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Good morning and welcome back to FirstFT. On today’s agenda:
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Israel says Iran violates ceasefire
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Nato summit begins
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New Yorkers choose Democratic candidate for mayor
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And Martin Wolf on why global imbalances matter
Hours after US President Donald Trump announced a ceasefire, Israel accused Iran of violating the agreement, putting the truce in jeopardy. Here’s what we know.
What happened? Explosions boomed and sirens sounded across northern Israel this morning, minutes after Israel announced it had agreed to a US-brokered ceasefire. Israel’s defence minister Israel Katz said his country would retaliate “forcefully” to a “violation of the ceasefire”. Iran denied breaking the ceasefire and warned that its military would respond to any further attacks by Israel. The two countries had agreed to halt hostilities yesterday, ending what Trump called the “12 day war”.
What was agreed? Both sides said they would end hostilities after more than a week of conflict. The agreement would result in an end to the conflict over 24 hours, the US president said, and would first be implemented by Iranian and then Israeli forces. The Trump statement came just hours after Iran attacked the US’s Al Udeid air base near Doha, which he said had resulted in no American or Qatari casualties.
Market impact: Oil prices ticked up after Israel’s warning of new strikes from Iran. Brent crude, the international benchmark, was down about 3 per cent on the day, at just under $70 a barrel, having earlier fallen almost 6 per cent to $67.50. Equity markets in Asia rose following the unexpected ceasefire announcement. The dollar weakened 0.3 per cent against a basket of its key trading partners.
Follow our live blog for the latest updates on whether the de-escalation of hostilities materialises and holds. And here’s more coverage of the conflict:
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Trump’s Iran policy: The head-spinning course changes on Tehran revealed once again how the US president alternates between blustery threats, efforts to cut deals, extreme measures and sudden victory laps.
Join FT journalists and guests for a webinar tomorrow, exclusive to FT subscribers, to help unpack the strategic, diplomatic and economic stakes of the Israel-Iran war. Register here.
Here’s what else we’re keeping tabs on today:
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Central banks: Federal Reserve chair Jay Powell delivers his semi-annual address to the House financial services committee. Powell’s appearance comes a day after Michelle Bowman, the Fed’s vice-chair for financial supervision, called for interest rate cuts as soon as July.
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Nato summit: Leaders from member states meet in The Hague for a summit aimed at placating Trump over defence spending.
Five more top stories
1. Exclusive: Germany will boost defence spending by more than two-thirds by 2029, outpacing France and the UK as Chancellor Friedrich Merz drives rearmament of Europe’s largest economy in the face of an aggressive Russia and a volatile America. Anne-Sylvaine Chassany has more on the plans.
2. Policymakers in Washington are considering a multibillion-dollar tax break for private credit funds as part of Trump’s flagship spending plan. The proposal was included in the US president’s “big, beautiful bill” passed by the House of Representatives, but was left out of the Senate draft. However, fierce lobbying by the private equity industry in recent days means it could be added back in.
3. Currencies, stocks and bonds in developing countries are defying Trump’s trade war and the conflict in the Middle East to outperform global markets in 2025, as investors seek to diversify away from dollar assets amid concerns over erratic US policymaking.
4. Chinese companies have built or operate 31 active ports in Latin America and the Caribbean, many more than previously thought, according to a Washington-based think-tank. Research by the Center for Strategic and International Studies found Chinese involvement in more than twice as many ports across the region, from Mexico to Chile, as had previously been reported by US researchers. Read the exclusive report.
5. Amazon founder Jeff Bezos and TV anchor Lauren Sánchez’s wedding in Venice this week has become a lightning rod for protest, as locals disgruntled about overtourism join climate activists to rage against a spectacle that to them epitomises many of the world’s ills.
Today’s big read
Andrew Cuomo, left, and Zohran Mamdani are duelling in New York’s Democratic mayoral primary
Today’s vote in New York to decide the city’s Democratic mayoral candidate could provide clues about the future direction of a party still reeling from its defeat to Trump in last year’s presidential election. Momentum has shifted in recent days behind Zohran Mamdani, a 33-year-old democratic socialist, who has huge appeal among younger voters. His rival, former New York governor Andrew Cuomo, has positioned himself as a moderate with the experience to resist the US president. Polls predict a dead heat.
We’re also reading . . .
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Military briefing: Russia’s summer offensive is starting to gain ground in Ukraine, with Moscow’s forces aided by drones that cannot be jammed.
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‘Chains of thought’: The world’s leading artificial intelligence groups are struggling to force AI models to show how they operate.
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‘Verification problem’: As technology becomes better, a return to face-to-face encounters looks more likely, writes Stephen Bush.
Chart of the day
The main reason to worry about global trade imbalances is not the impact on manufacturing, which for a country like the US is a second-order issue, but rather on financial stability. This is also why fiscal adjustment needs to be a co-operative venture when the participants are such big economies, writes Martin Wolf.
Take a break from the news
Last month, Dior chief executive Delphine Arnault appointed Jonathan Anderson as creative director to oversee both the men’s and women’s collections. Her decision to bring in the Northern Ireland-born designer is her biggest bet since she took the helm of the division in 2023. Read more on her plans to open a new chapter at LVMH’s second-biggest brand.
Delphine Arnault, left, has made Jonathan Anderson creative director of Dior’s clothing collections © Thomas Chéné