TL;DR

Ukraine peace talks ease oil, gas prices; China outflows, India GST cut boost Asia market focus.

Highlights

• Trump rules out Crimea return and NATO membership for Ukraine; U.S. and Russia discuss NATO-style security guarantees for Kyiv, but key details unresolved 12.
• Putin signals openness to Article 5-like protection for Ukraine, while European leaders seek clarity on enforcement and territorial issues 2.
• Druzhba pipeline strike halts Russian oil flows to Hungary and Slovakia; no restart timeline, heightening Central European supply concerns 3.
• Oil prices fall as Trump-Putin talks ease fears of new sanctions on Russian crude; Brent below $66/bbl 6.
• India’s Russian oil imports hit record 2M bpd, drawing U.S. criticism and underscoring U.S.-India tensions 9.
• PBOC holds rates steady despite weak July data; China posts record $58.3B capital outflow as investors buy Hong Kong equities 45.
• China’s rare earth exports surge 69% to six-month high; trade surplus and manufacturing surplus reach new records amid ongoing trade tensions 10.
• Japan FSA set to approve first yen stablecoin (JPYC); Nikkei 225 hits new record high, led by exporters as yen weakens 7.
• Bitcoin drops below $115,000, triggering $534M in leveraged liquidations; Ethereum shorts reach record 8.
• India cuts GST on small cars to 18% in tax overhaul, lifting Nifty futures and market sentiment 17.
• European gas prices hit 2025 low as markets anticipate possible Ukraine-Russia peace deal 15.
• Foxconn starts iPhone 17 production at new $2.8B India plant, deepening Apple ’s supply chain shift from China 16.

Commentary

Markets are watching the Ukraine peace process closely as Trump’s public position removes Crimea and NATO membership from Kyiv’s negotiating goals 1, while U.S.-Russia talks open the door to NATO-style security guarantees for Ukraine 2. Although Putin has signaled conditional support 2, unresolved territorial and enforcement questions mean geopolitical risk remains, especially for European energy. The Druzhba pipeline strike, which halted Russian oil flows to Hungary and Slovakia, underscores persistent supply vulnerabilities in Central Europe, even as oil prices ease on reduced fears of new sanctions 36.

China’s economic data continues to disappoint, with fixed-asset investment and retail sales both weak in July 4. The PBOC is holding rates steady, opting for targeted support rather than broad easing 4, but record capital outflows and persistent deflationary pressures are weighing on the yuan and regional sentiment 5. Meanwhile, China’s rare earth exports and trade surpluses have rebounded, reinforcing Beijing’s leverage in ongoing trade disputes with the U.S. and EU 10.

India remains a focal point: record Russian oil imports are straining relations with Washington 9, but the government’s GST cuts on small cars and insurance are supporting domestic equities and consumption 17. Foxconn’s ramp-up of iPhone 17 production in Bengaluru highlights India’s growing role in global supply chains, further diversifying away from China 16.

In Japan, the Nikkei 225 continues to hit record highs, driven by a weaker yen and strong exporter earnings 7. Regulatory approval for the first yen stablecoin (JPYC) is expected soon, signaling further development in Japan’s digital asset market 7. Crypto markets remain volatile, with Bitcoin sliding below key levels and leveraged liquidations accelerating, while Ethereum short interest has reached a record 8.

Traders should focus on developments in Ukraine-Russia negotiations, monitor China’s capital flows and policy stance, and watch for further supply chain and trade policy shifts in Asia and Europe. Energy, currency, and tech sectors remain sensitive to these crosscurrents.