TL;DR
Israel-Iran conflict escalates; gold hits records on central bank demand; U.S. cuts China tariffs.
Highlights
- Israel killed Iran’s new military chief Ali Shadmani in a Tehran airstrike 2; Iran had struck Israel’s Haifa refinery, forcing Bazan to halt operations 4.
- Iran’s parliament is considering withdrawal from the Nuclear Non-Proliferation Treaty, raising global proliferation risks 11.
- The U.S. reaffirmed it will not join the Israel-Iran conflict unless U.S. personnel are attacked; defensive support for Israel continues 1.
- Middle East airspace closures due to Israel-Iran hostilities have stranded 40,000+ tourists and disrupted Gulf and regional flights 13.
- Two oil tankers collided near the Strait of Hormuz, sparking fires and briefly lifting oil prices; incident appears accidental 3.
- Gold hit record highs above $3,400/oz as central banks plan to boost gold reserves and reduce dollar holdings 1615.
- Global equities whipsawed on Israel-Iran headlines but rebounded as fears of broader conflict eased; oil spiked then pared gains 17.
- The World Bank cut its 2025 global growth outlook to 2.3%, citing weak investment, high debt, and geopolitical risks 7.
- IEA trimmed 2025 oil demand growth forecast, sees China’s oil use peaking in 2027 and a supply surplus by 2030 8.
- U.S. cut China tariffs to 30% and paused new levies for 90 days; imports expected to rise 3.7% in H1 2025 5.
- Trump and Starmer signed a US-UK trade deal at G7, cutting auto tariffs and expanding agricultural quotas 6.
- SEC cleared Trump Media’s $2.3B Bitcoin treasury plan; company filed for a Bitcoin -Ether ETF 14.
Commentary
Markets remain focused on the Israel-Iran conflict, with Israel’s elimination of Iran’s new military chief 2 and Iran’s missile strike on Israel’s key Haifa refinery 4 underscoring the risk of further escalation. The U.S. has clarified its stance, limiting direct involvement to scenarios where Americans are targeted 1, which has helped cap risk-off moves for now. Iran’s possible withdrawal from the Nuclear Non-Proliferation Treaty adds a new layer of uncertainty for global security and energy markets 11.
Oil saw sharp intraday volatility: the Bazan refinery shutdown in Israel 4 and a tanker collision near the Strait of Hormuz 3 briefly lifted prices, but the IEA’s revised demand outlook and projections for a medium-term supply surplus have helped temper gains 8. Airspace closures across the Middle East are disrupting travel and logistics 13 but have not yet caused major supply interruptions. Traders should monitor for any further energy infrastructure damage or shipping disruptions.
Gold has surged to new highs, driven by central bank buying and a shift away from the U.S. dollar as a reserve asset 1615. The World Gold Council survey highlights a strong trend toward gold accumulation, with 95% of central banks expecting official holdings to rise 15. Equities have recovered from initial risk-off moves as market participants assess that U.S. involvement in the Middle East remains limited and direct economic fallout is contained 17. However, the World Bank’s global growth downgrade and weak investment flows remain a concern for risk assets 7.
On the policy front, the U.S. has eased China tariffs and paused new levies, prompting expectations of a near-term boost to imports and some relief for global supply chains 5. The US-UK trade deal and G7’s draft plan to secure critical minerals reflect ongoing efforts to diversify and strengthen supply chains, with implications for industrials and materials sectors 610. In digital assets, regulatory progress for Trump Media’s Bitcoin treasury and ETF plans could support further institutional adoption 14.