Wars are getting shorter and shorter. Source: BBC

As the news cycle is getting shorter, so are the wars. After the 12-day Iran-Israel war now we’ve witnessed a 5-day Cambodia-Thailand war (or so it seems). Based on a century old territorial dispute, it flares up from time to time. However, I expect to hear more news from the region, stay tuned for my next deep dive this week!

In the meantime, we had quite a lot of developments, from the US, through Europe and Ukraine war to Gaza! Click that subscribe button and see the world as it is.

Weekly Outlook

US Inc.

The Trump administration continues to put pressure on Powell to lower rates. Scott Bessent called for an inquiry into the whole Fed, saying that while Fed’s independence is a cornerstone of American stability, there is a mandate creep into areas beyond its core mission.

The calls to lower the rates to 1% (from the current 4.25-4.5%) continued throughout the week as the Fed is expected to hold them steady. The July meeting is this week while the next one is only in September. As an afterthought, Trump also visited the Eccles building that is under scrutinized renovation. He tried to bully Powell, however unsuccessfully.

In the meantime the Epstein saga continues. While Trump battles the WSJ allegations on him appearing in the files, a federal judge in Florida declined to release the grand jury testimony. Trump was looking to use it to soften his image in relation to the allegations. However, the New York requests are still pending.

He’s got ally in Mike Johnson though - he will dismiss the House of Representatives early for summer to avoid a vote related to Epstein. The House will only reconvene in September while the administration hopes the topic will die out till this time.

The Americas

Nothing to report here.

Asia

The focus this week was definitely on South East Asia. On July 24th we learned that the mine incident from a few day back where Thai soldier was injured, escalated into a full out war with artillery and F-16s used. The fighting went on for a few days - thousands were displaced among the clashes as well as at least 34 soldiers were killed.

The overall border disagreement is a century old as both sides want to have control over an old buddhist temple at the border. Calls for a ceasefire were plentiful, even Trump at some point announced a ceasefire, however only on Monday, both sides agreed to cease hostilities in Malaysia, where the current ASEAN head mediated the resolution.

I believe that we are bound to hear more from the region so stay tuned for my deep dive.

In the meantime, Taiwan’s Lai Ching-te, the president on the side of independence, suffered a setback when all 24 recall votes of the opposition failed. The China-friendly opposition is now set to have a majority, continuing the political gridlock.

Lastly, Australia and Britain signed a 50-year partnership to design, build and operate submarines. It comes after the US reviews the previously signed AUKUS pact that promised the US would share technology to help Australia build nuclear-powered submarines.

Middle East & Africa

Last week we’ve also seen a total collapse of ceasefire talks on Gaza when the Israeli delegation decided to leave Doha after weeks of unsuccessful negotiations. What we see in the news is mostly war propaganda, but it appears that once again both sides were not willing to compromise. Can’t really blame them, Hamas prefers martyrdom to surrender and Israel wants to finish it once and for all after committing so many resources.

The exit was coordinated with the US and now the narrative management is being done. To avoid a backlash around the humanitarian crisis, Israel is coordinating with allies and dropping aid. Only France defied with Macron saying that his country would recognize Palestine as a country. Netanyahu was furious, but its a minor act of defiance. The US will surely help them craft a better narrative in due time.

Around Israel, Saudi Arabia and Syria had a meeting where Saudi investment minister pledged to invest more than $6 billion in the Syrian economy. Both public and private sectors will benefit. This comes as Syria announced its first election, to be held in September. Despite this, traders are skeptical of a diplomatic development between Syria and Israel, where we’ve recently seen a military development instead:

Many would hope otherwise, but there are countless risks associated with elections in a war torn country. A peaceful transfer of power is not that likely. So while the news is good on the surface, the underlying issues are still there, especially with Israel.

Europe

Moving to Europe, Ukraine and Russia held peace talks in Turkey, however nothing came out of them (as expected). In the meantime Trump is supposedly losing patience with Putin and announced that his initial 50-day timeline for peace is now shortened to 10-12 days. I’m sure Putin is trembling (sic!).

The chances of a ceasefire are dropping steadily based on Adjacent aggregate:

This comes as Zelensky did a round trip on anti-corruption legislation. Initially a bill was passed that put 2 anti-corruption agencies in the hands of Zelensky. However, both domestic and international outcry put pressure on the president that backtracked and promised a new legislation to resolve the issue.

The move was supposedly motivated by the need to cleanse the agencies from Russian influence. However, neither the international community, nor the people of Ukraine and nor me believed that was the case. I think Zelensky wanted to use the agencies to silence his opponents. Now he will need to find another method.

Meanwhile Britain, despite leaving the EU, seems to adopt its policies before the EU itself - Ofcom, the media regulator, now requires companies to prevent the underage from accessing adult or “harmful” content. There were voices that harmful content includes protest in Britain. Condolences to my British readers, the internet should remain free…

Business, Finance & Economics

As the Fed is looking to keep rates stable this meeting, the ECB made the same decision last week after more than a year of consecutive cuts. The rate is now at 2% - Lagarde claimed that the inflation shock is behind them, however I believe that she wanted to wait for the US trade deal before making any commitment.

Tariffs

When it comes to deals, Trump announced two of them. First one with Japan that imposes 15% tariffs on the country. In return Japan will invest $550 billion in the US. The second one was with the EU. Trump visited Scotland to golf and negotiate and announced his massive success on Sunday.

The EU will also face 15% tariffs (down from 30%) and promised to buy $750 billion worth of oil, gas, nuclear fuel and semiconductors as well as invest $600 billion in the US, including purchases of military equipment. The EU probably caved to save its auto industry after Japan agreed to a deal if you ask me…

Wrap up

That’s all for the week. I remain vigilant watching the South East Asia as well as developments in Ukraine while the Middle East remains somewhat stable in a state of constant war.

Stay strong and see you soon!