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Iran War: US Attempts Project Freedom 2.0 as Israel Continues Attacks in Lebanon Despite Alleged Ceasefire; Iran Economy Not Harmed by Sanctions, Performed on a Par to Saudis; Rice Prices Jump in Asia | naked capitalism | Iran-Gulf Crisis | ConflictClarifier

strikeJun 4, 2026

Iran War: US Attempts Project Freedom 2.0 as Israel Continues Attacks in Lebanon Despite Alleged Ceasefire; Iran Economy Not Harmed by Sanctions, Performed on a Par to Saudis; Rice Prices Jump in Asia | naked capitalism

Summary

[Today’s Iran war update launched essential complete. Any updates will come at 9:00 AM EDT because I have to go out and my return time is uncertain. If you arrived early, please check comments to see when I have announced an update in comments and refresh your page then] After CENTCOM tried claiming that latest Iranian retaliatory strikes, in response to attacks on Qshem Island and other targets were only a scratch, enough evidence to the contrary has accumulated to show that Iran did real damage to the Kuwait Airport and the US Fifth Fleet operations in Bahrain. It appears that the escalation by the US was intended to tax Iran over time and Iran is having none of that, with its fierce retaliation reportedly taking the US by surprise. In the meantime, Israel is sabotaging any peace deal, as expected, by continuing attacks in Lebanon, Gaza, and the West Bank. Trump barking at Netanyahu has not deterred Israel. But it also appears that the US was misled by Israel even more severely than believed. Former adviser to the UAE, Steve Hank, argues that purchasing power parity GDP data shows that Iran and the Saudis were the best economic performers in the Gulf area post the 2008 crisis, and grew at nearly the same rate despite Iran having been under sanctions. So the idea that Iran was on the verge of collapse was a canard. As we will soon discuss, an important new article in Bloomberg describes how the US has not given up on trying to “open” the Strait of Hormuz, and is attempting to create a more-or-less secure corridor along the Oman Coast. In addition, even though Iran close-to-official channels had maintained that Iran had stopped sending messages to the US, more and more well-connected sources are saying that communications continued. I am not in a position to adjudicate this question. One way to square this circle is if Iran did halt its official written messages about the memorandum of understanding draft, but was still exchanging information via other channels.1 Finally, we will turn to yet more signs of economic stress, with the Asia picture already looking grim. And just as egg prices jumped up during Covid due to a big culling of flocks due to an unrelated factor, avian flu, so too are beef prices in the US at risk of big rises thanks to screwworm. Briefly, to kinetic updates first. The Hindustan Times segment below gives a sense of the damage to the Kuwait Airport and says Iran may also have hit a US destroyer, which is big if true: Another report. Note that “targeted” does not mean “hit”: ⭕️⚡️The Iranian Army's Navy targeted aUS destroyer in the Gulf of Oman, using anti-ship Cruise Missiles. — Statement "A few hours ago, following aggressive actions, violations of the Hormuz Strait regulations, and hostilities against Iranian commercial vessels in the Sea of Oman… pic.twitter.com/83BgzhcGZS — MenchOsint (@MenchOsint) June 3, 2026 NO1 contends the damage was considerable: - Kuwait airport T1 destroyed, US bases hit. Iranian missiles/drones struck Kuwait International Airport Terminal 1 — 1 killed, 63+ injured, airport shut for months (MilitarySummary, zerohedge, Lord Bebo). Satellite imagery confirms hangar/warehouse destruction at Ali Al Salem and Camp Buehring (MenchOsint, AMK Mapping). HIGH. - CENTCOM caught reversing itself. After claiming 100% interception of the Kuwait attack, CENTCOM then accused Iran of a deliberate airport hit — the contradiction was flagged by many (MenchOsint, Daniel Davis, imetatronink). Iran’s IRGC counter-claims the terminal was wrecked by a failed US Patriot. HIGH on the contradiction; attribution of cause unresolved. In keeping, Trita Parsi argues in a long tweet that the US was not prepared for the intensity of Iran’s kinetic response to the latest US escalation: Over the past eight or so days, the US has targeted Iranian vessels as well as targets on the Iranian mainland. This included non-Iranian oil vessels. In essence, this was the US seeking to escalate the blockade of the blockade. At first, Iran’s response was proportional. The US could tolerate that response. In fact, it was beneficial to the US to continue the exchange of blows but keep them relatively limited, as it would slowly but surely erode Iran’s deterrence without imposing intolerable costs on the US. But yesterday, Iran moved to change that equation. After the US struck a Botswana-flagged tanker as part of Trump’s blockade, the Iranians counter-escalated disproportionally. Tehran struck Kuwait International Airport as well as a US base in Kuwait, Ali Al-Salem. It struck the 5th Fleet facilities in Bahrain. (Full extent of damage unknown.) It struck Jordan. (Full extent of damage unknown.) It struck northern Iraq. (Full extent of damage unknown.) It struck the UAE. (Full extent of damage unknown.) It struck the Al-Udeid Air Base in Qatar. (Full extent of damage unknown.) It was a demonstration – and reminder – that Tehran retains escalation dominance. Whereas the US is comfortable with either a possible deal or a low-level exchange of fire, but not a return to full-scale war, Tehran is comfortable with a possible deal or a full-scale war, but not with a low-level exchange of fire that erodes Iran’s deterrence and allows for Trump’s “blockade of the blockade” to become effective. The area where both can actually be comfortable is some sort of a deal. Reaching it, however, is a different story. Predictably, the ceasefire in Lebanon is not holding. Israel has never respected one save to take a short breather for its own purposes. From Aljazeera’s live feed: Iran keeps up its trolling game: The damage to the terminal at Kuwait International Airport was the result of a failure in the U.S. Patriot air defense system. — Iran Embassy SA (@IraninSA) June 3, 2026 Several wounded in Israeli strike after agreeing to Lebanon truce Several people have been wounded in an Israeli drone attack that targeted a vehicle on the Zefta-Kfarwa road in southern Lebanon, the National News Agency reports. The strike came after Israel’s and Lebanon’s governments agreed to halt the war after a series of meetings in Washington, DC, mediated by US officials. It remains unclear whether Hezbollah, which condemned the peace talks, will agree to withdraw from the region south of the Litani River as demanded by Israel. Trump announced a ceasefire between Hezbollah and Israel yesterday. Israel responded by dropping over 50 bombs on Lebanon today, killing over 10. There is NEVER peace with these people. pic.twitter.com/EWu7DFgtX2 — Ethan Levins 🇺🇸 (@EthanLevins2) June 2, 2026 Even high-profile American media figures are calling out the Israel ceasefire abuses: 🚨WATCH: Megyn Kelly says Israel bombed Lebanon, broke the ceasefire from the start, then convinced Trump to let them keep bombing. Israelis are determined to do to Beirut what they did to Gaza. Our ceasefire is falling apart; it's being intentionally destroyed to drag the… pic.twitter.com/4J3VK7MKEg — THE GLOBAL WATCHDOG (@glwatchdog) June 3, 2026 And on top of that, again from the Aljazeera live feed: Israel threatens to strike Beirut if Hezbollah attacks Defence Minister Israel Katz says a ceasefire with Lebanon grants the military the “freedom” to strike the capital Beirut if Hezbollah attacks Israeli communities. “The [army] will, at this stage, continue its fire and ground operations, remain in the security zone in Lebanon up to the yellow line – including in the Beaufort area – and without the return of the population, while continuing to dismantle terrorist infrastructure on the ground,” Katz said in a statement. Israeli forces retain the “freedom of action, with American backing, to strike in Beirut in response to fire on Israeli communities and territory”, he added. Similarly: 🚨BREAKING: Israeli Air Defences Activated Over Kiryat Shmona Israel’s ambassador to the US just posted online that Tel Aviv will fire on Beirut because of rocket fire against Kiryat Shmona. Soon after, there appears to be rocket fire on Kiryat Shmona again. — MintPress News (@MintPressNews) June 3, 2026 And remember that even if a ceasefire were to hold in Lebanon, that does not meet Iran’s demands Iran has also called for an end to Israel operations in Gaza and the West Bank. Steve Hanke,2 in a new talk with Mario Nawfal, not only makes a point that can’t be stated often enough, that Israel can and will wreck any “deal” but that the idea that Iran is an economic basket case is an Israeli fabrication. Parsed correctly, the data shows Iran was still growing under the sanctions, and on a par with most Gulf states: From a lightly cleaned-up machine transcript: Nawfal: But why do you not think Trump could rein in Netanyahu as he did in the last couple of days and ensure that he does not sabotage the Iran war? Hanke: Well, he hasn’t reined him in. You think they’re reined in? Well, look at what’s going on in Lebanon. You have to lookat what’s going on in Lebanon and and every day, you know, everybody’s forgotten about Gaza, but there’s a drip drip every day. Every every day there, you know, half a dozen murders in Gaza. On the prospects for Strait of Hormuz traffic: Hanke: My scenario that the Strait will be closed for a considerable amount of time. And by the way, even when it so-called opens again, my baseline scenario is that it will be controlled by the Iranians…. I think that is a base-case scenario that people should be thinking about. I think most people are not thinking that way. They’re they they always raise the question when I’m interviewed, Mario. People say, “Well, if the Strait opens tomorrow, professor, what do you think’s going to happen?” And I and I come back and I say, “It’s not opening tomorrow.” So, you’re in a in a graduate seminar raising hypothetical questions that I think are largely irrelevant. Note how the press relentlessly keeps flogging the idea that the Strait of Hormuz will magically go back to the old normal. OilPrice provides an example Kuwait Says Oil Output Won’t Recover for 10-12 Weeks After Hormuz Reopens And on Iran’s economy: Hanke: If you look at the the Gulf States from 2008 when the great financial crisis started until prior right prior to the war, the the GDP per capita on a purchasing power parody basis, it it was going down big time in all the Gulf states with the exception of two, Saudi Arabia and Iran. And they were going up in Saudi Arabia and Iran by almost exact exactly the same… Let’s take away the narrative without getting in into the weeds of the details of how this actually happened and and the the narrative coming from the Gulf was it was booming everything was great you know that everyone was moving to Dubai. You know, every everyone in the world was moving there. It was booming a lot. Real estate boom, all the rest of it. Well, it actually was basically flatlining. It went from 100 to about 96, the number GDP per capita. Now, what happened in Saudi Arabia? Well, it went from 100 to about 115 or 16. Same thing happened in Iran. It goes from 100 to 115. Nawfal: I’m surprised at Iran. I thought the economy was… Hanke: Well, that’s the problem getting destroyed. That’s the propaganda. That that that is what they that that is what the Israelis told the Americans before they before they invaded and and hit them. They said Nawfal: They had the people on the streets as well. Hanke: Well, the numbers are the numbers. And I’m telling you, if you if you look at Kuwait, it goes from a 100 down to about 56. A huge a huge Kuwait really in in bad shape from a from a GDP per capita that and that’s the best measure of kind of general prosperity because when we say per capita, that’s GDP that’s like income per person and and it’s adjusted for purchasing power parity.. I think that yeah I think the propaganda was that the rial was collapsing. That’s true. It it was they had in a big inflation problem. Yeah. That that’s true. It was. But when you when the dust settles and you look at look at the whole picture and adjust for inflation adjust for exchange rates actually it was it was improving slowly. It was improving. improving almost exactly at the same rate the Saudis were improving… Nawfal: Despite the sanctions…. Hanke: Despite the sanctions and and everyone else in the Gulf the UAE was essentially flatlining and and Kuwait was plummeting big time Qatar was going going down Oman was going down Bahrain was going down. Now to the efforts to understand what if anything is happening, talks-wise, between Iran and the US. The full text of a tweet from Hormuz Letter: BREAKING: Iran rejects all of Trump’s new claims to NYP as “Trump’s fantasies” and “completely inconsistent with reality,” denying that Iran has been talking to the US in the past days, that Mojtaba Khamenei is involved in negotiations, that Iran has agreed not to have a nuclear weapon, or that the deal framework is being approved in Iran, per Tasnim. Iran has not provided any response to the US regarding the draft memorandum of understanding in recent days and has ended all exchange of texts and communications until Iran’s conditions regarding Lebanon are met. From Bloomberg on the latest US effort to “open” the Strait of Hormuz, in U.S. Looks to Unblock Hormuz With Quiet Version of Project Freedom: A month after President Donald Trump announced — and then abandoned — a plan to escort commercial ships through the Strait of Hormuz, the US military is trying less public ways of protecting vessels in the vital waterway. Rather than announcing an open challenge against Iran, the US is quietly coordinating with shippers willing to take a different approach. Evidence gleaned from US Central Command statements, shipping data and people with knowledge of the transits suggest ships are turning off transponders and sticking close to the Omani coast on the strait’s south to avoid Iranian mines, with the US military assisting if needed. The latest evidence came Tuesday night amid a flareup between the US and Iran. Central Command issued a statement saying its forces shot down Iranian attack drones aimed at “civilian mariners that were rightfully transiting regional waters.”… The effort marks a change in tactic from Trump’s previous effort, dubbed Project Freedom…Trump later said he was scrapping the idea after allies in the region asked him to back down. The latest US push has no title and the administration has offered little public explanation. But it’s been accompanied by other signals that suggest the US is working with shippers in ways that officials have declined to specify… Two shippers said previously they were in touch with the US military, which advised them on how best to navigate the waterway, Bloomberg News reported earlier. When one vessel was approached by suspected Iranian fast attack boats on a recent transit, helicopters appeared and drove them away, according to the person with knowledge of that transit. “If the commercial ships are hugging the coast opposite of Iran and turning off their AIS transponders, Iranian forces would need to use radar or spotters to detect the movement and direct drone or missile attacks,” said Bryan Clark, a senior fellow at the Hudson Institute. “The US Navy could detect these efforts and counterattack the Iranian units,” he said. While some shippers are growing more optimistic about a pickup in traffic, ship-tracking data compiled by Bloomberg indicates that movement through the strait has been limited. Just two inbound commercial transits were observed on Tuesday morning, following two outbound ships on Monday.. Two transits per day is the functional equivalent of zero. Forgive me for not dwelling on the House voting against the Iran war, (see NBC in House votes to rebuke Trump over war with Iran if you must), since this action is in the wet-noodle-lashing category. And a contrary data point: Greek shipping tycoon willing to pay Iranian transit toll in strategic Strait of Hormuz —— Prominent Greek shipping mogul Evangelos Marinakis stated on Tuesday that he is prepared to pay Iran a transit fee to ensure the Strait of Hormuz remains open, suggesting the funds could… pic.twitter.com/P4OYUejs8X — The Cradle (@TheCradleMedia) June 3, 2026 Some economic tidbits: Global food price inflation is accelerating: Thailand's white rice prices surged +20% in May, the biggest monthly increase in data going back to 2008. This benchmark used for Asian rice prices has surged +26% since April, to ~$480 per ton, while Chicago rice futures prices… pic.twitter.com/V7Q1ZaPHHy — The Kobeissi Letter (@KobeissiLetter) June 2, 2026 Note that this sighting is not quite as bad as it looks. As a local contact pointed out: The rice variety grown in Thailand is very heavily fertilizer dependent. This was because of a deal with corrupt officials in the government and certain Indian fertilizer importers. I was told this about 15 years ago by one of the Indians involved who was boasting about how much money they’re making. So I’m not surprised. Accordingly, Thailand is one of the biggest fertilizer importers in the world. Even though Thailand historically has been a large exporter of rice, we featured a story from the Washington Post on how many farmers were letting their fields lie fallow since they could not make a profit between fertilizer and fuel costs. So worse than the price hikes may be the coming shortages. Another shortage-in-the-making sighting: USDA has now confirmed the detection of a New World screwworm in a bovine in Zavala County, Texas. The detection of the parasite, which is deadly to cattle, comes at a dire time for the US beef industry, with a smaller herd having already sent prices to record highs. https://t.co/TBvKXtv81l — Javier Blas (@JavierBlas) June 4, 2026 And a final note: The Israeli ambassador to Europe is protesting the spread of this image. Let it spread all over the world. 🌍🔥" pic.twitter.com/ndUivVzz9x — Middle Eastern Affairs (@OpsHQs) June 2, 2026 ____ 1 I feel compelled to mention claims that Iran has obtained (note that John Mearsheimer said he did not believe (see at 24:05) that a third country would supply one and Mohammed Marandi effectively said that he could not prove a negative, but as far as he knew, the fatwa against nuclear weapons was still in place, see starting at 4:40). Keep in mind that Ted Postol has repeatedly stated that Iran could develop nuclear weapons in a matter of weeks from its existing stockpiles (I took his “weeks” to be “not two or three but not much more than that”). So the idea that Iran could devise a nuclear bomb quickly, indigenously, is not new news. However, the claim originated from a single source, which in my experience raises big red flags. In my history of reporting, single sources, unless they also present documentary evidence, are dodgy. Even if they are sincere and did hear what they say they heard, that does not mean they have the full picture. And in a worse case scenario, they may be trying to burn the reputation of the reporters by planting a story that winds up being disproven. What is new is the claim, per the well-connected Robert Barnes on a new talk with Mario Nawfal, that Trump was informed of this new story, last Thursday, and that Iran was specifically planning to make a demonstration if the US did not accept key Iran demands. Barnes’ argument is that the Iranians have worked out that Trump is most fearful of humiliation and having Iran show it has nuclear capabilities after Trump has gone on and on and on about how Iran must never get a nuclear weapon would be the most embarrassing thing that could happen to him and he would be highly motivated to avoid that. Barnes argues that he sees the risk of US escalation as much lower than before. Well….perhaps. First, the timeline does not match up. The US escalated further this week in the Strait of Hormuz, at best pushing the envelope of tit-for-tat dustups. Rubio also held to the existing US line in his Senate testimony, repeating US maximalist demands, such at that Iran needed to export or destroy (how has never been clear to me) its enriched uranium. Second, it is entirely possible that this is an information operation (which I do not regard as the same as a bluff). Keep in mind that Trump does not read intel briefings. He instead gets a daily 2 minute video update on Iran, which has been characterized as “Best explosions made by the US in the last 24 hours”. Barnes has earlier claimed that many of the leaks to the New York Times are to get information to Trump, since he does read the Times religiously. In other words, this story could have been devised by the many factions who see that Trump is about to destroy the US and the global economy, yet has seemed in no mood to back down. So this “Iran will detonate a bomb if you don’t relent” is a new reason for Trump to finally get over himself and find an exit. However, I can see this backfiring. Israel is determined to throw a spanner in any peace attempts. Recall also that Israel is rumored to have convinced Trump that Iran was behind the Butler assassination attempt. The many many Zionists around Trump could use the claim that Iran is now prepared to get or develop a nuclear weapon in the very near future as reason to strike Iran as hard as possible now to prevent that from happening. And either way, can Trump really constrain Israel? He clearly has the means, by cutting off intel plus weapons and spare part deliveries. But the backlash from the Zionist-supporting media in the US would be fast and brutal. 2 Please filter out that Hanke is a member of the Mises Institute. His commentary ex on monetarism and other libertarian hobbyhorses, is sound.

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[Today’s Iran war update launched essential complete. Any updates will come at 9:00 AM EDT because I have to go out and my return time is uncertain. If you arrived early, please check comments to see when I have announced an update in comments and refresh your page then] After CE…

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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

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

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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.