Syz the moment

As expected, there is some escalation as the war between the U.S. + Israel and Iran is intensifying. Here’s what changed in the last 24 hours: ✈️ Air Superiority Established US and Israeli air forces now hold near-total air control over Iran. Dozens of missile launchers, rear bases, and command centers were hit — especially in Tehran. 🎯 But Iran is far from neutralized Iran continues launching drones and missiles across the region. Some reached critical U.S. bases. Now the conflict has expanded geographically: • Hezbollah joined the fight from Lebanon • Israeli airstrikes followed inside Lebanon • Iranian strikes hit Saudi Arabia (including Ras Tanura / ARAMCO refinery) • US Embassy in Riyadh targeted • Ongoing strikes across Iraq, Kuwait, Bahrain, Qatar, UAE, Jordan, Cyprus, and Israel ⚠️ Notably: 3 American F-16s were reportedly shot down in Kuwait — by error. The Regional Fallout • Protests erupted around U.S. embassies in Iraq and Bahrain • The U.S. has called on all American citizens to leave the region • 20 U.S. cargo aircraft are en route to reinforce logistics and defense systems Strategic Questions Now Emerging ▫️ Despite 4 days of heavy bombardment, the Iranian regime remains intact ▫️ Iranian counter-strikes continue — but how deep are their missile stocks? ▫️ Gulf countries and Israel may soon face air-defense missile shortages This is no longer a contained confrontation. It’s a multi-front regional escalation with air dominance on one side and missile saturation strategy on the other. The coming days will likely determine whether this stabilizes… or spreads further. Source: @Clément Molin on X

Most were drones. These saturation attacks aim to overwhelm air defenses and drain interceptors. $20-50k Shahed drones vs. $4.19M PAC-3 interceptors put US and its partners on the wrong side of the cost curve. Source: Bloomberg, Becca Wasser

For the first time in history, a hyperscaler data center was physically struck during a war. An Amazon Web Services facility in the hashtag#UAE went offline after “objects struck” it—AWS’s carefully chosen words for what appears to be missile or drone debris. Power was cut. One availability zone went dark. Others stayed up. If reports from The Jerusalem Post are accurate that the facility supported Israeli military workloads, the implications are massive: dual-use cloud infrastructure just became a legitimate military target. That collapses a long-standing assumption: Data centers are civilian assets protected by fences and biometrics—not by missile defense systems. AWS, Azure, and Google Cloud all cluster regions in the same conflict-adjacent corridor. Oracle operates infrastructure in Dubai Will Wall Street price in this new risk for the hyper-scalers? Source: Shanaka Anslem Perera

China is the main destination of the 13.1mm barrels of oil that passes through the Strait every day. Source: zerohedge, Goldman Sachs

But the data reveals a massive irony that most people are missing. According to new analysis from Global Trade Alert, the very countries frequently singled out for criticism are set to see their average tariff rates drop the most. The Winners (The Surprise): Brazil: Enjoying a massive 13.6% reduction in average tariff rates. China: Seeing a 7.1% reduction. Vietnam, Thailand, & Malaysia: Set to benefit significantly as previous specific levies are replaced by the blanket rate. The Losers (The Allies): Traditional US allies—including the UK, EU, and Japan—are bracing for the biggest hit. They are moving from lower historical rates straight into the 15% line of fire. The Bottom Line: US Trade Representative Jamieson Greer is holding firm, stating the "urgency of the situation" demanded the jump from 10% to 15%. While this new regime is only valid for 150 days without Congressional approval, the message to global markets is clear: Volatility is the new constant. Source: FT

LONG-TERM: Morgan Stanley sees an opportunity for the President to alleviate some components of the existing tariff regime over time IN THE NEARER TERM: uncertainty will likely prevail in terms of which authorities will replace the existing tariffs, which sectors/countries will face more legally durable tariffs (Sec. 232/301 after months of investigation), and most importantly, what happens to the bilateral framework deals that are currently in place. That means the broader macro impact could be modest in the context of these two competing factors. Source: zerohedge

Goldman Sachs estimates that the changes will reduce the increase in the effective tariff rate since the start of 2025 from just over 10% to about 9% once the Sec. 122 tariffs are implemented. Source: Zerohedge

Source: Bloomberg