Germany's Chancellor Merz said Germany is building a stronger NATO to ensure the alliance maintains transatlantic ties.

A draft U.S. Treasury report warns AI market risks could be comparable to the dot‑com bubble, digital outlet NOTUS reports. Prepared by Treasury staff for Treasury Secretary Bessent, Fed Chair Kevin Warsh and several federal financial regulators, the draft was completed weeks ago and is awaiting formal sign‑off before distribution to intended recipients and likely public release. The report says AI firms are more deeply embedded in the U.S. economy than internet‑era companies and could pose systemic risks if financial conditions shift, projected productivity gains fail to materialize, or supply‑chain and other bottlenecks constrain the sector. It flags heightened vulnerability if financing for infrastructure projects dries up or long‑term growth expectations are unmet, drawing parallels with conditions before the internet crash. A Treasury spokesperson called the draft unaudited and not department policy, saying the official position is that AI will be a key driver of a new "golden age," delivering unprecedented productivity gains, expanding economic opportunities and empowering U.S. workers and firms.

Capital Economics economist Andrew Kenningham says strong retail prints last week and a 0.9% MoM rise in May industrial production indicate Germany may have weathered the Iran war shock and could post Q2 GDP expansion. He cautions the industrial gain is chiefly auto production‑led and, given sector headwinds, that momentum is unlikely to persist; manufacturing’s share of the economy is likely to decline over the medium term.