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Today’s agenda: US-China trade talks; Fed decision day; conclave starts; Merz’s rocky first day; and Carney holds his own with Trump
Good morning. We start in Asia, where India has launched what appears to be its most extensive military attack on Pakistan in decades.
What we know so far: India said it hit “terrorist infrastructure” in nine sites across Pakistan and the part of Kashmir its neighbour administers, adding that no Pakistani military facilities were targeted. Pakistan said India had launched 24 strikes at six areas, killing at least eight people — including two children — and injuring 35. Islamabad also said it had shot down five Indian fighter jets, while state media reported that Pakistani artillery was firing towards Indian-administered Kashmir.
Why it happened: Tensions have been rising since New Delhi linked Islamabad to last month’s militant attack which killed 26 people in Kashmir, a disputed region claimed by both countries. Pakistan has previously denied any involvement in the attack. In response, India had suspended participation in a key water-sharing treaty, and the two countries sharply downgraded ties, closing airspace, ports and their land border.
Looking ahead: Pakistan’s prime minister said India’s strikes were an “act of war” and has called a national security committee meeting. One analyst said Pakistan would retaliate “in the coming hours”, adding that there would be “behind the scenes” diplomacy and “the US will be involved at some level”. Washington, which has close ties with both countries, has urged restraint. US President Donald Trump called the strikes “a shame” and said he hoped the conflict “ends very soon”. We’ll bring you the latest updates here.
Here’s what else we’re keeping tabs on today:
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US rate decision: The Federal Reserve is expected to keep interest rates unchanged.
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Economic data: The EU, France, Germany, Italy and the UK issue construction purchasing managers’ indices, while the bloc also publishes retail sales data.
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Conclave: Tensions over the late Pope Francis’s legacy loom as cardinals gather to elect the next leader of the world’s 1.4bn Catholics.
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Xi in Moscow: China’s president is on a four-day trip to Russia for Victory Day and talks with Vladimir Putin.
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Results: DoorDash, which recently struck a £2.9bn deal to take over Deliveroo, reports, as do Arm, BMW, Disney and Uber.
How should central banks navigate the new world order? Pose your questions about monetary policy to Chris Giles and other FT experts, and have them answered in a live Q&A today.
Five more top stories
1. Washington and Beijing will this week hold their first trade talks since Trump imposed tariffs on China. Treasury secretary Scott Bessent and US trade representative Jamieson Greer will meet China’s vice-premier He Lifeng in Geneva. Here’s what to expect ahead of the talks.
2. Exclusive: Britain plans to set up a youth mobility scheme with the EU, a senior UK official has confirmed publicly for the first time. The scheme is part of a new “strategic partnership” with the bloc, to be launched at a summit this month. George Parker has more details from London.
3. Exclusive: Israel has allowed hundreds of Palestinians to leave Gaza in recent weeks after months of a near-total block on departures. Diplomats fear the exits are the start of a plan — proposed by Trump in February — to empty the Palestinian enclave of its inhabitants.
4. US companies are planning to buy back a record $500bn of their own shares, as they seek to deploy their huge cash piles at a time when Trump’s policies are adding to uncertainty over making capital investments. Deutsche Bank said the tally of announced buybacks over the past three months is the biggest rolling three-month sum on record.
5. Exclusive: Amazon’s self-driving start-up Zoox will scale up production next year as it accelerates plans for a commercial rollout of its fleet of robotaxis in the US. The company, which makes and operates a bespoke pod-shaped vehicle without a steering wheel, will open a new site in California’s Bay Area, its co-founder told the FT.
News in-depth
The Bundestag delivered a stinging blow to Friedrich Merz on day one when an initial vote denied him the majority needed to become Germany’s chancellor — a first in the history of the federal republic. Merz eventually secured the majority needed but yesterday’s events were a vivid example of his coming challenge: trying to deliver an ambitious agenda with a razor-thin parliamentary majority.
We’re also reading . . .
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‘Not for sale’: Canadian Prime Minister Mark Carney held his own as he once again rejected Trump’s push to annex his country during an Oval Office meeting.
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Italian deals: A dealmaking frenzy is poised to reshape the country’s banking sector, but the ramifications will be felt across Europe.
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Doge: By his own metrics, Elon Musk’s government cost-cutting drive has failed, writes Edward Luce. Was there a hidden method to the madness?
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Resilient coffee: As climate change puts pressure on supplies, new varieties are coming to the fore, writes Anjana Ahuja.
Chart of the day
The old US-led economic order is now unsustainable, writes Martin Wolf. America will no longer serve as balancer of last resort, and the world — especially China and Europe — has to think afresh.
Take a break from the news
What do flight attendants say about our culture? The evolution of their uniforms — charged with establishing the visual identities of their home nations — is reflective not only of changing fashion tastes but also of social progress, writes Jessica Beresford.
