Happy Monday from Copenhagen.

What a weekend in geopolitics, with an attack described by many pundits as “Russia’s Pearl Harbor.” While we find the analogy somewhat misleading (and, to some extent, appalling), we do consider the weekend’s events to be historic.

We’re seeing material moves in oil, copper, and gold on the back of 1) Trump’s proposed 50% steel tariffs, 2) Ukraine’s drone attacks inside Russia, and 3) renewed hostile rhetoric between the US and China.

The copper trade still looks attractive. In our view, Trump is likely to focus on Section 232 tariffs, given the legal uncertainty surrounding reciprocal tariffs — and with 50% now on steel, the “priced in less than 25% in copper” suddenly looks like a bargain. But the most interesting takeaway is that the USD is weakening fast from the get-go this month.

Trump and Bessent are well aware that the frozen Russian assets (and reserves) led to a tectonic shift among central banks elsewhere — a move from soft USDs to hard USDs (Gold, Bitcoin) in countries that fear being sanctioned in a similar fashion to Russia. With Ukraine now striking deep into the Russian motherland, it’s probably 100% off the table to consider Russia getting its reserves and assets back (as was mulled just weeks ago). Instead, we’re likely heading in the opposite direction: a total seizure of those frozen assets and potential secondary tariffs on countries trading with Russia — a stance that has widespread Senate backing.

This is all USD-negative, as central banks in the Global South will continue to move away from the USD at the margin, but if input costs rise a lot, we have a different environment looming during the second half of the year.

Chart of the week: The copper market is yet to fully price in the risk of 232 tariffs on Copper