Futures Rise Ahead Of Critical Nvidia Earnings As Oil, Bond Yields Drop

Summary

Futures Rise Ahead Of Critical Nvidia Earnings As Oil, Bond Yields Drop US equity futures are higher led by tech as the selloff in bonds eased and traders awaited earnings from Nvidia after the close. As of 7:30am ET, S&P futures are up 0.3% while Nasdaq futs rose 0.7% showing optimism heading into the release and overlooking weakness in tech during APAC trade. In premarket trading, NVDA is up 1.8% in premarket trading, as semis see a strong bid with Mag7 names almost all higher. Cyclicals ex-Energy are rallying led by Industrials with Defensives lagging and Staples down. European stocks have edged higher alongside a pullback in energy prices, which saw Brent briefly slip onto a $108/bbl handle. Today is all about NVDA but Fed Minutes this afternoon may provide color on the dissenters from the previous Fed Day. Bond yields in the US and Europe retreated from multiyear highs as traders pared back aggressive bets on interest-rate hikes this year. US yields are 1-3bp lower across the curve, the 10Y dropping to 4.64% from yesterday's high of 4.69%, as the USD sees a mild bid. Brent fell 1.8% toward $109 a barrel with the broader energy complex drops as JPM flags 6.6mm bbls of oil crossing the SoH over the last 24 hours; Precious Metals are also bid with Ags seeing weakness. Tomorrow’s macro releases include Flash PMIs and jobless data. In premarket trading, Nvidia is outperforming fellow Magnificent Seven stocks, rising 1.8%, ahead of its much-anticipated first-quarter results report after the market closes. Fellow chip stocks are also gaining (Tesla +1%, Alphabet +0.3%, Amazon +0.2%, Meta Platforms +0.2%, Apple -0.2%, Microsoft -0.4%) 8x8 (EGHT) jumps 17% after the software company reported fourth-quarter results that beat expectations. Cava Group Inc. (CAVA) is up 7.1%. The company raised its annual sales outlook after diners flocked to its restaurants in the first quarter, defying the crunch in consumer budgets that has weighed on the industry. Keysight Technologies (KEYS) is up 2.3% after the measurement instruments company reported second-quarter results that beat expectations and gave a third-quarter forecast that is above the analyst consensus. Toll Brothers (TOL) rises 2.3% after the luxury homebuilder reported second-quarter profit that beat analysts’ estimates and raised its full-year guidance. In other corporate news, Goldman Sachs is said to have the leading role on the cover of SpaceX’s IPO, with Morgan Stanley also listed as a lead bank. SpaceX expects to proceed with its acquisition of Cursor 30 days after the company begins trading publicly, and if the deal doesn’t go through, SpaceX would pay Cursor a $10 billion breakup fee in cash, BBG reported. Early AI tools are boosting productivity as much as 30%, said JPMorgan, while Standard Chartered’s CEO has sought to reassure staff after a backlash to his remarks on using artificial intelligence to replace “lower-value human capital.” Softbank’s $60 billion bet on OpenAI, and growing unease over Masayoshi Son’s devotion to Sam Altman is today’s The Big Take. Futures are higher in early trading as investors digest a backdrop of surging rates volatility, heavily crowded semis exposure and euphoric - and outright manic bubble in the case of Korea - positioning, while some of the most aggressive AI momentum trades globally show signs of strain, even as stocks broadly ignore the historic rout taking place in the bond market, sending 30Y yields to 19 year highs. A potential strike at Samsung and the words of Jensen Huang are two catalysts in the next 24 hours to keep traders on edge. The impending strike at Samsung could add to concerns around supply being able to meet burgeoning demand for AI memory chips in the face of already surging memory prices, at a time inflation is coming for the overcrowded AI trade. Nvidia will give a much-anticipated update on the state of the AI economy when it reports after the close. While sales are estimated to have grown 80%, investors will be more focused on what Nvidia has to say about ramping up production and fending off competitors.Options traders are pricing an implied move of about 5.5% for Nvidia shares in either direction following the results. With the report coming at a time when the roaring rally in chipmakers is coming off the boil, well-received earnings could give the sector fresh momentum and help drive global indexes even higher into superbubble territory. “The semiconductor rally has stalled, but really is just in a holding pattern until Nvidia reports,” said Joachim Klement, head of strategy at Panmure Liberum. “Nvidia can, for now, keep its beat-and-raise machine going, which will reignite the rally in semiconductors.” Today we also get the minutes of the April 28–29 FOMC meeting which should show that support for removing the easing bias from the statement extended beyond the three dissenters. The minutes should reinforce the market view that the easing cycle is on an extended hold, according to Bloomberg Economics. Fed’s Paulson said she favored holding interest rates steady and conditioned lower borrowing costs on making sustained progress on inflation. President Donald Trump threatened to resume strikes on Iran in the coming days as part of the push for a deal to end the war, after he said he had just called off a US attack. Alexandre Drabowicz, chief investment officer at Indosuez Wealth Management, said he wouldn’t be surprised if Trump’s next steps take into account where interest rates are headed, given the current yield levels. “We’re in the thick of the danger zone,” he said. “Stagflation risk has gone up significantly,” said Justin Onuekwusi, chief investment officer at St. James’s Place. “When we’re talking about increased inflation and falling growth, in that environment, most asset classes will struggle, including bonds.” In politics, the Republican-led US Senate signaled mounting opposition to continuing the Iran war in a procedural vote Tuesday, reflecting deepening political unease over a conflict that is taking a financial toll on Americans. Trump signed an executive order directing regulators to issue guidance on banking services to undocumented migrants, in a move that could tighten access to the financial system. Retail is in focus before the market opens, with Target and TJX set to report. Visits to Target stores during the first quarter were up 5.1% from the year prior, marking the chain’s first positive visit growth in more than a year, according to data from Placer.ai. The firm also notes traffic in April rose 5.5% from the previous year. European stocks edge higher alongside a pullback in energy prices, which saw Brent briefly slip onto a $108/bbl handle. Stock market operator Euronext is among the biggest gainers, while credit checking firm Experian fell on its latest earnings. Here are the biggest movers Wednesday: Euronext shares gain 7.1%, most since July 2023, after the stock market operator reported what analysts say are strong 1Q earnings, driven by better revenues and costs, with the equity markets division as the main standout CSG shares rise as much as 12%, the most since January, after the defense company reported results analysts called strong, saying the market should be relieved after the recent selloff Marks & Spencer shares rise as much as 5.5% after the retailer reported a milder drop in adjusted pretax profit than anticipated during FY26, having grappled with a costly cyberattack during the year RS Group shares rise as much as 10%, the most since November 2024, after the distributor of electrical and industrial products announced a £100m share buyback and pointed to improving momentum across its major markets Playtech shares gain as much as 5.1% after the gaming software maker said it delivered an “excellent trading performance” over the first four months of the year, according to a statement ahead of its annual general meeting Ypsomed shares jump as much as 14%, the most since April 2025, after the Swiss maker of injection systems reported better-than-expected financial results and provided guidance that pleased investors Severn Trent shares rise as much as 4.9% after the UK water company reported earnings ahead of expectations in FY26 and upgraded its outlook for FY28; peer United Utilities is up 1.3%%, while smaller rival Pennon is trading 1% higher Experian shares drop for the first day in five, falling as much as 6%, as the credit checking company’s full-year guidance proves slightly lower than analysts expected Orkla falls as much as 8.9% after the Norwegian consumer goods group reported earnings which fell short of expectations. DNB Carnegie sees a “mixed” report, flagging an adjusted Ebit miss and increased margin pressure Rusta falls as much as 8.6%, the most since September, after SEB cut its recommendation on the Swedish retailer to hold from buy, saying the stock’s valuation discount has disappeared after a strong rally B&M falls as much as 3.9% as Goodbody cut its rating on the European budget retailer to hold from buy. The broker sees tepid earnings as the UK macroeconomic climate deteriorates and poor weather weighs on sales Earlier in the session, Asian equities fell for a fourth straight session, heading for their longest losing streak in nearly two months as chip stocks dropped and bonds sold off on inflation concerns. The MSCI Asia Pacific Index declined as much as 1.3%, with Samsung and TSMC among the the biggest drags. Samsung shares slumped after its labor union said it will go on strike Thursday, a development that pushed the Korean benchmark Kospi lower. Most markets in the region were down, led by Kospi’s 3% decline. Concerns that the US-Iran war may stretch on have lifted global inflation expectations, pushing yields higher. The higher cost of capital may hinder the fast expansion of Asian stocks that have ridden artificial intelligence tailwinds to grow earnings. Stocks also fell in Japan, China, Hong Kong and Australia. In FX, the greenback has given back some ground after dollar gains pushed EUR/USD to its lowest level since April 7. JPY remains rangebound amid the threat of intervention, with Yen fundamentals still bearish (Supplementary Budget/Energy). Demand at the overnight JGB auction was weak and saw some pressure in JGBs but no real follow-through to the FX space. USD/JPY is unchanged and testing 159.00 to the downside at the time of writing. GBP is a little weaker after soft April inflation data trimmed bets on BoE hikes. GBP/USD moved lower by c. 15pips post-data, now above pre-release levels as it attempts to regain a 1.34 handle. EUR/GBP moved higher by 10pips post-data, a move which swiftly pared amid resistance at 0.8670 and recent energy-related moves. (See 08:40 BST headline for more). EUR is also a touch weaker and seemingly moving lower in tandem with USD strength. EUR/USD -0.1%, the pair delved as low as 1.1583 before attempting to return back to a 1.16 handle, where it has traded throughout the week so far. US Treasuries yields continue to test levels reminiscent of unnerving times. A sustained selloff in Asia and Europe on Tuesday continued through the US morning until a small relief bid emerged in the afternoon. Still, 30y yield ended the day hovering around 5.17% – the highest level since 2007. 10y yields have pushed past the 4.50% mark that has typically served as a reentry point from oversold territory and are inching closer to 4.75%. Global inflationary concerns, a Middle East crisis and a lack of conviction has led to a perfect storm of stop outs and compounding bearish momentum. The lack of thematic dip buying is likely summed up by sentiment that things look cheap but could look even cheaper. 2s5s10s – something the desk highlighted a few sessions ago – has dramatically cheapened 10bp over the past few days. Wednesday's 20y auction will be a key gauge on the market’s appetite for long-end duration at these levels. The elevated rate environment is bad news for risk assets in a world where debt-fueled capex is high, and this US administration has used tools to indirectly affect dip buying in duration before This morning treasuries hold gains amid a bigger curve-steepening rally in gilts after UK inflation gauge slowed more than economists estimated. US yields are 2bp-3bp lower on the day, with 5s30s curve steeper by more than 1bp; 10-year is down 2.7bp near session low 4.64%, with UK 10-year lower by more than 8bp, Germany’s by more than 3bp. UK front-end yields remain around 10bp richer on the day heading into the US session, which includes a 20-year bond auction poised to draw the highest yield since October 2023. July WTI crude oil futures, down around 2.5%, also support Treasuries. UK yields are 7bp to 10bp lower on the day with 2s10s and 5s30s curves steeper by about 1.5bp; following the UK inflation data, swaps-implied chance of a BOE rate hike in June ebbed to less than 20%, compared with about 50% at one point last week Treasury auctions resume with $16 billion 20-year new issue at 1pm New York time. WI 20-year yield near 5.17% is ~29bp cheaper than last month’s auction; a $19 billion 10-year TIPS reopening is ahead Thursday. IG dollar issuance slate includes a couple of offerings. Twelve borrowers raised almost $15 billion on Tuesday with issuers paying, on average, 4.8bp in new issue concessions on deals that were 3.9 times covered Economic data slate empty for the session. Fed speaker slate includes Barr (9:15am), and minutes of FOMC’s April 28-29 meeting are slated for 2pm release Market Snapshot S&P 500 mini +0.2% Nasdaq 100 mini +0.5% Russell 2000 mini +0.2% Stoxx Europe 600 +0.2% DAX +0.2% CAC 40 +0.3% 10-year Treasury yield -3 basis points at 4.64% VIX little changed at 18.03 Bloomberg Dollar Index little changed at 1204.72 euro -0.1% at $1.1591 WTI crude -1.5% at $102.59/barrel Top overnight news US President Trump signed a fintech Executive Order to protect the US financial system from illicit activity, while it was reported that the White House plans to release an Executive Order on cybersecurity and AI safety as soon as this week, which seeks early government access to advanced models. A more detailed look at global markets courtesy of Newsquawk APAC stocks declined following the weak handover from the US, with sentiment dampened amid headwinds from a higher yield environment and the uncertain geopolitical backdrop. ASX 200 retreated with the declines led by underperformance in the mining and materials sectors, while a lack of data and firmer yields contributed to the uninspired mood. Nikkei 225 fell beneath the 60,000 level with notable pressure in machine tool and electrical equipment manufacturers, while recent comments from Japan's Finance Minister, and current FX levels were seen to stoke intervention risks. Hang Seng and Shanghai Comp conformed to the downbeat sentiment amid bond and inflation woes, with the declines in Hong Kong led by mining, solar and property stocks, while there was a lack of surprises from the PBoC announcement to maintain the benchmark Loan Prime Rates for the 12th consecutive month. Top Asian News Chinese President Xi met Russian President Putin in Beijing and said that relations have reached their current level due to deepened political mutual trust and strategic cooperation, while Putin said ties between Russia and China support broader international stability. Furthermore, China and Russia plan to deepen continuous strategic coordination, and Putin invited Chinese President Xi Jinping to travel to Russia next year, while Xi told Putin that the world faces the risk of regressing into a “law of the jungle.” Japanese PM Takaichi said she is not currently at a stage where she can comment on the possible size of the extra budget. She further said that plans to protect people’s lives and businesses while curbing issuance of deficit-financing bonds as much as possible. European bourses (STOXX 600 +0.2%) were initially incrementally lower, but now display a more positive picture. On the trade front, the EU finalised the text of its US trade deal, in which the bloc would remove levies on US industrial goods in exchange for a 15% tariff ceiling on EU exports. Next steps are for the Parliament and EU countries to vote to ratify the text. The AEX (+0.4%) hovers around the U/C mark, with chip majors ASML (+3.2%) and BESI (+2.3%) supporting the index, while the FTSE 100 (-0.1%) sees little support following the cooler-than-expected UK inflation print. European sectors trade mixed. Basic Resources tops the sector pile as it manages to claw back some of Tuesday’s losses. Energy and Technology round out the top three sectors. To the downside, Media, Retail and Food, Beverages & Tobacco underperforms. UK supermarkets (Tesco -1.6%, Sainsburys -1.4%) have came under pressure after reports by the FT stated that the UK Treasury is pushing large supermarkets to introduce voluntary price caps on key groceries in return for lifting some regulations. Top European News UK Inflation Rate MoM (Apr) M/M 0.7% vs. Exp. 0.9% (Prev. 0.7%, Low. 0.8%, High. 1.3%). UK Inflation Rate YoY (Apr) Y/Y 2.8% vs. Exp. 3% (Prev. 3.3%, Low. 2.8%, High. 3.4%); Services 3.2% (prev. 4.5%). ONS: "There was a notable fall in annual inflation led by lower electricity and gas prices. This was due to the government’s energy bill support package reducing variable and fixed tariffs, along with lower global wholesale energy prices before the conflict in the Middle East, which fed through to the reduction in the Ofgem cap." UK Core Inflation Rate MoM (Apr) M/M 0.7% (Prev. 0.4%). UK Core Inflation Rate YoY (Apr) Y/Y 2.5% vs. Exp. 2.6% (Prev. 3.1%, Low. 2.5%, High. 3.2%). FX USD continues driving higher amid the continued unconstructive oil/yield environment with oil either side of USD 110/bbl and yields still elevated, albeit lower on the day. US/Iran news overnight was light, and nothing pertinent this morning, but the running commentary remains hostile. The Buck will remain attentive to Gulf developments, alongside expected hawkish FOMC minutes this evening, and NVIDIA earnings after the US close. DXY +0.1%, is now above all significant DMAs, with the 50DMA closest at 99.00. JPY remains rangebound amid the threat of intervention, with Yen fundamentals still bearish (Supplementary Budget/Energy). Demand at the overnight JGB auction was weak and saw some pressure in JGBs but no real follow-through to the FX space. USD/JPY is unchanged and testing 159.00 to the downside at the time of writing. GBP is a little weaker after soft April inflation data trimmed bets on BoE hikes. GBP/USD moved lower by c. 15pips post-data, now above pre-release levels as it attempts to regain a 1.34 handle. EUR/GBP moved higher by 10pips post-data, a move which swiftly pared amid resistance at 0.8670 and recent energy-related moves. (See 08:40 BST headline for more). EUR is also a touch weaker and seemingly moving lower in tandem with USD strength. EUR/USD -0.1%, the pair delved as low as 1.1583 before attempting to return back to a 1.16 handle, where it has traded throughout the week so far. Central Banks Fed's Paulson (2026 voter) said inflation remains too high and interest rate cuts may only happen after inflation is controlled, while he also commented that current policy is appropriate and it is healthy for markets to consider an extended hold or hikes. Paulson stated the US labour market is stable and consumption is slowing, but is resilient, and a rate hike may be considered if growth moves above potential or other inflation risks emerge. Furthermore, he reiterated that he did not see a need to change language at the last policy meeting, as well as noted that risks are 'super-elevated' right now to both inflation and the outlook. ECB's Wunsch said the bond selloff is not impacting the ECB's thinking of Iran and that the ECB will need to react at some point. JPMorgan expects the BoE to hike 25bps in July (prev. forecast of hike in June). Fixed Income Global fixed benchmarks are firmer this morning, attempting to rebound from recent losses as energy prices pull back this morning. UK benchmarks outperform thanks to a cooler-than-expected regional inflation report, which has reduced the chance of a hike in June. USTs are firmer by a handful of ticks and trades towards the upper end of a 108-19+ to 108-30+ range. Focus remains on the geopolitical environment, with a recent WSJ report suggesting that Iran's position in talks with the US to end the war hasn't changed much from earlier iterations that failed to yield progress towards a deal. Earlier today, the IRGC provided some punchy rhetoric after it stated that the war would extend “beyond the region” if Iran is attacked again. Ultimately, an environment which keeps energy-related inflation woes at the front of minds, allowing yields to remain at elevated levels. On that front, the US10yr is just off recent highs, residing at 4.65%; the US-30yr (5.17%) remains towards peaks, after it surged to levels not seen since 2007, in the prior session. Ahead, FOMC Minutes and a 20yr auction. Bunds are firmer by around 10 ticks, and hold within a 123.86 to 124.22 range. Earlier, German PPI M/M printed a touch above the expected (1.2% vs exp. 1%); the statistics office notes that it “is primarily due to higher prices for intermediate goods”, particularly in precious metals prices. The report also highlighted the continued surge in energy prices. There was little move in German paper following this report. On the central banking front, ECB’s Wunsch said that the bond sell-off is not impacting the ECB’s thinking of Iran, adding that the Bank will need to act at some point. Elsewhere, French President Macron nominated Emmanuel Moulin to head the Bank of France. He said at the Senate today that the ECB must be ready to act to combat inflation, and stressed the importance of an independent central bank. He now appears at the National Assembly, where the outcome of the votes for his nomination will be announced this afternoon. Gilts outperform vs peers, and are currently higher by around 45 ticks; UK paper holds at the upper end of an 86.07 to 86.54 range. From a yield perspective, unsurprisingly the UK curve is bull steepening; the 10yr is now eyeing the 5% mark to the downside, but will likely need some positive geopolitical updates for a decisive breach below the key level. Price action today follows a cooler than expected inflation report, where headline CPI slowed to 2.8% in April, from 3.3% in March and below consensus of 3.0%. This report spurred a dovish repricing at the BoE, with markets now assigning an 8% chance of a hike in June (vs 35% pre-release); July now 50% (vs 84% pre-release). Germany sells EUR 3.845 vs exp. EUR 5bln 2.90% 2036 Bund: b/c 1.5x (prev. 1.24x), average yield 3.16% (prev. 2.92%), retention 23.1% (prev. 23.66%). Japan sells JPY 525.8bln 20-year JGBs; b/c 4.01x (prev. 4.82), average yield 3.711% (prev. 3.327%). Commodities WTI and Brent July futures have been edging lower throughout the European morning thus far, with newsflow relatively mixed. Out of Iran, one official noted that the region is open to negotiations whilst an IRGC member stated that the war will extend beyond the region, if Iran is hit again. Most recently, Saudi press citing a diplomatic source suggested that Iran-Pakistan cooperation had declined/stopped over the past two weeks. Nonetheless, crude futures remain heavy, with WTI in a USD 102.50-104.45/bbl range while its Brent counterpart resides in a USD 109.52-111.49/bbl range at the time of writing, with some weakness seen in the European morning despite a lack of clear catalysts, although the moves did follow comments from the Iranian Deputy to the President. Dutch TTF is flat in choppy trade above the EUR 51.50/MWh mark. Spot gold is choppy and resides in a relatively narrow USD 4,453-4,508/oz at the time of writing, vs yesterday’s USD 4,464-4,589.58/oz parameter, with the yellow metal subdued by the firmer dollar. Spot silver, conversely, rebounds following yesterday’s 5% losses. Base metals are mixed with newsflow on the quieter side this morning as markets await further US-Iran updates, with its implications watched from inflationary/growth standpoints. 3M LME copper resides in a narrow USD 13,357.00-13,506.00/t range at the time of writing. US Private Inventory Data (bbls): Crude -9.1mln (exp. -3.4mln), Distillates -1.0mln (exp. -1.3mln), Gasoline -5.8mln (exp. -2.1mln), Cushing -1.4mln. Russia's Kremlin said there is an agreement with China regarding something important on energy. Russia's Kremlin spokesperson Peskov later said the details on the Power of Siberia 2 pipeline still needs to be agreed. UK Treasury said Chancellor Reeves is expected to introduce broad reforms that would allow Parliament to authorise critical energy infrastructure projects. Trade/Tariffs The EU has finalised the text of its US trade deal, as the bloc races to meet US President Trump's July 4th deadline. The deal would see the EU remove levies on US industrial goods in exchange for a 15% tariff ceiling on EU exports. EU's von der Leyen later said she welcomes agreement reached by the European Parliament and Council on reducing tariffs for US industrial exports to the EU, while she calls on the co-legislators to move swiftly and finalise the process on this. EU Trade Commissioner Sefcovic has reportedly been in contact with US Commerce Secretary Lutnick, US Treasury Secretary Bessent and USTR Greer. China's MOFCOM confirmed China will purchase 200 Boeing (BA) jets and said the US is expected to provide engines and parts support for the China Boeing deal. MOFCOM announced a resumption of poultry imports from certain US states and said China reinstated qualified US beef exporter registrations, while it stated the US and China are seeking to extend the Kuala Lumpur trade agreement. Geopolitics: Iran US intelligence assessment recently showed that US forces identified at least 10 mines in the Strait of Hormuz, according to CBS citing US officials. US Senate voted 50-47 to advance war powers resolution that would end US strikes on Iran unless approved by Congress. Iran's IRGC said that if the attack on Iran occurs again, the war will extend beyond the region, Fars News reported. Iranian Deputy to the President Banah said Tehran is open to negotiations within national interests, Al Mayadeen reported. Iranian Foreign Minister Araghchi said months after the start of the war on Iran, US Congress acknowledged the loss of dozens of aircraft worth billions, and Iran's powerful Armed Forces are confirmed as the first to strike down a touted F-35, while he added that with lessons learned and the knowledge they gained, a return to war will feature many more surprises. Iran-Pakistan cooperation had declined/stopped over the past two weeks, Al Arabiya and Al Hadath reported citing a senior diplomatic source. A diplomatic source says Iran and Pakistan held conflicting positions on negotiation channels and the venue for talks, and says mistrust was affecting coordination between Iran and Pakistan. Pakistan's Interior Minister Naqvi is on route to Tehran, according to Journalist Mallick. "On the verge of a decision: Trump and Netanyahu held a phone conversation last night that was described as “lengthy and dramatic,” according to journalist Segal. Two Chinese supertankers, carrying 4mln barrels of oil, exited the Strait of Hormuz on Wednesday, according to tracking data. It was later reported that India was preparing to send oil tankers through the Strait of Hormuz following prior reports regarding the Chinese tankers. Ukraine EU governments are discussing whether former ECB President Draghi or former German Chancellor Merkel could represent the bloc in potential negotiations with Russian President Putin, according to FT. Russian strike killed two in Ukraine's Dnipro and Ukraine reports multiple regional drone attacks, while Russia claims interception of 273 Ukrainian drones, according to AFP. Ukraine's military confirms it struck a Russian oil refinery in the region of Nizhny Novgorod. Other Some Trump advisers reportedly left the US-China summit thinking that a Chinese move on Taiwan was growing more likely, Axios reported. The piece suggested that Taipei is not in panic, at least on the surface US President Trump said Cuba is a failed nation that needs help from the US, while he believes a diplomatic deal can be made, according to Semafor. US indictment of former Cuban president Raúl Castro is expected to be announced today, according to two federal sources familiar with the investigation cited by NBC News. US Event Calendar 7:00 am: United States May 15 MBA Mortgage Applications, prior 1.7% 9:15 am: United States Fed’s Barr Speaks on Consumer Financial Health 2:00 pm: United States FOMC Meeting Minutes DB's Jim Reid concludes the overnight wrap As we await earnings from Nvidia, the largest company in the world, tonight, the global bond selloff showed no sign of easing yesterday, with yields at multi-year highs around the world. Long-end Japanese yields are rallying notably this morning though after a firm 20yr auction at historically high yields. Nevertheless front end yields everywhere have climbed over the last 24 hours. There hasn't been a single catalyst, but with Brent crude holding above $110/bbl and the Strait of Hormuz still blocked, investors moved to price a growing probability of imminent rate hikes. Indeed, the chance of a Fed rate hike in 2026 moved up to 81%, despite the easing bias in their last statement. And significantly, President Trump seemed open to Kevin Warsh proceeding how he wanted to, telling the Washington Examiner that “I’m going to let him do what he wants to do”. If you're looking for positives it seems there are three oil tankers currently navigating the Strait this morning, two Chinese and one South Korean. Assuming they get through this would mark one of the busiest days since the closure. So one to watch. Back to bonds and this upward pressure on yields was clear around the world yesterday, but it was US Treasury yields that saw the biggest jump, with new records across the curve. Most significantly, the 30yr yield (+5.8bps) hit a post-2007 high of 5.18%, whilst the 30yr real yield (+4.0bps) hit a post-2008 high of 2.86%. For shorter maturities, the records weren’t quite so big, but the 10yr yield (+7.9bps) still rose to 4.67%, the highest since January 2025. And with investors bringing forward their rate hike expectations, the 2yr yield (+7.4bps) also hit its highest since February 2025, at 4.12%. The worrying thing would be that with this base in yields formed, where would yields go if strikes resumed on Iran? It's not inconceivable that we'd return to the bond fears seen on April 9th 2025 a week or so after Liberation Day. That ultimately created the conditions for the US to pull back from the maxamalist tariff regime but the session that morning in Asia was pretty fraught. The latest rise in nominal and real yields kept up the downward pressure on equities as well. In fact, the S&P 500 (-0.67%) fell for a 3rd consecutive session, which is the first time that’s happened since late-March, right before the index staged one of its fastest rebounds ever. Tech stocks led the declines, with the Magnificent 7 (-1.33%) dragging the index lower. But it wasn’t just the megacaps, as the hawkish repricing also meant the small-cap Russell 2000 (-1.01%) had a decent pullback with cyclical stocks seeing a broad underperformance. Interestingly, yesterday’s rates move came despite pretty stable oil prices, which is noteworthy given how tight the correlation has been between Treasury yields and oil since the Iran conflict began. By the close, Brent crude (-0.73%) was down to $111.28/bbl, though that decline had come after Trump’s comments on Monday evening, with oil prices then creeping higher for most of yesterday’s session. Still, the stabilisation meant inflation expectations actually fell in many countries, and the rates repricing was driven by higher real rates instead. In particular, the 1yr US inflation swap (-1.9bps) fell to 3.37%, whilst the 1yr Euro inflation swap (-2.3bps) fell to 3.84%. The drift lower in Europe came even as natural gas prices recorded an eighth consecutive increase, with TTF gas rising +3.12% to EUR 51.82/MWh, its highest since early April. In terms of the latest in the Middle East, Trump reiterated his recent threats yesterday, saying that “I hope we don’t have to do the war, but we may have to give them another big hit”. In terms of how long he’d wait, he then said “I’m saying two or three days, maybe Friday, Saturday, Sunday. Something maybe early next week — a limited period of time.” So the prospect of an escalation was still being floated. The mood also wasn’t helped by a Wall Street Journal report that mediators saw little progress in the US-Iran talks. By contrast, Vice President Vance suggested that talks had “made a lot of progress” though he also said “we're locked and loaded” to restart a military campaign against Iran if a deal did not materialise. In the meantime, there was also a Bloomberg report that NATO was discussing the possibility of a deployment to help ships pass through the Strait of Hormuz. That came from a senior NATO official, who said it was being considered if the Strait isn’t reopened by early July. The article said the proposal had support from several NATO members, but not unanimous support. Asian equity markets are mostly lower this morning with the KOSPI (-1.98%) the biggest underperformer after Samsung reversed its initial gains, declining by over -4% following the company's announcement that negotiations with the union have collapsed due to unresolved differences on several outstanding issues, leading to the decision to initiate a strike. Elsewhere, the Nikkei (-1.67%) and the S&P/ASX 200 (-1.36%) are also trading sharply lower with the Hang Seng (-0.55%), the CSI (-0.28%) and the Shanghai Composite (-0.66%) out-performing. S&P 500 (-0.18%) and NASDAQ 100 (-0.13%) futures are more stable but European stock futures are down nearly three quarters of a percent. 30yr JGBs have rallied around 10bps this morning after a decent 20yr auction but yields out to 10 years are slightly higher. UST yields are around a basis point lower out to 10yrs this morning. In monetary policy action, the PBOC left benchmark lending rates unchanged for a 12th straight month as authorities balanced the need to support weak domestic demand against rising inflation risks linked to higher global energy prices. The central bank kept one-year loan prime rate (LPR) at 3.00% and the five-year LPR at 3.50%, in line with market expectations. In Europe, bond yields also moved up to new highs yesterday. Indeed, the 10yr German yield (+4.4bps) hit to a post-2011 high of 3.19%, and the 30yr German yield (+2.8bps) also hit a post-2011 high of 3.70%. That came as investors dialled up the prospect of an ECB rate hike at the next meeting in June, with the probability up to 89% by the close. Bundesbank President Nagel also pointed in that direction, saying that “This energy supply shock is more persistent, so we are moving away from our baseline scenario”, and that the ECB may “have to do something”. But unlike the US, European equities still managed to post a modest gain, with the STOXX 600 (+0.19%) up for a second day running. Here in the UK, gilts saw a relative outperformance after a dovish set of labour market data. Notably, the number of payrolled employees was down -100k in April (vs -10k expected), and the unemployment rate for the three months to March rose to 5.0% (vs. 4.9% expected). So that weakness meant investors dialled back the chance of rapid rate hikes from the Bank of England. Indeed, the probability of a hike by the June meeting fell to just 22%, the lowest it’s been in two months. And in turn, gilts outperformed their European counterparts, with the 10yr yield (+3.0bps) seeing a smaller increase to 5.13%. Over in Canada, the latest CPI print also came in on the dovish side, which led investors to dial back the chance of an imminent rate hike. That showed headline CPI only rising to +2.8% in April (vs. +3.1% expected). Moreover, both of the core measures followed by the Bank of Canada actually fell, with median core down to +2.1% (vs. +2.3% expected), and trim core down to +2.0% (vs. +2.2% expected). So the probability of a rate hike by July fell to just 24%, and in turn that put downward pressure on Canada’s front-end yields. For instance, the 2yr yield (-2.1bps) fell to 3.03%, despite the global moves elsewhere. On the data front, US pending home sales accelerated to +3.3% yoy in April (vs. +2.1% expected), their strongest annual pace since November 2024. Elsewhere, Eurozone trade data showed the block’s trade surplus falling to 9-month low in March amid higher oil prices and a rising deficit with China. Our European policy analysts discussed the EU push to increase trade defenses against China in a note yesterday (see here). Looking at the day ahead, the main highlight will be Nvidia’s earnings after the US close. Meanwhile, data releases include the UK CPI print for April just after we go to press. Then from central banks, we’ll get the minutes from the FOMC’s April meeting, and also hear from the Fed’s Barr and the ECB’s Sleijpen. Tyler Durden Wed, 05/20/2026 - 07:51

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Jun 22, 2026strikeUnverifiedUSIsraelIran

Iran agrees to invite IAEA inspectors back, says US

○ 1 source

Iran agrees to invite IAEA inspectors back, says US This is ‘the first step in permanently ending a nuclear weapons programme in Iran’, said US Vice-President J.D. Vance Tehran has agreed to invite International Atomic Energy Agency inspectors back into the country, US Vice-President J.

D. Vance said on Monday, after a first round of US-Iran talks towards ending the Middle East war. “The Iranians have agreed to invite IAEA inspectors back into their country,” Vance told reporters at Switzerland’s isolated Burgenstock resort, where his talks with Iran’s chief negotiator Mohammad Bagher Ghalibaf opened on Sunday.

“That is a major milestone for the American people and the first step in permanently denuclearising or permanently ending a nuclear weapons programme in Iran,” he said. The IAEA estimates that Iran had 440 kilograms (970 pounds) of uranium enriched to 60 per cent – close to the level needed for a bomb.

Iran suspended cooperation with the IAEA after Israel and the US launched a previous wave of attacks in June 2025, and inspectors have not seen the material since.

Agence France-Presse

Jun 22, 2026strikeUnverifiedUSIsraelIranProxyEUChina

Stocks Drift As Chips Extend Gains, Oil Slides On Positive US-Iran Talks

○ 1 source

Stocks Drift As Chips Extend Gains, Oil Slides On Positive US-Iran Talks

Futures are modestly lower coming off the US holiday weekend, after equities finished higher last week with both Dow and Russell clocking new ATHs and SPX finishing in the green for the 11th time in the last 12 weeks. As of 8:00am ET, S&P 500 futures edged down 0.1% while Nasdaq 100 contracts are higher by 0.1% with chips outperforming as usual while hyperscalers, aka "check payers" down as all Mag 7 are lower with TSLA (-1.4%) and GOOGL (-1.6%; Google’s DeepMind VP John Jumper is leaving the company to join Anthropic) being the biggest laggards. Overseas, Asian markets mostly higher overnight with China and Japan the big gainers, up over 1.5%. European markets higher, up ~0.3%. Big development over the weekend revolved around US-Iran talks in Switzerland, where both sides ultimately highlighted progress following some earlier headline noise. Donald Trump again threatened strikes on Iran if Hezbollah keeps attacking Israel, & US and Iran set up a communication line to avoid incidents and ensure safe passage of shipping through the Strait of Hormuz. In the UK, PM Keir Starmer announced his resignation outside 10 Downing Street. The pound erased losses after briefly touching a 2026 low, while gilts rallied as an orderly leadership transition took shape. Bond yields are 2-4bp higher, while the USD is largely unchanged. WTI crude fell $-0.58 to $75.27 reversing all earlier gains while Brent traded around $79. Gold and silver are higher as is bitcoin. There is little on the corporate calendar and scant macro data, leaving traders with little direction until Micron’s earnings due Wednesday and the Fed’s preferred inflation gauge on Thursday take center stage. Fed speaker slate includes Waller at 9am; Williams, Goolsbee, Kashkari and Barkin speak later this week

In premarket trading, SpaceX shares slid more than 5% in premarket trading, putting the stock on pace for a third straight loss. Meanwhile, the semi meltup continues: chipmakers including Intel rallied. Getty Images soared more than 300% after inking a display partnership with ChatGPT owner OpenAI. Here are the notable premarket movers:

Alphabet (GOOGL) -1.7%, Tesla (TSLA) -1.3%, Amazon (AMZN) -0.8%, Nvidia (NVDA) -0.2%, Meta Platforms (META) -0.9%, Apple (AAPL) -0.8%, Microsoft (MSFT) -0.4% Apogee Therapeutics (APGE) climbs 48% after AbbVie agreed to buy the company for $10.9 billion to bolster its anti-inflammatory portfolio amid growing competition for its best-selling drug. Arcosa (ACA) gains 7% after CRH said it has signed an agreement to acquire 100% of the provider of building materials in an all-cash transaction for $150 per share. Definium Therapeutics (DFTX) gains 32% after announcing positive topline results from a Phase 3 study evaluating a single dose of an orally disintegrating tablet in adults with major depressive disorder. Fervo Energy (FRVO) gains 8% after the geothermal-energy company agreed with Pacific Northwest National Laboratory and Nvidia to develop a digital twin platform for Enhanced Geothermal Systems technology. Getty Images (GETY) soars 156% after the company announced a display partnership With OpenAI. Regenxbio (RGNX) climbs 8% after the Wall Street Journal reported that the FDA has agreed to reverse the rejection of the firm’s rare-disease drug. SpaceX (SPCX) is down 5%, putting the stock on pace for a third straight loss. A peppering of M&A and ECM news is spicing up an otherwise quiet Monday morning. Budget airline EasyJet has rejected three offers by US private credit giant Castlelake. AbbVie is closing in on a nearly $11 billion deal to buy inflammatory disease drug developer Apogee Therapeutics, according to the FT, which also reports that building materials group Arcosa could be close to a takeout by larger rival CRH. SpaceX kicked off its debut US dollar high-grade bond offering expected to be at least $25 billion.

The big geopolitical development over the weekend revolved around US-Iran talks in Switzerland, where both sides ultimately highlighted progress following some earlier headline noise. Oil traders took comfort from evidence of progress in Middle East talks even as President Donald Trump threatened to strike Iran if Hezbollah militants continue to attack Israel. Vance said the warring sides set up a mechanism to keep the Strait of Hormuz open, while Iran agreed to invite nuclear inspectors.

“Even during the midst of the conflict in the Middle East, equities still priced a positive outcome,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “It seems logical that markets don’t rally too hard on something which they had already priced to a fair degree.”

Traders also followed the latest developments in UK politics as Prime Minister Keir Starmer announced his resignation outside 10 Downing Street. The pound erased losses after briefly touching a 2026 low, while gilts rallied as an orderly leadership transition took shape. The departure of Starmer is putting Britain on course for its seventh premier in a decade and paving the way for Andy Burnham to replace him. The former mayor of Manchester announced his candidacy hours after Starmer’s resignation and received the backing of Wes Streeting, a potential rival. Starmer said nominations for a new Labour leader will open July 9 and that a contest will be finalized by Sept. 1. The question for investors is about the impact on the UK’s finances if Burnham were to become prime minister. A slew of all-but-forgotten niche option positions betting on an oil glut are coming back into play as crude cools.

“Markets would be watching for Burnham’s pick of Chancellor,” wrote Mohit Kumar at Jefferies. “The fear is that Burnham’s policies are left-leaning and if the new chancellor is not credible, it would raise concerns over deficits and borrowing.”

The AI trade still works and investors should keep it, say Goldman Sachs traders in charge of thematic investing, baskets and equity structuring.

In geopolitics, China has imposed export controls against US rare earth firms, in response to the Pentagon’s accusations against some of China’s biggest companies supporting the Chinese military.

Meanwhile, Trump’s administration is rolling out new tools with the same protectionist goals after the Supreme Court ruled his sweeping global tariffs to be illegal. The rising cost of living, and corruption, are shaping up to be major campaign battlefronts in races that will determine control of the US Congress.

Bond traders, recently forced to reposition for the possibility of higher interest rates ahead, are looking to Thursday’s US personal consumption expenditures price index for a read on whether the market’s hawkish stance is warranted. Forecasters expect the index, the Federal Reserve’s favorite inflation gauge, to show acceleration on both a monthly and year-over-year basis in May. Fed Governor Christopher Waller is due to speak later on Monday. Bloomberg Economics’ head Anna Wong expects a hot PCE reading will likely reinforce the hawkish tilt by the Fed at its June meeting.

Ahead of Micron’s earnings, a leveraged ETF linked to rival SK Hynix is lifting an option cap. Rising leverage is also showing up in FINRA’s margin debt statistics, and the Roundhill DRAM ETF has recorded 19 straight days of inflows and AUM surpassed $20 billion. Micron’s fiscal 3Q revenue may exceed consensus by about 13% and guidance by 18%, notes BI.

European stocks struggled to derive much benefit with the Stoxx 600 down 0.1%, with construction and media stocks leading declines, while technology and energy shares are the biggest outperformers. Here are the biggest movers Monday:

Infineon shares rise as much as 5.3%, after CFO Sven Schneider maintained his bullish stance on the chipmaker’s growth over the next few years, while Bernstein increased its price target for the stock EasyJet shares rise as much as 5.4% to the highest level in almost a year after the British budget carrier rejected a third takeover proposal from US investment firm Castlelake BioArctic jumps as much as 10%, the most in more than four months, after the Swedish biopharma company signed a research and collaboration agreement with Eli Lilly for its BrainTransporter technology LISI gains as much as 7.6%, reaching a record high, as Berenberg initiates on the component maker with a buy rating, citing entrenched positions in automotive and aerospace fasteners Sanofi shares slip as much as 2.1%, making them the biggest laggard by index points in the Stoxx 600’s healthcare subgroup on Monday morning Babcock shares fall as much as 5.7%, the most since February, as the defense contractor posts full-year results UBS shares are slide as much as 0.6%, falling for a second straight session after being downgraded at Zuercher Kantonalbank on valuation grounds, with the Swiss bank having hit a fresh 2008-high last Thursday Asian stocks surged to a record as chipmakers and other artificial intelligence-linked firms rallied amid optimism surrounding US-Iran peace talks. The MSCI Asia Pacific Index rose as much as 1.1%, with information technology the top performing sector. Markets in Taiwan, mainland China and Japan led regional gains. Continued interest in AI and semiconductor plays drove Taiwan’s benchmark to a record high. South Korea’s memory maker SK Hynix also rose to an all-time high on expectations over its planned ADR listing, helping to erase earlier losses in the Kospi gauge. Meanwhile, equities in Hong Kong underperformed, as weak consumption data weighed on sentiment and investors chased the AI rally elsewhere. A gauge of Chinese stocks listed in the city was headed for a bear market before trimming some losses.

“We continue seeing liquidities leaving ‘old Techs’ in Hong Kong including Tencent, Alibaba and Baidu to chase AI-related stocks in Japan, Korea and Taiwan,” said Steven Leung, executive director at UOB Kay Hian.

In FX, the pound is down a handful of pips near its year-to-date low. The yen is the weakest of the G-10’s, falling 0.3% against the greenback.

In rates, treasuries decline, pushing US 10-year yields up 3 bps to 4.48% as trading resumes after Friday’s US cash-market holiday. US yields are 2bp-4bp higher on the day with losses led by front-end tenors, flattening 2s10s and 5s30s by 0.5bp and 1.5bp respectively. 10-year around 4.48% is cheaper by 3bp with bunds and gilts in the sector outperforming by 5bp and 6.5bp. European bonds outperform led by gilts after Wes Streeting backed Andy Burnham to be new UK Prime Minister, removing a key uncertainty after Keir Starmer’s resignation. Oil trades lower on signs of diplomatic headway between the US and Iran. IG dollar issuance slate includes a few items so far. Dealers forecast about $50 billion of US investment-grade bond sales this week, likely to include a jumbo bond offering from SpaceX. Treasury auctions resume Tuesday with $69 billion 2-year notes, followed by 5- and 7-year note sales Wednesday and Thursday

In commodities, Brent crude futures fall 1.6% after Iran said there had been “major progress” in all-night discussions with the US. WTI crude oil futures are down 0.8% near session lows after US Vice President Vance says Hormuz is open and talks with Iran have made progress. Precious metals advance, with spot silver rising 2%.

US event calendar: US economic data calendar empty for the session. Fed speaker slate includes Waller at 9am; Williams, Goolsbee, Kashkari and Barkin speak later this week

Market Snapshot

Top Overnight News

The U.S. and Iran made progress during talks in Switzerland on Monday toward reaching a final deal within 60 days, including the agreement to establish a committee and a mechanism to end hostilities in Lebanon. CNBC The US and Iran set up a communication line to avoid incidents and ensure safe passage of shipping through the Strait of Hormuz. BBG UK PM Keir Starmer announced his resignation and outlined plans for a successor to take office by September. The move clears the way for Andy Burnham to become Britain’s seventh PM in a decade. Former Health Secretary Wes Streeting said he backed Burnham to become PM. The pound hovered near its weakest level of the year while gilts were little changed. BBG China announced on Monday that it will add 10 American firms to its export control list, including two rare earth firms, while also restricting 46 US firms from government procurement, signalling it would respond to Washington’s recent expansion of a military blacklist, even amid a broader stabilization of bilateral ties. SCMP South Korea’s exports jumped again in early June, thanks to AI fueling a sustained boom in the semiconductor sector. BBG Chevron signed a 20-year deal with Microsoft to supply natural-gas fired power to a planned West Texas data center that may become one of the largest in the US. BBG Semis are on pace to finish as the most net bought global subsector for a second straight year, with net allocations now at record highs. GS Prime Brokerage Major investors warned that Fed Chair Warsh’s push to axe the Fed’s guidance on the direction of monetary policy could increase volatility in the Treasury market and drive borrowing costs higher: FT. Hong Kong is in talks with Chinese authorities to expand cross-border investment channels and grant mainland buyers access to local IPOs. BBG Colombia elected Trump ally Abelardo de la Espriella president by a razor-thin margin. The preliminary result was immediately challenged by outgoing President Gustavo Petro, who backed rival candidate Senator Iván Cepeda. BBG US Secretary of State Rubio congratulates Colombia's presidential candidate De la Espriella who leads against leftist rival Cepeda following the Colombian election. Democrats are set to make corruption a major campaign battlefront in the midterms as polling suggests voters are eager to see lawmakers take on conflicts of interest and self-enrichment by leaders. BBG US Southern Command announces that Task Force Southern Spear has conducted a strike on a vessel operated by designated terrorist organisations in the Caribbean. US Secretary of State Rubio plans trip to the Middle East next week: Kuwait, UAE and Bahrain at the moment: Axios US President Trump told Axios that he doesn’t see Anthropic PBC as a national security threat, despite his administration recently taking steps to cut off foreign access to the tech company’s most advanced AI models. Furthermore, Trump said that it was seen as a threat last week, but relations have improved since with the AI giant. US Department of Agriculture announced three new cases of screwworm to take the total number of domestic detections to 15 cases. Iran Headlines: Latest News

US and Iran talks opened in Switzerland on Sunday after US VP Vance arrived in Switzerland and the Iranian delegation led by chief negotiator Ghalibaf, which included Foreign Minister Araghchi, arrived on Saturday, while Pakistan’s Premier Sharif and military chief Munir travelled to Switzerland to join the US-Iran talks. Iran's delegation reportedly left the negotiation site in protest against statements by US President Trump, while Fars also reported that Iran halted talks with the US after Trump threatened strikes over Hezbollah’s actions in Lebanon. Iran said Trump’s threat is a blatant violation of the MoU and halted talks in Switzerland, while it is reviewing a response to Trump’s threats. However, sources cited by Al Hadath later stated that the Iranian delegation had not left the negotiation headquarters at the Burgenstock resort and the Iranian delegation head discussed a joint statement draft with mediators. US President Trump threatened to resume bombing and take over the Strait of Hormuz if a deal is not reached, while Trump said the US may take tolls if it has to and that he has a 60-day option, in which he can do whatever after it. Trump stated he spoke with Iranian officials and used expletive language in the call with Iranian officials on Hormuz, as well as threatened that they won’t have a country if Hormuz is closed, according to Fox. US President Trump posted that Iran must immediately stop their proxies in Lebanon from causing trouble, or else the US would hit Iran very hard again, “just like we did last week, only harder!!!” Trump separately commented that there will be no tolls in the Strait of Hormuz, unless they are imposed by the US. UKMTO reported an incident in which a cargo vessel was approached by a craft with six armed persons onboard 92 nautical miles southwest of Yemen’s Mukalla in the Gulf of Aden. Israeli army chief said the Lebanon ceasefire is fragile and forces remain ready for combat. Israeli military convoy reportedly entered southern Syria’s Quneitra region, near the Israeli-controlled Golan Heights. Qatar and Pakistan issue joint statement on conclusion of US-Iran talks in Switzerland, while Qatar said first session of the US-Iran high level talks has concluded and that talks were conducted in a positive, constructive atmosphere. said:. Technical talks are to continue for remainder of the week. US and Iran agreed to de-confliction cell over Lebanon. Encouraging progress has been made, including creation of a mechanism for further technical talks. Parties agree to establish high-level committee to provide political oversight on mediation. High-level committee agrees on roadmap to reach final deal within 60 days. "The negotiations of the main Iranian delegation in Switzerland have ended, however, experts are still in Switzerland and are following up on the implementation of the memorandum of understanding", Tasnim reported citing sources. Iranian negotiating team member said executive procedures about the release of Iranian frozen funds have taken place with the Qatari delegation and that a draft has been finalised regarding waivers of Iranian oil sanctions, which will be issued soon, although negotiations about other subjects will not take place if the war does not end in Lebanon. "No negotiations have taken place on the nuclear file so far", Tasnim reported citing a source. US diplomat said talks included robust discussions on a nuclear deal and enforcing the ceasefire in southern Lebanon, while talks also involved clarifying the messaging on the Strait of Hormuz. Furthermore, a US official involved in the negotiations told Al Jazeera that they held in-depth discussions on all elements of the nuclear agreement, and that mechanisms have been worked on to prevent escalation and ensure the strait remains fully open. Pakistani Army Chief said negotiating parties reached success stage, according to Al Arabiya. US official involved in the negotiations told Al Jazeera that they held in-depth discussions on all elements of the nuclear agreement, adds mechanisms have been worked on to prevent escalation and ensure the strait remains fully open. Sources cited by Al Arabiya said an anticipated statement will be issued by the Iranian and American negotiators and the mediators. Sources cited by Al Hadath stated that the Iranian delegation has not left the negotiation headquarters at the Bürgenstock resort and Iranian delegation head discusses joint statement draft with mediators. Tasnim reported Iranian delegation refused to return to negotiations but message exchanges continue through intermediaries. Iranian Commentary:

Iran's Foreign Minister Araghchi posted Pakistani and Qatari mediation delivered major progress to end Lebanon War, oil and petrochem exports are waived, blockade lifted, frozen assets released, and major reconstruction & development plan launched for Iran. Iran's Foreign Ministry said the technical team is to continue work, but negotiation delegation work has concluded, adds significant progress achieved in quadrilateral talks in Switzerland. Spokesman said groundwork for starting negotiations for the final agreement was discussed. Iranian Foreign Ministry Spokesperson Baghaei said Iran is working on safe passage mechanism for Hormuz and that Iran reported progress on oil sales and asset unfreezing, adds the war in all fronts, including Lebanon, must end. Iranian Supreme Leader adviser Rezaei said the US is responsible for Israel's actions in Lebanon and Iran will hold the US accountable in the event of a threat against Iran. Iranian Deputy Foreign Minister Gharibabadi to lead the technical team in Switzerland, Sky News Arabia reported. Iran resumed oil loading from Kharg Island after about a six-week halt, following the lifting of the US blockade of its ports. Lebanon/Israel:

Al Jadeed News cites Haaretz source stating the Israeli army will be forced to partially withdraw from the Blue Line in Lebanon. Israeli army will be forced to partially withdraw from the yellow line (buffer zone), Al Jazeera reported, citing Israel's Haaretz sources. Israeli Foreign Minister Saar told his New Zealand counterpart, "Israel will respect the ceasefire in Lebanon as long as it won’t be breached by Hezbollah.". Israeli political and security cabinet will convene on Thursday amid US-Iran talks, N12 reported. Israeli officials are dismissing reported of an agreement to withdraw from certain points in southern Lebanon, amid a lack of US pressure to do, Maariv's Barsky reported. Officials add, "because in Washington they understand the Israeli position: no partial withdrawal, no point-specific withdrawal, and no diplomatic 'gesture'.". And, "as long as the Hezbollah threat persists, there is no change in the deployment of forces and no intention to relinquish the security positions in southern Lebanon.". Lebanese presidency discussed the issue of consolidating the ceasefire in Lebanon, in a call with Qatari PM and US's Vance. Other:

Two South Korean vessels were said to have passed through the Strait of Hormuz after US and Iran signed a ceasefire MoU. Three India-linked supertankers re-emerged in the Gulf of Oman, which suggests an increase in traffic through the waterway. A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed with price action choppy following the recent conflicting headlines concerning US-Iran negotiations in Switzerland, as the Iranian delegation was said to have walked out of talks following Trump's renewed threats to resume bombing them if a deal is not reached and if they don't stop their proxies in Lebanon from causing trouble. However, the reports that gradually followed were more encouraging as mediators stated that talks were conducted in a positive, constructive atmosphere and technical talks are to continue for the remainder of the week, with the US and Iran agreeing to a de-confliction cell over Lebanon. Furthermore, the parties agreed to establish high-level committee to provide political oversight on mediation and on a roadmap to reach final deal within 60 days, while Iran's Foreign Minister Araghchi confirmed that mediation delivered major progress to end the Lebanon war, as well as stated that oil and petrochem exports are waived, blockade is lifted, frozen assets released, and that a major reconstruction and development plan was launched for Iran. ASX 200 struggled for direction as strength in gold miners and financials was offset by weakness in tech, energy and defensives. Nikkei 225 extended on record highs and rallied firmly above the 72,000 level as exporters benefited from a weaker currency and a pullback in oil, although the index has pared some of the gains, but comfortably remained the outperformer. KOSPI swung between gains and losses amid a divergence between Samsung Electronics and SK Hynix, in which the latter took over the throne as South Korea’s largest Co. by market cap. Hang Seng and Shanghai Comp were mixed with sentiment not helped by trade frictions after China added 10 US firms to its export control list and announced to take relevant measures against 46 US companies in government procurement activities, while there was a lack of surprises from the announcement that the benchmark Loan Prime Rates were maintained for a 13th consecutive month.

Top Asian News

The Japanese Government is reportedly planning to deploy JPY 68tln in public and private funding for the semiconductor sector by FY 2040, TV Asahi reported citing sources. Australia's Agricultural Minister said testing has confirmed H5 bird flu detected in a second bird found in Western Australia. China's Vice Premier Ding Xuexiang said risk of fragmented supply chains is growing and that some countries abuse use of export controls, adds China is anchor of stability and propeller of the global economy. said: Can work with all sides to build inclusive supply chains. Japanese Finance Minister Katayama ready to act suitably on currency fluctuations whenever necessary, but declines to comment on particular forex rates. European bourses (STOXX 600 -0.2%) began the session on a muted footing, as markets digest the volatile geopolitical situation (see above). European sectors began the session mixed. Tech tops the pile with ASML +1.5% after it denied shipping EUV lithography machines, or any related component, to China, following US Commerce Secretary Lutnick’s accusations. Citi this morning wrote “we find it very hard to believe that they would jeopardise their position in the industry”. The sectoral laggard is Construction, one of its largest constituents Holcim -1.0% (9% weighting), after RBC downgraded Holcim’s PT, citing the completion of the acquisition of Xella and an update to Q2 results model

Top European News

UK PM Starmer announces he will step down; nominations for Labour leader will open on 9th July, conclude by end-summer; will act as caretaker until new leader elected. Will fully support whoever takes over. UK PM's Chief of Staff resigns, New Statesman reported. UK Minister Smith said "I would have been very happy for him to continue", in reference to PM Starmer. UK Foreign Minister Cooper urges UK PM Starmer to resign, according to Sky News. Ireland said EU capital markets deal is possible by year end, according to FT. Italian PM Meloni called out US President Trump for “senseless”, “constant, unprovoked attacks”, while she said that Trump’s statements are completely made up and she doesn’t know why he behaves like this towards allies, after Trump told an Italian TV channel that Meloni begged him to take a picture with her and that he wouldn’t have taken it, but he felt sorry for her. Furthermore, Trump criticised Italy and its PM for not becoming involved with Iran and its nuclear threat. FX

DXY is firmer against all peers as it stabilises towards recent highs above 100. JPY is the underperformer after unsuccessful jawboning attempts, NOK holds on to gains after crude gapped higher at the re-open. USD-specific drivers are light, focus overnight was on geopolitics with US-Iran talks over the weekend whipsawing crude benchmarks. The main data point this week is PCE on Thursday, the session today sees remarks from Fed's Waller, aside from this, the session is likely to be quiet and driven by geopolitical moves in oil/yields. DXY gapped higher at the APAC re-open and rose throughout the European morning to a peak of 101.01. Since this peak, the index has slipped and now more towards the unchanged mark. UK PM Starmer announces he will step down, remaining as a caretaker until a new leader is elected (Nominations begin on 9th July). Burnham is overwhelmingly considered as the front-runner, with GBP and Gilts seeing underperformance in recent weeks. There was no reaction to the announcement from Starmer himself, as it had been widely touted in recent days/weeks, especially following Burnham's convincing victory in the Makerfield by-election. Given Burnham is nearly certain to become the next PM, focus is on his cabinet appointments, specifically his Chancellor pick. Over the weekend, the FT and Times made it clear that Miliband would be the least market friendly, citing comments from FTSE 100 executives; retaining Reeves would be the most market-friendly option, though the same outlets noted Burnham would likely want to remove the current Chancellor in a shift away from the last administration. GBP/USD -0.1% and tracking the stronger Buck. EUR/GBP +0.1%, gapped higher at the APAC re-open, but reversed most gains. JPY continues to underperform and moves further into intervention territory as USD/JPY looks towards 161.81 highs made last week. Japanese Finance Minister Katayama was on the wires overnight, said they were “ready to act suitably on currency fluctuations whenever necessary”; not sparking a move in the Yen. USD/JPY marked a session high of 161.78, looking to the aforementioned levels to the upside; awaiting further comments from Japanese officials. South African Parliamentary Speaker Didiza plans to support President Ramaphosa’s bid to halt his impeachment proceedings. Central Banks

Japan's PM Takaichi said expect BoJ to closely coordinate with the government and conduct a monetary policy appropriately to achieve the 2% price goal. BoJ Deputy Governor Himino said takes some time for policy to have an impact on the economy. said:. Pass-through from oil prices to downstream goods has progressed somewhat rapidly. Recent easing of Middle East tensions doesn't deviate much from their April outlook. Accommodative conditions are expected to continue. Risks of price overshoot could materialise if there is a delay in the necessary adjustment in the degree of monetary easing. Will closely monitor impacts that raising policy interest rates may have on businesses and households. ECB's Escriva warns that rising oil and commodity prices linked to the Middle East conflict are feeding into consumer prices and could cause wage spillovers. said energy cost increases are already transmitting through areas such as transport services. ECB must monitor possible second-round wage effects depending on inflation persistence. Chinese Loan Prime Rate 1Y (Jun) 3.0% vs. Exp. 3.0% (Prev. 3.0%). Chinese Loan Prime Rate 5Y (Jun) 3.5% vs. Exp. 3.5% (Prev. 3.5%). SNB adjusts remuneration of sight deposits; lowering threshold factor from 15 to 13.5; effective August 1st 2026. Fixed Income

Fixed benchmarks are mixed. USTs in the red by around 10 ticks, but off a 109-07 trough by another five. USTs lower as a function of catch-up from the holiday session on Friday, and as the complex acknowledged the gap higher in energy at the resumption of trade after Iran seemingly shut Hormuz transit amid ongoing conflict in Lebanon. However, the updates from negotiators thereafter and as technical talks take place this week in Switzerland, points that allowed energy to retreat and gave relief to EGBs. USTs look ahead to remarks from Fed’s Waller. Bunds, as above, benefited from the energy retreat in the second half of the APAC session and are firmer by around 10 ticks, but a similar amount shy of the 126.34 high. Specifics light for the complex, no move to ECB commentary thus far, and we now await text from Lagarde at the ECON hearing. Additionally, Germany digests reports into another meeting of the pensions committee today. The main point from it being that the retirement age will increase, though not at the pace some have been seeking. More broadly, Politico reports budget progress, however, tax reform remains the major outstanding point. Last but not least Gilts, lower by 10 ticks and a similar amount of the low in 88.30-72 confines after gapping higher by 24 ticks, seemingly taking relief from numerous reports that the team around Burnham no longer saw Miliband as the favourite for Chancellor. Since, PM Starmer has resigned. He will serve as caretaker during the process which begins in three weeks and will last for no more than one week, 9th-16th July. Burnham is the clear favourite. However, the three weeks between now and the start of that process could potentially see the odds around Burnham and theoretical rivals, i.e. Streeting, change notably. Geopolitics

A very busy geopolitical weekend, which initially saw the Iranians shut the Strait of Hormuz, and it suggested that the US and Israel broke the interim ceasefire agreement amid the continued military strikes on southern Lebanon. This led Brent Aug’26 to gap higher by c. USD 2/bbl, to a session peak of USD 82.30/bbl. Attention then turned to US-Iran talks in Switzerland. The outcome of the initial talks were positive. A Qatari and Pakistani joint statement stated that US and Iran agreed to set up a de-confliction cell over Lebanon and agreed to establish a high-level committee to provide political oversight on mediation. The high-level committee also agreed to a roadmap to reach a final deal within 60 days. Following the positive mood music from the talks, Brent Aug’26 gradually moved off best levels and turned negative; currently lower by c. 1.1%, and at the bottom end of a USD 78.58-82.30/bbl range. Attention remains on further developments on the negotiation process, which is expected to continue throughout the week. For now, the heads of the delegation team have headed back to Iran, while technical teams will remain in Switzerland to follow up the implementation of the MoU. Spot gold (+0.8%) is in the green, benefiting from the disinflationary implications of the positive geopolitical mood music. XAU/USD is currently holding within a USD 4136-4221/oz range. On analyst commentary: Goldman Sachs expects central bank Gold buying to slow slightly but remain a structural floor for prices. GS forecasts central bank buying at roughly 50T a month in 2026, then slowing to around 40T a month in 2027. Base metals are broadly firmer this morning vs a mostly negative APAC session. Focus overnight remained on China adding US firms to its export control list and decided to take relevant measures against 46 US companies in government procurement activities. 3M LME Copper currently resides within a USD 13,598.28-13,736.93/t range. "Confirmed crossings through the monitored Strait of Hormuz zone rose sharply over 19–21 June, with 71 total transits recorded", Kpler's Bakr reported. Goldman Sachs expects central bank Gold buying to slow slightly but remain a structural floor for prices. GS forecasts central bank buying at roughly 50 T a month in 2026, then slowing to around 40 T a month in 2027. US Department of Agriculture announces three new cases of screwworm to take total number of domestic detections to 15 cases. Iraq asked operators of five major oil fields to boost output to pre-war levels, targeting output of more than 3mln bpd, while it was separately reported that Iraq intends to gradually increase oil production to between 4.2mln-4.3mln bpd, according to the deputy oil minister for upstream affairs. Qatar’s Interior Ministry reported an internal explosion at a factory in the Ras Laffan Industrial Area, although no injuries or leaks were reported. A fire occurred in Marathon Petroleum’s Galveston Bay refinery (631k bpd) but was extinguished. Guinea’s President Doumbouya announced a ban on raw gold exports, in an effort to boost local processing of the metal and help the domestic economy. Trade/Tariffs

Iranian delegation is set to travel to Tehran after talks in Switzerland. India's Trade Minister said they intend to secure preferential market access via a trade agreement with the US. Signing of a US-India trade agreement will take longer than expected, because the US initially imposed 50% tariffs on Indian goods. China's MOFCOM issues action plan on strengthening foreign Investment; to support qualified key foreign firms listing on domestic exchanges. China added 10 US firms to its export control list including USA Rare Earths, while the Finance Ministry announcing to take relevant measures against 46 US companies in government procurement activities. USTR Greer is to travel to India and Uzbekistan, while he will discuss the US-India joint statement as part of bilateral trade agreement talks. US Event Calendar

9:00 am: Fed’s Waller Delivers Opening Remarks DB's Jim Reid concludes the overnight wrap

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Talking of extreme heat, the latest developments out of the Middle East have turned more constructive after a highly volatile start to the weekend. Encouraging progress in US–Iran talks in Switzerland, mediated by Qatar and Pakistan, has seen both sides agree overnight to a roadmap towards a potential deal within 60 days, alongside the creation of technical working groups, a de conflict mechanism covering Lebanon, and a direct communication line aimed at avoiding incidents and keeping the Strait of Hormuz open. This marks a notable shift from Saturday’s confusion, when Iran suggested the strait was now closed again after Israeli attacks in Lebanon, and briefly stepped back from talks following renewed threats from President Trump, who reiterated that the US would strike again if Iranian-backed proxies in Lebanon continue attacks on Israel. Despite that rhetoric, oil flows through Hormuz have continued and even picked up over the weekend, helping to calm markets, with Brent reversing earlier gains this morning before details of the talks came through. What the overall positive weekend has perhaps taught us is that the path to a durable resolution remains fragile.

However, for now Brent crude (-1.61%) is reversing its earlier gains, currently trading at $79.27 per barrel. Asian equities are not seeing a clear trend with the Nikkei (+1.56%) notably higher, but with the KOSPI fairly flat after being up +2% earlier in the session. The Shanghai Comp is +0.18%, while the Hang Seng is down -0.98%. China's central bank has maintained its benchmark lending rates for the 13th consecutive month overnight.

10-year USTs have increased by +3.2 bps, trading at 4.49% as cash trading has resumed following Friday's US holiday. 2yr yields are +4.7bps. US equity futures are down around half a percentage point but that's roughly where they were for a lot of Friday when the cash market was closed.

The main data highlights this week are the global flash PMIs tomorrow, and the US core PCE on Thursday. Elsewhere, other data of interest include the Ifo survey in Germany (Wednesday), Tokyo CPI in Japan (Friday), and CPI reports in Canada (today) and Australia (Wednesday). Note there is much speculation around whether UK Prime Minister Keir Starmer will resign this week after leadership rival Andy Burnham’s by-election win last week. The Observer newspaper yesterday reported that Starmer was preparing to set out a timetable for his departure, with an announcement possible today. If true it’s notable it's happening on the eve of the 10th anniversary of the Brexit vote tomorrow, something the UK still hasn’t come to terms with. Since then, the UK has revolved through six Prime Ministers which alongside Brexit, underlines the immense difficulties many incumbents have in the Western World today. Everyone arrives in the post with great hopes but then the lack of growth and the financial realities hit. Until you have stronger economic growth and are less constrained by debt it’s highly likely the conveyor belt of PMs will continue.

On this, the Deutsche Bank Research Institute will be pleased to welcome you to our London offices on Thursday (11:30 refreshments for a 12-1 presentation) for a look at “Brexit 10 years on: Whats’s worked, what hasn’t, what’s next?”. I’ll be introducing Sanjay Raja and Shreyas Gopal in what looks set to be a fascinating week for the UK.

Moving over to the other side of the Atlantic, after a hawkish FOMC last week with a clear shift in style from new Fed Chair Kevin Warsh, our economists now have two 25bps hikes in their Fed forecast. They have warned that the US economy needed tighter policy but were waiting for the meeting to confirm the tightening view. The central scenario sees two rate increases this year, likely in September and December, taking the fed funds rate to around 4.1%, followed by a prolonged pause through 2027. Easing is then expected to resume in the first half of 2028, with around 50 basis points of cuts, potentially delivered in March and June, bringing policy back towards a neutral range of roughly 3.5–3.75%. See their piece explaining their view here.

In terms of the US week ahead, our economists expect appearances by Williams and Goolsbee on Thursday to be particularly informative. Williams, who also serves as Vice Chair of the FOMC, is seen as one of those not currently predicting a hike this year, while Goolsbee is viewed as leaning towards around 50 basis points of tightening.

Earlier that day, attention will centre on the data flow. US economists expect May personal income to rise by around 0.4% (from flat previously) and consumption to increase by 0.6% (from 0.5%). The core PCE deflator is projected to rise by around 0.37% month-on-month, up from 0.24%. On this basis, the year-on-year rate would move higher to approximately 3.44%, marking the strongest reading since October 2023 and reinforcing the narrative of persistent underlying inflation. The Fed will also release its bank stress test results on Wednesday and there is other second tier data.

Over in Europe, in addition to the PMIs, sentiment indicators in Germany will include the Ifo survey (Wednesday) and the July GfK consumer confidence print (Thursday). In France, there will be business confidence tomorrow and consumer confidence on Thursday. Finally, the ECB will release its May consumer expectations survey on Friday, with inflation expectations in focus. ECB speakers will include President Lagarde amongst others.

In Asia, inflation prints due include the Tokyo CPI for June on Friday in Japan (see our Chief Japan’s economist week-ahead here) and Australia’s May CPI due Wednesday (DB forecast for headline CPI is -0.4% MoM / 4.3% YoY). Other notable data features BoJ’s Summary of Opinions from its June meeting (Wednesday), Australia’s labour force survey (Thursday) and the 1-year and 5-year loan prime rates in China (Monday).

Finally, there will be a few notable earnings reports out next week, including FedEx, Cerebras and Carnival tomorrow as well as Micron and Jefferies on Wednesday. Micron is up around 830% over the last year and around 250% since the end of March with a market cap of nearly $1.3tn. So it’s becoming one to follow from the macro side.

Recapping last week, oil prices kept falling as they reacted to the news that the US and Iran had reached an interim deal. So that meant Brent crude fell -7.74% last week (+0.90% Friday) to $80.57/bbl. So that considerably eased fears about a stagflationary shock to the global economy, particularly as data showed more traffic was starting to flow through the Strait of Hormuz again. Indeed, near-term inflation expectations plummeted, with the 1yr US inflation swap down -30.8bps last week to 2.44%, whilst the 1yr Euro inflation swap was down -23.7bps to 2.60%.

But even as inflation expectations fell, the Fed’s latest decision on Wednesday led to a clear hawkish repricing for markets. Notably, 9 of the 18 officials in the dot plot signalled there should be a rate hike this year, although new Chair Kevin Warsh did not submit a dot himself. But Warsh did reiterate the Fed’s inflation target, pledging to return inflation to target after five years above. Meanwhile in Japan, the Bank of Japan delivered a 25bp rate hike, taking their policy rate to a post-1995 high of 1%.

That backdrop meant markets brought forward their expectations for a Fed rate hike. So by the end of the week, 39bps of Fed hikes were priced in by December, up from 21bps at the start of the week. In turn, that led to a flattening in the Treasury yield curve, with the 2yr Treasury yield up +9.6bps to 4.18%, whilst the 10yr yield (-2.6bps) fell to 4.45%. A similar pattern was evident globally, with Germany’s 2yr yield (+2.7bps) up to 2.64%, whilst the 10yr yield (-1.0ps) fell to 2.98%.

Whilst equities saw a pullback after the Fed decision, they still ended the week higher as concern about a stagflationary shock faded. So the S&P 500 was up +0.93%, Europe’s STOXX 600 was up +0.38%, and Japan’s Nikkei surged by +7.92%, marking its biggest weekly jump since August 2024. The moves were supported by the ongoing rebound in chip stocks, with the Philly semiconductor index up +7.26% to a new record.

Recapping last week now and oil prices kept falling as they reacted to the news that the US and Iran had reached an interim deal. So that meant Brent crude fell -7.74% last week (+0.90% Friday) to $80.57/bbl. So that considerably eased fears about a stagflationary shock to the global economy, particularly as data showed more traffic was starting to flow through the Strait of Hormuz again. Indeed, near-term inflation expectations plummeted, with the 1yr US inflation swap down -30.8bps last week to 2.44%, whilst the 1yr Euro inflation swap was down -23.7bps to 2.60%.

Tyler Durden Mon, 06/22/2026 - 08:26

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