Germany in Focus: Political Turbulence and Chip Showdown

Today, the political focus is on Germany, where Chancellor Olaf Scholz faces a vote of confidence. The Social Democrat, who is likely to lose the vote, sees this as a necessary step to initiate new elections after he dissolved his ruling coalition. It could be surprising if right-wing representatives, wanting to gain a political advantage, pledge their support to him. The election date is set for February 23, with Friedrich Merz from the center-right party leading in the polls. Beyond the political stage in Europe, a legal battle is igniting between tech giants Qualcomm and Arm in Delaware. At the heart of the dispute is a licensing issue that arose from Qualcomm's acquisition of the company Nuvia. Arm accuses Qualcomm of violating intellectual property and demands the destruction of all products based on it—a drastic step that could significantly harm Qualcomm, especially since expansion into areas beyond smartphone chips is their growth target. Meanwhile, the London stock market paints a grim picture: a total of 88 companies have either delisted or relocated this year. Attention shifts across the Atlantic, where New York entices with a deep investor community, making stock liquidity and prospects considerably more attractive. An unexpected bright spot meanwhile shines on a small corner of Wall Street: structured finance. The market is flourishing here, but increased enthusiasm also brings risks. Insurers in particular are massively purchasing bonds to meet the rising demand for retirement products, which could lead to potential dangers as new, less familiar assets enter the investment mix. Lastly, we turn our attention to South Korea, which is in the midst of a political transition. The assumption of office by Prime Minister Han Duck-soo following the impeachment of President Yoon Suk Yeol has begun in an economically challenging climate. Han now has to appease both investors and international partners while the Constitutional Court decides on the impeachment.