TL;DR

France to recognize Palestine; Russia bans gasoline exports; ECB pauses cuts; VW, Puma warn on tariffs.

Highlights

• France will recognize the State of Palestine at the UN in September, the first G7 nation to do so; UK and Germany to discuss coordinated action as Gaza cease-fire talks stall1.
• Israel and the US pulled negotiating teams from Doha after Hamas’s latest cease-fire proposal, citing lack of progress; humanitarian and security concerns persist2.
• Russia to ban most gasoline exports in August–September to cap domestic prices; export volumes to key buyers like Egypt and Turkey will be affected3.
• Chevron resumes Venezuelan oil production with US approval, adding 200,000 barrels/day to US supply; no royalties or taxes to Maduro’s regime4.
• ECB pauses rate cuts, keeps deposit rate at 2% citing inflation near target but flags external risks, especially trade disputes and euro strength5.
• Bank of Russia cuts policy rate by 200 bps to 18% as inflation cools, but maintains cautious outlook6.
• US and Japan to launch a $550B sovereign wealth fund for US assets with 90% profit share to the US; Trump to oversee investments7.
• India and UK sign FTA, expected to boost annual trade by £25.5B, with phased tariff cuts on autos and alcohol8.
• Volkswagen cuts 2025 outlook after €1.3B US tariff hit; Puma warns of 2025 loss, shares fall 20%, both citing weak demand and tariff impacts1011.
• Intel to cut 15% of staff, cancels German/Polish fabs after $1.9B restructuring charge; future expansion tied to demand9.
• China offers to increase EU imports if tech export curbs are eased; Shanghai AI conference draws 800 firms despite US chip sanctions1216.
• Bitcoin drops to $115,000 on Galaxy Digital outflows; Ethereum ETFs reach $16.6B AUM as institutional flows shift1819.

Commentary

Geopolitics and trade remain front and center for global markets. France’s planned recognition of Palestine1, combined with the breakdown in Gaza cease-fire talks2, adds complexity to Middle East risk calculations. While direct market impact is limited for now, energy markets remain sensitive to escalation or supply disruptions in the region. The withdrawal of US and Israeli teams from Doha further reduces near-term prospects for de-escalation2.

On the commodity front, Russia’s gasoline export ban for August–September is likely to tighten refined product markets, particularly in countries reliant on Russian supply such as Egypt and Turkey3. However, the resumption of Chevron ’s Venezuelan oil production—without financial benefit to the Maduro regime—should help offset some supply concerns for US refiners4. Watch for volatility in oil and gasoline prices as traders assess the net effect of these moves.

Central banks are signaling a more cautious approach. The ECB paused after seven consecutive rate cuts, citing inflation near target but highlighting risks from trade disputes and euro appreciation5. The Bank of Russia’s 200 bps rate cut reflects easing inflation but policymakers remain wary of renewed price pressures6. Meanwhile, the US-Japan $550B sovereign wealth fund agreement removes a key uncertainty for the Bank of Japan, potentially supporting further rate hikes if growth and inflation hold up717.

Trade tensions and tariffs are weighing on corporate outlooks. Volkswagen and Puma both downgraded guidance, citing US tariffs and weak demand1011, while Intel ’s restructuring and fab cancellations underscore a shift to more disciplined capital allocation amid uncertain demand9. The India-UK FTA is a rare positive, with significant tariff reductions expected to boost bilateral trade, particularly in autos and alcohol8.

In digital assets, Bitcoin fell on large Galaxy Digital wallet outflows18, while Ethereum ETFs continue to attract institutional inflows, pushing AUM to $16.6B19. The rotation from Bitcoin to Ether is notable and could drive further volatility in crypto markets. China’s offer to expand EU imports if tech curbs are lifted12, and its large AI conference despite US sanctions16, signal continued tech sector maneuvering.