Key Takeaways
- Iran begins a massive six-day state funeral for slain Supreme Leader Ayatollah Ali Khamenei, with officials expecting up to 30 million attendees across Iran and Iraq.
- ECB Governing Council member Emmanuel Moulin states the bank is in a "good position" following June’s 25 basis-point rate hike, as a slump in oil prices helps ease Eurozone inflation.
- France and Turkey explore a diplomatic "reset" as shifting European security needs and the war in Ukraine drive a potential thaw between Presidents Macron and Erdogan.
- Exiled Prince Reza Pahlavi triggers global protests, with Iranian diaspora groups in Milan and other major cities demonstrating against any new international agreements with the Islamic Republic.
Iran Mourns Slain Leader Amid Vows of Revenge
On Saturday, July 4, 2026, Iran officially commenced a six-day public funeral ceremony for Ayatollah Ali Khamenei, who was killed in a February airstrike at the onset of the recent conflict. Thousands of mourners gathered at the Grand Mosalla prayer complex in Tehran, where the Supreme Leader’s flag-draped coffin was displayed in a glass case. The atmosphere was charged with grief and defiance, as crowds chanted "Death to America" and "Death to Israel," demanding "divine revenge" for the assassination.
The timing of the funeral coincides with the 250th anniversary of the United States, a move analysts suggest was intended to project defiance against Washington. The funeral procession is scheduled to travel through the Iranian city of Qom and the Iraqi Shia holy cities of Najaf and Karbala before a final burial in Mashhad next Thursday. Iranian authorities have shut down major airspace and ordered government employees to attend, framing the event as a massive display of national resilience.
ECB Signals Policy Comfort as Inflation Pressures Ebb
European Central Bank (ECB) Governing Council member Emmanuel Moulin indicated on Saturday that the central bank is currently satisfied with its monetary stance. Following a 25 basis-point interest rate hike in June, Moulin noted that the "balance of risks is in the right place." This confidence stems largely from a significant slump in global oil prices, which has provided a much-needed reprieve for Eurozone inflation data.
While the ECB was unanimous in its June decision to combat surging energy costs, the recent "Iran peace deal" and a sharper-than-expected slowdown in price growth have shifted the internal debate. Moulin emphasized that the ECB is not necessarily entering a new hiking cycle, stating that future decisions will remain data-dependent and made on a meeting-by-meeting basis. Market participants are closely watching the Euro (EUR) as expectations for further aggressive tightening begin to fade.
Diplomatic Thaw: France and Turkey Reassess Ties
In a significant shift in European geopolitics, France is reportedly weighing a reset of its often-combative relationship with Turkey. Sources indicate that French President Emmanuel Macron and Turkish President Recep Tayyip Erdogan are seeking common ground, driven by the evolving security landscape in Russia and Ukraine. A bilateral meeting is expected on the sidelines of the upcoming NATO summit in Ankara, where leaders will discuss a €70 billion ($80 billion) support package for Ukraine for 2026.
The potential rapprochement is centered on defense cooperation and the concept of "European strategic autonomy." France increasingly views Turkey as a critical pillar of continental security, particularly as the U.S. urges European allies to assume greater responsibility for their own defense. However, longstanding friction points—including disputes over the Eastern Mediterranean and democratic standards—continue to pose hurdles to a full normalization of ties.
Global Diaspora Protests Target Islamic Republic
As Tehran holds its state funeral, the Iranian diaspora has launched a "Global Week of Action" following a call from Prince Reza Pahlavi. In Milan, Italy, protesters gathered outside the U.S. Consulate to voice their opposition to any diplomatic agreements with the current Iranian regime. Demonstrators were seen waving pre-1979 Iranian flags and chanting in support of Pahlavi, urging the international community to halt negotiations with Tehran.
These protests follow months of unrest within Iran and a series of diaspora-led rallies that have drawn hundreds of thousands in cities like Los Angeles, Toronto, and Munich. The movement seeks to pressure Western governments to maintain sanctions and support a transition to a secular democratic government, highlighting the deep polarization between the Iranian state and its citizens living abroad.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.