Frank Kelly’s Geopolitical Week Ahead | July 5, 2026

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Frank Kelly’s Geopolitical Week Ahead | July 5, 2026

7/5/2026

Turkey hosts the NATO summit, Trump calls Putin to spark new Ukraine war peace talks, and Iran buries the Ayatollah.

Francis (Frank) J. Kelly

Founder & Managing Partner, Fulcrum Macro Advisors and Senior Political Strategist for DWS

Turkey hosts the NATO summit
Trump calls Putin to spark new Ukraine war peace talks
Iran buries the Ayatollah
Modi heads to Indonesia, New Zealand, and Australia
China’s Foreign Minister travels to Denmark, Sweden, Finland, and Norway
A quiet economic data week as central banks reprice inflation

Turkey hosts the NATO summit
The dominant geopolitical event this week will be the NATO Summit in Ankara, Turkey. U.S. Secretary of State Marco Rubio last month stated the meeting “is probably one of the most important in NATO’s history.” A key focus of the meeting is how NATO members intend to meet the 5% of gross domestic product (GDP) defense spending target by 2035. Each country is expected to table a concrete national plan, while several countries are expected to hit the 5% goal well before 2035; others are struggling to find a way.

NATO Secretary General Mark Rutte has explicitly promised "tens of billions of dollars" in new defense contracts will be announced at the Summit, alongside a Transatlantic NATO Industrial Capacity Expansion Pledge and Defense Production Action Plan targeting shortfalls in ammunition, air/missile defense, and long-range weapons.

Running concurrently with the Summit will be the NATO Summit Defense Industry Forum, which will stress an “industrial revolution” taking place in the defense industry, focused on drone warfare, critical raw materials (and the building of a NATO supply-chain framework in parallel with U.S. and other allied commercial critical mineral security efforts).

But the real subtext of the Summit will be the tensions and fractures that emerged in the alliance when President Trump launched the Iran War. Whether leaders can paper over internal splits will be the summit's critical challenge. Recall that at the beginning of the war, France criticized the U.S. decision to strike Iran, and Spain refused U.S. basing for the operations. President Trump criticized other NATO members for not “doing their fair share” in helping in the war. All of this comes in the wake of reports this past week that Secretary of Defense Pete Hegseth presented a plan to substantially reduce U.S. military forces in Europe (but was blocked and forced to conduct a force posture review over the coming six months instead).

Trump calls Putin to spark new Ukraine war peace talks
The Ukraine War and efforts to get peace talks back on track will also be on the agenda. President Trump called Russian President Vladimir Putin on July 4th, during which they spoke for 90 minutes. Trump then called Ukrainian President Volodymyr Zelensky to discuss ways to get the peace talks back on track. Trump is now expected to meet with Zelensky on the sidelines of the NATO Summit. However, there are reports that the U.S. is now pressing Ukraine to cede the Donbas to Russia as an incentive to secure a peace deal.

Iran buries the Ayatollah
Meanwhile, the U.S.-Iran peace talks have been paused as Iran continues carrying out its six-day funeral procession for slain Ayatollah Ali Khamenei (which concludes July 9th). The event is seen by the Iranian government as a means to rally national unity and sympathy abroad. This coming week, his body will be transported to Iraq, where it will pass through Shia holy sites before returning to Iran for burial on Thursday. Representatives from more than 100 countries have traveled to Iran to participate in the ceremony.

Modi heads to Indonesia, New Zealand, and Australia
Also this week, Indian Prime Minister Narendra Modi will travel to Indonesia, New Zealand, and Australia for bilateral meetings covering mutual security, trade, and investment. While in New Zealand, Modi is expected to discuss advancing a free trade agreement. India and Australia concluded a free trade deal in February.

China’s Foreign Minister travels to Denmark, Sweden, Finland, and Norway
Modi’s trip comes as China’s Foreign Minister, Wang Yi, travels to Denmark, Sweden, Finland, and Norway to improve trade and investment opportunities. China works closely with Denmark on shipbuilding and is now seeking a deal with Finland on shipbuilding, green energy, and infrastructure.

A quiet economic data week as central banks reprice inflation
Looking at the global economic and financial radar, it will be a light week for major economic reports. Markets are awaiting minutes from the Federal Reserve and the European Central Bank from their respective June meetings.

In the U.S., the June ISM services index is out on Monday. In Europe, the Bank of England publishes its financial stability report on Tuesday. Germany’s factory orders report is out Monday, industrial production on Tuesday, and trade balance on Thursday.

In Asia, China’s June inflation figures – both consumer price index (CPI) and producer price index (PPI) – are out on Thursday. And in Japan, the Economy Watchers Survey is out on Wednesday, and the PPI on Friday.

Additional resources

Francis (Frank) J. Kelly

Frank is the Founder and Managing Partner of Fulcrum Macro Advisors, a political risk advisory firm based in Washington, DC. He is the senior political strategist for DWS.

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