TL;DR

Israel-Iran attacks disrupt energy, WTI surges 14%; Iran mulls NPT exit; China retail beats, property lags.

Highlights

• Israeli strikes on Iran’s South Pars gas facility and reciprocal attacks have disrupted energy infrastructure, pushing WTI crude up 14% and raising supply concerns if the Strait of Hormuz is affected 117.
• Israel claims to have destroyed about one-third of Iran’s missile launchers; Iran has responded with missile and drone attacks, escalating regional risk 18.
• UK maritime authorities report GPS jamming and navigation disruptions for over 900 ships in the Strait of Hormuz, highlighting shipping risks 17.
• Iran’s parliament is drafting a bill to withdraw from the Nuclear Non-Proliferation Treaty, raising the risk of further Western sanctions and nuclear tensions 2.
• EU foreign ministers will hold an emergency meeting on June 17 to address the Iran-Israel escalation; China has called for immediate de-escalation 34.
• The EU is considering a ban on new Russian gas contracts and tighter banking sanctions; also negotiating a 10% flat US tariff to avoid steeper car duties 56.
• Reports suggest the Trump administration plans to end US military aid to Ukraine, urging Europe to step up support 19.
• China’s May retail sales beat expectations (+6.4% YoY), but property prices and investment continue to decline; industrial output missed forecasts 7.
• Bank of Japan is expected to keep rates unchanged and may slow JGB purchase tapering from April 2026 to curb volatility 8.
• ADNOC-led consortium offers A$30bn for Santos, sending shares up 15%; ASX shares fall as ASIC investigates repeated technical failures 1015.
• BlackRock and US Bitcoin ETFs added over 12,700 Bitcoin last week; Japan’s Metaplanet issued $210mn in bonds to buy 1,112 Bitcoin , signaling continued institutional crypto accumulation 1214.
• Polyhedra’s ZKJ and KOGE tokens dropped over 60% after a liquidity drain, triggering $99mn in liquidations and renewed scrutiny of crypto market structure 13.

Commentary

Energy markets are highly sensitive to the latest Israel-Iran escalation, with direct attacks on critical oil and gas infrastructure and ongoing missile exchanges 118. The risk of further disruption in the Strait of Hormuz—where navigation interference is already impacting over 900 ships 17—remains a key concern, with oil prices reacting sharply. Traders should closely monitor any signals of further escalation or maritime incidents, as these could drive additional volatility in crude, shipping, and related equities 117.

Iran’s potential withdrawal from the Nuclear Non-Proliferation Treaty adds a new layer of geopolitical risk, raising the likelihood of fresh Western sanctions and increased scrutiny on Iranian-linked assets 2. The EU and China’s calls for de-escalation, alongside the upcoming EU emergency meeting, highlight the urgency of diplomatic efforts, but near-term uncertainty remains elevated 34.

Macro data from China show a divergence: consumer spending is recovering, but property and industrial activity remain soft, limiting upside for China-exposed equities and EMFX 7. The Bank of Japan’s steady policy stance and measured approach to JGB tapering aim to contain domestic bond volatility, though global yield pressures persist 8.

In Europe, the EU’s moves to further restrict Russian gas and negotiate tariff terms with the US reflect ongoing adjustments to geopolitical and trade realities 56. The potential shift in US policy on Ukraine could increase Europe’s fiscal and defense burden, with implications for regional risk and the euro 19.

Crypto markets show continued institutional accumulation, with major Bitcoin purchases by BlackRock and Japanese corporates, but the sharp drop in Polyhedra tokens underscores ongoing structural risks 121314. Regulatory scrutiny of crypto market structure is likely to intensify 13.

TL;DR

Israel-Iran strikes spike oil 14%, global equities drop; Taiwan tightens China chip tech exports.

Highlights

• Israel struck Iranian nuclear and energy sites, prompting Iran to threaten closure of the Strait of Hormuz and target Western military bases if conflict escalates16.
• Brent crude rose up to 14% on supply fears; global equities fell, volatility spiked, and energy/defense stocks outperformed26.
• Iran shut its airspace and halted all flights after Israeli attacks; South Pars gas output was temporarily disrupted34.
• IAEA confirmed Israeli strikes destroyed Iran’s Natanz above-ground enrichment plant; radiation is contained, underground facilities intact5.
• US and UK are reinforcing military presence in the Middle East; US redeployed destroyers and counter-drone systems from Ukraine, UK sent RAF jets78.
• OPEC rejected IEA calls to tap emergency oil reserves, maintaining current output policy despite price surge17.
• Taiwan imposed new export controls on Huawei and SMIC, tightening restrictions on AI chip technology to China10.
• Chinese AI firms are bypassing US chip curbs by transporting data to Malaysia for Nvidia -powered model training11.
• China and US published draft rules easing data and design barriers for Tesla ’s self-driving cars, potentially accelerating autonomous vehicle rollout12.
• Bunge ’s $8.2B acquisition of Viterra cleared final Chinese regulatory approval; Bunge shares rose 8.6%13.
• Brazil introduced a 17.5% flat tax on all crypto gains, ending small-investor exemptions15.
• Invesco and Galaxy registered a Solana ETF in Delaware; SEC review could conclude by July14.
• Port of Los Angeles imports fell 19% in May as US-China tariffs hit trade; China’s loan growth also weakened20.
• Turkey and China renewed a $4.88B currency swap agreement, maintaining bilateral financial cooperation19.
• Nippon Steel’s acquisition of US Steel is set to close by June 18 after US regulatory clearance16.

Commentary

Markets closed the week with heightened risk aversion as direct Israeli strikes on Iranian nuclear and energy infrastructure raised the threat of wider regional conflict12. Iran’s threats to close the Strait of Hormuz, a critical chokepoint for global oil and LNG shipments, drove Brent and WTI sharply higher, with oil posting its largest daily gains in years12. Equity markets declined globally, volatility rose, and flows rotated into defensive sectors and traditional safe havens. Energy and defense stocks outperformed on expectations of supply disruptions and increased military spending26.

The US and UK moved quickly to bolster their military presence in the Middle East, redeploying naval and air-defense assets and signaling a readiness to deter further escalation789. OPEC’s decision to hold output steady, despite IEA calls for emergency measures, suggests the group is taking a wait-and-see approach, leaving oil markets highly sensitive to any confirmed shipping disruptions or military actions in key maritime routes17.

Trade and technology tensions remain in focus. Taiwan’s new export controls on Huawei and SMIC further restrict China’s access to advanced AI chip technology10, while Chinese AI firms’ workarounds highlight the challenges in enforcing export bans11. Meanwhile, draft rules from both the US and China to ease restrictions on autonomous vehicle data and design could accelerate the rollout of self-driving technology and benefit related equities such as Tesla 12. The completion of Bunge ’s Viterra acquisition and Nippon Steel’s imminent US Steel deal signal ongoing consolidation in commodities and industrials1316.

Crypto markets face mixed signals: Brazil’s new flat tax regime may dampen retail participation, while institutional demand could increase if the SEC approves a Solana ETF1415. In trade, the sharp drop in US imports from China and weak Chinese loan growth reflect the ongoing impact of tariffs and a softer global demand environment20.

Traders should monitor for further developments in the Middle East, particularly any confirmation of shipping disruptions or military escalation12. Oil, defense, and select tech names remain in focus, while macro data and trade flows will be key for assessing broader risk sentiment.

TL;DR

Israel-Iran conflict drives oil up 13%, gold to highs, Bitcoin down; U.S. hikes tariffs; EU tightens Russian energy.

Highlights

• Israel launched “Operation Rising Lion,” striking Iranian nuclear and military sites, including Natanz; Iran called the attacks a “declaration of war” and is preparing to retaliate 12.
• Iran fired over 100 drones toward Israel in response; interception ongoing. Iran closed its airspace indefinitely 35.
• Brent crude surged up to 13% to $78/bbl, its largest one-day gain since 2022; energy-linked equities rallied, global stocks fell, and haven assets gained 4.
• Israel shut the Leviathan gas field and other offshore platforms due to security threats, raising concerns over regional gas supply and potential knock-on effects for Egypt and Europe 6.
• Gold rose to a one-month high, with Indian futures breaking ₹100,000/10g for the first time, amid heightened geopolitical risk and a softer USD 19.
• Bitcoin dropped below $103,000, triggering over $1 billion in crypto long liquidations as risk aversion intensified 7.
• The U.S. will impose 50% tariffs on imported steel-based home appliances from June 23, prompting Asian manufacturers to review supply chains 8.
• EU, UK, and Canada are moving to cut the Russian oil price cap to $45/bbl without U.S. backing; the EU will ban LNG terminals servicing Russian customers by 2027 and require proof of non-Russian origin 910.
• China’s SAMR delayed approval of the $35B Synopsys -Ansys merger amid U.S.-China tech tensions; U.S. projects Huawei’s AI chip output will stay below 200,000 units in 2025 due to export controls 1112.
• Tencent is considering a $15B acquisition of South Korea’s Nexon , sending Nexon shares up 10% 13.
• Foxconn exported $4.4B of India-made iPhones to the U.S. in Jan–May 2025, already surpassing 2024’s full-year total as Apple shifts supply chains 14.
• The SEC withdrew proposals on crypto custody, DeFi regulation, and ESG disclosures, maintaining the current regulatory framework 18.

Commentary

Escalation between Israel and Iran has triggered a broad risk-off move across global markets. Israel’s direct strikes on Iranian nuclear and military assets 12, Iran’s drone response 3, and the closure of Iranian airspace 5 have sharply increased geopolitical risk in the Middle East. The immediate market impact is most visible in energy: Brent crude’s double-digit rally reflects concerns over potential supply disruptions 4, while Israel’s shutdown of the Leviathan gas field 6 adds further uncertainty to regional gas flows, with possible implications for Egypt and European LNG markets 6.

Safe-haven assets are in demand, with gold reaching new highs 19 and government bonds rallying as investors seek protection from volatility. Conversely, risk assets have come under pressure—Bitcoin ’s sharp decline and mass liquidations highlight the sensitivity of leveraged positions to geopolitical shocks 7. The SEC’s withdrawal of several regulatory proposals 18 may provide some relief for crypto and public companies, but is unlikely to offset the broader risk aversion.

Trade and supply chain themes remain active. The U.S. is expanding tariffs to steel-based appliances 8, increasing pressure on Asian exporters and prompting supply chain reviews. Apple ’s continued pivot to Indian manufacturing, evidenced by Foxconn’s surge in U.S.-bound iPhone exports from India, underscores the ongoing realignment away from China 14. In technology, China’s delay of the Synopsys -Ansys merger 11 and U.S. restrictions on Huawei’s AI chip output 12 signal persistent friction in global semiconductor supply chains.

Energy policy in Europe is also evolving, with the EU, UK, and Canada moving to tighten the Russian oil price cap 9 and phase out Russian LNG contracts 10. These steps, combined with Middle East tensions, add to uncertainty over energy pricing and supply, especially for European importers.

Traders should monitor for further escalation in the Middle East, energy market volatility, and potential spillovers into broader risk assets. Watch for updates on Iranian retaliation, LNG and oil supply disruptions, and ongoing trade and tech policy shifts.

TL;DR

U.S.–China trade deal with 55% tariffs, Middle East tensions lift oil, China tightens rare earth controls.

Highlights

• Trump announces U.S.–China trade deal with 55% tariffs on Chinese imports (pending Xi’s approval)1; China to supply rare earths and impose 10% tariffs on U.S. goods1.
• China restricts rare-earth export licenses to six months for U.S. buyers4; secures new rare earth mines in Myanmar, now supplying half of China’s imports18.
• Oil jumps over 4% to two-month highs (Brent $69.77, WTI $68.15) on Middle East escalation risks and U.S. embassy evacuations7.
• Israel reportedly weighing unilateral strike on Iran2; Iran to open third enrichment site and upgrade Fordow centrifuges after IAEA censure3.
• U.S. raises alert at Mideast diplomatic and military posts6; UK issues rare shipping warning for Gulf, Oman, and Hormuz16.
• Boeing shares drop up to 8% after Air India 787 Dreamliner crash17.
• UK GDP falls 0.3% in April, worst monthly decline since Oct 2023; Japanese business sentiment turns negative8.
• EU proposes sanctions on two Chinese banks for aiding Russia’s trade, expanding pressure on China’s financial sector5.
• U.S. Treasury signals likely extension of July 9 reciprocal tariff deadline for 18 partners, including Japan20.
• Ant International to seek stablecoin licenses in Hong Kong and Singapore, lifting Alibaba-linked stocks15.
• World Bank lifts ban on nuclear power funding for first time since 1959; may finance reactor upgrades and small modular reactors in developing countries12.
• JERA signs 20-year deal to triple U.S. LNG imports to Japan; Shell plans up to 12 million tons new LNG capacity by 203011.

Commentary

Trade and geopolitical risks remain in sharp focus. The U.S.–China trade deal, if finalized, signals a more entrenched tariff regime (55% on Chinese imports)1, but with rare earth supply guarantees and limited reciprocal tariffs from Beijing1. China’s move to restrict rare-earth export licenses to six months4 and its control over Myanmar’s rare earth output18 reinforce its leverage over global supply chains, especially for U.S. tech and EV sectors. The U.S. Treasury’s likely extension of the reciprocal tariff deadline for key partners, including Japan, offers some relief to global trade flows20, but uncertainty persists.

Escalating Middle East tensions are driving a risk premium in energy markets. Oil prices surged to two-month highs as Israel considers a potential unilateral strike on Iran2 and Iran responds to IAEA censure by expanding enrichment capacity3. The U.S. has raised alert levels at diplomatic and military sites6, and the UK has issued a rare warning for shipping in the Gulf and Hormuz16, underscoring the risk of supply disruptions. LNG markets are also in focus with Japan’s JERA securing long-term U.S. supply and Shell expanding capacity, highlighting ongoing efforts to diversify energy sources11.

Equities are mixed. Boeing faces renewed pressure after the Air India 787 crash17, while Alibaba-linked stocks rallied on Ant International’s stablecoin licensing plans in Asia15. European and Asian economic data remain soft, with UK GDP contracting and Japanese business sentiment deteriorating amid trade uncertainty and higher costs8. The EU’s proposed sanctions on Chinese banks for aiding Russia could further strain China-Europe financial relations5.

Fixed income may see safe-haven flows as traders weigh geopolitical escalation and slower growth in major economies. The World Bank’s decision to lift its nuclear funding ban signals potential for long-term infrastructure investment, but immediate market impact is limited12.

Traders should monitor developments in U.S.–China trade policy, Middle East security, and rare earth supply chains, as well as sector-specific moves in energy, tech, and defense.

TL;DR

US-China trade framework, World Bank cuts global growth, Russia extends oil export ban.

Highlights

• US and China reach provisional framework to ease rare-earth and tech export restrictions; awaiting Trump and Xi approval 1.
• World Bank cuts 2025 global growth outlook to 2.3% on trade tensions; US and Eurozone forecasts lowered 2.
• ECB’s Lagarde in Beijing warns that escalating protectionism risks triggering a global downturn 3.
• Russia extends ban on oil sales to countries observing Western price cap through end-2025; shipments require special permission 4.
• OPEC projects 44% rise in oil demand by 2050, urges $17.4T investment; Brent crude holds above $67 12.
• Hong Kong pension funds plan to cut US Treasuries if US loses AAA rating after Moody’s downgrade 14.
• EDF reports new cracks at Civaux nuclear plant, driving European power prices higher 13.
• US and Mexico near deal to lift 50% steel tariffs in exchange for import quotas; US steel stocks fall 6.
• Israel cancels banking waiver for Palestinian institutions, risking collapse of Palestinian financial system; UK and allies sanction Israeli ministers 820.
• Iran warns it will target US bases if conflict erupts, after missile test; US/EU file IAEA censure resolution 1110.
• Inditex misses earnings forecasts, pulling IBEX 35 down ~1% to 14,100; European equities mixed 17.
• South Korea unveils “one strike” rule and dividend-tax reforms to boost market confidence 16.
• Japan’s Marelli files for US Chapter 11, secures $1.1B financing to maintain operations 18.
• Peter Thiel-backed crypto exchange Bullish confidentially files for US IPO 19.
• China offers zero tariffs on all products from 53 African nations (except Eswatini), deepening Africa ties 5.

Commentary

The US-China provisional trade framework signals a potential de-escalation in critical sectors, notably rare earths and technology 1, but implementation hinges on final approval from both leaders 1. While this could stabilize supply chains and support global manufacturing equities, the World Bank’s lowered growth outlook 2 and ECB ’s Lagarde’s warnings 3 highlight that trade policy uncertainty remains a drag on global sentiment. Market participants should monitor for concrete details and signatures before pricing in a sustained improvement.

Energy markets remain tight. Russia’s extension of its oil export ban to price-cap adherents 4 and OPEC’s call for massive long-term investment 12 underpin Brent crude above $67 12. The supply outlook is further clouded by EDF ’s new nuclear safety issues, which have pushed European power prices higher 13 and may pressure Eurozone inflation. These developments support energy equities and could keep inflation expectations elevated, complicating central bank policy paths.

Fixed income faces renewed scrutiny: Hong Kong pension funds’ contingency to cut US Treasuries 14 if the US loses its AAA rating adds to global concerns over sovereign credit quality. This could drive volatility in US yields and the dollar, especially if further rating actions materialize.

In equities, Inditex’s earnings miss and the resulting IBEX 35 drop underscore ongoing earnings sensitivity in Europe 17. The US-Mexico steel deal, if finalized, would ease supply chain tensions but weighs on US steelmakers such as United States Steel Corporation and Steel Dynamics Inc 6. South Korea’s capital market reforms 16 and Bullish ’s IPO filing 19 highlight regional efforts to boost investor confidence and capitalize on digital asset momentum.

Geopolitical risk remains high. Israel’s banking move 8 and new Western sanctions 20 could destabilize Palestinian finances and raise regional tensions. Iran’s threats 11, coupled with US/EU censure at the IAEA 10, add to Middle East risk premia. Traders should stay alert to further escalations impacting energy, regional assets, and safe havens.

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.

TL;DR

China extends deflation, US-China trade talks open, PBOC boosts liquidity, Bitcoin tops $107K.

Highlights

• China’s May CPI fell 0.1% YoY, extending deflation to four months; exports to the US dropped 34.5% amid tariff escalation1.
• PBOC injected $139B and 173.8B yuan via reverse repos, supporting a rally in Chinese and Hong Kong equities; Hang Seng Tech Index rose over 3%4.
• Hong Kong Monetary Authority intervened with HK$129.4B to defend the USD peg as local rates hit record lows; 80% of offshore yuan payments now processed via Hong Kong3.
• Japan faces rising JGB yields and considers super-long bond buybacks as debt-to-GDP reaches 250%; Japanese investors sold German bunds at the fastest pace since 20145.
• Taiwan’s May exports to the US surged 38.6% YoY, driven by AI demand and pre-tariff shipment acceleration19.
• US-China trade talks begin in London, with China agreeing to resume rare-earth exports; rare-earth export licenses under review2.
• Ukraine intercepted a record 479 Russian drones and 20 missiles; Poland scrambled jets and raised air defense alert after Russian strikes near its border67.
• NATO chief called for a 400% increase in European air and missile defense capabilities10.
• Qualcomm to acquire UK’s Alphawave for $2.4B; IonQ to acquire Oxford Ionics for $1.08B, both targeting semiconductor and quantum tech growth1112.
• UK announced a £1bn AI investment and Nvidia partnership to train 7.5 million workers by 203014.
• JPMorgan now accepts Bitcoin ETFs and Ethereum as collateral; Bitcoin topped $107,000, with risk of large short liquidations1617.
• WPP CEO Mark Read to retire in 2025 as shares decline and Publicis overtakes as largest ad group20.

Commentary

China’s ongoing deflation and sharp drop in exports to the US underscore persistent domestic demand weakness and the impact of renewed tariff pressures1. The PBOC’s substantial liquidity injections have stabilized sentiment, fueling gains in Chinese and Hong Kong equities, particularly in tech4. However, the trade environment remains challenging, with US tariffs weighing heavily and rare-earth export concessions from Beijing setting the stage for this week’s London trade talks2. Taiwan’s surge in US-bound exports, driven by AI demand and pre-tariff shipment acceleration, further highlights shifting supply chain dynamics in the region19.

In fixed income, Japan’s rising long-end yields and consideration of super-long JGB buybacks reflect a significant shift in the country’s rate environment, with implications for global bond flows—evidenced by Japanese investors’ notable reduction in German bund holdings5. Hong Kong’s defense of its USD peg amid capital flow volatility and ultra-low local rates continues to support local property and bond markets, but ongoing scrutiny of the peg’s sustainability remains a theme3.

Geopolitical risk remains elevated. The record Russian drone and missile attacks on Ukraine, Poland’s air defense escalation, and NATO’s call for a major increase in missile defense all point to persistent security concerns in Eastern Europe6710. These developments may continue to influence energy and defense sectors, as well as broader risk sentiment.

Corporate activity in tech and AI remains strong, with Qualcomm ’s Alphawave acquisition and IonQ ’s Oxford Ionics deal signaling continued investment in semiconductor and quantum computing1112. The UK’s AI investment and collaboration with Nvidia further reinforce the sector’s momentum14. In crypto, JPMorgan’s acceptance of Bitcoin and Ethereum as collateral and Bitcoin’s move above $107,000 reflect ongoing institutionalization and volatility, with technical levels likely to drive near-term price action1617.

Key watch points: outcomes of US-China trade talks, Asian central bank liquidity actions, Japanese bond market developments, and any further escalation in Eastern Europe. Tech and AI sectors remain in focus, while crypto volatility is set to persist.

TL;DR

Trump-Xi to restart trade talks; US tightens China tech controls; rare earth curbs hit autos.

Highlights

• Trump and Xi to meet in London on June 9 to resume high-level US-China trade and rare-earth negotiations; both sides cite progress on tariffs and rare earths1.
• US suspends all export licenses for nuclear plant components to China, tightening controls on strategic tech transfers2.
• China’s rare earth export curbs disrupt global auto supply chains, with India’s EV sector facing possible July production halts and price increases3.
• Boeing resumes 737 Max deliveries to China after tariff reductions and DOJ settlement; 90-day US-China trade truce in place5.
• Swiss government proposes $26B capital increase for UBS by 2027, aiming to strengthen banking sector resilience4.
• SEC approves Nasdaq Crypto US Settlement Price Index (SOL, ADA, XLM, XRP), improving prospects for spot altcoin ETFs17.
• UK FCA proposes lifting ban on retail crypto ETNs; consultation open through July, aligning UK closer to EU crypto rules16.
• US imposes new sanctions on Iran’s shadow banking network; Trump warns Iran against uranium enrichment, threatening military response87.
• Russian forces launch largest strike on Kharkiv since 2022; Germany announces plan to add 60,000 troops to meet NATO targets1012.
• Leaked FSB memo reveals Russian counterintelligence program against Chinese espionage, despite official “no-limits” partnership11.
• Spain halts Venezuelan oil imports ahead of US sanctions; Venezuela signs deals with Chinese oilfield service firms19.
• Circle surges 168% after $1.1B NYSE IPO; Gemini files confidentially for US listing, highlighting strong demand for crypto equities20.

Commentary

US-China relations are in focus as Trump and Xi prepare for direct talks in London aimed at easing trade tensions and resolving rare-earth supply issues1. While both sides project optimism, the US move to suspend nuclear plant component exports to China signals ongoing strategic competition, particularly in sensitive technology sectors2. The outcome of Monday’s negotiations will be closely watched by industrials, autos, and tech, with any progress on tariffs or rare-earths likely to drive short-term moves in equities exposed to global supply chains13.

China’s rare earth export curbs continue to ripple through the auto sector, with Indian EV manufacturers warning of imminent production halts and price hikes3. Japanese and European automakers are also affected, highlighting the vulnerability of global supply chains to geopolitical developments3. The resumption of Boeing 737 Max deliveries to China and the temporary tariff truce provide a near-term boost for US aerospace, but underlying trade risks remain5.

Geopolitical risk remains elevated. The US imposed new sanctions on Iran’s financial networks and issued fresh military warnings over uranium enrichment87, while Russia escalated attacks on Kharkiv and Germany announced a significant military expansion to meet NATO goals1012. These developments may support defense equities and keep energy markets alert, especially as Spain halts Venezuelan oil imports and Venezuela pivots to Chinese service providers to maintain production19.

In financials, the Swiss government’s proposed capital increase for UBS reflects ongoing regulatory tightening post-Credit Suisse, with implications for European bank capital planning4. Austria faces higher borrowing costs after a Fitch downgrade, underscoring fiscal pressures in parts of Europe18. Meanwhile, crypto markets are buoyed by Circle 's blockbuster IPO and the SEC’s approval of a Nasdaq crypto index for major altcoins, setting the stage for potential spot ETF launches2017. The UK’s move to consult on lifting its retail crypto ETN ban further signals regulatory convergence with the EU and continued institutionalization of digital assets16.

Traders should monitor headlines from the Trump-Xi summit, developments in rare earths and tariffs, and ongoing geopolitical risk in Ukraine and the Middle East. Crypto, defense, and select industrials are likely to see increased volatility in the near term.

TL;DR

US-China trade talks resume; global equities hit records; rare metals, FX, and tariffs drive volatility.

Highlights

• Trump and Xi held a 90-minute call, agreeing to resume US-China trade talks and reciprocal state visits; rare earths remain a sticking point1.
• China’s rare metals export restrictions continue to disrupt global auto and EV supply chains, with European suppliers reporting shutdowns3.
• US Treasury added Ireland and Switzerland to its FX monitoring list, kept China, Japan, and South Korea after interventions, and warned China over currency transparency9.
• India and US are negotiating to avoid a 16% reciprocal tariff by July 9, focusing on agriculture, autos, and market access10.
• Australia rejected US beef access over biosecurity concerns amid ongoing tariff talks; considering carbon border tariffs on high-emission imports11.
• European Commission launched a tool to monitor import surges and trade diversion resulting from US tariffs12.
• Russia cut its key interest rate to 20% (from 21%) for the first time since 2022, citing easing inflation and economic strain7.
• BOJ is considering slower bond tapering through smaller quarterly cuts, possibly extending to March 2027; Japan may adjust bond issuance8.
• Global equities, including the S&P 500 and MSCI ACWI, hit new all-time highs, driven by tech and strong US/EU earnings14.
• Gold (+2.3% for the week), silver (+24% YTD), and oil rose on safe-haven demand, OPEC+ output moves, and US-China trade optimism13.
• NATO ministers endorsed new defense capability targets and signaled support for raising spending to 5% of GDP6.
• Metaplanet (Japan) to raise $5.4B to buy up to 210,000 BTC by 2027; UK FCA proposes lifting ban on crypto ETNs for retail investors1516.

Commentary

Traders are navigating a landscape shaped by renewed US-China engagement, persistent supply chain vulnerabilities, and shifting monetary policy. The Trump-Xi call signals a potential easing of trade tensions, but the lack of detail—particularly on rare earths—means industrial supply chains, especially in autos and EVs, remain exposed1. European and Asian manufacturers face ongoing risks from China's export controls, while new EU monitoring tools reflect heightened vigilance against trade diversion as US tariffs ripple through global flows312.

Currency markets are in focus after the US Treasury expanded its FX monitoring list, with scrutiny on China, Japan, and South Korea following recent interventions9. This, combined with the BOJ’s cautious approach to bond tapering and Russia’s rate cut amid economic strain, highlights diverging policy paths among major central banks78. Watch for increased volatility in JPY, KRW, and CNY, as well as possible shifts in global bond yields.

Equities remain buoyant, with global indices reaching record highs on strong tech and earnings momentum, even as trade and tariff risks persist14. Commodities are also active: gold and silver are benefiting from safe-haven flows and soft US data, while oil prices are supported by OPEC+ output signals and supply disruptions13. Meanwhile, institutional crypto adoption is accelerating, with Metaplanet’s large-scale Bitcoin purchase plan and the UK’s potential regulatory shift likely to drive further flows and volatility in digital assets1516.

Geopolitical and defense themes are intensifying. NATO’s push for higher defense spending and ongoing Russia-Ukraine hostilities may sustain elevated risk premiums in select sectors and sovereign bonds6. Trade negotiations between the US and India, as well as Australia’s stance on beef and carbon tariffs, underscore the complexity of global trade realignment1011. Traders should stay alert to headline risk from ongoing negotiations, central bank policy updates, and geopolitical developments.