TL;DR

Russia escalates Ukraine strikes; US dollar hits 3-year low; oil falls as OPEC+ plans output hike.

Highlights

• Russia launched its largest airstrike on Ukraine, downing an F-16; NATO states and Ukraine are withdrawing from the landmine ban treaty 111.
• Iran claims six missiles struck the US Al-Udeid base in Qatar; IAEA warns Iran could resume uranium enrichment within months 23.
• Oil prices fell to $67 (Brent) as Mideast risk premium fades and OPEC+ prepares another output hike; US oil rig count at lowest since 2021 4.
• US dollar hit a three-year low on concerns over Fed independence and rising rate cut bets; foreign investors shift from Treasuries to European debt 520.
• Trump’s tariffs are causing severe congestion at Europe’s largest ports, disrupting supply chains and raising freight costs 7.
• UK-US trade deal takes effect, slashing US tariffs on British autos and aerospace; Canada drops digital tax to restart US trade talks 89.
• South Korea seeks extension of US tariff pause to avoid economic hit; talks ongoing beyond July 8 deadline 10.
• ECB reaffirms symmetric 2% inflation target and readiness for forceful action amid increased volatility 6.
• China partially lifts ban on Japanese seafood (excluding Fukushima), signaling some easing in trade tensions 12.
• Kazakhstan’s central bank plans to add Bitcoin to reserves; Bank of Korea halts CBDC pilot as banks focus on won stablecoins 1314.
• Pakistan secured a $3.4B loan rollover from China, meeting IMF reserve requirements and easing near-term default risk 15.
• Torrent Pharma to acquire KKR ’s stake in JB Chemicals for $1.4B, triggering sector consolidation in India 18.

Commentary

Geopolitical risk remains elevated, with Russia escalating attacks on Ukraine and NATO -aligned states moving away from landmine restrictions, signaling a shift toward more aggressive defense postures in Eastern Europe 111. Meanwhile, Iran’s missile claims and the IAEA’s warning on uranium enrichment add to regional uncertainty 23, though markets have largely unwound the recent Mideast risk premium in oil as OPEC+ prepares for another supply increase 4. Energy traders should note the tension between rising global supply and declining US rig counts, which could limit downside for crude if demand remains resilient 4.

The US dollar’s sharp decline reflects heightened concerns over Federal Reserve independence and the growing likelihood of rate cuts, especially as President Trump’s $3.3–$3.9T spending bill prompts foreign investors to rotate out of Treasuries in favor of European sovereigns 520. This dynamic is pressuring the greenback and flattening the US yield curve, while the ECB’s reaffirmation of its inflation target and policy flexibility is supporting relative stability in European assets 6.

Trade disruptions are a key theme: Trump’s tariffs are creating significant backlogs at major European ports, with logistics bottlenecks expected to persist and potentially impact consumer goods and industrial supply chains into the autumn 7. The UK-US trade deal and Canada’s scrapping of the digital tax provide some positive offsets 89, but ongoing US-South Korea tariff talks and China’s partial seafood ban lift highlight the fluidity of global trade policy 1012.

In Asia, Kazakhstan’s move to add Bitcoin to its reserves and the Bank of Korea’s CBDC pause underscore divergent approaches to digital assets 1314, while China’s loan rollover to Pakistan alleviates near-term default risks in South Asia 15. The Torrent Pharma-JB Chemicals deal signals continued consolidation in India’s pharma sector, with implications for regional equity flows 18.

Traders should closely monitor further developments in US fiscal policy, energy supply dynamics, and global trade negotiations, as these factors will continue to drive cross-asset volatility.