Market Report.
🧱 The old order is once again coming up against a brick wall. Iran appears determined to press home the new reality in the Middle East, reminding Israel and the US that they no longer control the region.
🤝 There are mixed signals about peace talks between the U.S. and Iran concerning the Strait of Hormuz. After tensions rose with threats from President Trump and Iran’s closure of the strait, Iranian negotiators reported progress in talks, with plans for a committee to help reach a deal in 60 days.
⚠️ President Trump threatened to restart the war with Iran on Sunday, posting on Truth Social that Iran must stop its proxies in Lebanon from causing trouble or the U.S. would hit Iran very hard again, only harder. Fox News reported he went further in an interview, warning that if Iran closed the strait, “You close the strait and you won’t have a country. You won’t even make it back to your f***** country.”
🚶 In response, Iran’s delegation walked out of the Bürgenstock venue in protest. Iranian state-aligned Tasnim news agency confirmed the walkout, and The Hormuz Letter monitoring service reported the talks were “fully suspended.”
⛴️ Iran announced it had again closed the Strait of Hormuz, arguing the U.S. had failed to meet its commitment to halt fighting in Lebanon. Iran’s Fars news agency cited a military source saying no new permits were being issued for ships to cross until further notice.
📉 Shipping data showed an immediate impact. Only one small tanker crossed the strait with its location transponder on after the announcement, compared with dozens of ships in recent days.
🟨 U.S. officials disputed that the strait was closed. Sunday appeared to be the quietest day in Lebanon for some time, with no reports of major violence by nightfall after two days of heavy Israeli strikes and Hezbollah fire.
🗣️ U.S. Vice President JD Vance led the U.S. delegation and continued discussions through the night, rejecting reports of Iran leaving negotiations. Both sides are engaged in addressing outstanding issues related to the nuclear deal. The U.S. discussed ensuring the Strait of Hormuz remains open and working on ceasefire measures for southern Lebanon.
🛢️ Iran’s Foreign Minister Abbas Araghchi noted significant progress from the talks, including waivers for Iranian oil exports and a plan for reconstruction and development. He emphasized that the deconfliction mechanism in Lebanon would be a crucial test of the agreement amidst worries about ongoing violence there.
🎙️ Netanyahu gave a speech at the JNL International Policy Summit in Jerusalem this weekend. In his speech, he emphasised that, Israel occupied territory in Gaza, Lebanon and Syria and will keep it as long as necessary.
📊 Many Americans increasingly blame one person for Israel’s deteriorating image: Benjamin Netanyahu. A CNN poll shows 59 percent of Americans do not trust him, including 58 percent of young Republicans. Congressman Thomas Massie said his constituents no longer understand why their tax dollars are used to bomb hospitals in Gaza. They see images on TikTok and ask questions he cannot answer.
📈 These events have caused renewed volatility in the crude oil market. The price of a barrel of Brent crude opened the week with a significant rise compared with last week, at around $82.30, but has since fallen by almost 4% from the opening price and is currently trading at $78.90 on the spot market.
📉 While market concerns about a potential Federal Reserve rate hike are high. Key developments include remarks from Federal Reserve Board Governor Christopher Waller and speeches from ECB President Christine Lagarde and Economy Commissioner Valdis Dombrovskis. Additionally, EU consumer confidence and Canadian inflation data for May are set for release.
🌬️ Winds of change in the UK.
🤔 UK Prime Minister Keir Starmer is contemplating his political future after rival Andy Burnham won a major parliamentary seat in the Makerfield by-election.
📅 Starmer may decide today whether to resign or contest his leadership. Burnham’s victory has increased pressure on Starmer, with some lawmakers urging him to announce a departure timeline.
👥 Starmer is discussing his position with family and is expected to speak with Burnham. Foreign Minister Yvette Cooper reportedly suggested Starmer resign.
📉 Despite low popularity ratings and recent local election losses, Starmer’s team believes he has a mandate until 2029. If Burnham takes over, he would be the seventh prime minister in ten years.
🏆 Labour won a landslide in 2024 but has since seen a sharp decline in support. Recent polls suggest a future general election could reduce Labour to around 127 seats, with Reform UK potentially becoming the largest party.
🩺 Burnham previously served as Health Secretary and has long advocated for devolution. As Mayor of Greater Manchester, he pioneered integrated health and social care systems, publicly controlled buses and trams, community wellbeing hubs, and a regional growth fund. His approach emphasizes regional empowerment, public ownership, and tackling inequalities. He is a charismatic communicator with a “King of the North” image and pragmatic left-leaning politics.
🏙️ Burnham would likely pursue a major expansion of the Greater Manchester model nationally, with more fiscal powers, integrated public services, and regional decision-making. This could boost northern and midlands economies and improve transport and housing but may face resistance from the Treasury and slow delivery.
💼 On the economy and fiscal policy, Burnham would take a more interventionist approach with public investment, potential nationalisation, and a good growth agenda. This could stabilise support in former Red Wall areas but risks market concerns over spending, inflation, and global headwinds. Polls suggest even a Burnham-led Labour would struggle against Reform on the economy.
🛑 Keep in mind that this could be the best option for the establishment to prevent the british “Donald Trump”, Nigel Farage, from leading the UK government.
Market View.
📈 US markets remain afloat, with futures showing sideways movement, sceptical of the agreement between the US and Iran. Mini S&P 500 futures are trading at 7,565 points, whilst Nasdaq 100 futures are at 30,758 points.
💵 The US Dollar Index (DXY) remains unusually strong, close to its yearly highs, trading at 100.90 points. This keeps the major forex pairs against the dollar in check. EUR/USD is trading around the 1.1455 area and GBP/USD around 1.3200.
📈 In Europe, futures begin the week on a positive note, with DAX 40 futures trading at 25,245 points and Euro Stoxx 50 futures at 6,340 points.
🛢️ Crude oil had a bullish opening after the apparent breakdown of negotiations between the US and Iran, but over the last few hours it has fallen nearly 4% from its highs, dropping from above $82 per barrel to the current $79.30 for spot Brent.
🥇 Gold futures are trying to recover from last week’s losses, trading at $4,215 per ounce.
₿ Bitcoin is also attempting to recover from last week’s falls, trading at $64,200.
