Another week, another war… or so they say. The US couldn’t just watch as another nation fights Iran. But jokes aside, this was the main development from last week and it sparked real emotions throughout the world. From disbelief through anger to even joy.

Well, the world moves, on my (and hopefully your) P&L moves up and we live another day. While in the background I’m working on my constantly evolving article on Iran, let’s see what else happened last week.

Weekly Outlook

As usual recently, the war is the main topic. Makes me think that the Iranian situation is only symptomatic of the general state of the world.

US Inc.

As NATO is predominantly a US project, it’s only fitting to mention developments around it in this section. Ahead of the summit tomorrow all 32 countries agreed to increase defense spending to 5% of GDP by 2035 (sic!). Personally, I believe that European needs are more pressing than the timeline suggests, but who am I to judge, right?

Moving to domestic stuff, after Gavin Newsom sued the administration over allegedly illegal use of the National Guard, the appeals court allowed Trump to retain control of the National Guard. It seems that Trump is winning most of legal challenges in the end. Turns out you can just do things, X bros were right!

In a rare defeat for him, a federal judge indefinitely blocked the effort to prevent Harvard from enrolling foreign students. And so the war between the university and the administration continues.

Lastly, Vance Boelter, the man suspected of shooting two Democrats in Minnesota was charged with two federal counts of murder. He can face death penalty.

The Americas

Quiet week in the rest of America.

Asia

Back in Asia, we have some tensions around India and Pakistan. After this year’s confrontation India broke the Indus Water Treaty in Pakistan and now it vows to never restore it. The pact previously guaranteed water for most of Pakistan’s farms and previously Pakistan warned that blocking the flows could be an act of war. I don’t actually expect war to break out over water, but we will surely hear more about the issue in the coming weeks.

A bit farther east, Cambodia said it would stop importing fuel from Thailand and urges its citizens to avoid travel there. Last month a Cambodian soldier died during a border fire exchange. At the same time the internal situation in Thailand is tense as the prime minister faces resignation calls after she criticized the army’s handling of the situation.

As we approach election in Japan, the ruling Liberal Democratic Party took a big loss in the Tokyo’s metropolitan election taking only 21 out of 127 seats. It fares poorly for the unpopular prime minister Shigeru as he already battles with 3.7% inflation.

Middle East & Africa

And here we have a lot to unpack. This week was a roller-coaster of statements made by Trump. After rumors that the US may attack Iran, he went on a media spree, creating confusion around the potential decision.

At the same time, Britain, France and Germany met with senior Iranian officials in Geneva trying to deescalate the situation. As expected though, their efforts were in vain as Iran vowed to not negotiate while being under attack. Soon after the US did actually attack Iran with B2 bombers that went over the Atlantic in a non-stop flight to quietly deliver bombs and go back.

The US bombed 3 sites: Fordow, Natanz and Isfahan with a total of 14 MOPs and declared that the most important on - Fordow - is now completely destroyed. Iran obviously disagrees, but it didn’t change the fact that they were angry.

However, their response on the US base in Qatar today was toned down and telegraphed, hinting at possible deescalation. That being said, I see several signs that we might be far from over and I’m not talking about the vote on closing the Strait of Hormuz. That’s not as easy as some on X portray. More on this in the article this week - I promise to finally deliver it with some interesting predictions. If you follow me on X you already know that up until now my predicted course is happening.

Of course, Israel is still striking Iran (even Fordow) and Iran is still responding in kind. So far Iran has launched approximately 500 ballistic missiles and more than 1,000 drones.

But while the new war is brewing, the old one is still ongoing. The humanitarian crisis in Gaza continues despite Israeli effort to provide aid. On top of that it was reported that the IDF killed around 40 people as they were trying to get the aid. No more details on this sadly.

Europe

Another continent, another war. Ukraine said that it received the remains of 1,245 soldiers from Russia to complete the repatriation agreed in Istanbul. Russia received 78 bodies in exchange. But that’s about it when it comes to diplomatic solutions between the two. On the other hand the war itself is also in a bit of a deadlock as neither side is able to secure major gains:

While NATO meets tomorrow to agree on the new spending target, the greatest salesman in the world, Volodymyr Zelensky, urges allies to allocate 0.25% of their GDP to boost Ukraine’s weapons production. He is looking to tie Europe into prolonged war and being honest, Europe is already deeply in. This would just complete the process. However, I’m doubtful any country will be able to do such a commitment.

Staying in Eastern Europe, the US brokered the release of Siarhei Tsikhanouski, a Belarusian opposition leader and 13 others from jail.

And lastly, Nicusor Dan, the new Romanian president, nominated Ilie Bolojan, the leader of the center-right National Liberal Party to be prime minister asfter weeks of talks. Bolojan was acting president until Dan won the election. Now Romania’s parliament must approve this, but it looks like it will include 4 pro-EU parties so the choice is most likely locked.

Business, Finance & Economics

There can’t be a crisis in the Middle East without oil surging. As markets opened oil surged to $81.40 a barrel before dropping and further dropping as the nothingburger of an attack on US base happened. The market is now pricing in a deescalation. Hope is for the hopeless.

As I mentioned already, in Japan the core CPI rose by 3.7% in May y/y marking the sharpest increase in two years. Most importantly, the price of rice doubled which makes citizens furious. It also can make Michael Gayed happy as maybe this is the time his thesis on reverse carry trade finally is confirmed as Japan may be forced to raise rates.

Tariffs

Japan really did make an appearance this week. It reportedly cancelled a meeting between its ministers and America after Trump told them to spend more on defense. I can understand it as after the WWII they forced Japan to essentially demilitarize, promising to defend it. Now when they ask Japan to boost defense spending to 3.5% of GDP they can be angry as they can suspect that US may not want to defend them after all.

And lastly, South Korean trade minister is visiting the US to talk about new tariffs. For now Seul face 10% blanket tariff and 25% country specific tariff, paused for now. We’ll see what comes of that.

Join PROPHET NOTES to get reliable and straight to the point commentary on global events. Contrary to MSM I bet on my convictions. Accountability matters.

Wrap up

That’s it for the week. While I finish the article on Iran, make sure you follow me on X where I spill some of the alpha in real time when things move fast!

For now stay strong and see you soon!