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Oil prices drop as shares rise, markets ignore Iran conflict
The global equity markets rose on Monday, despite a drop in oil prices. However, they still traded at multi-month highs. This was because markets ignored the impact of U.S. strikes on Iranian nuclear sites to support an Israeli military offensive. All of Wall Street's major indexes traded higher. Nine out of eleven of the benchmark S&P 500 sectors also advanced. The session's biggest losers were energy equities. The Dow Jones Industrial Average rose by 0.17%, to 42279.55. The S&P 500 gained 0.48% at 5,996.40. And the Nasdaq Composite grew 0.61% at 19,565.74. European shares fell by 0.2%. Overnight, MSCI's broadest Asia-Pacific index outside Japan dropped 0.66%. MSCI's global stock index rose by 0.28%. Israel bombed Evin Prison in northern Tehran, a powerful symbol of Iran's ruling system, as well as the Revolutionary Guard command centres responsible for internal security within the Tehran region on Monday. Iran reiterated earlier threats of retaliation against the United States. The Strait of Hormuz was closed by its parliament, which is a key shipping lane for the global oil industry. "The market's higher price signals a risky sentiment, which is surprising given the volatile events that occurred over the weekend, including the U.S. bombing of Iran with Israel," explained Andrew Wells at SanJac Alpha, Houston. The lesson that we learn is that headline events have less impact on the market now since tariffs were implemented - so-called Liberation Day, which was the biggest volatile event. Brent crude futures dropped 0.83% to $75.37 a barrel. U.S. West Texas Intermediate Crude fell by 0.88% to $75.14. Brent crude and WTI crude benchmarks reached five-month highs at $81.40 and $79.40 respectively. At its narrowest, the Strait of Hormuz measures only 33 km (21 mi) in width. Around a quarter of all global oil trade as well as 20% of liquefied gas supply passes through this narrow stretch. Michelle Bowman, Vice Chair of the Federal Reserve's Supervision Department, said that she felt it was time to lower interest rates as she was more concerned about risks in the labor market and less worried about high import taxes causing an inflation problem. The dollar gained 0.41% against the Japanese yen, and fell 0.39% against the Swiss Franc. The euro rose 0.09% to $1.1532, recovering from previous losses after Bowman's remarks. The dollar index fell by 0.19%. It measures the greenback in relation to a basket of currencies, including the yen, the euro and the yen. Gold prices fell. Gold prices fell. U.S. Gold Futures increased 0.5% to $3.385.10 per ounce.
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UN Mission says Israeli strike on Iran could have violated international laws
An investigation by the United Nations found that Israel may have violated international humanitarian law in some cases, citing the deaths of three aid workers and civilians in an apartment building in Tehran. Israel launched airstrikes against Iran on 13 June in a surprise assault that resulted in the deaths of many top Iranian commanders. Since then, Israel has intensified its attacks and prompted an exodus out of Tehran. On Sunday, the United States also joined in by attacking Iran's nuclear underground sites. The Iranian Red Cross and several residents of a Tehran apartment complex were among those killed, as well as three Iranian Red Cross workers. A clinic for children with Autism and a hospital, in Kermanshah, was also damaged, according to a press release from the investigating body. The principles of proportionality and distinction in international humanitarian law are seriously concerned by this, as well as the reported lack effective of advance warning from Israel which could affect the ability of the population to reach safety. Mission said that so far millions have fled the capital. Lack of warning systems and shelters, and internet restrictions increased the dangers. After Israel struck a notorious On Monday, experts expressed concern over detainees near bombing sites. The statement stated that "the experts urge the Iranian authorities" to move prisoners from areas at risk of airstrikes. The report also expressed concern about reports of Iranian authorities arbitrarily arresting activists, journalists, and social media users who are accused of spying with Israel. This crime is punishable by In Iran. Reporting by Emma Farge Editing and Topra Chopra by Ludwig Burger
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Trump urges everyone to lower oil prices after Iran attack
Donald Trump, the U.S. president, expressed his desire to keep oil prices low on Monday amid fears they could spike after the attack on Iran's nucleonic facilities. "Everyone keep oil prices low, I am watching!" Trump wrote, in capital letters on his Truth Social platform: "You're playing right into the enemy's hands. Don't do it!" Trump then sent a second post to the U.S. Department of Energy encouraging them to "drill baby, drill", and adding, "I'm talking now." Chris Wright, the U.S. Energy secretary responded: "We're working on it!" In a post at X. The energy department was not clear on what it could do to increase oil and gas drilling which reached record levels during the former administration of President Barack Obama. Joe Biden Trump wants to push it even higher. The Energy Department didn't immediately answer a question about Wright's comments. The global benchmark Brent oil price fluctuated on Monday. It reached a five-month peak before dropping more than 1%, to $76.10 per barrel. Oil and gas transit from the Middle East continued via tankers after U.S. aerial strikes against Over the weekend United States In the event of severe disruptions, you could tap into the Strategic Petroleum Reserve (SPR), the world's largest reserve of emergency crude oil. The Trump administration has criticised Biden's usage of the SPR following the Russian invasion of Ukraine in 2022.
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Niger miners say production will continue at nationalised Uranium Mine
The Niger's biggest mine workers' union has pledged its support to the military government in their plan to nationalise Somair, the largest uranium mining operation in the world. They say production will continue despite the tensions between Orano and the French. Last week, Niger, who seized the Somair Mine in December, announced their plan to nationalise them, accusing Orano for taking a disproportionate part of production. The move is in line with other West African governments who have taken similar measures to boost the revenue from their natural resources. Orano, a French state-owned company, did not reply to a comment request on allegations that the company had taken more than it should have. The EU has said that it is opposed to the Niger plan and reserves the right of legal action. In a statement released on Saturday, the National Union of Niger Mine Workers (SYNTRAMIN) said that it supported the "sovereign decisions" of Niger's military leaders, who took power through a coup 2023. It added that "for more than 50 year...the benefits of this strategic richness have never fairly benefitted Niger", denouncing decades of "plundering organised for the advantage of foreign interests" without providing any evidence. Orano owns 63% of Somair while the rest is owned by Niger's Sopamin, a state-owned company. Orano has taken 86.3% between 1971 when the mine opened and 2024. The government did not elaborate. SYNTRAMIN has also committed to "mobilise in order to ensure continuity of production and the optimal valorisation our resources" as part of a new state management. Niger is home to the seventh largest uranium production in the world. Somair, a nuclear fuel supplier in Niamey, plays an important role. Reporting by Portia Corey in Dakar, and Boureima Balima in Niamey. Writing by Maxwell Akalaare Adombila. Editing by Robbie Corey Boulet and Barbara Lewis.
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Gold gains as tensions between Iran and Israel offset dollar strength
The gold price edged higher on Monday as the escalating tensions between Iran and Israel outweighed the pressure of a stronger dollar. Markets are closely monitoring Iran's next moves. As of 1339 GMT, the spot gold price was up by 0.2% to $3,375.79 per ounce. U.S. Gold Futures rose 0.2% to $3,391.70. The U.S. Dollar index increased by 0.5%. Gold becomes less affordable to other currency holders when the U.S. dollar is stronger. Israel bombed the Evin prison, a powerful symbol of Iran's ruling system in the north of Tehran. Israel described the attack as its most intense yet in the Iranian capital, just a day after America joined the war. Iran has also repeated its earlier threats of retaliation against the U.S. "If we do not see significant inflation, on top of the tariffs we are already experiencing, this will lead to more risk appetite." Bart Melek is the head of commodity strategy at TD Securities. He said that gold purchases as a safe haven may be reduced, at least temporarily. He added, "I believe prices will remain fairly stable and may even move up or down around $75." Gold has traditionally been seen as an inflation hedge and a safe place to invest in times of uncertainty. Gold's appeal is reduced by higher interest rates, since it does not generate any return. Investors are also awaiting the U.S. The Personal Consumption Spending data is due this week. Last week, policymakers hinted at possible rate reductions later this year. However, Chair Jerome Powell expressed his uncertainty over tariff policy and the economic response. Spot silver rose 0.4% to $36.14 an ounce, while platinum rose 2.1% at $1,291.50. Palladium rose 2.0% to $1,070.09 reaching its highest since June 12. (Reporting by Sarah Qureshi in Bengaluru; Editing by Shailesh Kuber)
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What is the scope of the UN's nuclear watchdog in Iran?
Since Israel's military strike on Iran's nuclear facilities on 13 June, the U.N. nuclear watchdog that polices the global Nuclear Non-Proliferation Treaty has been unable to conduct inspections in Iran. The International Atomic Energy Agency has a number of inspection powers. IS THE IAEA UNIVERSAL IN JURISDICTION? No. The IAEA has agreements with other countries that do not fall under its oversight. Iran is a signatory to the NPT, and is therefore subject to IAEA supervision. This includes inspections to ensure that nuclear material like uranium does not get "diverted", for example to be used in atomic weapons. Israel is not a signatory to the NPT, but is widely believed to be the only nuclear-armed country in the Middle East. Israel doesn't confirm or deny possessing them. The IAEA has signed a limited agreement that allows it to supervise some materials and facilities. This is a fraction of the material and facilities Israel possesses and does not include any of the nuclear weapons programme widely believed to exist in Israel. Iran, by contrast, has a Comprehensive Safeguards Agreement (CSA) with the IAEA under which it must account for all its proliferation-sensitive nuclear material, including every gram of enriched uranium. Can the IAEA go anywhere, anytime in Iran? No. No. The IAEA had access to these facilities regularly until the attack. The IAEA said that since then the facilities have been "closed", and inspectors are not allowed to enter. HAS THE IAEA HAD POWERS PRIOR? Yes. Yes. The IAEA's oversight of Iran was the most extensive ever. As part of the 2015 pact with the IAEA, Iran agreed to add the Additional Protocol to the CSAs of countries. The IAEA created this protocol to increase its ability to prevent nuclear proliferation. Iran has signed the Additional Protocol but not ratified it. The Additional Protocol grants the IAEA the ability to conduct snap inspections, which are short notice visits to places that Iran may not have declared as nuclear related. Why does it no longer have such sweeping powers? In 2018, President Donald Trump, during his first term in office, pulled the U.S. from the 2015 nuclear agreement, reimposing U.S. sanction on Iran, which had been lifted under the agreement. As a result, Iran started pushing beyond the limits of the nuclear deal the following year. It also reduced the additional IAEA supervision introduced by the agreement. In February 2021, Iran announced that it would not be fulfilling its additional commitments made under the 2015 agreement. This included the implementation of the Additional Protocol. The IAEA agreed to continue monitoring equipment, such as surveillance cameras, added under the 2015 deal. However, Iran ordered their removal in June 2022. What was lost with the extra Oversight? Snap inspections, an important tool for IAEA oversight, were removed. The IAEA's reduced oversight left blind spots where extra oversight was applied. IAEA says that because it has been losing "continuity" of knowledge for many years, it won't be able fully to piece together what has happened. This includes the production of centrifuges, their inventory and some key parts of centrifuges as well as Iran’s stock of “yellowcake” – uranium which has not yet been enriched. It is not impossible that many centrifuges, which are still unaccounted for, will be used in secret to enrich uranium at an undeclared site. A small warehouse would make it easy to conceal such a facility. IAEA cannot guarantee that Iran's nuclear activities are entirely peaceful, but there is no evidence of a coordinated nuclear weapon programme. What if Iran pulls out of the Non-Proliferation Treaty? Iran has threatened withdrawal from the NPT while at the same saying that it would not be developing nuclear weapons in the event of such a development. Tehran complained that the non-proliferation treaty failed to protect them from an attack by the United States and Israel, two countries widely believed to possess nuclear weapons. The NPT allows a withdrawal by a country with three months notice, "if they decide that extraordinary events related to the subject of this Treaty have compromised the supreme interest of their country". North Korea, the only country that has announced its withdrawal from NPT in 2003 is North Korea. It was this country who expelled IAEA inspections before testing nuclear weaponry. (Reporting and editing by Mark Heinrich; Francois Murphy)
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U.S. officials warn that Iran could soon retaliate against U.S. troops.
Two U.S. officials stated on Monday that the United States believes Iran will soon launch a retaliatory attack against American forces in the Middle East, but the U.S. still seeks a diplomatic solution whereby Tehran would refrain from any attacks. Unnamed officials who discussed the assessment under condition of anonymity said that Iran's retaliatory strike could occur within the next two days. Iran has threatened retaliation after the U.S. bombed their nuclear sites on the weekend. U.S. officials warned Iran not to retaliate against the U.S. President Donald Trump stated after the strikes that any retaliation from Iran against the U.S. will be met with force that is far greater than the U.S. attack of the weekend. General Dan Caine said that on Sunday, the U.S. Military had increased the protection of its troops in the area, including in Iraq, Syria and Afghanistan. Nearly 40,000 US troops are in the Middle East. Some of these forces operate air defense systems and fighter aircraft that can detect and shoot at incoming enemy missiles, but their positions remain vulnerable. Last week, it was reported that the Pentagon has moved aircraft and ships out of bases in the Middle East which could be vulnerable to an Iranian attack. This included aircraft being taken from the 24-hectare Al Udeid Air Base in the desert near Doha. The base is the largest U.S. military base in the Middle East and has around 10,000 troops. Tehran has pledged to defend and retaliate. It was still not targeting U.S. bases, or blocking a quarter of oil shipments through the Strait of Hormuz. Reporting by Phil Stewart, Idrees Ali and Alistair Bell
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Germany's Merz says EU's approach to US Trade Talks is 'far too complex'
The German Chancellor Friedrich Merz called the European Union’s approach to the trade negotiations with the United States “far too complex”, saying that the bloc should focus instead on reaching agreements for only a few major sectors. Merz stated during an event organized by the BDI Industrial lobby that "the Americans are relatively simple minded and geared toward reaching an agreement with me on four or five main industries." He said that the European Commission (the executive body that negotiates trade agreements for the 27-nation block) should focus on chemicals, pharmaceuticals, and machinery. President Donald Trump announced a wide range of tariffs against trade partners, and wants to reduce U.S. goods deficit with EU. Trump has imposed a 50% tariff in Europe on steel and aluminum, as well as a 25% tax on cars. The EU is now trying to reach a deal with Trump before the 9th of July when reciprocal tariffs could increase from 10% up to 50% on other goods. Maros Séfcovic, EU Trade Commissioner, said earlier that there are intensive discussions with the United States covering all economic sectors. (Reporting and editing by Ludwig Burger. Friederike Heine)
Holcim, the cement maker, completes a $30 billion North American Spin-off
Holcim completed the spin-off its North American building materials business Amrize, which was valued at $30 billion in the early trading of Monday.
The Swiss listed company stated that it wanted to focus its attention on the differences in market dynamics between North America and the rest of world.
Amrize's shares opened at 46 Swiss Francs on the Six Swiss Exchange. This gives it a market cap of 24.7 billion Swiss Francs (30.24 billion dollars), which is in line with expectations that the company would be valued at around $30 billion.
Holcim shareholders sold off some of their stock, causing the shares to drop 8.8%.
Holcim's shares dropped 33% since Friday, reflecting the separation of its North American business. However, they were still 10.5% higher than the reference price estimated for the new standalone business by brokers.
Martin Huesler, analyst at Zuercher Kantonalbank, said that some Holcim shareholders will have immediately sold their Amrize stocks. Many Swiss investors are also more interested in Holcim's decarbonisation story.
Holcim has established itself as a supplier of lower carbon building materials by producing CO2 reduced cement and reusing waste.
Huesler said that the combined stock price for Amrize, Holcim, and the two companies is higher than the Friday closing price of 93.68, which is a good sign for the spin-off.
The decision to spin off was made in January 2024 and is not related to the rise in U.S. Tariffs.
Holcim stated in March that it would aim to achieve an average annual earnings growth before interest and tax of between 6% and 10% by 2030. This was driven by mergers and purchases.
Amrize's sales, which were $11.7 billion in 2020, are expected to increase by 5-8% per year. It wants to grow its core operating profits by 8-11% from $3.2 billion in 2025-2028. ($1 = 0.88168 Swiss Francs) (Reporting and Editing by Miranda Murray, Barbara Lewis and Oliver Hirt)
(source: Reuters)