Shares of U.S.-listed companies exposed to Greenland surged on Monday after the U.S. and Denmark reached a deal regarding security arrangements on the Arctic territory.

Shares of Greenland Energy soared as much as 150% during premarket trading, with Greenland Mines seen up over 80% and Critical Metals Corp nearly 25% higher.

The agreement, which is expected to be signed during the United Nations General Assembly this week, sees the U.S., Denmark and Greenland enter into a pact to develop a significant military presence on the territory, while blocking Washington’s adversaries from building their own bases there.

It comes after several months of Trump’s threats to annex the self-governing Danish territory, with the president insisting Greenland is critical to U.S. national security.

This is a developing story. Please refresh for updates.

Treasury Secretary Scott Bessent is meeting with Chinese Vice Premier He Lifeng ahead of Chinese President Xi Jinping‘s visit to the U.S. this week.

The talks are expected to cover artificial intelligence, tariffs, rare earths and other economic issues ahead of Trump and Xi’s Sept. 24 summit in Washington, D.C.

“In New York City, Vice Premier He Lifeng and I are continuing our discussions on the U.S.-China economic and trade relationship ahead of [President Donald Trump‘s] historic summit with President Xi in Washington,” Bessent said in a post to X along with a photo of himself and He.

He added: “These talks help lay the groundwork for President Trump to advance America’s economic interests and deliver results for the American people.”

In brief remarks to reporters before the meeting at JPMorgan Chase in New York, Bessent said he looks forward to “focused, fulsome and constructive talks today that will set the stage” for this week’s summit between the leaders of the world’s two largest national economies.

U.S. Trade Representative Jamieson Greer is also expected to participate in the talks.

The meeting comes before Xi’s high-stakes visit to Washington this week, his first during Trump’s second term. Trump visited Beijing earlier this year amid escalating tensions between the world’s largest economies.

Bessent’s meeting with He also comes amid intensifying debate in Washington over the safety of artificial intelligence and national security as the U.S. and China compete for technological leadership. The Trump administration has favored voluntary and national-security-focused safeguards over broad mandatory rules for AI developers. The issue is expected to be part of discussions between Xi and Trump during the Chinese president’s visit.

Top AI executives have recently warned that the technology could quickly become out of control and poses sweeping new threats. They urged Washington to set guardrails and regulations on the industry, something Trump himself has recently derided.

CNBC reported Friday that JPMorgan CEO Jamie Dimon and Citigroup chief Jane Fraser are expected at a state dinner during Xi’s visit. OpenAI CEO Sam Altman and Nvidia chief Jensen Huang are also set to attend.

The summit in Washington is expected to include high-stakes economic dialogue as the U.S. and China remain locked in competition.

In addition to AI, the summit is likely to broach other issues such as trade and tariffs. A key part of the current U.S.-China trade truce — Washington’s suspension of heightened reciprocal tariffs on Chinese imports — is scheduled to expire Nov. 10.

The current truce includes Chinese commitments on rare-earth exports and U.S. agricultural purchases, while the Trump administration reduced some tariffs and suspended higher reciprocal tariffs on Chinese goods.

AirAsia is “sustainable” despite media reports to the contrary and is even planning for growth despite soaring fuel prices and geopolitical uncertainty, according to co-founder Tony Fernandes.

Reuters reported earlier this week, citing people with knowledge of the matter, that the Malaysian government had asked Malaysia Airlines and Batik Air whether they could take AirAsia’s domestic market share as part of scenario planning while authorities monitored the carrier’s financial health. Discussions had intensified in recent weeks as concerns mounted over AirAsia’s finances, the report said.

“We’re OK. We’re sustainable,” Fernandes said at a media briefing Friday, denying that the carrier needed a government rescue. “There is no chance of non-sustainability. Zero chance.”

Fernandes said AirAsia had adjusted its cost and revenue structure to cope with higher fuel prices after costs surged from the levels at which the airline had sold many of its tickets. Fuel expenses surged 58% from a year earlier as average jet fuel prices climbed to $183 per barrel, according to the company.

The fundraising “is targeted towards refinancing. It’s $1 billion, not $3 billion. We do not need $3 billion,” Fernandes said.

The Malaysia-based budget carrier said earlier this month that its planned fundraising, comprising up to $1 billion in international debt markets and 700 million ringgit ($171.5 million) in local credit facilities, was primarily aimed at debt restructuring and refinancing, as well as consolidating its balance sheet, rather than funding operational shortfalls.

Fernandes also rejected the suggestion that AirAsia’s operations could simply be replaced by rival carriers, pointing to the roughly 100 aircraft it operates in Malaysia.

“You can’t just step in,” he said, saying AirAsia’s cost structure, network and brand would be difficult to replicate.

What’s more, “we’ll be making a pretty exciting announcement with regards our growth and our strategy with Airbus within the next month,” he said, adding that the airline’s relationship with the aircraft maker was “fantastic.”

AirAsia is leaning more heavily on artificial intelligence, already seeing about 3% in fuel savings from the technology and with plans to roll out new customer-facing AI features over the next three months, Fernandes said.

Fernandes said AirAsia would continue entering markets where it could make money and provide better value than competitors, in response to questions from CNBC.

He also said AirAsia’s tie-up with Turkey’s Pegasus Airlines could serve as a model for further expansion, and that European low-cost airlines had inquired about potential partnerships.

The airline cut capacity by 11% during the quarter and suspended underperforming long-haul routes, while reducing fleet allocations in the Philippines and Indonesia. AirAsia said it plans to restore capacity to pre-war levels in the fourth quarter as year-end travel demand picks up.

An intense boardroom dispute is brewing for control of Tata Group, the Indian multinational conglomerate that owns Jaguar Land Rover and Air India, and is a key supplier for Apple.

On Thursday, Noel Tata, the heir of the Tata family and the chair of Tata Trusts, said that the reappointment of N. Chandrasekaran as the chairman of Tata Sons earlier in the day was “illegal.”

Noel Tata wants to keep Tata Sons private to safeguard its current ownership, experts said, while Chandrasekaran wants to grow the business by making large, bold bets that require massive capital.

If the dispute lasts beyond six months, as happened 10 years ago, it may delay the prospective listing of Tata Sons — a crucial part of Chandrasekaran’s strategy to get the funding he needs.

“The deadlock could slow down capital-intensive bets in Air India, semiconductors and batteries where leadership continuity and trust are as important as balance sheets,” Jaydeep Mukherjee, professor of Economics at Great Lakes, Chennai, told CNBC. “Tata needs to split operational leadership from shareholder-trust politics.”

Tata Group has made some big capital commitments under Chandrasekaran’s leadership, which in the latest letter to shareholders he described as the building blocks for India’s road to becoming a developed country by 2047.

These include the purchase of beleaguered national carrier Air India in 2022 and follow-up investments for its turnaround, plans to set up a $11 billion semiconductor plant and bets on low-margin electronic assembly work for Apple.

Tata Sons needs over 290 billion rupees ($3 billion) annually to support its loss-making businesses such as Air India, Tata Digital, Tata Electronics, and another 900 billion rupees to invest in the new semiconductor plant, Deven Choksey, managing director of Mumbai-based DRChoksey Finserv, told CNBC.

But it earns little over 300 billion rupees in dividends, he said, leaving a large funding gap. Listing the company might be one way to rectify that — Tata Sons could fetch a gross valuation of over 12 trillion rupees, Choksey said.

Tata Sons is the holding company of Tata Group companies, but the ultimate ownership lies with the Tata Trusts. Tata Trusts is the largest shareholder in Tata Sons with a 66% share, followed by 18% owned by Shapoorji Pallonji Group and 13% owned by Tata Group companies, Jefferies said in a report in August.

Last month, Chandrasekaran had expressed his displeasure over the delay in finalizing his reappointment and announced that he would not seek another term. The decision was accepted by the Tata Trusts, and it advised Tata Sons to initiate the process for setting up a selection committee for appointing a successor.

On Thursday, however, Tata Sons said in a release that its board, with a “majority vote,” approved the re-appointment of Chandrasekaran for another five years after his term expires in February next year.

While four directors on the Tata Sons board approved the decision, Noel Tata voted against the re-appointment, the Tata Trusts said in a separate release the same day. The chairman of Tata Sons cannot be appointed without the approval of the chair of the Tata Trust, so the decision was a “legal nullity,” it added.

Tata Trusts has resisted demands from Indian regulators to list Tata Sons and said on Thursday it will “explore all avenues and possibilities to move out of the regulatory framework that requires mandatory listing.”

“If Tata Sons is publicly listed, the rights of Tata Trusts as majority shareholders stand to be seriously impaired,” the Tata Trusts said in a release.

But Tata Sons likely cannot escape listing if it needs funds to support its large capital investment plans.

During the financial year ended in March, Tata Sons’ consolidated net profit slipped 35% to 266 billion rupees (about $2.78 billion) as losses from Air India, Tata Digital and Tata Electronics piled up, as per Tata Sons’ latest annual report.

While all these loss-incurring businesses are unlisted, the market capitalization of Tata Group’s listed companies dropped 12% during the same period.

The decision to take bold bets, risking losses at a time when the group’s top money-spinning company, Tata Consultancy Services, grapples with the impact of artificial intelligence on the information technology sector has deepened the rift between Chandrasekaran and Noel Tata.

Tata Sons does not have “access to capital markets or debt markets right now” to raise funds for its unlisted ventures that generate losses, Shriram Subramanian, founder and managing director of proxy advisory firm InGovern Research Services, told CNBC.

The moment Tata Sons raises funds through debt, it will be qualified as a non-banking financial company, which would require it to be listed under the Reserve Bank of India’s Upper NBFC mandatory listing regulations, he added.

Last week, the Reserve Bank of India rejected Tata Sons’ application from 2024 to surrender its registration as a Core Investment Company, dashing hopes that the company could avoid the mandatory listing, Tata Trusts said.

The listing could pose a challenge to the Tata Trusts’ ownership of Tata Sons, and thus to Noel Tata’s sway over the company.

The Tata Trusts has legitimate concerns that the listing of Tata Sons could provide an entry to a new strategic minority investor who would buy the 18% stake owned by Shapoorji Pallonji, said Choksey, adding that this could weaken their hold on the century-old family business.

To protect the ownership of the business, Tata Trusts on Thursday proposed to acquire the stake from S.P. Group for 250 billion rupees over 18 months. It suggested that Tata Sons could fund this acquisition through internal cash flows, sale of listed shares, or by bringing an investor into some of the newer businesses, rather than listing. 

The dividend that Tata Sons earns from its companies is not enough to “pay for the losses and fund for expansion,” Choksey said, while monetizing loss-making assets like Air India or Tata Digital is next to impossible in India right now.

U.S. President Donald Trump‘s administration has approved the potential $24.3 billion sale of nearly 50 F-35 warplanes to Saudi Arabia in what is seen as a major boost for the kingdom as it faces intensifying attacks from the Iran-backed Houthis in Yemen.

The package, which was announced on Thursday, includes the sale of 48 of Lockheed Martin‘s F-35 jets, the world’s most advanced fighter aircraft, and 49 Pratt & Whitney engines and other parts.

“This proposed sale will support the foreign policy and national security objectives of the United States by improving the security of a major non-NATO ally that is a force for political stability and economic progress in the Gulf region,” the State Department said in a statement.

The announcement comes as the Houthis have recently ramped up attacks on targets in Saudi Arabia and launched a lightning ground offensive to exercise control of the Bab el-Mandeb Strait, a strategically vital oil choke point.

The Trump administration said the proposed deal would help improve Riyadh’s capability to deter current and future threats but would “not alter the military balance in the region” — referring to a longstanding U.S. policy that Israel must maintain a military advantage over potential rivals in the Middle East.

Congress has 30 days to scrutinize or attempt to block the deal, and some lawmakers have already raised concerns.

Representative Raja Krishnamoorthi, D-Ill. said the U.S. should not move ahead with the deal at a time “when our own intelligence community is warning that it could put the crown jewels of American military technology within reach of the Chinese Communist Party.”

In a statement on social media, Krishnamoorthi added: “We must not sell our most advanced fighter jet anywhere the CCP may be able to get its hands on the technology inside it.”

Congress has previously questioned arms deals with Riyadh following the 2018 killing of Saudi journalist Jamal Kohsoggi, a high-profile critic of the kingdom.

In May last year, Trump had praised Saudi Arabia and its leaders after the White House announced a commitment for the kingdom to invest $600 billion in a series of deals with the U.S.

Among the agreements was a nearly $142 billion defense sales deal, which the White House said at the time would provide “state-of-the-art warfighting equipment and services from over a dozen U.S. defense firms.”

Trump, who has a close relationship with Saudi Arabia Crown Prince Mohammed bin Salman, had welcomed the crown prince to the White House in November.

Shares of Mercari jumped more than 4% on Friday, extending their rebound from a selloff sparked by the Japanese online marketplace’s restrictions on listings of Pokémon’s 30th anniversary products announced Tuesday. 

The company said the restrictions would remain in place for as long as it determines that a safe and secure trading environment cannot be ensured.

Its shares closed 6.4% lower on Wednesday, the day the restrictions took effect, before recovering to close 1.4% higher on Thursday.

The stock was also outperforming the Nikkei 225 on Friday morning, which was up roughly 1%. 

Mercari said it imposed the temporary listing ban over concerns that a surge in transactions following the release of the anniversary products could lead to trading disputes, as well as harassment of users involved in transactions.

Citibank attributed Wednesday’s more than 6% drop to Mercari’s announcement of the Pokémon card listing restrictions. It said Mercari’s recent share-price weakness had pushed the stock to “overly pessimistic levels,” calling the shares “oversold” and the pullback an investment opportunity.

Growth in the value of goods sold on Mercari’s marketplace in the second half of fiscal 2026 exceeded expectations, while a recovery across multiple categories could support double-digit growth, the bank added. 

Citi also said that the halt to trading of certain products was negative for Mercari, but said the impact was not significant enough for the bank to revise its forecasts.

The restrictions come amid a global Pokémon card boom. Online marketplace eBay said “Pokémon” was searched more than six million times on its U.K. site in July, underscoring continued demand for trading cards.

Pokémon card prices have surged 1,350% since 2020, according to an index compiled by Collectors, which owns card grading agency Professional Sports Authenticator, CNBC previously reported.  In February, influencer Logan Paul sold a rare Pikachu Illustrator card for more than $16 million, after buying it for just over $5 million in 2021. New cards can sell out within minutes, with people coordinating on X and Discord to know where to go.

A post on X this month claimed that a Pokémon card sold for $2.7 million at auction, setting a record.

Mercari signed an agreement with The Pokémon Company in 2023 to promote safer trading of Pokémon products on its marketplace, and introduced a policy in 2025 allowing it to restrict listings when issues such as fraud, transaction disputes or extreme price swings threaten marketplace safety.

Hello, this is Anniek Bao writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

Canadian Prime Minister Mike Carney told Brussels that Canada will pick its own partners, brushing off U.S. President Donald Trump’s warnings.

While apparently readying for a fight with the EU and Canada, Trump sounded optimistic about the Iran war nearing its end, even as tensions on the Saudi-Houthi front escalated, a reminder that one ceasefire doesn’t calm a whole region.

The one place Washington’s leverage is unambiguous is tariffs, where Congress just gave Trump a fresh weapon aimed at Beijing and New Delhi.

European Parliament members gave Canadian Prime Minister Mark Carney a standing ovation Wednesday as European Commission President Ursula von der Leyen floated an “Alliance for the Future,” with Canada as the bloc’s first associate member.

Trump dismissed the idea as “laughable” and called Canada a “terrible” trade partner, warning of heavy tariffs on Europe if the move was in bad faith. “If it’s a good intention, that’s fine,” he said.

Carney welcomed the EU’s proposal: “We do not seek power to dominate others … We are pursuing resilience so that no one can control our open markets.”

The House passed a Russia sanctions bill granting Trump statutory authority to slap tariffs of up to 100% on countries buying Russian oil, days after BRICS leaders — China and India among them — publicly rejected unilateral secondary sanctions.

New Delhi and Beijing rank among the top five buyers of Russian crude, putting them squarely in Trump’s crosshairs. Trade policy expert Deborah Elms said the law lets Trump “strike hard and quickly at any time for any reason.”

Neither China nor India are likely to cut back on Russian oil, though tariffs will give Washington leverage in dealing with New Delhi and Beijing, experts said.

Trump said the U.S. is “hopefully” approaching the end of its nearly seven-month-long war with Iran, even as fighting continues to escalate on a separate front between Saudi Arabia and the Iran-backed Houthis in Yemen.

“Well, hopefully we are toward the end of the war. They want to make a deal, we’ll see how that works out,” Trump told reporters in North Carolina Wednesday evening, adding he’d spoken with Tehran “directly,” without elaborating.

U.S. stock futures were little changed Thursday night, a day after the major averages rose on the Fed’s first rate hike in three years, while Asia markets opened higher as oil continued to slide for a third straight day.

Federal Reserve Governor Michelle Bowman, a permanent voter in the committee that makes interest rate decisions, and Kansas City Fed President Jeffrey Schmid, a non-voting member, are set to share remarks Friday — investors will listen for more color on Wednesday’s unanimous hike.

The Bank of Japan wraps its own two-day policy meeting Friday, and is widely expected to deliver a quarter-point hike to 1.25%, a 31-year high, though still within the BOJ’s estimated neutral range of 1.1% to 2.5%.

Nvidia CEO Jensen Huang said the company expects to sell twice as many chips in 2027 as it will this year, while urging for formal AI safety testing.

Palantir CEO Alex Karp called for “reasonable guidelines” on AI but said nationalization may ultimately be needed given the technology’s “unlimited risks.”

“The view that I believe they have is, these businesses have to be nationalized because if you don’t nationalize it, every single one of my clients is going to sue,” Karp told CNBC’s “Squawk on the Street” Thursday.

Amid debate over whether frontier AI development should slow, Anthropic published three metrics it says the public deserves to see: AI-led research and development, oversight of AI agents and compute allocation within Anthropic.

U.S.-based research firm Rhodium Group’s report, meanwhile, highlighted how China’s AI models were seeing rapid adoption, but that popularity isn’t yet showing up as revenue.

— Anniek Bao

Japan’s corporate leaders sound alarm over weak yen — even dollar-earners are voicing concerns

Japanese business executives, even those who have benefited from a weak yen, are calling for a stronger currency, with Kawasaki saying it would move manufacturing back to its home country if the yen strengthens.

When the yen fluctuates, “we cannot make [a] strategy,” Yoshinori Kanehana, chairman of Kawasaki Heavy Industries, told CNBC on the sidelines of the Gastech conference on Tuesday. He said it was the “biggest problem” for the company.

Kanehana said that yen at 150 could make him consider moving manufacturing from the U.S. to Japan. It has 27 production sites outside the country, including in the U.S., and 17 at home, according to a company report published last year.

— Lisa Kim

Hello, this is Priyanka Salve, writing to you from Mumbai.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest-growing large economy.

The world’s largest payments system by volumes, India’s unified payment interface, popularized cashless transactions in the country by offering free services for all. That’s about to change. Starting next month, merchants will need to pay a fee of 0.4% for accepting payments higher than $20.

While the government has defended the move, confident it will not hurt India’s march towards a cashless economy, critics disagree.

Any thoughts on today’s newsletter? Share them with the team.

The Indian government’s decision to charge a fee to merchants using its globally lauded real-time digital payment system, UPI, that undercuts the usage of Visa and Mastercard, has sparked an intense debate in the country.

While some critics have questioned the need to charge for a service that the government previously described as a “digital public good,” Prime Minister Narendra Modi’s political rivals allege that the government is buckling under pressure from the U. S.

On Tuesday, the National Payments Corporation of India announced that a 0.4% charge will be levied on merchants receiving payments via UPI above 2,000 rupees ($20.84). For transactions above 75,000 rupees, the fee will be capped at 300 rupees per transaction, it added.

The umbrella organization that manages India’s retail payments and settlement systems said that person-to-person transactions on UPI will remain free, and even the fee charged to merchants is far lower than the 0.9% on debit card transactions and 1.5%-2.5% on credit cards.

Fintech companies have welcomed the move to charge a fee to merchants.

“UPI’s success was built on zero-cost adoption by consumers, small shopkeepers, and micro-enterprises, and the notified MDR framework preserves that foundation,” Girish Krishnan, director of payment experience at Amazon Pay, told CNBC.

Head of Meta’s WhatsApp Pay Kunal Shah called it a “great move forward.” Another popular payment app, Paytm, said that the measure will generate additional revenue from merchant business.

In 2020, the Indian government cut the merchant discount rate, the fee incurred by merchants for accepting payments via UPI, to zero to promote digital transactions in the country. Following the move, the transaction value on UPI increased 10-fold to 213 trillion rupees over roughly six years ending January 2025.

“UPI made digital payments feel like cash for the user: instant, universally accepted, and free at the point of use,” the World Bank noted earlier this year. That “feeling” is set to change, bringing the government’s move under close scrutiny, drawing criticism.

Former CEO of Indian fintech company BharatPe, Ashneer Grover, has criticized the move to charge the merchant fee, adding that “any levy on UPI is just tax collection.”

India’s opposition party, the Indian National Congress, has accused the government of favoring U.S. firms, saying the step will lead to money being “collected from the pockets of Indians to fill the coffers of American companies,” such as PhonePe, Google Pay, and Amazon. Some commentators have said the move will encourage people to return to transacting in cash.

The UPI payment system on average processes more than 1.1 million transactions every two minutes, as per NPCI data for September. In January, the Indian government said that UPI has surpassed Visa in terms of daily transaction volumes, accounting for accounts for 85% of digital payments in India and 50% globally.

Those figures caught the attention of the U.S. Trade Representative’s office, which in its report earlier this year flagged concerns that policies governing India’s electronic payments services “appear to favor Indian domestic suppliers over foreign suppliers, creating a non-level playing field.”

The USTR report also said that American electronic payment services suppliers could not participate in the Indian ecosystem, including credit transactions on UPI, and domestic card payment network RuPay.

Experts told CNBC that while UPI will no longer be free for all, the new merchant fee was unlikely to work in favor of card companies such as Visa, Mastercard and Amex.

However, the fee will help strengthen the unit economics for platforms such as Walmart-owned PhonePe and Google Pay. The two payment apps together account for nearly 85% of UPI transactions by value and 81% by volume, as per a report by Indian brokerage Ambit Capital.

“A 0.4% rate severely undercuts credit cards at 1.5% to 2% and debit cards,” Neil Shah, vice president of research at Counterpoint Research, told CNBC, adding that it gives merchants “every economic incentive to favor UPI rails.”

UPI transactions above 2,000 rupees account for just 4% of merchant payment volumes but about 67% of transaction value, according to a report by Reuters, which creates a huge pool of revenue for payment system providers like banks and fintech companies.

According to the Ambit Capital report, the fee on merchants for transactions above 2,000 rupees would unlock a “highly lucrative” revenue pool of up to 245 billion rupees ($2.5 billion) for the sector.

“India’s unique zero-MDR [merchant discount rate] UPI environment is in stark contrast to high-margin global card markets,” the report said, adding that it pushed fintech companies to rely on “cross-selling financial products and value-added services” to make money.

Need to know

India’s retail inflation hits 4.8% in August, rises for 10th straight month
India’s headline rose to 4.82% in August from 4.45% in July, adding to pressure on the country’s central bank to raise key benchmark rates. Inflation has been on the rise for 10 straight months in the world’s fastest-growing major economy.

Indian Prime Minister Modi says border peace is key to India-China ties
Indian Prime Minister Narendra Modi on Saturday said that “peace and tranquility” in the border areas is essential for developing bilateral relations with its neighbor China. Ties between the two countries, which had deteriorated sharply following a deadly border skirmish in 2020, have been thawing for more than a year.

Coming up

Sept. 17: National Stock Exchange IPO opens.

Sept. 23: HSBC Flash PMI for September.

Russian President Vladimir Putin is bracing for a wartime reckoning as the Kremlin prepares to hold its first parliamentary election since the country’s full-scale invasion of Ukraine in early 2022.

The tightly controlled vote, which takes place over a three-day period from Friday to Sunday, is widely expected to shore up the dominance of the ruling United Russia party in the 450-seat State Duma, the lower house of parliament.

While the result is not in doubt, external observers will be paying close attention to voter turnout and the margin of United Russia’s victory for any signs of public discontent after more than four-and-a-half years of war.

Opinion polls have shown United Russia, a party backed by Putin, far ahead of its rivals, although the party’s approval ratings have slumped to a four-year low amid a nationwide fuel crisis and Ukrainian drone strikes on delivery warehouses.

All parties on the ballot have, at least to some degree, publicly pledged their loyalty to Putin and his political views. The Yabloko party had been the only registered political party to oppose Russia’s war in Ukraine, but last month the country’s top court barred the liberal party from contesting the vote.

“It is becoming a consensus and overall feeling in Russian society that the war is costly, to the extent that even members of Putin’s elite start talking about the need to bring it to a close,” Sergei Guriev, dean and professor of economics at London Business School, told CNBC.

The Kremlin reportedly fired Andrei Klepach from Russia’s state-controlled development bank VEB last month, after the former chief economist presented a report warning that Russia could not win a prolonged war of attrition with Ukraine and predicted a major social crisis.

Putin had also previously clashed with Sberbank’s German Gref. Speaking at an economic forum in September last year, the CEO of Russia’s largest bank issued a recession warning for the country’s economy, prompting Putin to push back.

“You also look at the polls, however biased they are. You see that Russians feel the pain of war in economic terms. Economy stopped growing. Indeed, as you rightly said, [the] budget is not in the best situation,” Guriev said.

“So, Putin had to raise taxes, something which is very unpopular. As you can imagine, even with higher taxes, he’s running significant budget deficit. It’s not something that will break [the] Russian economy, but it’s creating more and more unhappiness and dissatisfaction throughout Russia,” he added.

Russia’s Embassy in London was not immediately available to comment.

Analysts said one key reason why the State Duma elections may matter more than one might think is that the elected lower house of parliament will sit through to 2031, encompassing the 2030 presidential election.

That means if Russia was to undergo a profound political transformation during the next five years, the Duma will play a major role in managing and legitimizing it.

The United Russia party, which currently has 310 seats, will need to win at least 300 seats to maintain its supermajority and deliver constitutional changes without having to rely on support from other parties.

Ukraine has ramped up its attacks on Russian oil facilities and logistics hubs in recent months, seeking to raise the cost of the war for Russia and test Putin’s resolve to continue the conflict.

A recent spike in oil prices as the U.S. and Iran battle for control over the Strait of Hormuz has provided a major financial windfall for the Kremlin’s war chest, although not everyone is convinced it will make a big difference over the long term.

“It’s a very temporary boost,” Katia Glod, deputy head of foreign policy at the New Eurasian Strategies Centre think tank, told CNBC.

She added that even with a near-term oil price boost, the Kremlin cannot sufficiently prop up Russia’s budget to keep paying “very high” contractual salaries promised to soldiers recruited to fight.

“So, we don’t expect that this will translate into a bigger economic boost for the Kremlin that there will be more disposable money,” Glod said.

Some external observers have said Russian authorities appear to have been preparing the ground for a fresh wave of military mobilization after the State Duma election, a prospect that is deeply unpopular within Russia. The Kremlin has repeatedly denied plans for compulsory mobilization.

“There [was] a lot of intel suggesting that they will start the mobilization. We’ll see. To me, it looks like something quite opposite to the peace negotiation,” Vladyslav Vlasiuk, special envoy for Ukrainian President Volodymyr Zelenskyy, said during his trip to Singapore on Tuesday.

Vlasiuk also described his disappointment with what he perceived to be a lack of anti-war protests in Russia, concluding that perhaps this means most Russian citizens support Putin’s war. “That’s worrying. That’s really worrying,” he added.

One of the key indicators for investors to watch over the coming months is how the situation develops on the front line.

If Putin thinks Russian forces are moving forward in the eastern Donetsk region, Guriev said the Russian president will likely conclude “time is on his side” for peace talks.

“Once this line is frozen completely, and there are indications that Ukrainians may be actually getting there, eventually this year, Putin may start reckoning maybe it’s time to negotiate in earnest,” he added.

European Commission President Ursula von der Leyen on Wednesday said the European Union is opening the door for Canada to become the first associate member of the 27-nation bloc.

The announcement marks a significant change in EU policy and signals a major deepening of ties between Brussels and Ottawa.

Speaking in her annual state of the European Union address in Strasbourg, France, the EU chief said the bloc wants to bring the relationship with Canada “to the highest level possible.”

“And, dear Mark, I said we must urgently reimagine our partnerships so I would like to work with you on opening the door for Canada to being the first associate member of the European Union,” von der Leyen said.

Canadian Prime Minister Mark Carney, who was in attendance for the speech and is due to address EU lawmakers on Thursday, had previously said Ottawa was keen to pursue a “unique security and economic alliance” with Europe, but not full membership.

Canada is currently locked in a bitter trade war with the U.S. and has pledged to match President Donald Trump‘s tariffs dollar for dollar.

Von der Leyen said the EU and Canada “see the world with the same eyes” and pledged to work together on issues such as artificial intelligence, climate change, geopolitics and Arctic security.

The EU and Canada already have a free trade agreement, one that eliminated 99% of all tariff lines when it provisionally came into force in 2017. The pact is known as the EU-Canada Comprehensive Economic and Trade Agreement, or CETA.

“We will move from CETA to an alliance for the future, to create a common prosperity and economic security space,” Von der Leyen said.

The EU has previously been reluctant to entertain the prospect of flexible membership categories, notably when German Chancellor Friedrich Merz pushed for the EU to consider associate membership for Ukraine earlier in the year.

Asked whether von der Leyen’s push to embrace Canada as the EU’s first associate member was history in the making, Berenberg’s chief economist, Holger Schmieding, said, “I think this is a big step, indeed.”

“Europe is trying to openly form new partnerships or deepen partnerships with all countries in the world that are sort of like-minded,” Schmieding told CNBC’s “Squawk Box Europe” on Wednesday.

“It is not necessarily against the U.S., but it is clearly in favor of making us less dependent on the U.S. and less dependent on China, and that deeper partnership with other countries, like-minded democracies, is actually something we see in the economic re-arm,” he added.

In early June, Finnish President Alexander Stubb outlined his vision for a much larger European Union, saying the bloc should “think big” to project power on the global stage. As part of this, Stubb said the EU might consider increasing its membership to 40 states and named Canada, the U.K., Turkey, Norway and Iceland as potential candidates to join.

“Wouldn’t it be lovely if Canada was the 28th state of the European Union rather than the 51st state of the United States?” Stubb said on June 3, referring to Trump’s ambitions to annex Canada.

At the start of the year, Carney told delegates at the World Economic Forum in Davos, Switzerland, that so-called middle powers must band together to counter the rise of hard power and build a more cooperative and peaceful world.

“We have a situation where it is totally unpredictable what the United States are doing and we have aggressive industrial policy by China — and therefore, it’s so important that we strengthen our ties with democratic countries, and Canada is one example,” Bernd Lange, who chairs the European Parliament’s trade committee, told CNBC on Wednesday.

Alongside Ottawa, Lange said the EU should push to build stronger economic ties with Brazil, Indonesia Japan and South Korea.

“It’s so important that we work together and build a bloc and as Mr. Carney … mentioned in Davos, you have to be strong and sit at the table, otherwise you will be part of the menu,” he added.