Commentary

• The author warns that the United States is facing its most significant threat to the democratic republic in 250 years. • The commentary argues that the U.S. is experiencing a "rolling coup," characterized by a steady, incremental shift from self-governance toward authoritarianism. • A primary concern highlighted is the erosion of the foundation of democracy, specifically the ability to conduct and maintain valid, trusted elections.

• Chinese AI entrepreneurs and researchers, such as Moonshot AI founder Yang Zhilin, are increasingly choosing to build companies in China rather than pursuing careers in Silicon Valley. • Despite receiving offers from top U.S. institutions like Stanford and MIT, and tech giants including Apple, Google, and Meta, a growing number of "AI stars" see greater opportunities at home. • This shift signals a change in the global talent war, as China's domestic ecosystem becomes more attractive for high-level innovation and entrepreneurship.

• The European Central Bank (ECB) is reportedly preparing to raise interest rates during its upcoming September meeting, according to Bloomberg sources. • While the ECB kept rates steady during its most recent session, Chair Christine Lagarde acknowledged that internal discussions regarding a hike have already begun. • This potential shift follows Lagarde's assertion that a significant volume of economic data is expected in the coming weeks, which will inform the bank's final decision.

• The European Central Bank (ECB) is expected to keep its main policy rate steady at 2.25% during today's meeting. • Investors are closely monitoring the ECB for hints regarding potential policy shifts in September, which will include updated economic forecasts. • South Korea reported stronger-than-expected Q2 GDP growth of 0.6% quarter-over-quarter (3.7% year-over-year), driven by semiconductor exports and growth in manufacturing and services.

• Energy markets are experiencing significant volatility following an escalation of conflict in the Middle East. • Key drivers include the United States expanding the scope of its airstrikes and Houthi rebels, allied with Iran, implementing a maritime blockade in the Bab-el-Mandeb Strait. • Brent crude oil prices reacted sharply to the instability, reaching an intraday high of $95.5 before settling slightly lower at $94.5.

• The US-Iran conflict has entered its sixth consecutive day of escalating hostilities, with both nations intensifying their military strikes. • Iran has targeted critical infrastructure in Kuwait, specifically attacking power generation and water desalination plants, while maintaining a strategic grip on the Strait of Hormuz. • The situation is critical due to the potential for the conflict to expand, with threats remaining that Houthi rebels and the Bab-al-Mandab strait will be drawn into the fighting.

• US stock markets are showing increased vulnerability, with the Nasdaq dropping 1.5% yesterday as momentum stocks face defensive selling. • Despite benign June CPI and PPI figures, Dallas Fed President Logan warned that inflation is not yet on track to hit the 2% target, suggesting interest rates may need to remain modestly higher. • Risk aversion has spread to Asian markets this morning, with indices in China, Taiwan, and Japan seeing declines between 3% and 6%.

• Nepal and Hong Kong, China, are facing off in the final of the Asian Games Men's T20I Qualifier for 2026. • The match is being broadcast with live scores, ball-by-ball commentary, and highlights via Cricbuzz for viewers in the USA and Canada. • This high-stakes final determines which team secures a qualifying spot for the 2026 Asian Games.

• Oil prices dominated market attention today due to a lack of other significant economic drivers. • The focus remains on the collapse of a ceasefire, raising concerns that the US and Iran are far from a permanent agreement. • A primary point of contention is the need to ensure safe and unhindered maritime passage through the strategically vital Strait of Hormuz.

• Wall Street rebounded after a long weekend, with the Nasdaq rising over 1% and the Dow Jones closing at another record high despite initial volatility. • Treasury yields experienced choppy trading, with net daily changes ranging from -3.1 bps for 3-year notes to 0.1 bps for 30-year bonds. • Japan's Ministry of Health, Labour and Welfare reported May labor cash earnings rose 3.2% year-over-year, falling from April's 3.6% and missing market expectations.

• Portugal and Spain are facing off in a Round of 16 match during the FIFA World Cup 2026. • BBC Sport is providing comprehensive live coverage, including text commentary, real-time score updates, and detailed match statistics. • Fans can access advanced performance metrics such as expected goals (xG), shots on target, and distance covered for individual players.

• US investors returned to trading following the Independence Day long weekend, though their return provided little new momentum to overall market dynamics. • European and UK yields remained stable, fluctuating by less than 1.5 basis points due to a lack of significant EMU economic data. • 10-year spreads versus swaps for Italy (72 bps), France (73 bps), Belgium (51 bps), and Spain (43 bps) have shifted from levels seen prior to the US-Iran conflict.

• US markets were closed on Friday, July 4th, in observance of the Independence Day holiday. • During the European session, stocks rose by 0.8% and yields increased by 2–3.8 basis points, while the US dollar remained mostly flat. • The USD/JPY pair stood out as an exception, with initial gains for the yen evaporating as the trading day progressed.

• Coface chief APAC economist Bernard Aw warns that the reopening of the Strait of Hormuz will not signify a quick return to pre-war normalcy for Asia. • While alternative routes exist, they remain tied to the Middle East's energy production system and are subject to the same geopolitical risks and infrastructure disruptions. • This lack of true diversification means Asia's energy supply base remains vulnerable to regional escalations.

• The author argues for a constitutional amendment to protect voting rights in response to the proposed SAVE America Act. • The legislation, supported by Donald Trump and congressional Republicans, would change how states register voters and maintain data, potentially requiring original birth certificates for registration. • This shift is viewed as a significant barrier that could disenfranchise many Americans and hinder participation in upcoming midterm elections.

• The Supreme Court narrowly upheld birthright citizenship, ruling that being born on U.S. soil grants citizenship regardless of the parents' legal status. • In her opinion, Justice Ketanji Brown Jackson warned that the case reflects a broader political effort to rewrite history to serve specific ideological aims. • Dissenting justices argued that the 14th Amendment is ambiguous and should not grant citizenship to children of parents present only temporarily or unlawfully.

• England and India are facing off in the 1st T20I as part of India's 2026 tour of England. • Fans in the USA and Canada can access comprehensive coverage, including live scores, ball-by-ball commentary, and video highlights via Cricbuzz. • This match marks the beginning of a high-profile international series between two of the world's leading cricket nations.

• A high-profile panel debate at the ECB Sintra forum featuring Fed Chair Warsh, ECB President Lagarde, BoE Governor Bailey, and Bank of Canada Governor Macklem failed to provide new insights into short-term monetary policy. • In contrast, the Bank of Korea is expected to raise its current 2.5% policy rate multiple times in the coming months due to persistent inflation above the 2% target. • South Korea's economy continues to benefit from the AI and semiconductor boom, though the Korean won remains historically weak, trading around USD/KRW 1554.75.

• Gearoid Reidy of Bloomberg Opinion argues that football's "Asian century" remains unrealized, noting that the 2026 World Cup does not yet signal a shift in the sport's global center of gravity. • The author highlights a lack of competitive success in Southeast Asia, where only Indonesia has reached the finals, dating back to the 1938 tournament. • Reidy suggests that genuine growth requires more hosting opportunities similar to the 2002 Japan-South Korea World Cup, rather than "sportswashing" projects in the Middle East.

• Market trading during the final session of the quarter was driven by end-of-quarter repositioning, comments from the ECB Sintra forum, and new economic data. • July inflation figures for EMU members showed slight downside surprises, with Germany reporting HICP of -0.2% M/M (2.4% Y/Y) and France reporting -0.3% M/M (2% Y/Y). • Italy's data showed a slight increase of 0.1% M/M, resulting in a yearly inflation rate of 3.1%.

• Asia-Pacific markets showed mixed performance following strong first-half gains on Wall Street, which were primarily driven by the semiconductor sector. • South Korea's KOSPI index fell 2.63% to 8,253.22, while financial markets in Hong Kong remained closed for a public holiday. • Investors are closely monitoring upcoming commentary from the Fed Chair and key economic reports due Wednesday, including the June ADP employment data and ISM manufacturing readings.

• Belgium and Spain released their national Harmonized Index of Consumer Prices (HICP) data, marking the start of a series of reports leading up to the full euro area print this Wednesday. • Belgian harmonized CPI showed a significant decrease, dropping from 4.1% in May to 3% in June. • Spanish inflation unexpectedly remained steady at 3.6% annually, defying the 3.4% consensus forecast due to a monthly price increase of 0.6%.

• Today's economic calendar focuses on European data, specifically the European Commission's confidence indicators and June inflation figures for Spain and Belgium. • Market participants are awaiting the EMU CPI figures due Wednesday, with consensus expectations of 3% Y/Y for headline inflation and 2.5% Y/Y for core inflation. • These projected declines in inflation may reduce the immediate pressure on the European Central Bank (ECB) to implement further monetary tightening.

• Bloomberg Opinion columnist Andreas Kluth argues that the "America First" policy is rapidly evolving into "America Alone." • The commentary highlights how President Donald Trump is accelerating the process of alienating international allies and isolating the United States. • This shift matters as it signals a departure from traditional U.S. diplomacy and global leadership in favor of a more insular national strategy.

• NTU linguistics professor Luke Lu argues that Singapore should rethink its long-standing ban on dialects in public media. • The proposal suggests that localized forms of Hokkien and Teochew, which are unique products of regional multiculturalism, should no longer require special approval for broadcast. • This shift is not intended to introduce dialects into the formal education system or actively promote them, but rather to remove restrictive barriers.

• India and New Zealand are facing off in the final of the ICC Men's T20 World Cup 2026. • The match is being broadcast with live scores, ball-by-ball commentary, and highlights for viewers in the USA and Canada. • This championship game determines the global T20 cricket winner for 2026, marking the culmination of the tournament.

• Singapore faced Thailand in the final of the Asia Pacific Cricket Champions Trophy 2026. • Thailand was bowled out for 73 runs, with Manpreet Singh scoring 23 off 16 balls and Raheel Thakkar contributing 13 off 18. • Singapore reached 76/4 after 12 overs, successfully chasing the target to secure the championship title.

• Indonesia defeated Uzbekistan in the 3rd Place Play-off of the Asia Pacific Cricket Champions Trophy 2026. • Indonesia posted a dominant total of 227/6 in 20 overs, powered by Syed Ahzamul Haq's 55 off 49 balls and Nikhil's 35 off 33 balls. • Uzbekistan struggled to keep pace, finishing their 20 overs with a score of 130/6, resulting in a significant victory for Indonesia.