TL;DR

Iran-Israel conflict escalates; Swiss/Nordic central banks cut rates; gold surges 30% YTD.

Highlights

• Iran launched 20–30 ballistic missiles at Israel, with one hitting Soroka Hospital; Israel vows retaliation and continues airstrikes in Tehran targeting regime assets12.
• North Korea fired over 10 rockets after US-South Korea-Japan drills, escalating regional tensions4.
• Swiss National Bank cut rates to 0%, joined by Norway’s Norges Bank and Sweden’s Riksbank in monetary easing as inflation fades3.
• Japan’s Ministry of Finance to cut super-long JGB issuance by 10% and increase short-term debt supply amid weak demand and rising yields5.
• China approved a limited batch of rare-earth export licences, maintaining tight control over strategic mineral flows6.
• EU Advocate General recommended upholding a €4.1bn antitrust fine against Google , signaling continued regulatory headwinds for Big Tech7.
• EU is considering shifting €200bn in frozen Russian assets into riskier investments to boost returns for Ukraine aid8.
• BYD launched a €19,990 EV in France, outpacing Tesla in April EU registrations and pressuring European automakers12.
• Gold surged 30% YTD to $3,400/oz, outpacing other havens; China’s retail gold boom faces scrutiny after Yongkun Gold’s collapse1320.
• Brazil declared itself bird-flu free, moving to restore chicken exports after a sharp drop in shipments11.
• Russia and China plan joint military drills in 2025; Putin warns Germany against supplying Taurus missiles to Ukraine916.
• Spain opposes NATO’s proposed 5% of GDP defense spending target, highlighting divisions ahead of the alliance summit17.

Commentary

Rising geopolitical tensions remain a key market driver. Iran’s direct missile strike on Israel, including the hit on a major hospital, and Israel’s ongoing air campaign in Tehran mark a notable escalation in Middle East hostilities12. This, alongside North Korea’s latest rocket launches following allied military drills4, and Russia’s warnings to Germany over potential weapons deliveries to Ukraine16, underscores a persistently fragile global security environment. The announcement of Russia-China joint military drills further signals deepening strategic alignment9, while Spain’s opposition to higher NATO defense spending highlights divisions within Western alliances17.

Central banks in smaller European economies are shifting toward looser policy. The Swiss National Bank cut rates to zero, with Sweden and Norway following suit, citing subdued inflation and slowing growth3. This divergence from larger peers could pressure local currencies and support regional bond markets, while Japan’s reduction in super-long JGB issuance aims to address weak demand and rising yields5. These moves collectively point to a cautious macro outlook in Europe and Japan.

In commodities, gold ’s 30% YTD rally to $3,400/oz reflects sustained demand for havens amid fiscal and geopolitical uncertainty20, but the collapse of China’s Yongkun Gold highlights risks in the retail bullion market13. China’s limited approval of rare-earth export licences keeps supply-chain risks in focus for global manufacturers6. Brazil’s restoration of bird-flu-free status should support a rebound in global poultry trade, with potential price impact for protein markets11.

On the corporate and regulatory front, the EU’s Advocate General backing the €4.1bn fine against Google signals continued regulatory pressure on Big Tech7. BYD ’s aggressive EV pricing and market share gains in Europe are intensifying competition for incumbents, despite new EU tariffs12. The EU’s debate over investing frozen Russian assets in higher-yield instruments to aid Ukraine could have implications for European financials and cross-border capital flows8.

Traders should closely monitor further Middle East and East Asia escalations for commodity and defense sector impacts, track European rates and FX for policy divergence, and watch gold and rare earths for signs of volatility or regulatory shifts.