Weekend Brief: Geopolitical Tensions and OPEC+ Output Hike Dominate Weekend News

Lead Geopolitical developments, including renewed US diplomatic efforts in the Ukraine conflict and North Korean missile tests, alongside an OPEC+ agreement to increase oil output, are shaping the weekend narrative. The US 10-year yield is unchanged at 4.48%. Session narrative The weekend saw a flurry of geopolitical activity. President Donald Trump offered to broker a resolution to the Ukraine war during a nearly 90-minute call with Russian President Vladimir Putin. Separately, North Korean leader Kim Jong Un was reported to have watched a test launch of a strategic cruise missile from a naval destroyer. The European Commission outlined five new large-scale projects to enhance the bloc's defense, earmarking EUR325 million for the development of drones, maritime defense, space, air and missile defense, and security along the EU's Eastern Flank. In energy markets, OPEC+ nations reportedly agreed to boost crude oil output quotas by 188,000 barrels per day starting in August, in line with previous plans to overturn output curbs. Federal Reserve Chair Kevin Warsh stated that "inflation risks have come down," a comment that could influence market sentiment. In specific market movements, gold saw a significant rise of 1.49%, while silver surged by 2.87%. The Dow ETF (DIA) posted a gain of 1.03%, contrasting with a 1.76% decline in the Nasdaq 100 ETF (QQQ). Cross-asset check Equity markets showed mixed signals over the weekend, with the Dow ETF (DIA) up 1.03% and the Nasdaq 100 ETF (QQQ) down 1.76%. S&P 500 futures saw a modest gain of 0.38%, while Nasdaq futures rose 1.17%. In the commodities complex, gold climbed 1.49% and silver jumped 2.87%. WTI crude was up 0.13% and Brent crude gained 0.46%. The US 10-year yield remained flat at 4.48%. The US Dollar Index (DXY) was also unchanged. Bitcoin (BTC) saw a slight decline of 0.69%, and Ethereum (ETH) was down 1.03%. Themes & continuing stories Geopolitical tensions remain a dominant theme, particularly with the ongoing Ukraine conflict and the US diplomatic overtures. North Korea's missile test adds to regional instability. The OPEC+ decision to increase oil output will be closely watched for its implications on global energy prices and inflation. European defense integration continues to be a focus, with new projects aimed at strengthening the bloc's military capabilities. The Federal Reserve's assessment of inflation risks will continue to influence expectations for monetary policy. What’s ahead Looking ahead to the start of the week, key economic data releases include the S&P Global/CIPS Construction PMI for the United Kingdom on July 6. The United States will see the release of its S&P Global Composite PMI, S&P Global Services PMI, ISM Non-Manufacturing Prices Paid, ISM Non-Manufacturing Employment, and ISM Non-Manufacturing PMI, all on July 6. Speeches from central bank officials, including ECB Executive Board Member Schnabel, Fed Governor Waller, ECB President Lagarde, and BoE MPC Member Mann, are also scheduled for July 6. These events will provide further insights into economic conditions and central bank perspectives.