GERMANY - German bond yields plunged to a historic low and two-year rates briefly fell below zero on Thursday on fears of widening recession in the eurozone, and a flight to safety as Russian troops massed on the Ukrainian border. Yields on 10-year Bunds dropped to 1.06 percent after a blizzard of fresh data showed that recovery has stalled across most of the currency bloc, with even Germany now uncomfortably close to recession. Commerzbank warned that the German economy may have contracted by 0.2 percent in the second quarter and is far too weak to pull southern Europe out of the doldrums. The public debt ratio jumped from 130.2 percent to 135.6 percent of GDP in the first quarter from a year earlier and will now rise again, despite austerity measures and a primary budget surplus.

ISRAEL - Prime Minister Benjamin Netanyahu on Wednesday night set out a moral justification for the way the IDF has dealt with the Hamas strategy of firing rockets at Israel, and tunneling under the Israeli border, from the heart of Palestinian residential neighborhoods in Gaza. Arguing that Israel’s battle over the past month against terrorists in Gaza using civilians as human shields came during a critical test period, he said it would be a “moral mistake” as well as a practical one to not take action against terrorists operating from mosques, schools and other civilian areas. Such behavior would represent “an enormous victory for terrorists everywhere,” he said, and would result in more and more civilian deaths around the world.

IRAQ - The US has conducted its second air-drop of food and water to thousands of Iraqis hiding in mountains from jihadist fighters, the Pentagon says. It came hours after the US launched fresh air strikes against militants from the Islamic State (IS). The group had recently made fresh gains in northern Iraq and is threatening the Kurdish city of Irbil. The US is also piling pressure on Iraqi leaders to form a unity government capable of dealing with the jihadists. IS, a jihadist group formerly known as Isis, has taken control of swathes of Iraq and Syria and has also seized Iraq's largest dam. IS remained defiant. One fighter told Reuters that the strikes would have "no impact on us". "The planes attack positions they think are strategic but this is not how we operate. We are trained for guerrilla street war," he said.

USA - The head of the Senate Intelligence Committee on Friday said the extremist group the Islamic State in Iraq and Syria (ISIS or ISIL) must be confronted forcefully by the US, though she stopped short of calling for boots on the ground. “It takes an army to defeat an army, and I believe that we either confront ISIL now or we will be forced to deal with an even stronger enemy in the future,” Senator Dianne Feinstein (Democrat for California) said in a statement. The group is “operating with military expertise, advancing across Iraq and rapidly consolidating its position,” she added. “Inaction is no longer an option,” according to Feinstein. The senior lawmaker also said it had “become clear” that the group is recruiting and training fighters from Western countries and possibly sending them back to cities in the US and Europe in order to “attack us in our backyard.” “We simply cannot allow this to happen,” Feinstein warned.

MIDDLE EAST - The terror group President Barack Obama threatened to strike in Iraq Thursday evening is itself threatening to strike the American homeland. “I say to America that the Islamic Caliphate has been established,” Abu Mosa, a spokesman for the terror group known as the Islamic State in Iraq and Syria (ISIS), told VICE Media in a video interview posted online Thursday. “Don’t be cowards and attack us with drones. Instead send your soldiers, the ones we humiliated in Iraq.” “We will humiliate them everywhere, God willing, and we will raise the flag of Allah in the White House,” he added. The video is the first of a multipart series on ISIS VICE Media says it plans to release. VICE Media reporter Medyan Dairieh recently spent three weeks in the ISIS-controlled Syrian city of Raqqa, which the terror group has proclaimed the capital of its newly declared Islamic caliphate.

RUSSIA - On Thursday Russia responded to sanctions by imposing a total ban on certain food products from the United States. “Fulfilling the presidential order, I’ve signed a government decree. Russia imposes a total ban on deliveries of beef, pork, fruit, vegetables, poultry, fish, cheese, milk and dairy products,” said Russian Prime Minister Dmitry Medvedev during the opening of a weekly government session.

EGYPT - A court in Egypt has dissolved the Freedom and Justice Party (FJP), the Muslim Brotherhood's political wing. The ruling will effectively prevent the banned Islamist movement from formally participating in parliamentary elections expected later this year. The government declared the Brotherhood a terrorist group in December. It was accused of orchestrating a wave of violence to destabilise the country after the military overthrew President Mohammed Morsi in July 2013. At the same time, more than 1,400 people have been killed and 16,000 detained in a crackdown by the authorities on Mr Morsi's supporters. President Abdul Fattah al-Sisi, a former military chief who was elected head of state in May, has vowed to wipe out the group.

RUSSIA - The last 3 months have seen Russia's "de-dollarization" plans accelerate. First Gazprom clients shift to Euros and Renminbi, then the UK signs currency swap agreements with China, then NATO ally Turkey cuts ties and mulls de-dollarization, Switzerland jumps in the currency swap agreements, and BRICS create their own non-US-based funding vehicle, and then finally this week, Russia's oligarchs have shifted cash holdings to Hong Kong. But this week, as RT reports, Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments. "The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China," the Russian regulator said.

UK - An academic who is seen as a major authority on the recent financial crisis has claimed that Winston Churchill may have voted UKIP were he still alive today. Professor Johan Lybeck, who is author of 'A Global History of the Financial Crash of 2007-10' said in a letter to the Financial Times that "the Hypothesis most certainly cannot be excluded" that Churchill would have "ratted" on his party - the Conservatives - and voted UKIP.

RUSSIA - Russia’s ban on agricultural food imports could cost the European Union about $16 billion (12 billion euro) and drag the continent into the crisis, officials warn. The Russian government signed a decree on Thursday which bans the import of beef, pork, poultry, meat, fish, fruits and vegetables, cheese, milk, and dairy products from the EU, US, Australia, Canada, and Norway. EU trade is heavily dependent on Russian food imports, last year Russia bought $16 billion worth of food from the 28-nation bloc, or about 10 percent of total exports, according to Eurostat. Russia’s response to Western sanctions could push Europe into a market crisis, according to the National Federation of Unions of Agricultural Operators (FNSEA), France’s largest farming association.

MIDDLE EAST - Israel said it launched air strikes across the Gaza Strip on Friday in response to Palestinian rockets fired after Egyptian-mediated talks failed to extend a 72-hour truce in the month-long war. As rocket-warning sirens sounded in southern Israel, the military said Hamas had fired at least 18 rockets from Gaza and Israel's "Iron Dome" interceptor system brought down two. No injuries or damage were reported. Gaza militants said they had fired 10 rockets on Friday. After a huge explosion in Gaza City, apparently from an air raid, a military spokesman said Israel had responded to Hamas rocket fire by launching air strikes at "terror sites" across the Gaza Strip. "We will continue to strike Hamas, its infrastructure, its operatives, and restore security for the State of Israel," Lieutenant-Colonel Peter Lerner said in a statement.

USA - US President Barack Obama says he has authorised air strikes against Islamic militants in northern Iraq but will not send US troops back to the country. He said Islamic State (IS) fighters would be targeted to prevent the slaughter of religious minorities, or if they threaten US interests. Strikes have not yet begun, but the US has made humanitarian air drops to Iraqis under threat from the militants. IS has seized Qaraqosh, Iraq's biggest Christian town, forcing locals to flee. The Sunni Muslim group, formerly known as Isis, has been gaining ground in northern Iraq and Syria for several months. Mr Obama said the Iraqi government had requested assistance and the US would act "carefully and responsibly, to prevent a potential act of genocide".

UK - In the largest study of its kind, an international team of experts led by Newcastle University, UK, has shown that organic crops and crop-based foods are up to 69% higher in a number of key antioxidants than conventionally-grown crops. Analysing 343 studies into the compositional differences between organic and conventional crops, the team found that a switch to eating organic fruit, vegetable and cereals – and food made from them – would provide additional antioxidants equivalent to eating between 1-2 extra portions of fruit and vegetables a day. The study, published today in the prestigious British Journal of Nutrition, also shows significantly lower levels of toxic heavy metals in organic crops. Cadmium, which is one of only three metal contaminants along with lead and mercury for which the European Commission has set maximum permitted contamination levels in food, was found to be almost 50% lower in organic crops than conventionally-grown ones.

USA - The current Ebola crisis in West Africa is on pace to sicken more people than all other previous outbreaks of the disease combined, the health official leading the US response said Thursday. The next few weeks will be critical, said Dr Tom Frieden, director of the Centers for Disease Control and Prevention, which is sending more workers into the affected countries to help. "It will be a long and hard fight," Frieden told a congressional committee Thursday. In his prepared testimony, he estimated it would take at least three to six months to end the outbreak, under what he called a best-case scenario. Frieden said the outbreak, which began in March, is unprecedented in part because it's in a region of Africa that never has dealt with Ebola before and has particularly weak health systems.

UK - The current Ebola outbreak in Africa is dominating headlines globally. But Dr Seth Berkley, CEO of the GAVI Alliance questions why this - rather than any of the other deadly diseases which exist. He suggests it's because people in the west have forgotten what it is like to deal with an untreatable disease.