Market Report.
🇸🇦 As we mentioned in yesterday’s report, Saudi Arabia suspended U.S. military access to Prince Sultan Airbase and Saudi airspace in response to Trump’s unilateral “Project Freedom” announcement without consulting Gulf allies, forcing Trump to pause the operation.
🛢️ Oil extended its gains after the U.S. conducted strikes in the Strait of Hormuz area. U.S. Central Command said it targeted military facilities linked to what it described as “unprovoked” Iranian attacks, adding that Washington does not seek further escalation. Trump said the ceasefire remains in place despite the attacks.
🚀 A statement attributed to the naval forces of Iran’s Islamic Revolutionary Guard Corps (IRGC) says the group launched a “large‑scale and very precise joint operation” in response to what it described as a U.S. ceasefire violation and aggression against an Iranian oil tanker near the port of Jask.
🗣️ A senior Iranian official, Mohsen Rezaei, said Tehran would reject any U.S. proposal to reopen the Strait of Hormuz unless it includes compensation for war‑related damage. “Iran wants tangible benefits, not symbolic concessions,” he said.
⛽ Sixty-three percent of Americans blame Trump for gas price increases, and higher airfares threaten tourism and business travel, creating political vulnerability for the administration.
📰 Wall Street Journal Editorial Board opposes Trump’s peace initiative, demanding Iran completely dismantle nuclear facilities at Fordow, Natanz, and Isfahan, surrender all enriched uranium, allow unrestricted IAEA inspections, and restore Hormuz free passage.
📜 Iran’s chief negotiator quickly dismissed Trump’s latest peace proposal, with Iranian officials denying an imminent settlement despite U.S. media reports suggesting a deal framework exists. Iran has 30 days to respond formally, but experts assess Iran will reject the U.S. outline.
🇨🇳 Beijing’s diplomatic line:
🕊️ Wang Yi labeled the U.S.–Israel war on Iran “illegitimate,” urged cessation of hostilities, backed Iran’s sovereignty claims, and promoted a regional security architecture led by regional states—signalling active Chinese mediation and political support.
🌏 Backing Iran fits Beijing’s gradual approach to expand influence and reduce U.S. extraterritorial leverage.
🚢 Iran’s new “Persian Gulf Strait Authority” and talk of managed transit raise the prospect that post-war navigation could change from unrestricted passage to regulated tolling, threatening the longstanding norm of freedom of navigation and setting a precedent for other chokepoints.
⚖️ Ceding de facto control of Hormuz would weaken U.S. naval underwriting of global energy flows, shifting burden onto Gulf states and partners to build alternative export routes and infrastructure, and potentially realigning regional energy geopolitics and security responsibilities.
🇫🇷 France is deploying a carrier group to support freedom of navigation while the UK focuses on domestic politics and non-engagement rhetoric.
🇸🇦🇦🇪 Saudi–UAE rivalry and operational ramifications:
⚔️ Growing Saudi–UAE competition, and Saudi suspension of U.S. base/airspace access reportedly linked to U.S. ties with the UAE, underline how intra-GCC tensions can directly constrain U.S. military options and complicate coalition operations in the Gulf.
🕵️ Rumors circulating online claim that Saudi Arabia — not Iran — was responsible for the reported bombing of the UAE’s Port of Fujairah. Saudi Arabia may have orchestrated the UAE drone strike on Fujariah port and falsely blamed Iran to create ceasefire violation pretense, according to intelligence sources. This alleged false flag operation followed UAE’s OPEC withdrawal, suggesting regional power struggles complicate U.S.-Iran negotiations and demonstrate Gulf state willingness to manipulate conflict narratives.
🌍 Trade War update:
⚖️ President Donald Trump’s 10% global tariffs have been declared unlawful by a federal trade court, coming months after the Supreme Court vacated other levies he had imposed.
🇪🇺 Despite the legal setbacks, Trump has set a July 4 deadline for the European Union to ratify his proposed trade deal. He had previously warned that auto import tariffs could be raised as soon as this week if an agreement was not reached, escalating pressure on Brussels.
🇧🇷 Brazil’s president, Lula, visited the White House.
🤝 The meeting at the White House on Thursday marked their third in‑person encounter since relations deteriorated amid tensions over President Trump’s trade war and former Brazilian President Jair Bolsonaro, a Trump ally who confronted Luiz Inácio Lula da Silva for Brazil presidency.
🛢️ As Latin America’s largest oil producer, Brazil benefited from elevated crude prices, but President Lula’s government offset consumer pain by cutting fuel taxes and offering subsidies, trading higher export revenues for short-term domestic price relief and political cushioning.
📦 Brazil hit a monthly export record in April — $34.15 billion, up 14.3% year-on-year and the highest since 1997 — driven largely by higher commodity receipts as oil prices rose amid the Iran war; the surge boosted national external revenues and trade metrics.
📊 Brazil’s April trade surplus climbed 37.5% to $10.5 billion, reflecting stronger export inflows versus imports and improving the country’s external balance.
🦠 New Pandemic?
📈 Polymarket is already quoting in the likelihood of a new pandemic following the outbreak of hantavirus. The Andean strain identified is said to be one of the worst, with a fatality rate of 30 to 50 per cent in previous outbreaks in Argentina.
🎙️ Journalists asked Trump about this yesterday: ‘We have the ship under control, we have brilliant people looking into it, we should be fine.’
🇬🇧 Historic change in British politics:
🗳️ The nationalist Reform UK party is razing in the UK regional elections. Net gains already exceeding 150–270 seats across 13–21 councils declared so far, with “stunning percentages” in traditional Labour heartlands in the north-east and north.
📊 Pre-election polling (late April) had already shown Reform UK leading national voting intention at 27–29%, ahead of Labour (21%) and Conservatives (~17–19%), driven by voter frustration over immigration, taxes, winter fuel cuts, and public services.
Market View.
📉 US futures experienced modest pullbacks yesterday afternoon amid rising tensions between Iran and the United States.
📈 E‑mini S&P 500 futures declined from their recent highs around 7,400 and are now attempting to regain upward momentum.
💻 Nasdaq 100 futures followed a similar pattern, slipping below 28,600, but have since strengthened again and are currently trading above 28,800.
🛢️ Oil prices saw heightened volatility following the exchange of fire between Iran and the United States. Spot Brent crude approached $104 per barrel, but has since retreated to around $100.
💵 Consequently, the dollar regained strength. The US dollar index (DXY) climbed towards the 98.25 area before easing back in recent hours to around 98.00.
💱 EUR/USD reflected this volatility, falling below 1.1725, though it has since resumed its upward bias and is now heading towards the 1.1750 level.
🇪🇺 In Europe, DAX 40 futures pulled back during yesterday’s session, finding support around 24,500, where they are currently trading.
📉 Euro Stoxx 50 futures also declined below 5,900, although they have managed to recover those levels in recent hours.
🥇 Gold futures approached $4,775 per ounce yesterday but retreated later in the session and are now stabilising around $4,735.
₿ Meanwhile, Bitcoin has fallen below the $80,000 mark and is currently finding support near $79,500.
