In Geopolitical Concerns, Israel’s recent strikes crippled Iran’s deterrent capabilities and killed senior commanders, marking a historic reversal in Middle East power dynamics. As Iran’s ideological ambitions unravel, reformist factions push for economic pragmatism and realignment with the West, while the foremost Western defense alliance, NATO, pledges to boost spending amid growing trans-Atlantic tensions and continued reliance on U.S. military support.
In Geoeconomics, central banks are rapidly divesting from the dollar, boosting gold reserves as safe-haven confidence in U.S. assets fades, while the euro gains traction in global trade and reserve portfolios. China’s financial system push—anchored by the renminbi and digital infrastructure—is reshaping global currency norms and accelerating a multipolar monetary shift.
Global Junctions explores how AI, robotaxis, and crypto are converging into foundational economic forces in 2025, driving massive disruption in advertising, transport, and finance as institutional trust and regulatory clarity remain uneven.
Finally, in Global Trajectories, the U.S. drawdown from global aid and governance is opening space for China’s rise and authoritarian resurgence, especially in Africa and Asia, as democratic capitalism faces growing internal fractures and existential questions.
Geopolitical Concerns
Mission accomplished for Netanyahu?
The Economist
Afshon Ostovar, Foreign Affairs
What Regime Change Means in Iran
Arash Azizi, Foreign Policy
Kori Schake, Angela Stent, Franz-Stefan Gady, Anders Fogh Rasmussen, Liana Fix, Fabian Hoffmann, Minna Alander, Gabrielius Landsbergis, and C. Raja Mohan, Foreign Policy
Israel’s large-scale strikes on June 12th devastated Iran’s military infrastructure, including nuclear facilities, missile sites, and fuel depots, and eliminated key regime figures such as Mohammad Bagheri and Hossein Salami, effectively dismantling a deterrence strategy built over three decades. These attacks, supported by U.S. strikes on Iran’s three principal nuclear sites, including Fordow, came after a period of escalating confrontation initiated by Iran’s regional proxies in the wake of Hamas’s October 7th, 2023, assault on Israel. By mid-2024, Iran’s influence stretched from Iraq to the Mediterranean, but this overreach provoked a forceful Israeli response that crippled Hamas, degraded Hezbollah, and led to the collapse of Syria’s Assad regime by December. Even Iran’s massive ballistic missile launches in April and October 2024—its largest ever—were largely neutralized by Israel’s U.S.-backed air defenses, highlighting the limits of Iran’s military capabilities and leaving its airspace vulnerable. Israel’s October 2024 retaliation against Iranian territory, coupled with Prime Minister Netanyahu’s public praise for President Trump’s role in the offensive, marked a definitive collapse of Iran’s regional deterrent framework.
This strategic breakdown signals the probable evolution of Iran from a theocratic ideological state into an authoritarian regime dominated by military and oligarchic elites, with a renewed focus on economic engagement and pragmatism—an internal shift already quietly underway before the June 2025 bombardments. Supreme Leader Ayatollah Khamenei’s long-standing vision of a purist Islamic society leading an anti-Western axis lies in ruins, as Iran has become one of the least religious societies in the Muslim world, and its regional alliances have unraveled. The election of reformist Masoud Pezeshkian in the summer of 2024 exemplifies the growing strength of pragmatic factions now poised to steer Iran toward normalization with the West. Looking to the West, a NATO summit took place on June 25th in The Hague, where leaders aimed to prevent a trans-Atlantic rupture by securing a landmark pledge from all 32 allies to raise defense spending to 5% of GDP, responding directly to Washington’s demands and threats of disengagement. This comes amid persistent doubts about the durability of U.S. military support, as American threat perceptions increasingly diverge from those of European NATO members. Still, new commitments emerged: Poland reaffirmed its plan to field 500,000 troops and reservists, while the Baltic states reiterated their 2026 target of 5% GDP defense spending. Yet, these allies remain heavily reliant on U.S. “strategic enablers” to counter Russia’s buildup and hybrid operations, particularly from Kaliningrad.
Geoeconomics
Bull or Bear? Here’s How the Outlook for Stocks Stacks Up
Sarah Hansen, Morningstar
Currency Traders Are Ditching Dollar for Euro on Option Bets
Naomi Tajitsu and Vassilis Karamanis, Bloomberg
Central banks plan to boost gold reserves and trim dollar holdings
Leslie Hook, The Financial Times
China’s central bank chief expects new currency order to challenge dollar
Thomas Hale and Cheng Leng, The Financial Times
Global geoeconomic developments in early to mid-2025 reveal a notable shift in market sentiment and international monetary dynamics. By June 17th, the U.S. stock market had rebounded from April lows, with the Morningstar U.S. Market Index rising over 20% before flattening by mid-May. Analysts such as Adam Hetts (Janus Henderson) and Dave Sekera (Morningstar) foresee mid-single-digit returns in 2025, a slowdown from prior years. Bullish factors include resilience in U.S. economic data, strong Q1 S&P 500 earnings growth of 13%, and fading fears over the worst-case tariff scenarios. Still, concerns persist over elevated valuations—S&P 500 at a forward P/E of 21.7—and economic soft spots, such as downgraded payroll numbers and lingering tariff uncertainties. Meanwhile, by June 20th, traders began shifting from the dollar to the euro, reacting to erratic U.S. policy and global trade war risks. Data shows 15–30% of dollar-linked contracts switched to the euro between January and May. The euro has gained 11% against the dollar, reaching a post-2021 high, while a broad dollar index has fallen 7%, eroding global confidence in U.S. assets. The euro is increasingly viewed as a safe haven, with prominent hedge fund manager Paul Tudor Jones projecting another 10% drop in the dollar within a year.
This reassessment of the dollar’s role extends to central banks, many of which are diversifying reserves. A World Gold Council survey released on June 17th found 95% of central banks plan to increase gold holdings—up from previous years—while three-quarters expect to reduce dollar exposure. Gold prices have surged 30% since January and have doubled since 2023, now surpassing the euro as the second-largest reserve asset. Concerns over sanctions, geopolitical instability, and comments by President Trump about Fort Knox have driven some countries, like India, to repatriate gold reserves. In parallel, China is accelerating efforts to reshape the global financial order. On June 18th, PBOC Governor Pan Gongsheng called for a “multi-polar monetary system,” noting the renminbi is already the second-largest trade finance currency and third-largest payment currency. He warned of the risks of dominant currencies being “weaponised.” Pan also met with European Central Bank President Christine Lagarde in Beijing, signing a cooperation memorandum. China’s initiatives include launching a digital renminbi operations center, expanding the Cross-Border Interbank Payment System (CIPS) with six new foreign institutions, deepening Shanghai–Hong Kong financial ties, and broadening outbound investment via the QDII scheme.
Global Junctions
Have cryptocurrencies arrived as an asset class? It’s complicated
Philip Stafford, The Financial Times
Taking the wheel: US and China jockey for robotaxi leadership – Nikkei Asia
Cissy Zhou and Yifan Yu, Nikkei Asia
AI is turning the ad business upside down
The Economist
The second half of 2025 is shaping up to be a transformative period across multiple sectors as artificial intelligence, autonomous vehicles, and digital assets converge to reshape the global economy. At the Cannes Lions festival beginning June 16th, AI’s impact on advertising took center stage, with leaders like Sam Altman and Mark Zuckerberg predicting that up to 95% of creative agency tasks could soon be automated. As AI tools such as Meta’s Advantage+ and Google’s Performance Max boost ad returns by over 20%, companies like TikTok and Kalshi are producing full commercials in under 48 hours for a fraction of traditional costs. Meanwhile, robotaxis are going mainstream, with Tesla’s long-awaited launch in Austin on June 22nd joining aggressive expansions from Waymo and Chinese players like Baidu and Pony.ai, who are deploying hundreds of vehicles in cities worldwide. Goldman Sachs projects China’s robotaxi market could surge from $54 million in 2025 to $47 billion by 2035, highlighting the urgency of scaling cost-efficient autonomous fleets.
This wave of disruption is mirrored in financial markets, where bitcoin has rebounded dramatically, rising over 50% since Donald Trump’s November election win and surpassing $100,000 in December. The approval of U.S.-based bitcoin ETFs in early 2024 and Trump’s policy pivot—earning him $60 million from crypto ventures—have fueled a $176 billion fund market with over $11 billion in new inflows this year. Yet challenges remain: volatility, regulatory fragmentation, and fraud, such as the $1.5 billion hack of Bybit in February and the SEC’s $100 million fraud charge against Unicorn in May. While institutional interest in assets like Ether and Solana is growing, only 8% of U.S. adults engaged with crypto in 2024, down from 12% in 2021. As AI begins to generate ads for digital agents and robotaxis begin to drive themselves, and as crypto inches toward mainstream legitimacy, 2025 is increasingly defined by technologies once thought futuristic becoming economically foundational.
Global Trajectories
More than 13mn people in Africa could catch malaria owing to proposed US cuts
Michael Peel, The Financial Times
China is trying to win over Africa in the global trade war
The Economist
Asia’s Autocrats Welcome USAID’s End
Joseph Rachman, Foreign Policy
The End of Democratic Capitalism?
Daron Acemoglu,Foreign Affairs
America’s global retreat is opening space for rising authoritarian influence across Africa and Asia, while also leaving gaps in critical humanitarian programs. President Trump and Elon Musk’s dismantling of USAID through the new Department of Government Efficiency has emboldened autocrats from Cambodia to India, where officials now blame U.S.-funded NGOs for “color revolutions.” In India, BJP official Amit Malviya accused the U.S. of election interference, while critics blamed the ouster of Bangladesh’s PM Sheikh Hasina in August 2024 on a U.S. plot. In Africa, a Lancet study warns that Trump’s proposed 47% cut to the President’s Malaria Initiative (PMI) could result in 13 million additional infections and over 100,000 deaths in 2025. Once a cornerstone of bipartisan global health policy, PMI’s decline reflects broader institutional erosion and accelerates humanitarian crises that threaten long-term stability.
China, by contrast, is expanding its strategic footprint in Africa. On June 12th, Beijing granted zero-tariff access to all African countries except Eswatini, bolstering trade ties as U.S. support for the African Growth and Opportunity Act (AGOA) is set to expire in September. In 2024, China-Africa trade reached $296 billion, with exports projected to rise 12% in 2025. Countries like Kenya and South Africa anticipate gains, though structural challenges remain. In an article for Foreign Affairs, Economist Daron Acemoglu comments on two books discussing how shifting inequality threatens the foundations of democratic Capitalism. Martin Wolf and Pranab Bardhan argue that the breakdown between capitalism and liberal democracy, along with growing economic and cultural insecurity, has fueled authoritarianism. Both propose reforms—such as universal basic income or investment in good jobs—but emphasize that restoring trust and civic engagement is essential to saving democracy.
