Israel and Iran appeared to be honoring a truce unexpectedly announced by Donald Trump overnight, after the US president reacted angrily to early breaches by both sides.

The ceasefire agreement followed an extraordinary night in which Tehran retaliated against a US attack over the weekend by launching missiles at an American air base in Qatar. Iran’s move was telegraphed — with Qatar and the US being forewarned — and there were no casualties. 

Oil held losses but continued to fluctuate. Equities and stock-index futures jumped, the dollar fell and gold retreated. Meanwhile, the biggest mystery of the war remains unsolved: the location of Iran’s near-bomb-grade uranium.  — Caroline Alexander

What You Need to Know Today

European leaders were expected to agree on a new commitment to raise defense spending to 5% of GDP at a NATO summit that starts today. But Spain is pushing back against the pledge, designed to appease Trump. The risk is that the US president sees the divisions spill out in the open and walks out. Already, on his way to the gathering, he declined to say if he would commit to one of the alliance’s key pillars: Article 5, which requires members to defend each other from attack.

 Trump speaks to members of the media at the White House before boarding Marine One in Washington, DC. Photographer: Francis Chung/Politico

Two weeks from Trump’s self-imposed deadline to reach deals with the US’s major trading partners, some of the most-watched talks aimed at clinching agreements to avoid higher tariffs are struggling to get over the finish line by July 9. Here’s a rundown of where various talks stand.

Federal Reserve Chair Jerome Powell will tell Congress the central bank is in no rush to lower interest rates as officials wait for more clarity on the economic impact of Trump’s tariffs. The central bank last week left interest rates unchanged in a range of 4.25%-4.5%, and it’s on-hold position has angered the president, who has called for lower rates and argued the Fed is keeping borrowing costs for the US government high by holding rates steady.

The French government is under pressure. Talks over a retirement reform ended in deadlock late yesterday. By mid-July another round of spending cuts and tax increases — which are also controversial but needed to get control of the country’s growing debt pile — will be presented to lawmakers. Both issues risk triggering censure ballots that would bring down the government if opposition parties unite.

Novo Nordisk is hunting for more early-stage deals to pad its pipeline of next-generation obesity drugs, casting a wide net with an open checkbook. Novo faces its biggest challenge since its diabetes treatment Ozempic and sister drug Wegovy sparked the global craze that, at various times, made it Europe’s most valuable company. Its shares have slumped as rivals piled in, particularly Eli Lilly, the drugmaker now taking the majority of new prescriptions in the US.

Spain’s government told BBVA that it won’t be able to integrate Banco Sabadell for several years if it goes ahead with its unsolicited takeover offer, in another setback to the proposed €14 billion ($16 billion) deal. A combination of the two banks would create a new behemoth in the country, with more than 140,000 employees worldwide, and reduce BBVA’s dependence on income from emerging markets. 

The wealthy are exiting the UK for tax havens like Monaco, Switzerland and Dubai. But many well-heeled Europeans with similar dreams of escape are finding they can’t do so quite as easily. High-tax nations across the continent are seeking to slow such departures by hitting residents with a levy on the value of their assets when they exit. The idea is to make them think twice — or pay their fair share if they go. 

What You’ll Need to Know Tomorrow

For Your Commute

We’re about to hit peak summer, which means long days to dig into a great book or two (helpfully provided below), prestigious European festivals you can dip into on your travels, and some fantastic TV and movies that provide a more than ample excuse to stay inside and enjoy the AC.

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