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Iran War: Negotiations Deadlocked on Fundamental Issues as Media Keeps Up Happy Talk; Iran Promises Retaliation as US Still Coiled to Strike | naked capitalism | Iran-Gulf Crisis | ConflictClarifier

strikeMay 27, 2026

Iran War: Negotiations Deadlocked on Fundamental Issues as Media Keeps Up Happy Talk; Iran Promises Retaliation as US Still Coiled to Strike | naked capitalism

Summary

[This Iran war post again launched before complete. Please return at 8:00 AM EDT or refresh this page then for a final version] It has been frustrating to see the media, particularly Bloomberg, latch on to the thinnest shred of positive developments and present it as if it was representative of the state of play. We are seeing that continue as the US again attacked Iran during negotiations, albeit not as seriously before but still another demonstration of bad faith and bad intent, Trump alienates Arab allies by trying to push them into the Abrams Accords, and Israel doubles down on its attacks in Southern Lebanon. All of these are negatives for any negotiated settlement. Yet the orthodox press continues to portray the talks as making progress. That can be true if you equate activity to being progress. Specifically much of the Western press is misrepresenting these Iran positions, which it has held and has not changed: 1. No discussion of nuclear issues now. Iran is insisting on sequencing, as in a cessation of hostilities, acknowledgement of it and Oman’s control of the Strait of Hormuz, freeing of at least some of the frozen assets in the first 60 days, and relief of sanctions of Iran’s energy. 2. Even though #1 means Iran is making no commitments whatsoever regarding the status of its enriched uranium, the most credible sources indicate it will not leave Iran (if there is ever a deal, dilution seems a more realistic outcome) 3. Iran also requires that $12 billon of its frozen assets be returned at the publication of the agreed memorandum of understanding. There is simply no way that will happen. Even though this demand is entirely reasonable form the Iran side, the US will choke on it. Iran has also reiterated that it will not sign a partial “deal”: BREAKING: 🇮🇷🇺🇸 Iran says indirect negotiations with the U.S., reportedly being mediated through Pakistan, are still ongoing. Tehran added: "Nothing is finalized until every issue is agreed upon." Markets are now bracing for extremely high volatility as tensions and diplomacy… pic.twitter.com/jpnzkn1Rg9 — IRGC NEWS (@IRGC_IRAN_News) May 27, 2026 Larry Johnson confirms this assessment in his latest post: The Pakistan-Qatar mediation channel toward a possible memorandum of understanding remains active. But “active” does not mean “settled.” The unresolved center of gravity remains sequencing. The following is based on information I received from a knowledgeable source with access to the negotiations. It mirrors my analysis. Washington and Israel want Iranian concessions first, while Tehran wants tangible, front-loaded economic and security relief before it gives ground on anything that matters. That is the heart of the present deadlock. Iran’s position is not theatrical. It is rooted in a clear strategic doctrine: after decades of sanctions, pressure, assassinations, sabotage, and military threats, Tehran will not trade hard leverage for verbal assurances or a memorandum of understanding. Promises are not enough. Mechanisms matter. Sequencing matters. Asset movement matters. Enforcement matters. The central judgment is this: Iran is not blinking… The Nuclear File: Sovereignty Is the Red Line According to a knowledgeable source, enrichment is not a negotiable bargaining chip. Tehran views enrichment as three things simultaneously: 1. A sovereign right; 2. A deterrence instrument; 3. A domestic legitimacy anchor. No meaningful quantity of enriched uranium will leave Iranian territory under the present framework. That line is firm… Strait of Hormuz: Tehran’s Non-Nuclear Strategic Lever The Strait of Hormuz is Iran’s most powerful non-nuclear instrument. The logic from Tehran is blunt: the United States cannot freeze Iranian assets, sanction Iranian exports, suffocate Iranian banking channels, and then expect unconditional maritime passage as though nothing has happened. Iran’s emerging posture appears tiered and deliberate. Friendly states receive passage. Neutral states are handled selectively. Hostile or adversary-linked shipping will face interdiction, delay, or denial. This is not simply military posturing. Tehran is attempting to convert maritime geography into a regional security architecture based on reciprocity: if Iran’s economy is strangled, the economic arteries of others will not remain entirely immune. The reported MOU framework involving the Strait appears real: Iranian de-escalation in exchange for sanctions relief, asset movement, and restoration of commercial access. But the sequencing dispute remains unresolved. Iran wants assets released before surrendering maritime leverage. Washington wants compliance in the Strait before releasing assets. As I write this (Tuesday evening eastern time) this issues remains unresolved…. Lebanon and Hezbollah: The Detonator Built Into the System Lebanon remains the most dangerous variable in the entire equation. The diplomatic architecture now being constructed contains a structural flaw, and that flaw runs directly through Beirut. Lebanon is not a side theater. It is the tripwire. Israel wants continued freedom of operation in southern Lebanon. Iran views Hezbollah as a central pillar of its regional deterrence architecture. From Tehran’s perspective, Hezbollah is not a disposable card. It is non-negotiable. This update in the Aljazeera live feed is consistent with Johnson’s take, albeit it pre-supposes a fig-leaf-level memorandum of understanding: US, Iran ‘closer than ever to a deal’, but that deal is ‘very superficial’ Ali Vaez, director of the Iran Project at the International Crisis Group think tank, explains that the deal being negotiated “is only going to try to consolidate the ceasefire and reopen the Strait of Hormuz”. “But it is not really going to fundamentally resolve any of the problems between Iran and the United States. It is going to defer them to a 60-day, negotiating period that would start once the memorandum of understanding is finalised,” he said. Vaez told Al Jazeera that Iran – given its mistrust of the US and the Trump administration, in particular – wants to ensure that sanctions relief is a “real and verifiable and concrete” element of any agreement. “That’s why you saw Iran’s parliamentary speaker, foreign minister, and head of the central bank in Doha yesterday to try to negotiate the very details of that mechanism,” he said, adding that Tehran also wants an end to Israel’s attacks on Lebanon. For Washington’s part, reopening the Strait of Hormuz is a major red line. “There are mismatches in expectations,” Vaez said. “But I think given that the alternative to a negotiated settlement is so much more unattractive for both sides, there is a high likelihood that they will cross the finish line.” And look as schizophrenic messages like this: Iran to open Hormuz 30 days after US deal to end fighting: source Tehran still not close to signing an agreement, Foreign Ministry spokesperson sayshttps://t.co/xD1kFXWTPn — Nikkei Asia (@NikkeiAsia) May 27, 2026 Again, to point to the elephant in the room: Israel has agency and is continuing to pound Lebanon. Iran will not accept a “deal” unless fighting ends on all fronts. Even if Trump wanted to drop a hammer on Israel (like denying intelligence support), the screams of betrayal from Zionists and evangelical Christian nutters would force him to relent. Recall how quickly the Biden Administration went into reverse over a rumored intel cut-off to the vastly-less-influential Ukraine (less than a week along with media muddying as to whether it had happened). To confirm the degree of coordination between Israel and the US, Netanyahu paused a security meeting to take a call from Trump..1 There is also the question of what the US thought it was accomplishing with its attack on Iran. If you though it might move Iran, think twice. As Press TV pointed out. Iran says latest ceasefire violations prove US ‘ill-will’, vows decisive response PressTV Larry Wilkerson contends this strike was a manifestation of how Trump thinks negotiations go: punch out the other side if they are not giving in to your demands. Karen Kwatkowski argues that it was a probing attack and she does expect the US to launch big strikes, even as she stresses that that is a very bad idea. Note that Iran may be holding back on its promised retaliation due to the Hajj; see Almayadeen as an example of the coverage given to the pilgrimage. We will also cover more discussion in the business media of the approaching energy cliff and other signs of below-the-waterline damage. From a fresh talk between Larry Wilkerson and Nima. Wilkerson does say he was convinced the US would take one more big whack at Iran but is now confused as to what is going on on the US side. From a lightly-edited machine transcript: Nima: Let me start Larry with what has happened last night and the night before the confrontation between Iran and the United States firing at each other. It was started by a by fighter jets, US fighter jets attacking speedboats in the Persian Gulf…. Wiilkerson: Well, it’s the Trump method of diplomacy. It’s a method that I think is pretty obvious to the world now that particularly with the case of Iran and the United States that we get into diplomacy and we feel like that part of the diplomacy this is the only way we can operate anymore Nima is sanctions and military force military force and sanctions and we get in the middle of the diplomacy such as it is it isn’t real diplomacy and if they’re not adhering to our points the way we want them to adhere or we want to move them a certain direction, we start the bombing over again. We start the kinetic action over again. That’s the only way we know how to negotiate. The only way we know how to deal. Um, and we’re teaching the world in many respects this sort of technique. So, we can expect it back at us, if not soon, more so than not. And it’s a terrible thing, terrible precedent we’re setting. First of all, if you look at this very closely, there has been no contact between an Iranian diplomat or an Iranian government representative or both and an American of equivalent stature. There there simply hasn’t because we’ve put no diplomats forward. There are no diplomats dealing with this. There’s only people like Jared Kushner and Steve Whitoff. And I don’t even include Marco Rubio in what I would call a diplomat. He’s made it clear that he’s not a diplomat. He’s an advocate of bombs, bullets, bayonets, and sanctions, just typical of the empire. So, this is the strangest diplomacy. At no point in time since we commenced this quote diplomacy unquote, have we actually talked with Iranians, nor are they with us, probably at their behest on their side or their decision on their side because they don’t trust us worth of crap and certainly because Trump won’t let anybody talk directly with Iranians…..So there’s no diplomacy going on, Nima. Period. There is no diplomacy going on. There’s only a pronouncement here and a pronouncement here and then Bibi in the center saying I don’t like that. I’ll start the bombing again in Lebanon or I’ll do something else. Karen Kwiatkawski, in a talk with Mario Nawfal, by contrast, views the US as readying an attack and the dustup in the Strait of Hormuz as probing. From a lightly-edited machine transcript: Kwiatkowski: It’s sad that we’re reduced to trying to interpret um the whole entirety of US foreign policy by how many tweets uh or how many truth social posts the president makes. Um you know, Israel had uh doesn’t want the war to end. And they had just ordered an acceleration, intensification, of their campaign in Lebanon. So, um and they’ve done this before. I mean it’s so predictable like when the war comes close to an end or there’s talk that hey we can come to some solution Israel accelerates. It is they’re doing and they don’t really listen to the United States even though Trump periodically says, you know, like he said last week “Netanyahu does whatever I tell him.” That’s not that’s not true. But it’s nice that Trump is aware that he has to actually vocalize that because everybody thinks it’s not true… I’m not optimistic and I see really, not that I know any more than anybody else. I don’t. But the I think what we were doing with the shooting of the boats and some of the land targets that we had that to me that’s a probe. that’s practice and probe to test. What are they gonna do? Kwiatkowski also argues that Zionists are taking advantage of Trump’s cognitively challenged state. She believes the sure-to-alienate-the-Gulf-States-and-Pakistan Abraham Accords pressure was their bright idea to undermine the talks. The continued movement of aircraft into theater lends credence to Witkowski’s warning. From Anadolu Agency in US deploys F-22 fighter jets, dozens of refueling aircraft in Israel: Report: The US has deployed F-22 fighter jets and dozens of refueling aircraft across military facilities and airports in Israel in what Israeli media described Tuesday as an unprecedented military presence. Israel’s public broadcaster KAN, citing Israeli security sources, said Washington is interested in maintaining the deployment at least through the end of the year, in addition to longstanding US military forces stationed across the Middle East. The broadcaster said satellite imagery reviewed over recent months showed an unprecedented deployment of US fighter jets and refueling aircraft inside Israel. The analysis covered the period from the start of Israel’s attacks on Iran on Feb. 28 through last week. According to the report, F-22 fighter jets were deployed at Ovda Air Base in southern Israel, while dozens of US refueling aircraft were stationed at Ben Gurion and Ramon airports… Israel’s Channel 12 previously reported that dozens of US refueling aircraft stationed at Ben Gurion and Ramon airports were already affecting airport operations and airline ticket prices. The broadcaster also cited Civil Aviation Authority chief Shmuel Zakai as warning that Ben Gurion was being operated “as a military base rather than a civilian airport.”… KAN said the unusually large US deployment in Israel has remained intact since the ceasefire with Iran took effect last month. And Israel is inflicting plenty of pain in Southern Lebanon. Israel’s Channel 12 reports Israeli forces have crossed the “Yellow Line” in Lebanon, the ceasefire boundary that, until now, marked the outer limit of Israeli ground presence since 2006. With diplomacy stalling, U.S. strikes on Iran underway, and Washington firmly behind… pic.twitter.com/x4IBoAv1q4 — Ahmed Shihab-Eldin (@aseisfree) May 26, 2026 Humanitarian crisis deepens in southern Lebanon as Israel invades Israel has issued about 50 forced displacement orders for Lebanese towns and villages over the past 24 hours, as well as a blanket displacement order for the entire city of Nabatieh. This, combined with the recent attacks, is causing a huge humanitarian crisis that is only continuing to grow, putting pressure on the Lebanese government to find a fast end to this conflict. But as Israel says, it is going to continue expanding its military “operations”. It’s not clear how that’s going to end, but this is going to have a huge impact on civilian life as the attacks continue to intensify and the death toll continues to go up. And on the economic front. Reread the sections above on progress to a deal, which is actually nada. The Strait of Hormuz is certain to remain under tight Iranian control for a bare minimum of 60 days after a memorandum of understanding is inked, if that ever happens. That means that even if traffic were to move towards normalization, the level would still stay well below where it is now. And that charitably assumes no kinetic action which would correctly deter operators from moving into the Strait of Hormuz. Lloyd’s List provides a reality check in a new story, Strait of Hormuz traffic falls as reopening efforts make little headway:2 - According to Lloyd’s List Intelligence data, traffic volumes slumped 48% last week on the previous week - Despite the overall collapse in transits, at least half of all transits continued to involve Iranian cargoes - Towards the end of the week, dark transits peaked as the security situation deteriorated Hormuz transits plunged to nearly half their previous levels last week, with US interdictions, Iran’s new traffic authority and stalled negotiations combining to push vessel movements below early war lows And some are waking up to the implications: 3 months of continued Hormuz disruption is inevitable, writes @TheMichaelEvery My take: No Hormuz resolution ever. Flows will return to 25-50% in 2027 with crushing effects that will change the world forever. The biggest blunder in history.#oil #Hormuz #IranWar pic.twitter.com/FEmOIAIBEM — Art Berman (@aeberman12) May 26, 2026 In the meantime, the US is in close to party-on mode as the energy cliff approaches: You can see how unsustainable current US oil exports are here… Crude stocks are draining, refining runs rates have surpassed seasonal highs, & imports have fallen nearly 500k bpd. And despite all of that, crude exports reach all time highs, pushing the US nearly to a… https://t.co/fviV8hzdNe pic.twitter.com/9RDD0zS4WK — Wisdom & Boats (@wisdomandboats) May 26, 2026 "Whenever it starts to reopen, resuming supplies through the strait is not a case of flicking a switch. With no export ability, many oilfields were fully shut in; S&P Global estimates that some could take seven months to restart. Some resumed oil flows will have to go into… — Gregg Carlstrom (@glcarlstrom) May 26, 2026 Another mammoth SPR release last week, with a flow equal to ~1.3m b/d (nearly 9.1 million barrels over the week). The weekly release is the **second highest on record**, just a notch below the all-time high set the previous week of 9.9 million barrels. pic.twitter.com/TqcSVvyqDb — Javier Blas (@JavierBlas) May 26, 2026 I just noticed the US EIA isn't updating its SPR dataset since February – maybe that's why trading algorithms behave as if there is no energy crisis, considering when these data are fetched via API, no drop in SPRs is being recorded 🤭 Nice hat trick here pic.twitter.com/4dvmIfCvHS — JustDario (@DarioCpx) May 27, 2026 Done for today! See you tomorrow! _____ .1 BREAKING: Netanyahu unexpectedly left a limited-security cabinet meeting for an emergency phone call with Trump, per Channel 14. — The Hormuz Letter (@HormuzLetter) May 26, 2026 2 Some misinformation yesterday, apparently triggered by the Wall Street Journal: 🚫CLAIM: Recent media reporting claims that the U.S. Navy has restarted escorting or assisting commercial vessels during transits through the Strait of Hormuz. FALSE. ✅TRUTH: Project Freedom has not resumed, and U.S. forces are not currently escorting commercial vessels through… pic.twitter.com/JD9cY5FUNN — U.S. Central Command (@CENTCOM) May 26, 2026 But then again, this is the sort of “play stupid games, win stupid prizes” behavior that appeals to the Trump Administration: 🚨🔥Urgent: The US Navy begins escorting the first ship to cross the Strait of Hormuz.. and within minutes, it caught fire The strait is not as Washington thinks." pic.twitter.com/pafcnDbrJS — Middle Eastern Affairs (@OpsHQs) May 26, 2026 UKMTO reports that an Oil Tanker was struck in the Gulf of Oman this morning. My guess: It's the Oil Tanker that US forces escorted throught the strait of Hormuz last night, before striking Iranian boats. https://t.co/1DeyNcdYpA pic.twitter.com/TQu8mQNXJZ — MenchOsint (@MenchOsint) May 26, 2026

Perspectives

Iranian Official

The Iranian government condemns the latest US aggression and Israeli attacks on southern Lebanon as blatant violations of national sovereignty and attempts to sabotage ongoing talks through bad-faith actions. Tehran stands firm in its resistance, demanding an immediate cessation of hostilities, recognition of its control over the Strait of Hormuz, release of frozen assets, and sanctions relief on its energy sector before any discussion of nuclear matters. Western media distortions, including those from Bloomberg, ignore these legitimate positions and falsely portray Iranian resolve as intransigence.

Israeli

Israel faces an existential threat from Iran's nuclear program and its proxy network, including Hezbollah's ongoing attacks from southern Lebanon, necessitating defensive strikes to prevent encirclement and rocket barrages on Israeli population centers. Media claims of negotiation progress ignore Tehran's unchanged demands for sanctions relief and asset releases without limits on its enriched uranium or proxy activities, enabling further aggression via the Strait of Hormuz and allied militias. US moves during talks only underscore the need for robust Israeli self-defense over illusory diplomatic sequencing.

Neutral

Reports indicate that U.S. strikes on Iran occurred during negotiations, while Israel continued operations in southern Lebanon. Iran has outlined positions requiring an initial sequence of measures, including a cessation of hostilities, sanctions relief, and access to frozen assets, before nuclear issues are addressed. Some Western media outlets have described the talks as showing progress, though assessments of developments remain subject to differing interpretations.

Western

Western and Israeli forces have executed precise strikes on Iranian-linked targets to neutralize threats from Tehran's nuclear advancements and proxy networks, even amid ongoing diplomatic efforts. These operations underscore the priority of verifiable constraints on Iran's enriched uranium stockpile and sanctions relief tied to behavioral changes, countering Tehran's demands for upfront asset releases and Strait of Hormuz concessions without reciprocal commitments. Such actions support broader strategic goals of regional stability and deterrence against escalation by Iran and its allies.

Actors involved

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Sources

Yves SmithBy Yves Smith
[This Iran war post again launched before complete. Please return at 8:00 AM EDT or refresh this page then for a final version] It has been frustrating to see the media, particularly Bloomberg, latch on to the thinnest shred of positive developments and present it as if it was re…

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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

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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

For those in Europe and parts of the US this week I hope you can cope with the expected extreme heat. The UK is certainly not ready for what's about to hit us. I'm looking to exploit this and set up my own AI company. Aircon Installations. Please enquire for the best prices and for the IPO launching soon!

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%.

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.

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

Jun 22, 2026strikeUnverifiedUSIsraelIranProxy

Iran Declares Renewed Closure of Strait of Hormuz

○ 1 source

Vessel Traffic Has Fallen to Single Digits As Mines, Insurance Gaps and Safety Concerns Hamper Restart Iran’s ‘renewed closure of Hormuz’ CNN reported onJune 20 (local time) that although Iran declared it would blockade the Strait of Hormuz again, ships passing through the strait had already virtually disappeared.

Despite the United States and Iran signing an agreement to end the war, forecasts suggest that it will take months for shipping traffic and crude oil flows to normalize. According to the report, the Iranian military announced on the day that it would blockade the Strait of Hormuz again, citing ongoing fighting between Israel and Lebanon’s Hezbollah.

Since this announcement came one day before the United States and Iran were set to hold end-of-war negotiations in Switzerland on June 21, it has emerged as a test of the agreement’s implementation and a variable in the negotiations. However, making the blockade declaration effectively meaningless, the number of ships passing through the strait had already dwindled to single digits.

According to maritime intelligence firm Kpler, 25 ships passed through the Strait of Hormuz as of June 18, which was the highest number since Iran briefly allowed commercial navigation in mid-April. But upon the news that the initial negotiations between the United States and Iran to coordinate the details of the agreement had fallen through, the number of passing ships dropped back to single digits on April 19.

This is still extremely minimal compared to the 100 to 120 oil tankers that traveled daily between Iran and Oman before the war. Matt Smith, lead oil analyst at Kpler, said, “It is not a situation where a sudden mass exodus is occurring,” adding, “Although traffic has increased somewhat, it is not at a significant level, and it is not yet the stage for a ‘first mover’ to emerge.

” Since the outbreak of the war, approximately 500 ships, including 220 oil tankers, are currently stranded in the Persian Gulf. Analyst Smith predicted, “It will take weeks just for about 120 oil tankers loaded with oil to get out, and it will take even more time for 100 empty oil tankers to fill up with crude oil and set sail.

” The biggest reason shipowners are hesitating to operate is safety concerns. Jakob Larsen, head of maritime safety and security at the Baltic and International Maritime Council (BIMCO), an international shipowners’ association, stated, “Despite the signing of the ceasefire agreement, the security situation for the shipping industry remains unstable,” and “The central part of the strait is heavily mined, making navigation impossible, and only the coastal routes close to Oman and Iran are known to be free of mines.

” However, he added that even these coastal sections are dangerous to navigate due to congestion and the risk of accidents. Along with the ships, an estimated 20,000 crew members are also trapped on board. Ben Bailey, director at the seafarers’ support organization Mission to Seafarers, conveyed that many sailors want to leave despite the anxiety over departure safety, saying, “The expression ‘cautious optimism’ would be accurate.

” The insurance void is also a burden for shipowners. Marine insurers withdrew their “war risk” coverage for damages caused by attacks and mines at the beginning of the war, and they have not restored it for most customers despite the ceasefire agreement.

This means that if they suffer damage while navigating hazardous sections without coverage, they cannot receive compensation. Independent oil analyst Tom Kloza pointed out, “It was not only Iran that closed Hormuz, but also insurance companies like Lloyd’s of London.

” In addition to this, there are numerous practical hurdles, such as the seaworthiness of ships that have been anchored for over three months, securing fuel and supplies, and removing barnacles attached to the hulls. Director Bailey pointed out, “It is not a simple matter of saying the green light has turned on at the traffic light, so everyone can just start their engines and go.

” Even if ships immediately resume operation, the normalization of crude oil production in the Persian Gulf is a separate issue. A significant portion of regional production and refining stopped when oil tanker traffic was cut off early in the war, and restarting it will also take time.

Ultimately, trust that the peace agreement will be maintained in the long term is the key. Analyst Kloza said, “We do not know the answer to that,” adding, “It might be considered a safe sea someday, but there is a long way to go to reach that stage.

Location: Strait of Hormuz

Jun 22, 2026strikeUnverifiedUSIsraelIranProxy

Iran live updates: US and Iran agree to roadmap for 'final deal' within 60 days

○ 1 source

President Donald Trump announced "major combat operations" against Iran on Feb. 28, with massive joint U.S.-Israeli strikes targeting military, government and infrastructure sites. Delegations from the United States and Iran arrived over the weekend at the Bürgenstock resort in Switzerland, where they entered negotiations aimed at a war-ending deal based on a memorandum of understanding signed last week by both countries.

Iranian delegation leaves talks, heading back to Tehran The Iranian delegation in Switzerland has left the talks and is heading back to Tehran, Iran's state media reported early on Monday, citing the Iranian Foreign Ministry. Mohammad Bagher Ghalibaf, the speaker of Iran's parliament, who is leading the Iranian delegation, "left the building where the negotiations were held on Monday, following approximately 18 hours of intensive dialogue and consultations," Iran's state broadcaster reported.

-ABC News' Victoria Beaule 41 minutes ago US and Iran to seek 'final deal' within 60 days under newly agreed roadmap The United States and Iran agreed on Sunday to negotiate toward a war-ending deal within a 60-day timeframe, according to Pakistan and Qatar, which are mediating the ongoing talks in Switzerland.

The delegations agreed on Sunday to create a "High Level" committee to "provide political oversight" for the talks, and that new committee in turn agreed to a 60-day roadmap, the mediators said in a joint statement early on Monday. The fighting in Lebanon between Israel and Hezbollah, an Iran-backed militant group, remained a key point for Iranian negotiators going into Sunday’s talks, officials in Tehran said.

The U.S. and Iran agreed on Sunday to a “deconfliction cell,” a group that will include officials from Tehran and Washington alongside Lebanese officials. That group will seek "to ensure the adherence of the termination of military operations in Lebanon as per the MoU," the mediators said.

Whether the "deconfliction cell" will be able to make headway in stopping the fighting in Lebanon will mark the "1st real test" for the talks, Iranian Foreign Minister Abbas Araghchi said on Monday. Israel’s defense minister said in a statement on Sunday that the Israel Defense Forces did not plan to leave the areas in southern Lebanon where they’re fighting Hezbollah.

Araghchi otherwise praised Pakistan and Qatar for delivering "major progress" for their efforts in ending the war. "Technical talks will continue for the remainder of the week at the Burgenstock resort on all issues," Pakistan and Qatar said in their joint statement.

"The mediating parties will continue to do their utmost to ensure that the negotiations continue to be conducted in a constructive atmosphere with the aim of reaching a final deal.