Today's signals

The Signal

Israeli airstrikes in southern Lebanon killed one person and wounded two on Saturday — the first casualties since Friday's US-brokered framework. Hezbollah leader Naim Qassem rejected the deal outright, calling it "humiliating, shameful, and a surrender of sovereignty" and vowing continued armed resistance. The sticking point is concrete: the four-point framework ties Israel's withdrawal to Hezbollah disarming and lets Israeli forces stay in an expanded "security zone" up to ten kilometers inside Lebanon. Hezbollah, which never signed it, calls that a red line.

Before This

The deal was built to close a war the US-Iran memorandum could not. Lebanon was pulled in on March 2, when Hezbollah fired missiles into Israel to avenge an Israeli strike that killed Iran's supreme leader; Israel answered with an air campaign and a ground invasion that has killed more than 4,190 people and displaced over 1.2 million. The November 2024 ceasefire never held — Israel kept striking, Hezbollah kept rebuilding. Friday's framework tried again, but carries the same flaw: it was negotiated by Israel, Lebanon, and the US, while the actual combatant — Hezbollah — was left out, free to reject terms it never agreed to.

The Signal

Abelardo de la Espriella — "El Tigre," a millionaire lawyer who had never held elected office — won Colombia's June 21 runoff by under one percent, about 250,000 votes, over leftist Iván Cepeda. He ran a culture-war campaign — anti-abortion, "traditional family," Bukele-style mega-prisons, a 90-day military offensive against armed groups — and waved the bright-yellow national football jersey at rallies even after a judge told him to stop. Trump gave a "complete and total endorsement" and posted congratulations to "El Tigre (THE TIGER!)".

Before This

De la Espriella's win is less a one-off than a regional pattern. He is the latest in a Trump-aligned rightward turn across Latin America — Bukele in El Salvador, Milei in Argentina, Kast in Chile, with Fujimori leading in Peru. The mechanism is a backlash vote: outgoing leftist Gustavo Petro moved Colombia toward China, foreign direct investment fell about 33% from 2022 to 2025 under him, and security deteriorated. De la Espriella ran explicitly as the reversal — pro-US, free-market, iron-fist — and qualified for the ballot by citizen signatures rather than a party. Trump has now endorsed friendly candidates in Argentina, Honduras, and Colombia, building a bloc of deferential regional leaders.

The Signal

Iran's Revolutionary Guard fired ballistic missiles and drones Sunday at US military sites in Kuwait and Bahrain — including the home of the US Navy's Fifth Fleet — answering US airstrikes a day earlier on Iranian coastal sites at Sirik, Bandar-e Lengeh, and Qeshm Island. The Guard, which controls Iran's missile arsenal, threatened a "complete halt" to negotiations if Washington keeps striking. Bahrain and Kuwait, both bystanders hosting US forces, condemned the attacks as violations of their sovereignty.

Before This

The crossfire traces to one unresolved clause: who controls the Strait of Hormuz. The June 17 "Islamabad" memorandum extended a 60-day ceasefire and said Iran would use "best efforts" for safe passage, while Iran and Oman worked out the strait's future administration. Iran read that as the right to route all traffic through its own waters and charge for it; the US began promoting an alternative lane along Oman's coast. When the tanker Kiku — more than two million barrels of crude — tried the Omani route Saturday, an Iranian drone hit it; US Central Command said Iran "elected not to" honor the ceasefire and struck back, the third such US strike in three weeks.

The Signal

Allspring's chief fixed-income strategist George Bory is steering clients toward government bonds outside the US, where central banks are raising rates or face different inflation dynamics. The Fed hasn't hiked since July 2023, yet markets now price a 78% chance it does in December. Abroad, the move is already underway: the European Central Bank raised rates 25 basis points to 2.25% on June 11 — its first hike since September 2023. BlackRock's Steve Laipply makes the same case, pointing to European bonds with lower risk and higher yields.

Before This

The trade is a near-total reversal of where the year began. In January, investors expected roughly two Fed rate cuts in 2026; now they expect a hike. What flipped it was inflation — driven partly by the Middle East war and resilient growth — pushing US 10-year yields above 4.5% and 30-year above 5% by mid-May. The shift Bory is playing is desynchronization: for years US bonds offered the world's best risk-adjusted yield, so global investors stayed "very US-centric". Now the ECB, Bank of England, and even Australia are tightening ahead of a stuck Fed, so the same duration bet pays better abroad — different rate cycles, run at the same time.