For the third time since the Russia-Ukraine war started, a large explosion has damaged the bridge connecting Russia’s mainland to Crimea. 

Ukraine’s security service (SBU) has quickly claimed responsibility, describing that this time it was an underwater explosive attack, possibly facilitated with an unmanned submarine, which left the structure which goes from the Russian city of Krasnodar in the east to Kerch in Crimea “in disrepair”.

Video was soon after published of the explosion of what the SBU called the “badly damaged” bridge after support columns were blown up.

“The Security Service of Ukraine carried out a new unique special operation and struck the Crimean Bridge for the third time – this time underwater!” the SBU declared on Telegram.

“Today, at 4:44 a.m., without any civilian casualties, the first explosive device was detonated,” the statement said. “The underwater support pillars were severely damaged at the seabed level — aided by the equivalent of 1,100 kg of TNT. As a result, the bridge is effectively in an emergency condition.”

BREAKING: Kerch bridge pic.twitter.com/7unanrrzQU

— Pekka Kallioniemi (@P_Kallioniemi) June 3, 2025

Russia since confirmed that traffic on (alternatively called) Crimea Bridge was temporarily suspended as a result of the damage and emergency situation. But the 12-mile bridge, Europe’s longest, was reportedly quickly reopened after hours.

“RIA Novosti, a Russian state news agency, reported that the bridge was briefly closed for several hours on Tuesday,” the NY Times writes. “An app that is widely used in Russia to track traffic on the bridge showed that it was open again as of midafternoon.”

Several attacks on the $3.7 billion, iconic bridge have occurred throughout the war, including an October 2022 truck bombing on the bridge, which killed and wounded civilians. That attack took at least ten months to repair, but there was another attack nearly a year after the first one, which utilized maritime drones hitting support pillars.

This comes two days after Ukraine’s ‘Operation Spider’s Web’ which reportedly took out some forty Russian combat aircraft, among them strategic bombers, in Kiev’s most ambitious and provocative operation to date.

Ukrainian intelligence is really on a roll, but the world awaits a likely devastating ‘shock and awe’ style attack by Moscow, which is apparently exercising patience as it readies the inevitable retaliation. Likely, ‘command HQ’ centers are going to be targeted in the coming days.

US equity futures follow European markets lower, although off session lows, amid more tariff gloom confronting traders this morning: the pressure of Trump’s tariffs pushed China’s manufacturing PMI survey to its lowest since 2022, while the OECD cut its 2025growth outlook for a second time. As of 8:00am, S&P futures are down 0.2%, erasing almost a 0.7% drop as the US benchmark is set to continue a run of daily swings between gains and losses; Nasdaq 100 futures were flat even as all Mag 7 are modestly lower premarket (AMZN/META -0.4%). Meanwhile, the OECD slashed its global economic forecast again, blaming trade anxiety for holding back investment and warning that protectionism is inflationary (which it clearly isn’t judging by recent inflation prints). The OECD now expects 2025 and 2026 US GDP to print 1.6% and 1.5%, respectively; this is below the G20 average of 2.9% and 2.9% in 2025 and 2026, respectively.  Bond yields are 2-3bp lower; the dollar climbed on Tuesday, posting a broad-based rebound after closing Monday at the lowest point since July 2023; all G-10 currencies declined, with the Australian dollar and Swedish krona under-performing peers. Commodities are mixed with oil moving higher and precious metals lower. Overnight headlines are mostly muted. Today’s US economic data includes April factory orders and JOLTS job openings (10am). 

In premarket trading, Mag 7 stocks were mixed (Nvidia +0.4%, Tesla +0.3%, Meta +0.1%, Apple -0.2%, Microsoft -0.2%, Amazon -0.2%, Alphabet -0.3%). Nuclear stocks (CEG) gained in US premarket trading after Constellation Energy agreed to sell power from an operating nuclear plant in Illinois to Meta Platforms, an agreement that could lead to the construction of a new reactor at the site. Here are some of the biggest US movers today:

• Block shares (XYZ) rise 3% in premarket trading after the digital payments provider was upgraded to outperform from inline at Evercore ISI, with analysts citing positives such as resilient consumer spending trends and a boost from new products.
• Bumble shares (BMBL) fall 5.4% in premarket trading on Tuesday after JPMorgan downgrades to underweight from neutral.
• Credo Technology shares (CRDO) advance 13% in premarket trading after the company reported revenue for the fourth quarter that beat the average analyst estimate.
• Dollar General shares (DG) rise 8.1% ahead of the bell after the retailer reported first-quarter profit and sales that topped expectations, and management boosted its comparable sales forecast for the full year, as well as the low end of its EPS target.
• MoonLake Immunotherapeutics shares (MLTX) jump 22% in premarket trading after the Financial Times reported that Merck held talks to buy the Swiss biotech firm, citing three unidentified people familiar with the matter.
• Pinterest (PINS) gains 3.8% in premarket trading after JPMorgan raises rating to overweight from neutral. A diversification of its advertising platform to provide full-funnel capabilities is supporting further revenue upside at the social media firm, says analyst Doug Anmuth.
• Signet Jewelers shares (SIG) climb 13% in premarket trading after the owner of Kay Jewelers boosted its adjusted earnings per share forecast for the full year, following first-quarter results that was ahead of expectations.
• Woodward shares (WWD) are up 1% after it was upgraded back to buy at Deutsche Bank, after 11 months with a hold rating on the aircraft and industrial engine component maker, with the broker conceding last year’s cut was a mistake.

Earlier today, the Paris-based OECD slashed its global growth forecasts for the second time this year, saying that a combination of trade barriers and uncertainty are hitting confidence. The alert comes two months into President Donald Trump’s push to reshape global trade and agree new deals, with few signs of a breakthrough in talks with major partners.

“We’re clearly seeing a lot of volatility and investors want more visibility,” Massimiliano Bondurri, founder and chief executive officer of SGMC Capital in Singapore, said on Bloomberg TV. “It’s normal that markets are actually going to be flip-flopping.”

The US economy has also increasingly shown signs of a moderate yet broad-based softening. A report due later Tuesday on April vacancies is forecast to show a decline in job openings to the fewest since 2020 as companies are growing more conscious about consumers’ cost-saving efforts. Payrolls data scheduled for Friday will probably show a slowing in the pace of hiring.

“Markets are trading higher than on April 2, but earnings have been revised down, global growth too,” said Gilles Guibout, head of European equities at AXA Investment Managers in Paris. “Are we really in a better position? The answer is ‘no’.”

Meanwhile, Bloomberg reported that Trump was working the phones Monday and took to social media to try to sway Republican holdouts on his multi-trillion dollar tax bill. Investors and traders have raised concern that the legislation could worsen a ballooning budget deficit and US debt pile.

Conference season kicks off in earnest this week, with CEOs gathering for gabfests from San Francisco to New York at a time when their confidence in the economy has barely recovered from the shocks of “Liberation Day.” 

In Europe, the Stoxx 600 pared losses of as much as 0.5%, while the euro fell 0.4% against the dollar after inflation in the euro-area eased more than expected, dipping below the European Central Bank’s 2% target and supporting the case for interest rates to be lowered further. Here are the most notable European movers:

• UBS shares jump as much as 4.1%. Jefferies upgrades the stock to buy from hold, saying that the bank may be reaching a potential turning point on capital, with some clarity expected this week.
• Chemring Group shares rise as much as 3.6%, hitting new 2011-highs. Analysts at Shore say strong demand for defense is driving the stock higher, with shares up for a fifteenth consecutive session.
• Dalata shares gain as much as 4.3%, to 2019 highs, after a consortium including Pandox and Eiendomsspar submitted a non-binding bid for the the Dublin-based hospitality operator, valuing it at €1.3 billion.
• European miners underpeform as base metals fall on concern about China’s economic outlook, as a gauge of the country’s manufacturing activity fell to its lowest level in more than two years.
• ASML shares slip as much as 1.6% after a cut to equal-weight from overweight by Barclays, which says the firm may struggle to see any growth in unit numbers for its most cutting-edge extreme ultraviolet lithography tools next year.
• HSBC shares decline as much as 1.6% after BofA Global Research cut its recommendation to neutral from buy, citing the challenges facing large banks “in a more unstable world.”
• GSK shares fall as much as 1.7%. Berenberg downgrades the stock to hold from buy to “pause for breath” after a strong year-to-date performance from the drugmaker.
• Rio Tinto shares fall as much as 2.3% in London after Jefferies downgraded to hold from buy, with the bank citing geopolitical factors, capital allocation and expenditure risks and valuation.
• Julius Baer shares retreat as much as 2.3% after its strategy update on Tuesday failed to impress analysts, with KBW describing it as “underwhelming.”
• Poste Italiane shares fall as much as 2.1% as Morgan Stanley downgrades the stock to equal-weight from overweight expecting limited extraordinary capital deployment until 2027.
• NKT shares slide as much as 5.6% after the electrical component maker was downgraded by analysts at DNB Carnegie.
• MJ Gleeson shares slump as much as 28%, the most on record, after the UK homebuilder issued a profit warning.

Earlier in the session, Asian stocks edged higher as investors looked ahead to a potential conversation between US President Donald Trump and China’s Xi Jinping to dial down the recent flare-up in trade tensions. The MSCI Asia Pacific Index rose as much as 0.5%, before paring much of the gain. Concerns over persistent weakness in China’s economy also kept a lid on sentiment, after the latest Caixin PMI factory data showed the worst slump in over two years amid higher US tariffs. 

Key benchmarks in Hong Kong jumped more than 1%, with notable advances also in Taiwan and mainland China. South Korean markets were closed for a presidential election Tuesday after months of political chaos. The White House said Trump and Xi are “likely” to speak this week, fueling optimism that trade negotiations between the two nations can get back on track. China hasn’t confirmed any decision on such talks, however, and investors remain wary after Washington and Beijing recently accused each other of violating an agreement reached in May.

In FX, the dollar rose against all of its Group-of-10 peers, erasing part of Monday’s drop, while US Treasuries gained. Focus is on job openings data, which will give an insight into the health of the labor market ahead of non-farm payrolls on Friday. Bloomberg Dollar Spot Index inched up 0.2% on Tuesday, having dropped on Monday due to a flare-up in global trade tensions. The gauge saw its weakest level since 2023 after data showed that US factory activity contracted in May for a third month running. USD/JPY gains 0.2% to ~143. The euro fell 0.4% against the dollar to 1.1383 after inflation in the euro-area eased more than expected, dipping below the European Central Bank’s 2% target and supporting the case for interest rates to be lowered further.

In rates, US Treasuries gained, sending yields about 2bps lower across the curve, as US stock futures fell; 10-year yield -2bps to 4.42%. Gilts outperformed after the Bank of England’s Catherine Mann said late Monday there’s a tension between cuts to interest rates and efforts to unwind quantitative easing; 30-year yield falls 7bps to 5.34%

Today’s US economic data includes April factory orders and JOLTS job openings (10am). Fed speaker slate includes Goolsbee (12:45pm), Cook (1pm) and Logan (3:30pm).

Market Snapshot

• S&P 500 mini -0.4%
• Nasdaq 100 mini -0.4%
• Russell 2000 mini -0.4%
• Stoxx Europe 600 -0.3%
• DAX little changed
• CAC 40 -0.4%
• 10-year Treasury yield -3 basis points at 4.41%
• VIX +0.7 points at 19.04
• Bloomberg Dollar Index +0.2% at 1210.84
• euro -0.3% at $1.1411
• WTI crude +0.4% at $62.8/barrel

Top Overnight News

• The Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners ahead of a self-imposed deadline in just five weeks. RTRS
• US Commerce Secretary Howard Lutnick said he was optimistic that the United States and India would reach a trade agreement soon, but urged New Delhi to open its markets, reduce arms purchases from Moscow, and scale back its alignment with Brics. SCMP
• US President Trump posted on “Passing THE ONE, BIG, BEAUTIFUL BILL is a Historic Opportunity to turn our Country around after four disastrous years under Joe Biden. We will take a massive step to balancing our Budget by enacting the largest mandatory Spending Cut, EVER, and Americans will get to keep more of their money with the largest Tax Cut, EVER, and no longer taxing Tips, Overtime, or Social Security for Seniors”.
• OECD cut its global growth forecast this morning (2025 from +3.1% to +2.9% and 2026 from +3% to +2.9%) due to rising headwinds (“Substantial increases in trade barriers, tighter financial conditions, weakened business and consumer confidence, and elevated policy uncertainty all pose significant risks to growth). OECD
• A private gauge of China’s manufacturing activity tumbled into contraction in May, touching the lowest level since September 2022 as tariffs continue to weigh despite a trade truce with the U.S. The Caixin manufacturing purchasing managers index slid to 48.3 in May from 50.4 in April. WSJ
• China’s chief trade negotiator, He Lifeng, is prepared to play “hardball” with the US as Beijing pursues a more confrontational approach to talks w/Washington vs. Trump’s first term. WSJ
• Stronger demand at Japan’s 10-year bond sale brought some temporary relief as traders position for another auction in less than 48 hours that will test appetite for longer-dated debt (30 yr). BBG
• Russia told Ukraine at peace talks on Monday that it would only agree to end the war if Kyiv gives up big new chunks of territory and accepts limits on the size of its army. RTRS
• Eurozone CPI for May comes in below expectations at +1.9% on the headline (down from +2.2% in Apr and vs. the Street +2%) and +2.3% core (down from +2.7% in Apr and vs. the Street =2.4%) BBG
• TSMC said profit will rise to a record this year and reaffirmed its plan to invest another $100 billion on manufacturing in Arizona. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly higher as the region took impetus from the rebound on Wall St but with gains capped following disappointing Chinese Caixin Manufacturing data and as trade uncertainty lingered. ASX 200 edged higher amid strength in mining stocks but with further upside limited as defensives lagged and after mixed data releases including a surprise contraction in net exports contribution to GDP. Nikkei 225 kept afloat but lacked firm conviction after recent currency fluctuations and after a deluge of comments from BoJ Governor Ueda who reiterated they will continue to raise interest rates if the economy and prices move in line with forecasts, but also noted there was no preset plan for rate hikes and that they will raise interest rates only if the economy and prices turn up again and outlooks are likely to be realised. Hang Seng and Shanghai Comp were underpinned after the US reportedly extended the tariff pause on some Chinese goods to August 31st, while the White House Press Secretary stated that US President Trump and Chinese President Xi will likely talk this week, although the upside was restricted in the mainland given the lack of confirmation by Beijing regarding Trump-Xi talks and as participants also digested disappointing Caixin Manufacturing PMI data which showed its first contraction in eight months and printed its weakest since September 2022.

Top Asian News

• BoJ Governor Ueda said Japan’s economy is modestly recovering despite some weakness seen, corporate profits are improving and business sentiment is solid, but noted the slowdown in the overseas economy pressures corporate profits and the pace of economic growth is expected to slow down. Ueda reiterated that they will continue to raise interest rates if the economy and prices move in line with forecasts and they will conduct monetary policy appropriately depending on price, and economic developments to achieve the 2% target in a stable and sustainable manner. However, he noted it is important to make judgments without any preset ideas and that they said in the Outlook Report that the baseline scenario could change significantly, as well as stated there is no preset plan for rate hikes and they will raise interest rates only if the economy and prices turn up again and outlooks are likely to be realised. Furthermore, Ueda said they will review bond taper plans at the next policy meeting taking into account the opinions of bond market participants and he is aware of the market view that some investors’ appetite for super-long JGBs has declined.
• BoJ Governor Ueda says domestic and overseas economic developments have changed shape since Liberation day, which the levels exceeded many expectations; price environment is becoming more complex. Uncertainty is high; could weigh on corporate and household spending. Must look at underlying inflation, which excludes direct cost-push factors, in judging whether Japan sustainably achieves the BoJ’s 2% inflation target.
• RBA Minutes from the May meeting stated the Board considered keeping rates unchanged and cutting by 25bps or 50bps but decided the case for a 25bps cut was the stronger one and preferred policy to be cautious and predictable. RBA said inflation is still not at the mid-point of the target band and the labour market is still tight, while the Board agreed developments in the domestic economy alone warranted a rate cut and progress on inflation meant policy did not need to be as restrictive. Furthermore, it was stated that a larger move might offer more insurance against adverse global scenarios although the Board was not persuaded that 50bps was needed and US tariffs had not yet affected the Australian economy, while it would be challenging for businesses and households if aggressive easing had to be reversed and the Board judged it was not yet time to move monetary policy to an expansionary setting.

European bourses (STOXX 600 -0.3%) opened modestly firmer across the board, but sentiment soon slipped surrounding reports that Dutch Far Right Leader Wilders, confirmed to quit government coalition. European sectors opened with a strong positive bias, but sentiment soon dwindled to display a negative picture in Europe. Telecoms took the top spot, then joined by Utilities; Financial Services was the morning’s outperformer, lifted by upside in UBS (+2.7%) after it received a broker upgrade at Jefferies. Basic Resources have been pressured today given the downside in metals prices following weaker-than-expected Chinese Caixin Manufacturing PMI. US equity futures are broadly in negative territory, in-fitting with the risk tone and scaling back from some of the upside seen in the prior session.

Top European News

• Dutch Far Right Leader Wilders, confirms to quit government coalition (as expected), according to NOS. Dutch Far Right leader Wilders tells PM Schoof that all of his ministers will quit government.
• Dutch Cabinet scheduled to meet at 13:30 CET (12:30 BST) to “discuss next steps”.
• OECD GDP Forecasts: Forecasts generally downgraded, with the exception of the EZ (maintained) and Japan 2026 (upgraded). 
• Polish Parliament Speaker has proposed a government confidence vote to take place next week.

BoE TSC

• BoE Governor Bailey says the key factors for the May rate decision were domestic and not tariffs; have not seen particular inflation surprises. Labour market has loosened somewhat, pay growth is above levels consistent with the 2% inflation target but lower than expected in February. Gradual and careful remain “my guide for rates”. Savings to public finances through changing reserve remuneration by tiering would be illusory.
• BoE’s Breeden says sees merit in maintaining a gradual and careful approach to adjusting the policy stance. As the BoE approaches a neutral policy stance, evidence of restrictiveness will become less clear, and the decision to further loosen policy will require a greater degree of certainty that inflation is on track. Has gained greater confidence that the disinflationary process is progressing at a steady pace. The economy appears to be moving gradually into excess supply. Sees downside risks from greater trade diversion, but also sees upside risks from the introduction of supply chain frictions globally. Thinks this latter channel is likely under-represented in models. Tariffs expected to have a small impact on the UK economy. In March, “I expected that I would vote to cut again in May”.
• BoE’s Mann said must consider interactions of QT and rate decisions, while she added that the BoE cannot exactly offset high long-term rates caused by QT by cutting the bank rate further and extra cuts to short rates to compensate for QT could run counter to the need to purge structural rigidities in the UK labour and product markets. Furthermore, she expects these issues will be part of MPC considerations before the September QT decision.
• BoE’s Dhingra says risks to inflation and growth are tilted to the downside; would have preferred the bank rate to followed a different path. Overly restrictive policy risks supressing demand and disincentivising investment.

FX

• USD is attempting to atone for recent losses after being sold yesterday on account of trade woes, ongoing fiscal concerns and a miss on ISM manufacturing PMI. Focus thus far has been on the trade front after a Reuters report noting that US President Trump’s administration wants countries’ “best offer” by Wednesday. Elsewhere, the White House Press Secretary said US President Trump and Chinese President Xi will likely talk this week; note, we have not seen any confirmation of this from the Chinese side. Focus now turns to US JOLTS Job Openings and Fed speak.
• EUR is on the backfoot vs. the USD but just about holding above the 1.14 mark. Losses were extended in early European trade alongside a deterioration in the risk environment as news broke that Dutch Far Right Leader Wilders confirmed he is to quit the government coalition. Flash CPI metrics were cooler-than-expected with both the headline and core figures printing shy of expectations.
• JPY is softer vs. the USD but to a lesser degree than peers. USD/JPY briefly reclaimed the 143 level but failed to hold onto the level alongside a deterioration in the risk environment and a slew of comments from BoJ Governor Ueda who reiterated the Bank will continue to raise rates if the economy and prices move in line with forecasts. On the trade front, Japan’s trade negotiator Akazawa said they are aiming to have cabinet discussions towards a US trade deal and are seeking to accelerate talks ahead of the mid-June G7 talks. USD/JPY is back on a 142 handle and has traded within a 142.39-143.27 range.
• After a session of gains yesterday, GBP is softer vs. the USD but still managing to hold above the 1.35 mark. In terms of UK-specific newsflow, UK Trade Minister Reynolds will meet USTR Greer on Tuesday to discuss the implementation of a trade deal that has been complicated by the announcement of fresh US tariffs on steel, according to Reuters. Elsewhere, BoE’s Mann said the BoE cannot exactly offset high long-term rates caused by QT by cutting the bank rate further. Cable’s session low sits at 1.3511. Do note that the BoE’s Treasury Select Hearing on the BoE May MPR is ongoing. Just to pick out the key commentary so far; Breeden reiterated the Bank’s gradual and careful approach; Bailey highlighted that the May rate decision were domestic and not tariffs; Mann kept her usual hawkish tone and suggested Services is above what she viewed as consistent to get inflation back to target.
• Antipodeans are both softer vs. the USD and at the bottom of the G10 leaderboard in a reversal of yesterday’s price action. Losses come as risk sentiment has deteriorated. RBA minutes noted that the Board considered keeping rates unchanged and cutting by 25bps or 50bps, but decided the case for a 25bps cut was the stronger one and preferred for policy to be cautious and predictable. Elsewhere, Australian data saw a surprise contraction in net exports contribution to GDP.

Fixed Income

• Japan’s 10yr sale was met with strong demand overnight and a very small price tail, a well-received outing that sparked immediate upside in JGBs and weighed on yields. Japanese paper was unreactive to BoJ Governor Ueda comments overnight.
• Bunds picked up at the resumption of trade, perhaps acknowledging ongoing trade uncertainty and the commentary from China in response to the EU on Monday taking action to limit China’s participation in healthcare. Thereafter, German paper picked up following the strong Japanese 10yr auction overnight, a move which has continued into the European morning. There was some choppy action on news that the Dutch government collapsed. As for EZ HICP, metrics were cooler-than-expected sparking some modest upside in Bunds but failed to test the earlier peak of 131.49.
• As above, USTs picked up on the Japanese auction and has continued to grind higher since. As high as 110-25, but so far at least has stalled ahead of a double-top at 110-30 from the two sessions prior. Ahead, the docket features JOLTS, Factory Orders, RCM/TIPP, the latest Discount Rate Minutes and remarks from Fed’s Cook (voter), Goolsbee (2025) and Logan (2026).
• Gilts began the day on the front-foot, given the outlined bullish bias. Specifically, it opened higher by 24 ticks and then climbed another 22 to take out last week’s 91.89 best and print a 92.01 peak for the day. Do note that the BoE’s Treasury Select Hearing on the BoE May MPR is ongoing. Just to pick out the key commentary so far; Breeden reiterated the Bank’s gradual and careful approach; Bailey highlighted that the May rate decision were domestic and not tariffs; Mann kept her usual hawkish tone and suggested Services is above what she viewed as consistent to get inflation back to target.
• UK sells GBP 1.25bln 4.0% 2063 Gilt: b/c 3.51x (prev. 2.8x), average yield 5.281% (prev. 5.076%), tail 0.3bps (prev. 0.3bps)
• Germany sells EUR 3.678bln vs exp. EUR 4.5bln 1.70% 2027 Schatz: b/c 2.9x (prev. 2.2x), average yield 1.78% (prev. 1.94%), retention 18.27% (prev. 24.42%).

Commodities

• Crude is trading in positive territory and has been trading with a modest upward bias throughout the European morning. This comes in contrast to a mostly downbeat mood across markets, with energy traders still very much focused on the current geopolitical backdrop with Iran dismissing the US proposal for a nuclear deal as “unrealistic”. Brent Aug’25 currently trading towards the mid-point of a USD 64.68-65.09/bbl range. Do note that Kpler’s Bakr reported that there was no OPEC+ discussion about a higher hike than the 411k bpd over the weekend – but the complex was little moved on this.
• Precious metals are broadly in the red, with some modest underperformance in spot silver. As for spot gold, the yellow-metal was subdued overnight and scaled back from the upside seen in the prior session; it has traded sideways throughout the European morning. XAU/USD currently trades in a USD 3,351.81-3,392.10/oz range.
• Base metals are entirely in negative territory, in reaction to weaker-than-expected Chinese Caixin Manufacturing PMI data and as the Dollar moves a little higher. 3M LME Copper currently trades in a USD 9,521.55-9,610.90/t range.
• “During the OPEC-plus meeting on Saturday with the 8 member states, there were no discussions at all about a higher hike than the 411kbd, according to delegates attending the meeting”, via Kpler’s Bakr.” Russia did propose a pause which was also supported by Oman, but quick consensus was reached to go ahead with the 411kbpd addition in July”.

Geopolitics: Middle East

• US President Trump posted on Truth Social “The AUTOPEN should have stopped Iran a long time ago from “enriching.” Under our potential Agreement — WE WILL NOT ALLOW ANY ENRICHMENT OF URANIUM!”
• An Iranian official reportedly said the US nuclear proposal is unrealistic, according to CNN.
• US State Department said Secretary of State Rubio spoke with Saudi’s Foreign Minister and discussed Ukraine and Russia talks, stabilisation in Syria and the situation in Gaza.

Geopolitics: Ukraine 

• Russian-controlled parts of Zaporizhzhia in Ukraine lost power as a result of Ukraine’s attacks although the power cut-off had not affected the Zaporizhzhia nuclear power plant, according to Russian agencies.
• Ukraine’s Energy Minister says Russian Rocket attack hit a large energy generation facility in overnight attack

US Event Calendar

• 10:00 am: Apr Factory Orders, est. -3.2%, prior 4.3%, revised 3.44%
• 10:00 am: Apr F Durable Goods Orders, est. -6.3%, prior -6.3%
• 10:00 am: Apr F Durables Ex Transportation, est. 0.19%, prior 0.2%
• 10:00 am: Apr F Cap Goods Orders Nondef Ex Air, est. -1.29%, prior -1.3%
• 10:00 am: Apr F Cap Goods Ship Nondef Ex Air, est. -0.08%, prior -0.1%
• 10:00 am: Apr JOLTS Job Openings, est. 7100k, prior 7192k

Central Banks 

• 12:45 pm: Fed’s Goolsbee Participates in Moderated Q&A
• 1:00 pm: Fed’s Cook Discusses Economic Outlook
• 3:30 pm: Fed’s Logan Gives Opening Remarks at Fed Listens

DB’s Jim Reid concludes the overnight wrap

This morning DB host our 29th annual European LevFin Conference, the largest in the continent with well over 1000 issuers and investors attending. I’ve been speaking at it for 20 years now and kick off the event at 8am this morning. In previous years the likes of Bon Jovi, Duran Duran and The Killers, amongst others, have performed. Hopefully they’ve taken away some sage advice on their CLO portfolios. These events have evolved over the years across the industry and there is now sadly more chance of having my band perform than rubbing shoulders with Jon Bon Jovi.

Looking on the Mr Brightside, yesterday we released our latest World Outlook from DB Research, which updates all our global macro forecasts. It is called “The Limitations of Liberation…” You can read the full report here. It’s a difficult time to forecast right now given the relentless crossfire of trade headlines. But there’s a growing sense that we’re now on a turbulent but sustained path towards de-escalation. Even if the US administration remain hawkish on trade, we have already seen there are limits to that approach, particularly in the face of market turmoil and declining approval ratings for President Trump. So although we think there’s likely to be prolonged uncertainty and a notable slowdown in US growth over H2, the de-escalation so far will support growth relative to earlier expectations.

Nevertheless, a lot of collateral damage has already been done. Our outlook argues that the structural foundations of US exceptionalism – particularly the ability to finance itself cheaply via the dollar’s reserve status – have begun to erode. So we remain structurally bearish on the dollar and expect US term premia to keep rising.

The biggest risk to our view would be if the US administration reverts to a more aggressive stance after the court ruling. But in a world where funding US deficits is now going to be structurally harder, Washington may not have the latitude it once did. For Europe, this may be a rare window to recapture the geopolitical and economic momentum. Indeed, their economy has shown surprising resilience so far, and we revised up our 2025 Euro Area forecast back to 0.8%, where it was in our last World Outlook in November. Indeed since last November the largest growth downgrade is the US and the largest up move is Germany. See the full report for much more.

When it comes to the last 24 hours, June has got off to a mixed start amidst the latest trade tensions and an underwhelming ISM manufacturing print. To be fair markets have been more resilient than sentiment with the S&P 500 managing to recover from a weak open to close +0.41% higher, even if futures have given up these gains this morning. Bonds saw a renewed sell off, with the 30yr Treasury yield (+3.4bps) moving up to 4.97% before rallying back a basis point this morning. Matters also weren’t helped by a fresh rise in oil prices, as OPEC+ only increased supply in line with expectations for July over the weekend. Brent crude was up +2.95% to $64.63/bbl, which in turn led to a renewed bout of concern about inflationary pressures. So although there wasn’t a single story driving markets, the incremental newsflow predominantly leaned in a more negative direction.

To be fair, there wasn’t much optimism going into the session, as markets were already reacting to Trump’s tariff announcement after the close on Friday, where he promised to double the steel and aluminium tariff rate to 50%. As a reminder, that’s one where Trump’s still able to take action, as the court ruling last week did not include the steel/aluminium/automobile tariffs. And from a market perspective, it reminded investors that the administration wasn’t backing down from an aggressive trade posture, despite the various court rulings.

Then as the US session got underway, the latest ISM manufacturing print for May came through. That unexpectedly fell to a 6-month low of 48.5 (vs. 49.5 expected), so that added to investor nerves about the near-term outlook. Strikingly, the import component slumped to just 39.9, which is beneath its low point during the Covid pandemic, and at a level unseen since May 2009 as the economy was emerging from the GFC. Meanwhile, the prices component remained elevated at 69.4, so there wasn’t much to get excited about, and it offered a fresh indication of how the trade war was having a tangible economic impact.

That backdrop was a pretty tough one for markets, and the various developments meant the dollar index (-0.63%) continued to slide, moving very close to its post-Liberation Day low back in late-April. In bond markets, there was another round of déjà vu as the 30yr Treasury yield bounced off the 5% mark again. That’s proved something of a resistance level in this cycle, and by the end of the session, it was up +3.5bps to 4.97% (4.96% in Asia). That move in yields was echoed across the curve, with the 10yr yield (+3.9bps) up to 4.44%, whilst the 2yr yield (+3.7bps) was up to 3.94%. Meanwhile in Europe, yields on 10yr bunds (+2.4bps), OATs (+2.8bps) and BTPs (+1.9bps) all moved higher as well. And the Italian-German 10yr spread fell to its tightest level since September 2021, at just 97.5bps.

Equities also struggled for much of the day, with the S&P 500 trading as much as -0.85% lower shortly after the ISM release. However, the equity mood improved as the session went on, with the S&P closing +0.41% higher led by gains for energy (+1.15%) and information technology (+0.89%) sectors. The Mag-7 advanced +0.59%, while the Philadelphia Semiconductor index (+1.57%) saw an outsized gain. Still, the overall equity mood was far from upbeat, with just over half of the S&P 500 stocks moving lower on the day. In Europe, markets closed before the late US rally, with the STOXX 600 (-0.14%) falling back slightly. Meanwhile, gold prices (+2.81%) were one of the few beneficiaries of the more anxious mood, posting their biggest daily jump in almost a month.

Asian equity markets are mostly higher this morning with the Hang Seng (+1.47%) recovering from yesterday’s losses. The S&P ASX 200 (+0.41%) briefly reached a near four-month high following the release of the RBA’s May meeting minutes, which largely indicated a dovish outlook from the central bank. Elsewhere, mainland Chinese markets have resumed trading after a long weekend, with the CSI (+0.49%) and the Shanghai Composite (+0.48%) both higher perhaps after US Press Secretary Leavitt last night suggested that Trump and Xi could still speak as soon as this week. S&P 500 (-0.42%) and NASDAQ 100 (-0.40%) futures are both lower though.

Early morning data revealed that China’s manufacturing activity in May contracted at its most rapid rate since September 2022, as the Caixin/S&P Global manufacturing PMI printed at 48.3 (compared to the expected +50.7) and fell sharply from 50.4 in April. This decline was exacerbated by a significant drop in new export orders, underscoring the effects of stringent US tariffs.

In FX, the Japanese yen (-0.32%) weakened past 143 against the dollar, ending a three-day winning streak, despite BOJ Governor Kazuo Ueda expressing willingness to raise interest rates once the central bank is sufficiently convinced that economic and price growth will resume after a period of stagnation.

In terms of other data releases yesterday, UK mortgage approvals were weaker than expected in April, coming down to a 14-month low of 60.5k (vs. 62.8k expected). We also got the final manufacturing PMIs for May. The Euro Area PMI was unchanged from the flash print at 49.4, but the US number was revised down three-tenths from the flash reading to 52.0.

To the day ahead now, and data releases include the Euro Area flash CPI print for May, along with the unemployment rate for April. We’ll also get the US JOLTS report for April, and factory orders for April. Central bank speakers include BoJ Governor Ueda, the Fed’s Goolsbee, Cook and Logan, BoE Governor Bailey, Deputy Governor Breeden, and the BoE’s Mann and Dhingra.

Dutch right-wing leader Geert Wilders has pulled his Freedom Party (PVV) from the country’s ruling coalition after issuing an ultimatum last week demanding tougher action on curbing the migrant crisis. With no agreement, Wilders, whose party held the most seats, quit the coalition in The Hague, plunging the Netherlands into political uncertainty.

“No signature for our asylum plans. No changes to the Main Outline Agreement. PVV leaves the coalition,” Wilders wrote on X earlier. 

“The PVV promised voters the strictest asylum policy ever,” including a hard-line 10-point plan to “close the borders to asylum-seekers,” Wilders told reporters earlier. He noted that when coalition partners (populist Farmer-Citizens Movement (BBB), the centrist New Social Contract (NSC), and the liberal People’s Party for Freedom and Democracy (VVD)) disagreed on the new plans, “I had no choice but to say: We rescind support for this Cabinet.” 

The four-party coalition lasted 11 months and was fraught with frequent disputes. 

Geert Wilders has just left the coalition government because he doesn’t want to compromise on immigration. pic.twitter.com/x6HI7f6zw6

— Visegrád 24 (@visegrad24) June 3, 2025

At a press conference last Monday, Wilders unveiled the border plan to reduce migration and dismantle existing asylum policies. He warned the coalition that failure to adopt the plan would trigger the PVV’s withdrawal.

“Our patience has run out now,” PVV’s leader said at the time, adding his party has been “very reasonable and very patient” over the past year while waiting for tougher migrant policies. 

“My limit, and the limit of a lot of Dutch people, has been reached,” he noted, emphasizing, “Holland must become Holland again. The PVV will wait no longer.”

Onze vrouwen onveilig zoals hier, het zal je dochter maar zijn. Het tuig kent geen grenzen maar onze grenzen staan nog veel te wijd open. Die moeten dicht en snel ook! #PVV pic.twitter.com/DbufqSJrId

— Geert Wilders (@geertwilderspvv) June 1, 2025

So what’s next? 

Politico offered key insight:

Ministers are meeting Tuesday to decide what’s next, although the assumption is that the prime minister will offer up the resignation of his cabinet.

Leftist corporate media have framed Wilders’ PVV exit as a “tantrum” or evidence of “political chaos.” In reality, it’s anything but. Voters sent him to The Hague with a clear mandate: curb inbound migration flows and dismantle existing asylum policies. He didn’t win on promises of compromise—he won by pledging to stop the migrant crisis that has very much doomed parts of Europe. 

More broadly, right-wing movements across Europe have surged by focusing on the continent’s out-of-control migrant crisis, securing political gains this year in Germany, Poland, Austria, Portugal, and Romania.

On Sunday, nationalist conservative Karol Nawrocki was elected president of Poland and won based on immigration, abortion, support for Ukraine, and Polish integration with the rest of Europe.

By Tsvetana Paraskova of OilPrice.com

Russia’s natural gas deliveries via pipeline to Europe jumped by 10.3% in May compared to April, data calculated by Reuters showed on Monday.

Last month, Russia’s gas giant Gazprom sent 46.0 million cubic meters of natural gas via the only remaining route to Europe – TurkStream, per the Reuters estimates based on data from Entsog, the European gas transmission group.

The deliveries in May compare to 41.7 million cubic meters per day that Russia supplied in April.

Year to date, Russia’s deliveries via TurkStream rose compared to the first five months of 2024—to 7.2 billion cubic meters this year, up from 6.6 billion cubic meters last year, Reuters’s calculations showed.

Russian gas supply via pipelines to Europe has slumped since 2022, after Russia cut off many EU customers from its gas deliveries, and Nord Stream stopped supplying gas to Germany, after Russia reduced flows and after a sabotage in September 2022.

Russian gas still accounts for more than 15% of the EU’s gas deliveries, including by pipeline and via LNG imports.

The EU has reduced the share of Russian gas imports, from 45% of all gas imports before 2022, down to 18% now, European Commission President Ursula von der Leyen said at the end of April.

Russian pipeline gas supply via Ukraine stopped on January 1, 2025, after Ukraine refused to negotiate an extension to the transit deal.

However, some European countries, including Hungary, continue to receive Russian gas through the TurkStream pipeline via the Balkans.

Last month, the EU unveiled a roadmap to end dependency on Russian energy.

The roadmap calls for the EU to stop all imports of Russian gas by the end of 2027 by improving the transparency, monitoring, and traceability of Russian gas across the EU markets. New contracts with suppliers of Russian gas will be prevented and spot contracts (for immediate payment) will be stopped by the end of 2025, the European Commission said.

Boeing’s 737 MAX production reached 38 jets in May, according to a new report, marking a stabilization at the Federal Aviation Administration’s (FAA) monthly production cap. The company’s best-selling aircraft has seen monthly output fluctuate between the single digits and 30s amid a series of crises that have battered its finances and strained employee morale.

The Air Current, citing sources familiar with production figures, reported that Boeing’s narrow-body jet output hit 38 units in May—the first time the company has reached that level since late 2020.

Reaching 38 per month inside its Renton, Washington factory is a major industrial milestone for the struggling planemaker as it works to rebuild trust and regain solid strategic footing after years of safety crises, development delays, industrial issues, leadership, and toxic wokeism. 

Last month, Reuters cited sources saying Boeing was “on track to produce about 38” of the popular single-aisle airplanes in May.

Boeing CEO Kelly Ortberg told investors last week, “We’re very close—getting very close to achieving that 38 per month rate.”

Since the mid-air panel blowout on a 737 MAX in early 2024, the FAA has capped production at 38 jets per month. Boeing must now demonstrate consistent output at that level for several months before it can request a higher cap.

After losing nearly $12 billion in 2024, Boeing must increase 737 Max output, which represents its biggest cash cow, to shore up its balance sheet. 

In early May, Goldman analyst Noah Poponak showed clients Boeing’s monthly aircraft deliveries by type (through April), which indicated that Max jet production had plunged to single digits in late 2024, then bounced between the 20s and 30s from January to April.

“For 2025, Boeing expects to deliver around 400 737 MAX and 80 787; and we think the company is tracking to the underlying production rate assumptions required to achieve those targets, then continue growing beyond this year. We are Buy rated on the stock,” Poponak said last month. His 12-month price target is $212

Authored by Oscar Zarraga Perez via BitcoinMagazine.com,

On Friday at the 2025 Bitcoin Conference in Las Vegas, the CEO of Tether Paolo Ardoino talked about the investments, inventions and Bitcoin mining of Tether.

Paolo Ardoino began his speech by saying, “last year we made $13 billion in profit. We keep a $120 billion blast in US treasuries as of now. We have committed to bring re-invest a lot into Bitcoin. We now have more than 100,000 Bitcoin that we own as a company.”

JUST IN: Tether announces it owns over 100,000 #Bitcoin and more than 50 tons of gold. pic.twitter.com/0Ja83hCs1H

— Bitcoin Magazine (@BitcoinMagazine) May 29, 2025

“Bitcoin is perfect, gold is imperfect,” said Paolo

Ardoino explained a little of their history with Bitcoin.

“We are a company that was born with Bitcoin,” stated.

”We are all Bitcoiners at heart. Everyone in our company loves Bitcoin.”

El Salvador has been a supporter of Bitcoin and Paolo mentioned, “we have our headquarters in El Salvador, the original Bitcoin country. We support el Salvador.”

During his speech, he made a big announcement of Tether becoming the biggest Bitcoin miner in the world. 

“We invested 2 billion in energy production and bitcoin mining actually is a bit more than that. Something that we have been very shy to say, but I think that it’s very realistic that by the end of the year, Tether will be the biggest Bitcoin miner in the world, even including all the public companies.”

Ardoino mentioned their new AI system made for society and not for corporations. 

“I want my AI agent to have a non-custodial wallet, so I can grant him some money. The money is kept by the AI agent and the AI agent will work for me. Will not work under the rules and conditions of someone else,” announced Ardoino. “We have announced our AI platform recently. It’s called QVAC.”

Closing, Ardoino talked about their investment with Rumble and their new project.

He stated, “we are collaborating to launch a Rumble Wallet that will be Bitcoin first and a little bit of stable coins wallet for the people.”

Authored by Rainer Zitelmann via RealClearMarkets,

The most undervalued industry in the world is the space industry. It is particularly unappreciated in Europe, which has now fallen hopelessly behind the United States and China. The US carried out 153 launches last year, China 68 and Europe three.

The science fiction author Arthur C. Clarke wrote back in 1977: “The impact of satellites on the entire human race will be at least the same impact as the advent of the telephone in so-called developed societies”. And he was right. Satellite mega-constellations such as Starlink, Qianfan, Kuiper, and Sat Net will ensure that the third of the world’s population that does not currently have access to the internet will soon be connected – with far-reaching economic implications.

CNBC has called space “Wall Street’s next trillion-dollar industry”, and according to a study by the World Economic Forum in April 2024, the space economy is expected to be worth USD 1.8 trillion by 2035. Morgan Stanley expects a space-based business to create the world’s first trillionaire.

Following the moon landings at the end of the 1960s and beginning of the 1970s, manned space flight in the U.S. all but stalled, largely due to political interference. Each new president came to office with new ideas and new priorities, and contracts were too often awarded or simply cancelled on blatantly political grounds.

NASA’s space shuttle program failed to live up to expectations. Despite the substantial investments made in the International Space Station (ISS), questions remain as to whether the money was spent wisely. And the launch costs, measured as the cost of getting one kilogram of payload into space, more or less stagnated for almost four decades.

It was private companies that achieved the breakthrough, driving launch costs down by approximately 80%. And this is just the beginning. Space exploration once again proves the superiority of capitalism. The space race between the Soviet Union and the United States in the 1960s has now been replaced by a contest between the United States and China. But there is one crucial difference: during the original space race, the U.S. and USSR space programs were both state-led. Yes, private companies also built rockets for the Apollo program, but those companies were given strict and narrow guidelines by the state space agency NASA, which told them exactly how to construct a rocket and led to high costs as the companies followed NASA’s instructions meticulously. Through cost-plus programs, there was not the slightest incentive to reduce costs; instead, the companies were incentivized to increase costs.

The relationship between NASA and private companies has changed dramatically in recent years. Elon Musk insisted on fixed prices and instead of telling SpaceX what to build, NASA specified what services it wanted to buy. The result: of 261 space missions worldwide in 2024, 134 were launched by SpaceX. If SpaceX were a country, it would by far surpass the second-largest country in the world, China, which registered 68 launches.

Even today, private space travel is hampered by superfluous regulations and government interference, particularly in Europe, but also in the United States. I suspect that a key reason for Elon Musk’s foray into politics is that he wanted to find a way to liberate private space companies from the growing bureaucratic burdens in the U.S.

The outcome of the new space race – whether China or the United States emerges victorious – will largely depend on which country grants more freedom to the growth of private space exploration. Currently, the United States is well ahead, but it would be dangerous to underestimate developments in China, which is also reducing its reliance on an exclusively public sector space program and is increasingly involving private companies.

Rainer Zitelmann is a German historian, sociologist and multiple bestselling author, whose books include “How Nations Escape Poverty” , “The Power of Capitalism” and “Hitler’s National Socialism.” He published 29 books that have been translated into more than 30 languages. In recent years, he has written articles and been the subject of interviews in leading media such as Wall Street Journal, Forbes, Newsweek, The Daily Telegraph, The Times, Le Monde, Corriere della Sera, Israel Hayom, Frankfurter Allgemeine Zeitung, Neue Zürcher Zeitung, and numerous media in Latin America and Asia.

Today, public companies based in Dallas-Fort Worth hold a combined $1.5 trillion in value—a figure doubling in the past five years.

Owing to its pro-business policies and lower cost of living, Texas is attracting scores of corporate headquarters, particularly from California. As a result, states are losing billions in tax revenues as the corporate landscape shifts south.

This graphic, via Visual Capitalist’s Dorothy Neufeld, shows the fastest growing—and shrinking—headquarter markets in America, based on data from CBRE.

Corporate Headquarters Are Moving to the Lone Star State

Below, we show the top five markets nationally gaining the most headquarters since 2018:

As the country’s best state for doing business, Texas is home to three of the top five markets nationally.

Fueling this migration are its growing talent pool, the absence of corporate and personal income tax, and its lack of red tape. The state is notable in its diverse business landscape attracting Chevron, Charles Schwab, and SpaceX to relocate headquarters since 2018.

Additionally, companies are expanding their presence in the state. Goldman Sachs, for instance, plans to grow its headcount in Dallas to 5,000—up from 970 in 2016.

U.S. Markets Losing the Most Headquarters

By contrast, California is experiencing a corporate exodus.

With homes at least 50% more expensive than in Texas, along with the fifth-highest tax burden in the country, the state has lost at least 275 headquarters since 2018.

As the above table shows, the San Francisco Bay Area stands as the hardest hit market, in a market facing one of the highest office vacancy rates in the nation.

To learn more about this topic from a population growth perspective, check out this graphic on the fastest growing states since 2003.

British Prime Minister Keir Starmer has announced a significant overhaul of the U.K.’s defense posture, warning that the British Armed Forces must be prepared to fight a future war in Europe or the Atlantic Ocean. 

“We are moving to warfighting readiness,” Starmer said while unveiling the government’s 130-page “Strategic Defence Review,” which calls for strengthening military forces to deter Russia and other adversaries across Europe and for ramping up weapons production.

Starmer said the U.K.’s defense spending would rise to 2.5% of GDP by 2027 and set out the “ambition” to raise that figure to 3% of GDP in the next Parliament — that is, by 2034 — “when economic and fiscal conditions allow.

The U.K.’s shift to warfighting readiness will include:

• Defence spending to rise from 2.3% to 2.5% of GDP by 2027.

• Ambition to reach 3% by 2034, though political debate continues over accelerating that timeline.

• £15bn allocated to modernize the U.K.’s nuclear warheads and maintain the Trident deterrent.

• £1.5bn to build six munitions factories for sustained production.

• 7,000 long-range weapons (missiles and drones) to be built domestically.

• Creation of a Cyber and Electromagnetic Command for enhanced digital warfare capabilities.

• £1.5bn for military housing upgrades through 2029.

• £1bn for battlefield targeting technology upgrades.

• Continued investment in Dreadnought-class submarines to replace the Vanguard fleet starting in the early 2030s.

The report identifies Russia as an “immediate and pressing danger,” with concerns it could rearm quickly if a ceasefire is reached in Ukraine. China is labeled a “sophisticated and persistent challenge,” while Iran and North Korea are called “regional disruptors.”

On Sunday, U.K. Defence Secretary John Healey acknowledged that the British military has shrunk to its smallest size in 300 years, warning that it now faces the challenge of reversing “15 years of recruitment and retention failure” across the armed forces.

In markets, UBS analyst Tricia Wright told clients that Starmer’s move to increase “warfighting readiness” sent shares of U.K. defense companies like “BAE Systems and Rolls-Royce hit all-time highs with Babcock International at multi-year highs.” 

UBS analyst Daniel Graf made a very interesting point in a note earlier titled “Defense Is To Europe What AI Is To The US“: 

The UBS EU Defense Spending basket (UBXESPND) has more than doubled YTD alone. Rheinmetall shares are +205% YTD. Is it a bubble in a concept stock (where viable alternatives do not come a dime a dozen) or a real winner with fundamental support? HOLT analysis shows Rheinmetall’s current share price still implies revenue growth below management guidance. UBS Research calculate Defense stocks overall are currently pricing in less than 3% of GDP spent by European NATO members in the medium term – at a time when the 5% era appears to become a plausible reality.

Analyst Sven Weier’s research shows 2030 may not be the peak in sales and he takes a benign view on capacity and supply chain constraints. Don’t sell your Rheinmetall shares just yet. Also, despite the broader basket’s performance, the UBS Crowding Score still screens Neutral. Remember this basket trades c. $250 mn per day at 10% of ADV. Next stop: NATO Summit.

All told, there are two dominant investment themes: AI in America and defense in the West. These themes are likely to remain intact well into the 2030s as the AI race with China intensifies and hemispheric defense spending increases across the U.S. and Europe. The world is entering a volatile phase—fracturing into a bipolar geopolitical order. 

Authored by Steve Watson via Modernity.news,

The former mayor of Kiev, Vitali Klitschko has blasted Ukrainian President Volodymyr Zelensky, and bluntly stated that the country is plagued by authoritarianism.

The former world heavyweight champion boxer told the Times of London that Kiev City Council essentially cannot operate because of “raids, interrogations and threats of fabricated criminal proceedings.”

“This is a purge of democratic principles and institutions under the guise of war,” Klitschko declared, adding “I once said that it smells of authoritarianism in our country. Now it stinks of it.”

🇷🇺🇺🇦 Mayor of Kyiv Vitali Klitschko has publically criticized President Zelensky, essentially calling him a dictator and accusing him and his government of turning Ukraine into an authoritarian state. pic.twitter.com/FzqTcGWmsh

— Heyman_101 (@SU_57R) June 1, 2025

The Times describes Zelensky and Klitschko as being in a “de facto state of war.”

The report notes that the Ukrainian government has arrested seven Kiev city officials as part of ongoing investigations targeting an alleged criminal network involved in corruption cases related to urban development.

Our strength is not just about muscles – it starts in the mind and the heart.#FaceTheChallenge #Willpower pic.twitter.com/DMyBMKVWxP

— Klitschko (@Klitschko) May 30, 2025

“Many mayors are intimidated, but my celebrity status is a protection,” Klitschko stated, adding  “You can dismiss the mayor of Chernihiv, but it is very difficult to dismiss the mayor of the capital, whom the whole world knows.”

“That is why everything is being done to discredit and destroy my reputation,” he further urged.

Zelensky has reportedly been considering arresting Klitscho after he called for the President to consider ceeding Crimea to Russia as part of a peace deal.

This fued has been ongoing for sometime. A year and a half ago, Klitschko urged that Zelensky failed to prepare Ukraine properly for the war with Russia and will “pay for his mistakes.”

Meanwhile, after earlier in the week calling for three way meetings between himself, President Trump and Putin, Zelensky has now declared that it would be “meaningless” and instead wants more military aid.

A major escalation is expected after Ukraine launched a massive drone attack on Russian airbases Sunday, which many are equating with the Japanese attack on Pearl Harbor.

* * *

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