TL;DR

US delays EU tariffs; Ukraine conflict escalates; China tech, BYD price war, and Bitcoin surge.

Highlights

• Trump delays 50% tariffs on EU goods to July 9, supporting euro and oil; gold falls 111.
• Trump considers new Russia sanctions after heavy Ukraine strikes; US, Germany, UK, and France lift range limits on weapons for Ukraine 24.
• Germany orders full military re-armament by 2029, quadrupling air defenses; EU shifts toward greater defense self-reliance 316.
• China supplies 80% of Russian drone electronics and materials to 20 Russian military plants, raising Western scrutiny 12.
• China advances high-tech manufacturing push (40% of GDP target), bank mergers, and digital supply chain initiatives; Hygon and Sugon announce $56bn HPC merger 891420.
• BYD cuts EV and hybrid prices by up to 34%, triggering auto sector selloff and intensifying China's price war 10.
• Bitcoin hits all-time high of $111,000 as tariff delay boosts risk appetite; China cracks down on crypto misinformation 1920.
• Oil rises to $65.15 on tariff delay and Russia-Ukraine risk; OPEC+ to decide output June 1 11.
• RBA cuts rates by 25bps; AUD/USD rises; US dollar weakens; Bank of Israel holds rates amid Gaza tensions 17.
• S&P 500 falls on US policy volatility, clean energy uncertainty, and tariff risks; global investors shift capital out of US equities 18.
• Israel rejects Trump-backed Gaza ceasefire; Spain proposes UN arms embargo and sanctions on Netanyahu; Ireland advances bill to ban trade with Israeli firms in occupied territories 567.
• Finland summons Russian ambassador over airspace violation; Baltic region sees increased Russian military activity 15.

Commentary

The US decision to delay EU tariffs has provided a short-term lift for risk assets, with the euro strengthening and gold declining as safe-haven demand eases 1. Oil prices also benefited on improved sentiment, but the underlying risk of renewed tariffs keeps volatility elevated, especially as US policy uncertainty continues to drive outflows from US equities and weigh on the S&P 500 1118. The dollar weakened broadly, with the AUD and other EMFX gaining after the RBA's rate cut 17.

Geopolitical risk remains a key theme. The escalation in Ukraine, with Russia's largest air assault and the West lifting range limits on weapons to Kyiv, signals a more confrontational phase 24. Germany's re-armament directive and the EU's move toward defense self-sufficiency underscore a structural shift in European security policy, likely to support European defense and industrial names but also raising fiscal and inflationary questions 316. China's reported supply of critical drone components to Russia, alongside its push for high-tech manufacturing and financial sector consolidation, highlights ongoing decoupling pressures and the risk of further sanctions 81214.

In Asia, BYD's aggressive EV price cuts triggered a sharp selloff in Chinese auto stocks and intensified the domestic price war, which could pressure margins across the sector and impact global supply chains 10. The Hygon-Sugon merger consolidates China's HPC sector, reflecting Beijing's focus on tech self-sufficiency amid external headwinds 9. Meanwhile, Bitcoin 's record high points to continued appetite for alternative assets as policy and currency volatility persist 19.

Traders should monitor further developments on US-EU trade talks, OPEC+ output decisions, and any escalation in Ukraine or the Middle East. Cross-asset volatility is likely to remain elevated as macro, policy, and geopolitical drivers continue to dominate 1118.