Issue 31: Q Becomes M

19 June 2025

The timing of Israel’s unprovoked strike has all to do with self-preservation – specifically for Netanyahu rather than the Israeli people – and scuppering the US-Iran nuclear deal.  The US does not want to get drawn into another war. Potential outcomes include the abandonment of the US-Iran deal, a modified version that aligns more closely with Israeli interests, or a peace agreement between Israel and Saudi Arabia—all of which would bolster Netanyahu’s hold on power. For Europe, the risks of direct energy supply disruption remain limited. The broader impact is likely to be felt through central bank policy: geopolitical uncertainty may prompt a pause. Even if the ECB holds steady, underlying business cycle indicators remain supportive, justifying an overweight position in European equities.