  • Back in Washington, focus now turns to the Senate, which will consider parallel tax legislation after the House approved Trump's measure by a single vote.
Global equities were sluggish Thursday as US Treasury bond yields moderated following House passage of President Donald Trump's mammoth tax cut legislation.
A spike on Wednesday in yields on 10- and 30-year US bonds sent stocks sharply lower amid revived worries about a sell-off in US assets comparable to one earlier this spring before Trump retreated from some of his most onerous tariffs.
But bond yields retreated somewhat later Thursday, boosting stocks a bit. Major US indices finished mixed after a choppy session with the Dow flat, the Nasdaq up slightly and the S&P 500 down slightly.
The rise in yields had "gone a little bit too far," said Victoria Fernandez, chief market strategist at Crossmark Global Investments.
European key indexes ended their session just in the red as London, Frankfurt and Paris all shed around 0.5 percent as investors noted weak business activity data out of the eurozone and Britain.
The HCOB Flash Eurozone purchasing managers' index published by S&P Global registered a figure of 49.5 compared to 50.4 in April.
"May's snapshot is not pretty," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. "Looking ahead, companies are only cautiously optimistic. The expectations index is still well below its long-term average."
But he said there were reasons for confidence in the longer term, pointing to a rebound in manufacturing "with encouraging signs coming out of both Germany and France", more interest rate cuts expected this year and lower oil prices compared to last year.
Back in Washington, focus now turns to the Senate, which will consider parallel tax legislation after the House approved Trump's measure by a single vote.
The bill extends for 10 years tax cuts introduced under Trump's 2017 legislation, while enacting cuts to social safety net programs. 
While investors welcome the tax cuts, they have been unnerved by forecasts that the proposal will add trillions of dollars in US debt.
The yield on 30-year US government bonds climbed to 5.15 percent following the House vote, nearing levels last seen in 2007 at the start of the global financial crisis.
But yields pulled back later in the session, hitting 5.07 percent near 2030 GMT.
Jack Ablin of Cresset Capital Management said the shift in the bond market Thursday reflects short-term dynamics after Wednesday's poor US Treasury auction sent yields sharply higher.
"Investors are turning their attention back to the day rather than the structural dynamics," Ablin said.

Key figures at around 2030 GMT

New York - Dow: FLAT at 41,859.09 (close)
New York - S&P 500: DOWN 0.1 percent at 5,842.01 (close)
New York - Nasdaq Composite: UP 0.3 percent at 18,925.73 (close)
London - FTSE 100: DOWN 0.5 percent at 8,739.26 (close)
Paris - CAC 40: DOWN 0.6 percent at 7,864.44 (close)
Frankfurt - DAX: DOWN 0.5 percent at 23,999.17 (close)
Tokyo - Nikkei 225: DOWN 0.8 percent at 36,985.87 (close)
Hong Kong - Hang Seng Index: DOWN 1.2 percent at 23,544.31 (close)
Shanghai - Composite: DOWN 0.2 percent at 3,380.19 (close)
Euro/dollar: DOWN at $1.1281 from $1.1331 on Wednesday
Pound/dollar: DOWN at $1.3419 from $1.3420
Dollar/yen: UP at 143.99 yen from 143.68 yen
Euro/pound: DOWN at 84.07 pence from 84.41 pence
West Texas Intermediate: DOWN 0.6 percent at $61.20 per barrel
Brent North Sea Crude: DOWN 0.7 percent at $64.44 per barrel
bur-jmb/md

diplomacy

State Dept says Chevron must leave Venezuela, even as American freed

  • Asked about the contradicting messages, State Department spokeswoman Tammy Bruce said Rubio was "making it clear that that license is going to expire."
  • The US State Department said Thursday that Chevron must wrap up operations in Venezuela next week as scheduled, contradicting an envoy who told a podcast differently after Caracas freed an American.
  • Asked about the contradicting messages, State Department spokeswoman Tammy Bruce said Rubio was "making it clear that that license is going to expire."
The US State Department said Thursday that Chevron must wrap up operations in Venezuela next week as scheduled, contradicting an envoy who told a podcast differently after Caracas freed an American.
President Donald Trump's administration has canceled an exemption in sanctions on Venezuela, run by leftist Nicolas Maduro, that had been granted by former president Joe Biden under a previous deal.
Ric Grenell, a Trump loyalist who holds a broad role of "special presidential envoy for special missions," on Tuesday flew back to the United States with a freed US military veteran, Joe St. Clair, who had been detained in Venezuela since November.
Grenell, who secured St. Clair's release in talks in Antigua, said after his return to Washington that Trump believed in "engagement."
Asked in an interview with pro-Trump media personality Steve Bannon about Chevron, Grenell said, "President Trump authorized that extension if we were able to get some progress, if we were able to build some confidence."
"We were able to do that today. So that extension will be granted," Grenell told Bannon's "War Room" podcast.
"We want to put America first and do what's best for America. That means making sure that the Chinese do not take the Venezuelan oil," he said.
But US Secretary of State Marco Rubio, who is also Trump's national security advisor, promptly wrote on X late Wednesday: "The pro-Maduro Biden oil license in Venezuela will expire as scheduled next Tuesday May 27th."
Asked about the contradicting messages, State Department spokeswoman Tammy Bruce said Rubio was "making it clear that that license is going to expire."
"There's no confusion. I think many people, on every issue, can have a lot of opinions, but I think clearly who we look to are the people who have the power to have the impact and who make the decision," Bruce said.
Rubio, a Cuban-American and former senator from Florida, is a vociferous opponent of Latin American leftists including in Venezuela and Cuba.
Maduro is angling to sweep power in parliamentary and regional elections on Sunday, 10 months after his disputed re-election. Only a handful of countries, including longtime allies Russia and Cuba, have recognized the 62-year-old's presidency.
Grenell, early in Trump's term, traveled to Venezuela which agreed to send planes to bring back undocumented migrants, a key Trump priority.
The deal drew outrage from Florida Republicans in the narrowly divided House of Representatives who instead want more robust support for Venezuela's democratic opposition.
sct/sla

Disney

Disney suspends Venezuelan workers after protected status revoked

  • "As we sort out the complexities of this situation, we have placed affected employees on leave with benefits to ensure they are not in violation of the law," a spokesperson for Disney said in a statement, however noting the leave is "unpaid."
  • Entertainment giant Disney has placed at least 45 Venezuelan employees on unpaid leave, the company told AFP Thursday, following the US Supreme Court's decision to allow the revocation of a special legal status that shielded them from deportation.
  • "As we sort out the complexities of this situation, we have placed affected employees on leave with benefits to ensure they are not in violation of the law," a spokesperson for Disney said in a statement, however noting the leave is "unpaid."
Entertainment giant Disney has placed at least 45 Venezuelan employees on unpaid leave, the company told AFP Thursday, following the US Supreme Court's decision to allow the revocation of a special legal status that shielded them from deportation.
Shortly after returning to office, President Donald Trump revoked temporary protected status (TPS) for Venezuelan nationals, which shields foreign citizens from deportation who cannot safely return home -- affecting about 350,000 people.
The US Supreme Court has allowed that revocation to stand pending an appeal in a lower court.
"As we sort out the complexities of this situation, we have placed affected employees on leave with benefits to ensure they are not in violation of the law," a spokesperson for Disney said in a statement, however noting the leave is "unpaid."
"We are committed to protecting the health, safety, and well-being of all our employees who may be navigating changing immigration policies and how they could impact them or their families," the statement added.
The entertainment giant informed workers placed on leave that their employment will be terminated if they do not find an alternate work permit within 30 days, according to the Miami Herald.
It was not immediately clear where all of the employees worked, but the newspaper said it had spoken to several who work at Disney World in Orlando. 
One Venezuelan Disney employee, a woman in her 40s, told the Herald she was "very distressed" by the suspension.
"We have bills, we just renewed our apartment lease, my son goes to college," she told the publication.
Former president Joe Biden had extended TPS for Venezuelans for 18 months just days before Trump returned to the White House in January, citing ongoing crises in the South American country under longtime ruler Nicolas Maduro.
But Homeland Security Secretary Kristi Noem moved to revoke the protections, leading to the ensuing court battle.
gma/jgc/sst

tech

Xiaomi launches new advanced in-house mobile chip

BY LUNA LIN

  • Xiaomi has not confirmed which company is manufacturing the XRING O1, though Lei said it uses the same second generation 3nm-process technology as Apple's latest chips. 
  • Tech giant Xiaomi unveiled a new advanced in-house mobile chip on Thursday, a significant milestone for the company as Chinese firms shift resources towards home-grown technology against a bleak international trade backdrop.
  • Xiaomi has not confirmed which company is manufacturing the XRING O1, though Lei said it uses the same second generation 3nm-process technology as Apple's latest chips. 
Tech giant Xiaomi unveiled a new advanced in-house mobile chip on Thursday, a significant milestone for the company as Chinese firms shift resources towards home-grown technology against a bleak international trade backdrop.
Xiaomi, which sells goods from smartphones to vacuum cleaners and electric vehicles (EVs), is one of China's most prominent consumer electronics firms.
With the XRING O1, it becomes only the second smartphone brand globally after Apple to mass produce its own 3-nanometre chips, among the most advanced on the market.
This despite being a latecomer to the chip industry, Xiaomi founder Lei Jun said at a launch event on Thursday, joking that the feat had been "harder than ascending to heaven".
Xiaomi took early steps into semiconductors for smartphones with the launch of the firm's first in-house chip, the Surge S1, in 2017.
But the group was forced to halt production of the chip due to technical and financial obstacles.
Lei said the journey to developing the XRING O1 had taken over a decade. 
"How much hardship, how much sweat, how much untold pain have been involved in these 11 years? How much courage and determination did it take to make this decision?" he said. 
The XRING O1 will first be deployed in Xiaomi's new 15S Pro flagship smartphone and the Pad 7 Ultra tablet, which were also launched Thursday along with a preview of the firm's first electric SUV. 

'Step to self-sufficiency'

A number of Chinese firms are racing to develop their own chips with the aim of freeing themselves from reliance on foreign suppliers.
Xiaomi is only the fourth smartphone brand globally to have developed its own system-on-chip, with Huawei the only domestic competitor. 
"This represents yet one more step toward China reaching self-sufficiency in this crucial industry –- as well as in broader ICT and electronics supply chains," Stephen Ezell from US-based think tank Information Technology and Innovation Foundation (ITIF) told AFP.
Over the past few years, Washington has sharply tightened export controls on advanced chip technology to China, citing national security concerns. 
Chinese chip foundries are restricted from accessing foreign equipment needed for cutting-edge chip production -- meaning that firms have to rely on overseas foundries for 5nm-process and below. 
Xiaomi has not confirmed which company is manufacturing the XRING O1, though Lei said it uses the same second generation 3nm-process technology as Apple's latest chips. 
Apple contracts Taiwanese chipmaking titan TSMC for its fabrication. 
The chip is a "significant" achievement for Xiaomi, and allows it to reduce "its reliance on external designers" such MediaTek and Qualcomm, Washington-based semiconductor and technology analyst Ray Wang told AFP.  
"Longer term, owning its SoC (system-on-chip) roadmap will insulate Xiaomi's devices from the US–China geopolitical tensions and help mitigate global supply-chain disruptions," he said.
ll-reb/tc

conflict

EU parliament backs Russian fertiliser tax opposed by farmers

BY ADRIEN DE CALAN

  • "Markets in other areas will compensate for the European duties, but the Europeans will continue, as always, to shoot themselves in the foot," Kremlin spokesman Dmitry Peskov said at a regular news briefing.
  • EU lawmakers greenlighted tariffs on Russian fertiliser imports on Thursday, a move the Kremlin derided as Europeans shooting themselves in the foot.
  • "Markets in other areas will compensate for the European duties, but the Europeans will continue, as always, to shoot themselves in the foot," Kremlin spokesman Dmitry Peskov said at a regular news briefing.
EU lawmakers greenlighted tariffs on Russian fertiliser imports on Thursday, a move the Kremlin derided as Europeans shooting themselves in the foot.
European farmers fear the move will increase prices as over a quarter of the 27-nation bloc's imports of nitrogen-based fertilisers come from Russia, with more entering from Moscow ally Belarus.
The European Parliament voted 411-100 for a bill that will enact duties in July and gradually increase them to a point where they would make imports unviable in 2028.
Three years after Russia's invasion of Ukraine, the EU must stop fuelling "the Russian war machine" and "limit the dependency of Europe's farmers to Russian fertilisers", said lawmaker Inese Vaidere, spearheading the tariff push in the EU parliament.
Russia shrugged off the move. 
"Markets in other areas will compensate for the European duties, but the Europeans will continue, as always, to shoot themselves in the foot," Kremlin spokesman Dmitry Peskov said at a regular news briefing.
EU member states have to formally give the bill their final approval, having previously already backed the idea. 
Pan-European farmers' group Copa-Cogeca said that -- as production costs have risen -- using Russian fertilisers was "the most competitive in terms of price, due to well-established logistics" for supplying the EU.
Brussels also intends for the levies to prevent the indirect export of Russian gas, which is used to produce fertilisers.
The EU wants to increase the bloc's own fertiliser production, and its moves are welcomed by the fertiliser industry in the bloc.
"Time is running out. We've been basically calling for action at the EU level for three years," said Tiffanie Stephani of Norwegian fertiliser manufacturer Yara.
But she admitted the farmers' concerns were "more than legitimate".

'Punishing farmers'

The EU has its work cut out to reassure farmers, who are already angry about administrative burdens, squeezed revenues and what they see as unfair competition from less-regulated overseas rivals.
The tariff could be "potentially devastating" for the agriculture sector, warned Copa-Cogeca, adding: "European farmers must not become collateral damage."
A farmer in central Belgium, Amaury Poncelet, accused the EU of hurting the sector.
After spreading nitrogen fertiliser on his field in Berloz -- which he buys from a dealer in Ghent without knowing where it comes from -- the grain and beet farmer said he "doesn't understand the European Union's idea of punishing its farmers".
"We're losing money because of these European decisions that treat us like pawns who don't matter," he said.
The EU has suggested that duties on imports from North Africa, Central Asia, the United States, Trinidad and Tobago, and Nigeria could be removed to alleviate pressure on prices, among other mitigating measures, in case of price shocks.
Yara's Stephani pointed to estimates showing that, with tariffs on Russian imports, there would be an increase of fertiliser prices of $5 to $10 per tonne "because of different logistic costs".
Prices vary, but a tonne of nitrogen fertiliser is currently worth around $400.
adc-ub/lth

internet

Ads pressured to evolve as AI changes Google search

BY GLENN CHAPMAN

  • - AI ad tools too - Google announced it is making AI tools available to streamline the creation of online ads, mirroring similar initiatives by Facebook-owner Meta, Google's primary rival in online advertising.
  • As Google races to lead in artificial intelligence, it faces the challenge of making sure the technology doesn't slow its profit-pumping advertising engine.
  • - AI ad tools too - Google announced it is making AI tools available to streamline the creation of online ads, mirroring similar initiatives by Facebook-owner Meta, Google's primary rival in online advertising.
As Google races to lead in artificial intelligence, it faces the challenge of making sure the technology doesn't slow its profit-pumping advertising engine.
The internet giant is dabbling with ads in its new AI Mode for online search, a strategic move to fend off competition from ChatGPT while adapting its advertising business for an AI age.
"There's no question that AI is becoming more commonplace as a source for answers," IDC advertising and marketing technology research director Roger Beharry Lall told AFP.
"That will inevitably result in a shift in terms of search and the opportunities to promote a brand."
The integration of advertising has been a key question accompanying the rise of generative AI chatbots, which have largely avoided interrupting the user experience with marketing messages.
However, advertising remains Google's financial bedrock, accounting for more than two-thirds of its revenue.
"Google certainly needs to find a way to monetize AI search in the way that it has monetized its past versions of search," Techsponential analyst Avi Greengart told AFP at the tech giant's annual developers conference this week.

AI-fueled ads

A new AI Mode enables conversational interaction with Google during search queries, providing answers in diverse formats, such as video, audio or graphs.
The internet giant said it is testing integrating ads into AI Mode responses, building on insights gained from AI-generated summaries, or "Overviews," introduced to search results a year ago.
These Overviews display comprehensive AI-generated summaries of results above traditional website links and ads.
"The future of advertising fueled by AI isn't coming — it's already here," stated Vidhya Srinivasan, Google's vice president of Ads & Commerce. 
"We're reimagining the future of ads and shopping: Ads that don't interrupt, but help customers discover a product or service."
Google is extending ads in AI Overviews to desktop in the US, following successful mobile implementations.
More than 1.5 billion users see AI Overviews monthly, according to the company.
"Google's doing very good job of adapting," Beharry Lall said.
"The move right now is to experiment and to gain traction, just as they have."
Google's aggressive push into generative AI intensifies its competition with OpenAI's ChatGPT, which added search engine capabilities to its popular chatbot.

AI ad tools too

Google announced it is making AI tools available to streamline the creation of online ads, mirroring similar initiatives by Facebook-owner Meta, Google's primary rival in online advertising.
New features, available in the United States, will enable merchants to leverage AI for effective marketing campaigns and to "power an algorithm capable of targeting new searches and generating additional conversions," Google said.
"AI helps a lot in advertising as far as targeting customers more precisely," Creative Strategies analyst Carolina Milanesi told AFP.
Google should have opportunities to charge for AI tools for ad campaigns, and even for insights from data the tech firm has about its users’ lives.
"When you have AI agents doing things for you, those agents are going to need data," Milanesi said.
"To get access to that data, you're going to have to pay."
For example, Google knowing the kinds of restaurants or places someone has searched for online would have value for targeting ads, she said.
Making money from AI tools and data could help Google diversify revenue sources at a time when its ad business is under pressure from regulators, according to Milanesi.
"There could be entirely new business models around how a brand connects into those AI results," said Beharry Lall.
"In the long run, it's going to be additive and beneficial to Google."
How Google and other platforms make clear the difference between paid messaging and organic results generated by AI "is going to be the $64 million question," Beharry Lall said.
"It'll be incumbent on regulatory bodies to develop guidelines," the analyst said.
gc/sla

Ukraine

G7 finance chiefs seek unity as Canada talks near end

BY BEIYI SEOW AND BEN SIMON

  • Italian Finance Minister Giancarlo Giorgetti said the start of the talks faced "some difficulties."
  • Talks among G7 finance ministers faced challenges Wednesday as the group worked to overcome divides on thorny issues like the impact of US President Donald Trump's tariffs and support for Ukraine. 
  • Italian Finance Minister Giancarlo Giorgetti said the start of the talks faced "some difficulties."
Talks among G7 finance ministers faced challenges Wednesday as the group worked to overcome divides on thorny issues like the impact of US President Donald Trump's tariffs and support for Ukraine. 
With discussions set to close Thursday, hopes for a final communique reflecting unity among the Group of Seven advanced economies remained uncertain, as tensions persist on Trump's trade policies. 
The day began with an exchange of pleasantries and the traditional group photo in front of snow-capped mountains at a hotel in western Canada's Banff National Park. 
But friction among the group -- comprising Britain, Canada, France, Germany, Italy, Japan and the United States -- emerged shortly after meetings began. 
Italian Finance Minister Giancarlo Giorgetti said the start of the talks faced "some difficulties."
But he added that the group was "able to overcome these differences," and voiced hope a final statement reflecting G7 unity could be reached. 
Few concrete details emerged from Wednesday's talks but US Treasury Secretary Scott Bessent had been expected to face pushback on Trump's tariffs, which threaten to drag down global economic growth. 
Bessent described Wednesday's talks as "very productive."
The meeting's host, Canadian Finance Minister Francois-Philippe Champagne, declined to say whether he raised the issue of tariffs in his bilateral meeting with Bessent, but insisted the pair "get along very well."
Asked about friction in the talks, Champagne said: "That's why we have meetings, we have frank discussions."
"We're both pleased about the progress we're making and the sense of unity of the G7," Champagne told reporters. 
Japanese Finance Minister Katsunobu Kato told reporters that during his meeting with Bessent, he affirmed that US tariffs were "extremely regrettable" and "not always an appropriate measure to adjust trade imbalances."
Trump has repeatedly complained about US trade deficits, and at times implied his global tariffs were partly aimed at balancing US exports and imports. 

Joint statement?

Champagne declined to say whether he was optimistic a joint statement could be agreed. 
But a European official, who requested anonymity when discussing the ongoing talks, told a AFP a unifying closing statement was not a priority. 
"The important thing is not whether there is a communique, but moving forward together," adding that Bessent's presence in Banff should be seen as positive.  
"At least the Americans remain engaged in the multilateral system. We clearly disagree on tariffs, but the G7 is the place for candid exchanges, to advocate for our point of view," the official said.  

Russia pressure

Champagne told reporters on Tuesday the presence of Ukrainian Finance Minister Sergii Marchenko in Banff "sends a strong message to the world" that members are recommitting to support the country against Russia's invasion.
UK finance minister Rachel Reeves, who chaired Wednesday's meeting on Ukraine alongside Marchenko, said "pressure on Russia's war machine is needed now more so than ever," according to a government statement.
She charged that Russia's Vladimir Putin has "failed to engage in good faith with proposals", and attempts to broker a ceasefire from his "illegal and brutal war."
Reeves also aired an ambition to move fast in lowering the $60 price cap on Russian crude oil, the UK statement said.
Marchenko did not brief reporters following the meeting on Ukraine. 
But on Tuesday he told reporters he would seek during the gathering to reiterate Ukraine's position on the need for further pressure on Russia.
"It is a significant G7, existentially," said Ananya Kumar, a deputy director at Washington-based think tank the Atlantic Council.
"I don't think in any of the past years, people have questioned the US's relationship with the other G7 member states as much as they have in the last 100 days," she told AFP ahead of the gathering.
"The big theme is going to be how do we prevent global instability, how do we find consensus in this chaos?"
This week's meeting come ahead of the G7 Summit next month, set to take place near Banff, with Trump expected to attend.
bs-bys/nl

mortgage

Trump says mulling privatizing Fannie Mae and Freddie Mac

  • The US government took around 80 percent ownership of Fannie Mae and Freddie Mac in 2008 when the world's financial systems were upended by a crisis that began in the American subprime mortgage sector.
  • President Donald Trump said Wednesday he was considering selling off US mortgage-backing giants Fannie Mae and Freddie Mac almost two decades after they were brought under government control during a global financial crisis.
  • The US government took around 80 percent ownership of Fannie Mae and Freddie Mac in 2008 when the world's financial systems were upended by a crisis that began in the American subprime mortgage sector.
President Donald Trump said Wednesday he was considering selling off US mortgage-backing giants Fannie Mae and Freddie Mac almost two decades after they were brought under government control during a global financial crisis.
The move, if confirmed, could resolve an issue that has dogged administrations as far back as Barack Obama's, offering possible dividends for investors, but risking driving up borrowing rates for homebuyers.
"I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public," Trump wrote on his Truth Social website.
"I will be speaking with Treasury Secretary Scott Bessent, Secretary of Commerce Howard Lutnick, and the Director of the Federal Housing Finance Agency, William Pulte, among others, and will be making a decision in the near future. 
"Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right. Stay tuned!"
The firms do not originate consumer mortages, but buy them on the secondary market from banks and other lending institutions, then bundle them and sell them on as investment products, guaranteeing the principal and the interest.
That protects investors, and injects liquidity into the mortgage market, permitting institutions to offer the kind of long, fixed-rate mortgages popular with American buyers.
The US government took around 80 percent ownership of Fannie Mae and Freddie Mac in 2008 when the world's financial systems were upended by a crisis that began in the American subprime mortgage sector.
The firms had to be bailed out because of their exposure to so many mortgages that had gone into default, and the US government at the time intervened as part of a mammoth effort to unstick global liquidity.
They have since paid back their debts to the US taxpayer and now have tens of billions of dollars on hand.
Advocates for privatizing them say it would promote competition and move risk from taxpayers to private investors.
But opponents say the process could reduce liquidity in the mortgage market, which would drive up interest rates and reduce availability of home loans to lower income borrowers.
hg/sla

airlines

Consumer groups want airlines to pay for baggage fees 'distress'

  • They say that the fees and policies imposed by the airlines breach European Union aviation regulations and European Court of Justice rulings.
  • Sixteen European consumer groups on Wednesday called on the European Union to take action against seven low-cost airlines over their baggage fees.
  • They say that the fees and policies imposed by the airlines breach European Union aviation regulations and European Court of Justice rulings.
Sixteen European consumer groups on Wednesday called on the European Union to take action against seven low-cost airlines over their baggage fees.
The European Consumer Organisation, BEUC, which has overseen the initiative, accuses airlines of "misleading" passengers and creating "confusion" and "distress" at check-ins with their different policies.
The action by the consumer groups names easyJet, Norwegian, Ryanair, Transavia, Volotea, Vueling and Wizz Air.
Passengers can pay up to 280 euros ($315) to take on a suitcase, depending on the airline, according to the consumer groups. They say that the fees and policies imposed by the airlines breach European Union aviation regulations and European Court of Justice rulings.
The groups, which come from 12 EU nations, have sought an investigation by the European Commission and national consumer authorities in EU states. They also demanded sanctions for the "illegal" practices.
The BEUC said that a standard luggage allowance should be included in a plane ticket price.
The airlines were mainly unrepentant.
Ryanair said in a statement that it "welcomed" the complaint, which it predicted would "confirm that Ryanair's bags policy fully complies with EU Law", which "grants all EU airlines the freedom to set prices, including prices of optional services".
Norwegian also said it believed its rules were in line with EU regulations. "Norwegian is committed to offering safe and affordable travel, and our baggage policy reflects this," the airline said, adding that the fee rules were "essential for managing weight and limited space on board, ensuring passenger safety, and maintaining punctuality".
Transavia, a subsidiary of Air France-KLM, and Volotea, referred to a statement by the industry body Airlines for Europe, which said: "The action taken today by consumer organisations would decrease consumer choice and oblige all passengers to pay for additional services that they may not all need."
myr-eg/tw/rsc

AI

Apple design legend Jony Ive joins OpenAI

BY GLENN CHAPMAN WITH THOMAS URBAIN IN NEW YORK

  • Ive and his team will take over design at OpenAI as part of an acquisition of his startup named "IO" valued at $6.5 billion.
  • The legendary designer behind Apple's iPhone, Jony Ive, has joined OpenAI to create devices tailored for using generative artificial intelligence, according to a video posted Wednesday by the ChatGPT maker.
  • Ive and his team will take over design at OpenAI as part of an acquisition of his startup named "IO" valued at $6.5 billion.
The legendary designer behind Apple's iPhone, Jony Ive, has joined OpenAI to create devices tailored for using generative artificial intelligence, according to a video posted Wednesday by the ChatGPT maker.
Ive and his team will take over design at OpenAI as part of an acquisition of his startup named "IO" valued at $6.5 billion.
Sharing no details, OpenAI chief executive Sam Altman said in the video that a prototype Ive shared with him "is the coolest piece of technology that the world will have ever seen."
The San Francisco-based AI company finished the clip with a message that it looks forward to sharing fruits of the device collaboration next year.
British-born Ive was an Apple employee from 1992 to 2019, during which time he oversaw the development of the brand's now legendary products, from the iMac and AirPods to the iPod, iPhone and Apple Watch.
Working closely with Apple co-founder Steve Jobs, his designs revitalized Apple, making it the company with the world's third-largest market capitalization and a global standard for product design.
Altman said a transformational new technology such as AI deserves a revolutionary new way to interact with it.
Comparing AI to "magic intelligence," Altman said the technology behind ChatGPT "deserves something much better" than having to type questions into a laptop.
Ive began collaborating with Altman two years ago and it "became clear that our ambitions to develop, engineer and manufacture a new family of products demanded an entirely new company," the pair said in a joint post.
"The products that we're using to deliver and connect us to unimaginable technology are decades old," Ive said.
"So it's just common sense to at least think, surely there's something beyond these legacy products."

Dethroning smartphones?

OpenAI putting its hot chatbot into a new kind of gadget could be a threat to Apple, which has struggled with its AI strategy, particularly when it comes to making its Siri digital assistant smarter.
Apple shares were down nearly three percent in after-market trades on Wednesday.
Almost a year after announcing the integration of a host of generative AI functionalities into its new iPhone 16, Apple has been slow to implement them.
The Cupertino, California-based group has also postponed the release of an updated version of its Siri voice assistant until next year, at best.
The race to put generative AI into devices also involves Amazon, which is adding the technology to its Alexa voice assistant, with a rollout of that service currently underway.
Dubbed Alexa+ and boosted with AI, Amazon's adoption of the technology is intended primarily for connected devices in the home, such as smart speakers or televisions.
Hyped startup Humane in 2024 launched its AI Pin, a square gadget to be worn like a brooch that was theoretically capable of answering spoken questions, taking photos, and making phone calls.
But it quickly failed to catch on due to its high price and poor performance, and was subsequently acquired at a low price by HP.
IDC advertising and marketing technology research director Roger Beharry Lall said that it remains to be seen if a gadget dedicated to using AI can dethrone smartphones that still rule modern lifestyles.
"Right now, the phone is the medium through which you can access these technologies," Beharry Lall said.
"If anyone can figure out what the next-generation interface is going to look like, it's probably Mr. Ive."
OpenAI has become one of the most successful companies in Silicon Valley, propelled to prominence in 2022 with the release of ChatGPT, its generative AI chatbot.
gc-tu/arp/sst

Global Edition

Dollar, US bonds under pressure as Trump pushes tax bill

  • "Investors are getting worried about the Trump tax bill that is working its way through Congress that is not going to be trimming the debt but actually adding to it," said Sam Stovall of CFRA Research.
  • Wall Street stocks tumbled Wednesday along with the dollar as a bond sell-off signaled investor unease while Congress weighs a tax-cut bill that could push up the US deficit.
  • "Investors are getting worried about the Trump tax bill that is working its way through Congress that is not going to be trimming the debt but actually adding to it," said Sam Stovall of CFRA Research.
Wall Street stocks tumbled Wednesday along with the dollar as a bond sell-off signaled investor unease while Congress weighs a tax-cut bill that could push up the US deficit.
The yield on the 10-year US Treasury note approached 4.6 percent, its highest level since February, as Trump seeks to unify Republicans in the House of Representatives behind a sweeping bill that would slash taxes and roll back federal spending.
Major US indices fell about 1.5 percent or more after a poor US Treasury auction sent bond yields sharply higher.
"Investors are getting worried about the Trump tax bill that is working its way through Congress that is not going to be trimming the debt but actually adding to it," said Sam Stovall of CFRA Research.
"As a result, the bond yields have been moving higher and that is causing investors to be concerned."
Activity on Capitol Hill has taken center stage this week, while top finance leaders from the G7 group of nations gather in Canada for talks touching on the war in Ukraine and trade negotiations in the wake of Trump's tariff onslaught.
"A bond market crisis is exactly the sort of event that could send stocks tumbling and volatility surging," said Kathleen Brooks, research director at XTB.
"It's also harder to recover from compared to the man-made tariff crisis," she added.
Bitcoin on Wednesday hit a new record high, of $109,499.76, as investors eyed new US legislation on cryptocurrency with optimism.
In Europe, London's FTSE closed slightly up, despite inflation data coming in higher than expected, which analysts said could slow the pace of interest rate cuts by the Bank of England.
Germany's DAX also ended in positive territory. But the CAC in Paris ended lower.
An initial surge in crude prices spurred by a CNN report that Israel was planning a strike on Iranian nuclear sites reversed direction after a surprise announcement by the US Energy Information Administration that the country's oil stocks had risen last week.
Among individual companies, Google parent Alphabet bucked the tide, gaining 2.9 percent after announcing plans to include advertisements into its new AI Mode for online search.
The integration of advertising has been a key question surrounding generative artificial intelligence chatbots, which have largely avoided interrupting the user experience with ads.
Target fell 5.2 percent following another disappointing earnings release. The big-box chain, which is contending with tariffs and fallout from a boycott over its reversal on diversity pledges, reported a 2.8 percent drop in sales.

Key figures at around 2030 GMT

New York - Dow: DOWN 1.9 percent at 41,860.44 (close)
New York - S&P 500: DOWN 1.6 percent at 5,844.61 (close) 
New York - Nasdaq Composite: DOWN 1.4 percent at 18,872.64 (close)
London - FTSE 100: UP 0.1 percent at 8,786.46 (close)
Paris - CAC 40: DOWN 0.4 percent at 7,910.49 (close)
Frankfurt - DAX: UP 0.4 percent at 24,122.40 (close)
Tokyo - Nikkei 225: DOWN 0.6 percent at 37,298.98 (close)
Hong Kong - Hang Seng Index: UP 0.6 percent at 23,827.78 (close)
Shanghai - Composite: UP 0.2 percent at 3,387.57 (close)
Euro/dollar: UP at $1.1334 from $1.1283 on Tuesday
Pound/dollar: UP at $1.3421 from $1.3393
Dollar/yen: DOWN at 143.66 yen from 144.51 yen
Euro/pound: UP at 84.42 pence from 84.24 pence
Brent North Sea Crude: DOWN 0.7 percent at $64.91 per barrel
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Bitcoin

Bitcoin hits record high amid optimism over US legislation

  • Bitcoin broke back through the symbolic $100,000 threshold on May 8 for the first time since February, as Britain and the United States unveiled a trade deal.
  • Bitcoin hit a record high on Wednesday, driven by a wave of optimism over cryptocurrency legislation in the United States.
  • Bitcoin broke back through the symbolic $100,000 threshold on May 8 for the first time since February, as Britain and the United States unveiled a trade deal.
Bitcoin hit a record high on Wednesday, driven by a wave of optimism over cryptocurrency legislation in the United States.
The world's most popular cryptocurrency surged to an all-time peak of $109,499.76, surpassing its previous high set on January 20 when Donald Trump was sworn in as US president.
Bitcoin gained after US policymakers showed greater bipartisan support for a cryptocurrency bill on the regulation of so-called stablecoins, digital coins whose value is tied to the dollar, according to analysts. 
This has sparked fresh hopes for regulatory clarity in the sector, including for Bitcoin which is not directly linked to the dollar.
The digital currency has also been buoyed by a more favourable macroeconomic environment, as investors' appetite for riskier assets has returned following an easing of tensions between the US and its key trading partners.
Trump vowed to support crypto currencies during his campaign for a second White House term.
But a wave of US tariffs unleashed on countries around the world dampened financial markets, causing a wave of uncertainty.
Bitcoin broke back through the symbolic $100,000 threshold on May 8 for the first time since February, as Britain and the United States unveiled a trade deal.
Cryptocurrencies have made headlines since their creation, gaining attention for their extreme volatility and the collapse of several industry giants, foremost among them the FTX exchange platform.
The digital currency is created -- or "mined" -- as a reward when powerful computers solve complex problems to validate transactions made on a meddle-proof register known as the blockchain.
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