Report - 10 jully, 2025Gold / U.S. DollarFOREXCOM:XAUUSDBurankuGermany Pushes European Rearmament — Supply Chain Call to Action Key Developments German Defense Minister Boris Pistorius demands the defense industry “stop complaining and deliver,” pushing for accelerated production. Berlin plans to raise annual defense spending to €162 billion by 2029 (+70% vs. current), the largest defense expansion since WWII. Focus on munitions, drones, tanks, submarines, fighter jets. Long-term contracts with annual purchase obligations to provide production certainty and encourage new capacity. Meeting with US Defense Secretary Pete Hegseth to secure US support and coordinate Patriot missile supply (Germany has only 6 left). Despite Ukraine’s renewed requests, Germany will not send Taurus long-range missiles. Strategic Analysis Germany’s pivot (the "Zeitenwende") signals a historic shift toward a leadership role in European defense, stepping up as US support for continental security wanes. The move reshapes Europe's industrial base and procurement priorities, creating a structural, multiyear demand boom in defense production. This strategic acceleration responds to: Russia's aggression and rapid advances in Ukraine. A fragmented EU defense industry needing standardization and scale. The risk that delays in rearmament could embolden adversaries. Market & Investment Implications Bullish outlook for European defense primes: Rheinmetall, Hensoldt, KMW, and MBDA. Strong orders pipeline supports supplier valuations and capital investments. Defense-focused ETFs and long-cycle industrial funds gain attractiveness. Potential execution risks: capacity bottlenecks and regulatory procurement hurdles. North Korea’s Unconditional Support to Russia — New Security Axis Key Developments Kim Jong Un pledges "unconditional support" for Russia’s Ukraine war effort during Lavrov’s visit. North Korea has reportedly sent 13,000 troops and 12 million artillery shells since October, with plans for more troops this summer. Joint military and economic ties deepening: possible new infrastructure projects and North Korean goods in Russian markets. Strategic Analysis The explicit military alliance between Moscow and Pyongyang cements a new anti-Western axis in Northeast Asia. North Korean boots on the ground in Ukraine (even indirectly) create significant escalation risks and could legitimize wider allied responses. Market & Security Implications Increases global defense spending momentum, particularly in missile defense and artillery systems. Heightens regional security risk premium in Northeast Asia, reinforcing demand for US-Japan-Korea trilateral cooperation. Potential new sanctions regimes targeting Russian and North Korean trade. EU to Intensify Foreign Subsidy Investigations Key Developments EU to expand probes into foreign-subsidized companies, particularly Chinese, using the Foreign Subsidies Regulation (FSR). Target sectors: chemicals, pharmaceuticals, cars, batteries, and green tech. FSR empowers Brussels to block public procurement bids, M&A deals, and restrict single-market access. Strategic Analysis A clear industrial policy pivot: Brussels seeks to protect European value chains, local talent, and technological sovereignty. The EU is signaling it will emulate China’s own JV requirements to force knowledge transfer and local investment. Market & Corporate Implications Defensive boost for EU industrial and tech players — potential reshoring and local capacity expansion. Risks for Chinese EV, solar, and battery players in Europe. New compliance costs and operational hurdles for multinationals with Chinese JV exposure. EU Temporarily Suspends Tariff Retaliation Against US Key Developments EU delays €21 billion in planned retaliatory tariffs on US exports following Trump’s 30% tariff threat. Negotiations ongoing; additional €72 billion of potential retaliatory measures being prepared. Germany’s finance minister stresses continued “serious talks,” warning of possible decisive countermeasures if negotiations fail. Strategic Analysis EU seeks to avoid a major trade war escalation that could hit vulnerable industries (aircraft, agriculture, luxury goods). The postponement reflects both economic pragmatism and strategic patience. Market Implications Near-term relief for European cyclical exporters and automotive supply chains. Volatility risk persists; underlying uncertainty keeps global supply chain hedging active. Global Health Risks from Western Aid Cuts Key Developments Wellcome Trust warns that sharp cuts in Western aid (e.g., 83% of USAID programs, UK’s 40% cut) could lead to deaths exceeding those caused by COVID-19 in Africa and other regions. Reductions threaten vaccination programs, HIV/AIDS prevention, and basic health infrastructure. Strategic & Social Implications Rising health crises could create regional instability, migration pressures, and political fragility. Potential for emergent humanitarian crises to undermine global economic resilience and security. Crypto Firms Move Toward US Banking Integration Key Developments Ripple, Circle, and BitGo seek national banking charters; Kraken to launch crypto-backed debit/credit cards. Trump administration’s pro-digital asset stance and proposed Genius Act accelerating integration of stablecoins with Treasury backing. Strategic Analysis Crypto players are rapidly shifting from an anti-establishment stance to a regulated model, seeking legitimacy and direct ties to the US banking system. This is a major strategic pivot toward mass-market adoption and integration. Market Implications Growth catalysts for regulated digital asset ecosystems. Opportunities in infrastructure (custody, payment rails, compliance tech). Regulatory framework evolution remains a key risk factor. US-Japan Relations Enter Critical Phase Key Developments Sharp deterioration in US-Japan ties as Trump imposes tariffs and demands higher defense spending (up to 3.5% of GDP). Japan’s requests for tariff exemptions rebuffed; possible alliance strain. US threatens to halt Okinawa troop relocation plans, creating a defense strategy crisis. Strategic Analysis Deepening transactional approach by US administration risks destabilizing one of Washington’s most strategic alliances. Japan’s ability to recalibrate is limited, leading to potential security vulnerabilities vis-à-vis China and North Korea. Market & Policy Implications Elevated geopolitical risk premium in Asia-Pacific. Potential reassessment of Japanese defense contractors and broader regional security investments. Possible long-term tailwinds for local defense and cybersecurity initiatives. Copper Tariff Uncertainty — Global Supply Chain Alert Key Developments US plans 50% copper tariffs from August 1; manufacturers seek clarity. Copper critical for EVs, semiconductors, defense, and green infrastructure. Stockpiles may last 6–9 months; longer-term supply risk remains acute. Strategic & Market Implications Significant inflationary pressures in downstream sectors. Supply chain disruptions could affect US manufacturing competitiveness, defense readiness, and green transition timelines. Potential opportunities for non-US copper producers and recyclers. Apollo's UK Pension Play — Bulk Annuities Strategy Key Developments Athora (Apollo-backed) acquires Pension Insurance Corporation for £5.7bn, entering the UK’s £500bn pension de-risking market. Signals strategy shift as US private capital increasingly integrates with retirement and insurance liabilities. Strategic Analysis Apollo’s model of “permanent capital” (buying long-duration liabilities to invest in high-yielding private assets) advances further into Europe. The move addresses demographic pressures and opens new fee streams. Market Implications Bullish for Apollo and similar alternative asset managers. Heightened scrutiny by regulators on risk transfer and solvency. UK pension de-risking market consolidation may create opportunities for specialized asset managers. Overall Global Themes & Recommendations Themes Structural defense rearmament and deterrence strategies reshaping Europe and Asia. Geopolitical realignments create new economic blocs and challenge global supply chains. Rise of state-supported industrial policies in Europe (FSR) and US (tariffs). Growing integration of crypto into mainstream finance under a friendlier US regulatory regime. Recommendations Overweight: European and US defense primes, cybersecurity, regulated crypto infrastructure. Underweight: Asian export-heavy sectors highly exposed to US tariff risk, particularly Japan. Selective Long: European industrial reshoring beneficiaries, US pension risk transfer facilitators. Monitor: Copper and critical mineral supply chains for inflation pass-through and supply constraints.