Iran — promise and peril: We are going to find out if Iran has a nuclear weapon. So far Iran has been scatter-gun in its response. If it continues on this trajectory, markets will calm down — but this is unknown territory and the range of outcomes is extreme.

The American position: The Trump administration's engagement with Russia is best understood through a commercial and strategic lens. Washington benefits materially from the current conflict: it sells weapons to European allies, attracts displaced European industrial and financial capital, and keeps Russia preoccupied with its western flank rather than consolidating influence across Greater Eurasia. American support for Ukraine is contingent, not unconditional — it persists while the strategic and commercial calculus favours engagement.

The Chinese position: Sino-Russian bilateral trade reached $245 billion in 2024. Chinese exports to Russia rose over 70% between 2021 and 2024. The yuan now accounts for the overwhelming majority of Russia's financial transactions. Yet Beijing's optimal position is calibrated instability — sufficient to sustain Russian dependence and divide American strategic attention, while stopping short of a conflagration that damages Chinese export markets. On 3 July 2025, Foreign Minister Wang Yi told EU foreign policy chief Kallas directly: Beijing cannot afford a Russian defeat because it would free the US to focus entirely on China.

The Russian position — Karaganov's February 2026 paper: Russia's long-standing Kremlin advisor argues that Europe's political elite must be moved from performing fear to experiencing it. He advocates conventional strikes on European capitals if deterrence fails and calls for preemptive action against French and British nuclear capabilities should either expand their arsenal. He frames European rearmament not as legitimate defence but as escalation warranting a nuclear response. This is not a marginal voice. The strategic implication: Russia views the current window as an opportunity to restructure European security by coercion.

Assessment: American commitment is transactional. China has a positive interest in sustaining European vulnerability. Russia is signalling, through credible intellectual proxies, that it views this moment as structurally advantageous. European rearmament is accelerating — but converting political commitment into operational military capacity is measured in years, not months.

The macro fog and global divergence: Markets were hammered by a bombardment of unpredictable news — Trump's tariffs, escalating tensions with Iran, Russia, and Cuba. Yet the FTSE 100 and Nikkei 225 acted as outliers, powering to fresh highs as investors rotated out of US tech and into tangible, high-asset-value sectors. The divergence is significant.

Private credit — the canary in the coal mine: A major red flag emerged this week. Blue Owl froze redemptions in its private credit funds, raising fears of a 2008-style liquidity mismatch. UBS warned of potential 15% default rates in PE-backed software — terrifying if that debt is levered at the rumoured 10x. The 'unholy alliance' between private equity giants and life insurance firms is under the spotlight.

NVIDIA defies gravity: NVDA continues to post exceptional numbers, signalling that the Agentic AI revolution is moving from hype to exponential infrastructure build-out. Real-world assets are the new safe havens. Bulls are betting on European defence spending, strategic commodities, and hardware as the most resilient plays in a volatile world.

S&P 500 at an inflection point: FOMO remains strong — expect another attempt at 7,000. But the Citrini Research report on where AI is heading sparked a proper face-plant in software stocks this week. Markets have been in turmoil since its publication. Watch Iran: if it goes sideways, all bets are off.