TL;DR

US-China rare earth talks, EU tightens Russian oil cap, Nvidia/TSMC surge on AI and tariff shifts.

Highlights

• US-China trade talks in London focus on rare earths and chip export controls; both sides signal possible concessions1.
• China’s rare-earth export curbs disrupt global auto supply chains; Maruti Suzuki cuts EV output, India and others seek alternatives14.
• BYD’s deep EV price cuts trigger a China-wide price war, erasing $21.5B in BYD market value; government urges restraint13.
• EU’s 18th sanctions package lowers Russian oil price cap to $45/bbl, targets shadow fleet and Nord Stream2.
• OPEC oil output rises 150k bpd in May, well below OPEC+ target; oil steady near $65/bbl3.
• Nvidia accelerates US shipments ahead of 145% China tariffs; TSMC, Quanta, and Gigabyte post strong AI-driven May sales1520.
• US court blocks Trump’s IEEPA tariffs, but 10% baseline and 125% China tariffs remain during appeal17.
• BOJ’s Ueda signals limited scope for further easing; yen weakens to 145/USD as inflation stays below 2%8.
• UBS shares drop 7% after Swiss government proposes $26B capital raise, raising concerns on payouts and competitiveness9.
• Bitcoin tops $110,000 on ETF inflows and short squeeze; over $200M in positions liquidated10.
• Societe Generale to launch USD CoinVertible stablecoin with BNY Mellon ; trading begins July11.
• NATO and German intelligence warn of increased Russian hybrid threat to Europe; calls for higher defense spending718.

Commentary

US-China trade negotiations in London are a focal point, with rare earths and technology export controls at the center1. Both sides are considering concessions, but China’s ongoing rare-earth export restrictions are already causing production cuts and supply chain adjustments in the global auto sector, notably forcing Maruti Suzuki to reduce EV output14. This supply risk is compounded by a price war in China’s EV industry, triggered by BYD’s price cuts, which has led to sharp declines in sector valuations and prompted government intervention to stabilize the market13.

Energy markets remain sensitive to geopolitics. The EU’s new sanctions package aims to further limit Russia’s oil revenue by lowering the price cap and targeting the shadow fleet, while OPEC’s modest output increase fell short of pledged targets23. Oil prices remain steady near $65/bbl, but traders should monitor for further supply disruptions or compliance issues that could impact volatility3.

In technology, Nvidia accelerates US-bound shipments ahead of steep China tariffs, and strong AI-related sales from TSMC and peers highlight ongoing demand and pre-tariff stockpiling1520. The legal environment for US tariffs remains unsettled, as courts have blocked Trump’s IEEPA-based tariffs but left high tariffs on China in place during appeal, keeping trade policy risk elevated for importers and exporters17.

In financials, UBS shares saw their steepest drop in two months after Swiss authorities proposed a $26B capital raise, raising questions about future dividends and competitiveness9. Meanwhile, the Bank of Japan’s dovish stance and limited room for further easing have pushed the yen to 145/USD, reinforcing yield differentials and supporting Japanese equities8.

Crypto markets are active, with Bitcoin surging above $110,000 on ETF inflows and a short squeeze10, while Societe Generale’s upcoming USD CoinVertible stablecoin launch with BNY Mellon signals further institutional adoption in Europe11. Security concerns remain high in Europe, as NATO and German officials warn of increased Russian hybrid threats and call for greater defense spending718.