TL;DR

Trump threatens EU tariffs; Apple, equities drop; Japan yields spike; gold, Bitcoin see record inflows.

Highlights

• Trump threatens 50% tariffs on EU goods and 25% iPhone import duty; Apple drops 4%, US and EU equities fall 1.
• US imposes new export restrictions on Huawei AI chips, raising tensions with China and risking trade truce 2.
• EU to sanction Nord Stream 2, aims to phase out Russian gas by 2027; Italy supports, Germany divided 3.
• Japan’s 30- and 40-year bond yields hit multi-decade highs amid fiscal concerns and BoJ policy shift; life insurers report rising bond losses 5.
• Gold up 28% YTD with $85B inflows; Goldman Sachs raises price target to $3,700–$3,880/oz; S&P 500 down 2% 12.
• US spot Bitcoin ETFs post $2.75B weekly inflows, $25B volume; Bitcoin hits record $111K, leveraged trading volatility spikes 13.
• Moody’s affirms Italy’s Baa3 rating, outlook raised to positive on improved deficit and economic resilience 14.
• Russia intensifies attacks on Ukraine, establishes buffer zone; largest prisoner swap since 2022 underway 67.
• Israel expands Gaza ground operations; British Airways suspends Israel flights through July after Houthi missile strike 89.
• Iran issues warnings to US and Israel amid regional tensions and nuclear negotiations 10.
• Trump approves Nippon Steel’s $14.9B acquisition of US Steel ; shares jump over 20% 11.
• Kazakhstan to exceed 2M bpd oil output, driven by Chevron ’s Tengiz expansion; OPEC+ quota compliance in focus 15.
• HSBC launches Hong Kong’s first blockchain settlement service after stablecoin law; Ant International completes first transaction 17.
• India overtakes Japan as world’s fourth-largest economy with $4T GDP 16.

Commentary

Markets are digesting a sharp escalation in global trade tensions after President Trump threatened sweeping tariffs on EU imports and a targeted iPhone duty. The immediate reaction—Apple shares down, US and European equity futures lower—reflects concern over supply chain disruption and the risk of retaliatory measures 1. This comes alongside new US export restrictions on Huawei AI chips, which could further strain US-China trade relations and impact global tech supply chains 2.

Sovereign debt markets are under pressure, particularly in Japan, where long-end yields have surged to multi-decade highs following the BoJ’s reduction in bond purchases 5. This has led to significant unrealized losses for Japanese life insurers and echoes rising bond losses at US banks 5. The risk-off tone is evident in gold ’s 28% YTD rally, with record inflows and a bullish outlook from Goldman Sachs, while the S&P 500 has slipped 2% 12. Crypto markets are also active, with US spot Bitcoin ETFs seeing record inflows and Bitcoin reaching new highs, though leveraged trading is adding volatility 13.

Geopolitical risks remain elevated. Russia’s intensified attacks on Ukraine, the establishment of a buffer zone, and the largest prisoner swap since the invasion highlight ongoing instability in the region, with potential implications for energy and commodity flows 67. The EU’s move to sanction Nord Stream 2 and phase out Russian gas by 2027 adds further uncertainty for European energy markets 3. In the Middle East, Israel’s expanded ground operations in Gaza and Iran’s warnings to the US and Israel are causing continued caution, as reflected in flight suspensions and ongoing legal scrutiny 8910.

Elsewhere, Moody’s upgrade of Italy’s outlook provides some stability within the eurozone, though high debt remains a constraint 14. Trump’s approval of Nippon Steel’s acquisition of US Steel removes a key overhang for the sector, with shares rallying on the news 11. Kazakhstan’s planned oil output increase—despite OPEC+ quotas—could affect global supply dynamics 15. HSBC ’s launch of a blockchain settlement service in Hong Kong signals further digitalization of financial infrastructure, while India’s rise to the world’s fourth-largest economy underscores shifting global growth dynamics 1716.

Traders should monitor for further escalation in US-EU and US-China trade actions, potential central bank interventions, and developments in Ukraine and the Middle East that could impact risk assets and commodities.