Summer’s in and it seems that everyone wants to have some time off. Even politicians and military seems to be eager to have a breather. We had a 12 day war that ended as suddenly as it started. We are back to the status quo, but for how long?

There are still events happening in the background, shaping up the future. From wars to election, last week was especially telling of the future. Between the NATO summit, NYC primaries and some summer protests, there is plenty to unpack.

Weekly Outlook

US Inc.

Americans last week were shocked by the results of the NYC Democratic Primaries. In a somewhat surprising turn of events, a socialist Zohran Mamdani won the nomination, beating the favorite Andrew Cuomo.

Half a year ago I mentioned that I don’t see either Eric Adams or Andrew Cuomo winning the nomination considering the allegations against them. Eventually, Mamdani just had a better campaign than Cuomo that was backed by the establishment, but my instincts were correct nonetheless. Now the big question remains - who will win as this time around there will be an independent competition as both Adams and Cuomo want to run regardless.

Moving to the national stage, we’ve been hearing about courts trying to block Trump’s executive orders basically since the 20th of January. Now the Supreme Court ruled that federal judges cannot temporarily block executive orders for the entire country. A big win for Trump administration as each serious legal challenge will land in the Supreme Court that for now is GOP aligned.

Lastly, the “big beautiful bill” was advanced in the Senate by a narrow majority as two Republicans voted against it. Senate aims to pass the bill before July 4th (probably for Trump to announce a major victory on the Independence Day), but there are still several issues to resolve. Traders have little doubt though:

The Americas

Canada signed a defense deal with European Union and pledged more support to Ukraine. However, the main part of the agreement for Canada is getting access to EU’s new defense fund. The new prime minister, Mike Carney, reiterated that Canada is looking first to Europe.

Asia

In Asia, Thailand once again makes the headlines as protesters gathered in Bangkok, demanding the resignation of the prime minister after a leaked call with Cambodia’s former leader. She criticized the army about the earlier fire exchange at the border. Some people are worried about another coup in Thailand (would be a fourth this century).

Middle East & Africa

First part of last week was full of news around Iran-Israel war. After the US bombing of Iranian nuclear facilities, Iran responded in kind, but smartly, announcing the attack on the US base in Qatar.

Following night, Trump announced a ceasefire. Despite both parties agreeing to it, pretty soon Iran was accused of launching a missile and soon after Israel sent its planes to conduct strikes. However, visibly furious Trump (as indicated by him cursing on live TV) stopped Netanyahu who ordered the planes to turn around.

However, the drama was hardly over. Only a day after there was a leaked intelligence assessment from the Pentagon saying that US strikes on Iran failed to destroy its nuclear program. The report speculated that the program was only delayed by a few months.

Throughout the week, Trump continued to defend the operation, claiming that Iran’s nuclear site’s were completely obliterated. That being said, it remains extremely likely that Iran moved its enriched uranium stockpile and only equipment was damaged or destroyed.

For more of my takes on the situation, take a look at my article on the whole situation.

In the aftermath of the war, for now both sides proclaimed victory. Iran proclaimed it can go back to negotiations, but still wants to maintain the ability to enrich uranium for peaceful purposes. UN’s nuclear watchdog sustains the findings of the leaked Pentagon report that Iran could start enriching uranium in a matter of months.

Additionally, Iranian ministers started to visit both Russia and China, most probably in an effort to secure new military equipment. I bet they will be better prepared next time (if they have enough time, which is in my opinion debatable).

In the meantime, on another Middle Eastern front, Trump signaled some developments. He claimed that a Gaza ceasefire is very close and Hamas confirmed that talks had intensified. That being said, after Trump denied to enter a prolonged war with Iran, I doubt he will be able to extract another concession from Netanyahu:

As usual, these markets are overvalued on empty headlines.

Europe

This week in The Hague, we had an annual NATO summit, during which the European nations did their best to make Trump happy. Mark Rutte even resorted to calling Trump “Daddy” in a moment of desperate humiliation (sic!). However, the main result of the summit was definitely setting the new defense spending target to 5% of GDP.

On the other hand, the target needs to be achieved only by 2035 which makes it rather insignificant. The countries that feel the pressuring need to arm up are already close to the target, while the southern and western nations will do their best to delay the increase.

In other military news Britain will buy 12 F-35A fighter jets. They are expected to carry American nuclear bombs. As part of the deal, Britain will now participate in NATO’s airborne nuclear mission.

Lastly, Ukraine now claims that it halted Russian summer offensive in Sumy. In a more shocking statement, Ukraine also claims to recapture some territory occupied by Russia. We will see how these statements age. The Adjacent Russian military offensive index remain flat for now:

Business, Finance & Economics

We had some economic numbers out this week from the US. Business activity slowed slightly in June as S&Ps PMI index registered a drop to 52.8, from 53 in May (values above 50 indicated growth). Additionally we saw data on consumer spending which unexpectedly fell in May by 0.1% compared with April.

However, Jerome Powell is still uncertain about rates cut. During his appearance before a congressional committee he said that the Fed is unlikely to cut rates until they assess the impact of tariffs on inflation.

Moving to business, a federal judge in the US ruled it was fair for AI companies to train their models on books without authors’ permission. A massive win for LLM creators as they do what they can to access vast amount of data.

Lastly, Trump claimed that he has found a group of very wealthy people to buy TikTok as it faces ban in the US, until a majority of its US division are Americans. However, I still very much doubt that there is a seller.

Tariffs

In tariffs, we learned that Trump cancelled talks with Canada after it imposed a digital-services tax targeting American tech companies. I guess that Canada got scared as it scrapped the tax soon after. However, we are still yet to learn hta tthe talks resumed.

In a more global context, we now await the resumption of tariff rates as the 90-day pause deadline looms and there were hardly any deals signed. The next two weeks are poised to be very interesting. Watch the Adjacent tariff index - it’s been trending upwards for a while now! It’s clear that traders across all markets expect high tariffs to be back soon.

Wrap up

That’s all for today. It seems that the next two weeks will be focused on tariffs and GDPs once again. Watch for July 4th announcements, Trump loves symbolic victories.

Stay strong and see you soon!