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Bessent will examine US sanctions list and urge more disruption of Iran's financial system
Treasury Secretary Scott Bessent called on allies on Tuesday to'more forcefully disrupt Iran’s financing networks. He also said that the Treasury would scrubbing its outdated sanctions list to make it easier to root out sophisticated terrorist financing schemes. Bessent, in remarks prepared for a conference on anti-terrorism finance after the G7 finance leaders had met in Paris said that participants should "stand with us fully" against Iran. Bessent stated that "that will require our European partners, for example to join the United States by taking action against Iran, by designating its financials, unmasking their shell and front companies and?shuttering their bank branches and dismantling his proxies." It will be up to those in the Middle East and Asia, including you, to eliminate Iran's shadow banks. The U.S. Treasury, as the Trump administration attempts to press Tehran to reopen the Strait of Hormuz in order to restore vital oil flow disrupted by U.S. and Israeli attacks against Iran, has increased its sanctions efforts through a?program dubbed Economic Fury." The program aims to disrupt Iran’s shadow banking networks and has frozen nearly half a billion dollars of cryptocurrency tied to the regime. Treasury will update its sanctions system to make it more effective because "our enemies adapt and innovate", by creating new shell corporations. Treasury sanctions are mostly imposed against individuals, companies, and other entities who are on the Specially Designated Nationals List. This list contains tens and thousands of designated persons and entities. These are cut off from a dollar-based financial system, and their assets are frozen. Transacting with designated entities can lead to sanctions for the person or company involved. Treasury tailors its sanctions program to the 21st Century in order to sharpen national?security?outcomes. Bessent stated that we are reviewing outdated and obsolete designations to help financial institutions focus their attention on the most sophisticated terrorist funding schemes and sanctions evasion plans. He said that the most effective sanctions are aggressive and targeted. Those left in place for too long may have unintended effects. Bessent stated that sanctions are not meant to punish people, but to change their behavior. "Sanctions in place for many years without any visible or 'tangible' changes in behaviour can have generational impacts that are almost impossible to predict." He stated that Treasury would maintain "agility to maximize effectiveness", and gave examples such as easing sanctions against Venezuela and Syria after regime changes. (Reporting and editing by David Lawder)
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The Canadian inflation rate has accelerated to 2.8% due to the Iran war and higher gasoline prices
Data released on Tuesday showed that the annual inflation rate in Canada increased to 2.8% from 2.4% in March. This was largely due to a sharp rise in gasoline prices following the 'Iran War, which pushed up global crude oil prices. The consumer price index has reached 2.8% for the first time since almost two years. This shows how quickly the economic effects of the war in Iran that began on February 28 have been felt. The inflation rate was lower than analysts expected as the prices of travel, tours, certain accommodation costs and furniture fell on an annual basis in April. The analysts polled had predicted the annual inflation rate to be 3.1%, and?the monthly rate of inflation at 0.7%. Statistics Canada reported that the monthly inflation rate in April was 0.7%. StatsCan reported that the removal of the carbon tax on consumers in April 2025 has resulted now in a monthly decrease for gasoline and natural gases. This also increased the pressure in the CPI basket. The cost of transportation increased by 7.6%, the highest level since November 2022, due to higher gasoline prices. These prices rose 28.6% from April to April, and 38% overall since the beginning of war. The carbon tax has ended, and the gasoline prices have also increased on an annual basis. Rents rose 3.6%, and prices for passenger vehicles rose 2.8%. The Bank of Canada closely monitors the core measures of inflation to gauge underlying inflation trends. They have slowed. CPI-median (the centermost component in the CPI basket) was 2.1% in April, down from 2.3% in march. CPI-trim (which excludes the most extreme changes in price) was down from 2.2% to 2%. Prime Minister Mark Carney offered a 10-cent-per-liter reduction in gasoline excise tax for a period of five months. After the inflation report, the Canadian dollar fell 0.20% to C$1.3766 (or 72.64 U.S. cents). The yields on two-year government bond were down 4 basis points at 2.782%. After the CPI report, money market bets on a rate increase slipped and now price in a 25 basis-point hike in interest rates for October.
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Bloomberg News reports that Indonesia is planning to tighten its state control on commodity exports.
Bloomberg News reported on Tuesday that Indonesia plans to tighten controls over commodity exports, including palm oil and coal. Indonesia is the largest producer of palm oil and thermal coal in the world. The government intends to create a state entity to supervise commodity exports and reduce under-invoicing. According to the report, this new entity will be overseen by the sovereign wealth fund Danantara which reports directly to President Prabowo. It could be announced as early as Wednesday. The report stated that details on how the body will function are still being worked out. Purbaya Yudhi Sadewa, Indonesia's Finance Minister, declined to comment on this report. Indonesia's main equity index continued its week-long slumber on Tuesday. This was due to traders responding to rumours earlier that the government would be implementing new export controls for strategic commodities to try and limit capital flow. The spokesperson for President Prabowo Subianto, officials from Indonesia's ministries of economic affairs and trade, as well as Danantara, the sovereign wealth fund, did not respond to requests earlier that day. Reporting by Abu Sultan from Bengaluru, and Gayatri Sundero. Andrew Heavens, Mark Potter and Andrew Heavens edited the report.
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India Oil reports revenue losses on LPG in May
Indian Oil Corp., the country's largest fuel retailer, has suffered a revenue loss on the sale of one cylinder of LPG of 617 rupees, compared to 171 rupees back in April after the Iran war pushed up the price, according to its finance chief. Anuj Jain, an analyst, said that the company lost 100 rupees on the sale of 14.2-kilogram LPG cylinders, which are mainly used for cooking. Indian state-run fuel retail outlets sell LPG to households at discounted prices. India, the second-largest LPG exporter in the world, is experiencing its worst gas shortages in decades. The government has cut supplies to industry, to protect domestic cooking fuel needs. India will consume 33.15 millions tons of LPG by 2025. About 60% of the demand was met by imports, and 90% of those supplies came from the Middle East. The U.S. and Israeli war against Iran has led to the closure of the Strait of Hormuz, which has caused a disruption in the supply of LPG. Indian Oil (IOC), in response to the closure of the Hormuz Strait, has been forced to diversify their sourcing of crude oil, LPG and liquid natural gas to meet local demands. We have changed our refinery diet to accommodate this change. Jain said that we have changed the dietary requirements of our refineries. IOC operates its refineries to full capacity. He said that the company had about a months' worth of crude oil in its inventory. He said that IOC bought LNG from Oman as well as?Nigeria Angola, and Indonesia, after the Middle East's major suppliers declared force majeure. Jain stated that IOC hopes to expand its Panipat plant to 500,000 barrels a day by the end of the year. Its Gujarat refinery will be expanded to 360,000 barrels a day and its Barauni facility to 180,000 barrels a day.
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Oil prices drop after Trump's Iran remarks, but shares and bonds remain steady
The global stock market was mixed on Tuesday, and bond markets were stable after U.S. president Donald Trump postponed an attack against Iran. He also said that there was a high chance of a nuclear deal. This sent oil prices down. Trump announced on Monday that he had halted the planned resumption in attacks against Iran, to give time to negotiate a peace deal after Tehran sent Washington a new proposal. The U.S. has a "very high chance" of reaching an agreement with Iran that would prevent Tehran from getting a nuclear bomb. European stocks gained 0.7% on Monday, regaining ground they lost last Friday when they fell 1.5% due to bond market volatility. Stocks in Europe are still below their pre-war level and lag behind the U.S. counterparts. Futures for U.S. S&P 500 fell 0.3% in pre-market trade as memory chip and storage companies declined. These companies had helped push U.S. stocks to record highs over the past few weeks, as part of a?AI boom. "We've already seen a lot back and forth," said Fabien YIP, a market researcher at IG about the Iran negotiations. "Until we see real action (in the Strait of Hormuz), in which?ships pass through safely, and we see material rebound in traffic through the Strait I think that?the general market is shrugging?off?the comments from either side." Brent crude futures dropped 1.1% to $109.90 per barrel, on the backs of Trump's remarks. U.S. crude fell 0.4% at $108.30 a barrel. Both were still more than 50% higher than their pre-war level. Overnight, MSCI's broadest Asia-Pacific index outside Japan dropped 1.2%. Earnings from Nvidia, the world's largest chipmaker, are expected to be released on Wednesday. Expectations for this company are sky-high. Richard Reyle is chief investment officer of Questar Capital Partners. He said that "Nvidia" was the shorthand used by the market for all things AI. The market has seen a lot of growth in the last few years, largely due to AI. BOND SELLOFF ABTENS Oil prices fell on Tuesday and helped to stop a massive sell-off of global bonds, but there are still concerns about a possible inflationary shock caused by the?Iran war. The yields on the benchmark U.S. Treasury 10-year note have fallen from a high of more than 4.63% to just 4.61%. Yields are inversely related to prices. British bond yields dropped after reports that the most likely candidate to succeed Prime Minister Keir?Starmer would not change the country's borrowing regulations. The markets are pricing in major central bank rate increases?this coming year, on the expectation that policymakers will need to tighten their policy to combat an inflation resurgence driven by high energy prices for longer. Florian Ielpo is the head of macro investment at Lombard Odier Investment Managers. He said that the micro story was still strong and AI remained the main supporter of US?equities. However, the macro story has become less forgiving, referring to rising oil prices, bond yields, and other factors. The dollar, which has been a safe-haven since the start of the war, was up by 0.15% to 159.10yen. This puts traders on high alert for any Tokyo intervention in order to support its currency. The euro fell 0.3% to $1.162. The dollar fell by 0.2%, to $1.341. Rae Wee and Harry Robertson reported from Singapore and London, and Jamie Freed and Tom Hogue edited the article.
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South Africa increases steel import duties in order to protect struggling local industry
South Africa has imposed higher import duties of 10% to 30% on certain steel products to protect the industry from the weak demand and the rising imports of China. ArcelorMittal South Africa, among others, has closed some mills. The country's International Trade Administration Commission recommended that the government take immediate action to protect the steel sector by proposing import duties starting at 10%. The government's notice of May 15, 2015, announced the duties that will be applied to flat-rolled steel, non-alloy, bars, rods and tubes. South Africa had previously applied tariffs ranging from zero to as high as 15% to these products. ITAC Chief Commissioner Ayabonga Cawe stated on Tuesday that they hoped the decision would give local industries the necessary room to adapt in a way?that will allow them to invest in a manner that allows them to improve their capabilities. Cawe stated that the tariff rebates for processors who use products like heavy structural steel or?flat steel? used in electronics has also been adjusted. He added that the tariff adjustments wouldn't affect preferential treatment for certain geographies. The South African Iron & Steel Institute reports that imports account for?about 36 percent of South Africa's steel consumption. China accounts for 73%. South Africa also imposed steep import duty on structural steel imported from China and Thailand after finding evidence for dumping. Reporting by Olivia Kumwenda Mtambo; editing by Gus Trompiz
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As heavy rains flood southern and central China, at least 18 people have died
Authorities reported that torrential?rain continued to fall across central and southern?China Tuesday, with at least 18 people killed in flooding which also affected schools, businesses and transport. China's weather service said that areas in Jiangxi and Anhui, Hunan and Hubei, Guizhou and Guangxi as well as Guangdong, Guangdong, and Hainan were at high risk for rain-related disasters. These included landslides and flash floods, severe urban flooding, and waterlogging. Authorities have announced that they have set aside 150 million yuan (22.04 millions) for disaster relief. They also launched emergency response in several affected regions. Images posted on the Chinese video platform Douyin show that many residents of Jingzhou in central 'Hubei were able to swim in the water, and catch fish. Some cars were almost completely submerged in water on roads that are surrounded by commercial and residential buildings. CCTV reported that ten people died after a pickup truck carrying 15 farm workers fell in a river flooded by heavy rains. CCTV reported that heavy rains and flooding caused the deaths of four people in southwest Guizhou Province, three in Hubei's central low-lying province and one in Hunan. State media reported that schools, businesses, and transport services had been suspended and the authorities were relocating residents from certain parts of Hubei, Hunan. Heavy Rain Expected Along the Yangtze River According to Chinese?meteorologists, the high cumulative rainfall was also due to the?slow-moving nature of the weather system. According to Chinese'meteorologists, the'slow-moving weather system was also responsible for the high rainfall. The National Meteorological Centre of China said that severe weather will gradually move from east to south in China over the next couple of days. The heaviest rain is expected to fall along the middle and lower reaches the Yangtze River starting Wednesday. On Tuesday, authorities on China's southern Hainan Island?issued an earthquake warning after a mountainside collapsed into a highway in Lingshui. This led to the closure of several major roads within that area. Separately in Guangxi, authorities set up temporary housing on 99 sites for over 4,000 residents, and relocated another 7,000 after Monday's magnitude 5.2 quake, which caused tremors to be felt across many cities.
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Estonia claims NATO shot down suspected Ukrainian drone
The Baltic state of Estonia said that a NATO jet shot down an alleged Ukrainian drone above Estonia on Tuesday. This is the latest in a series of airspace violations occurring in the?region due to frequent Ukrainian attacks against Russia. The Latvian army reported that neighbouring Latvia had also issued a drone warning, telling residents living near the Russian border not to leave their homes. NATO Baltic Air Police Jets were summoned in the area. Ukraine has intensified long-range drone strikes on?Russia including in the Baltic. Since March, Ukrainian military drones strayed into the airspaces of NATO member countries Finland, Latvia and Lithuania, all of which border Russia. The Latvian government resigned last week over the handling?of these incursions. Hanno Pevkur, Estonian Defence Minister, said that a Romanian F-16 fighter shot down the suspected Ukrainian drone on Tuesday. Hanno Pevkur, Estonia's Defence Minister, said that NATO did not respond immediately to a comment request. Last week, Ukrainian President Volodymyr Zelenskiy announced that Ukraine would be sending experts to Latvia to protect the country's sky. On?May 15, Finnish authorities warned that suspected drone activity was taking place in the capital's?region. They told people to stay inside and suspended traffic at Helsinki Airport for three hours. No drones were found despite the?Finnish defense forces scrambling fighter jets and other emergency services. Reporting by Andrius Sytas, Janis Laizans, in Riga, and Essi Lehto, in Helsinki. Additional reporting by Lili Bayer, in Brussels, and Niklas pollard, in Stockholm. Writing by Anna Ringstrom. Editing by Terje Sollsvik and Peter Graff.
Dombrovskis, EU's Dombrovskis, says that the G7 has not agreed on everything.
Valdis Dombrovskis, EU Economy Commissioner, said that the extension of a waiver for Russian sanctions showed that 'G7 members are not always in agreement.
Dombrovskis stated that the G7 was a forum to discuss and cooperate with like-minded allies.
He said, "But, well... we're not always 100% in agreement on everything. This is unfortunately one of those topics."
He praised, however, the joint statement after the G7 meeting. It was said to be a positive outcome of the meeting between the central bank governors and finance ministers.
Dombrovskis stated that he was reassured by the United States, who said that European banks will be able to access Anthropic’s Mythos AI Model while?the U.S. maintains tight control over it.
He said, "Because it's?important to ensure that this model doesn't end up in the wrong hands."
Christine Lagarde said that the ECB was studying defenses against Mythos guided cyberattacks. However, it is 'at a disadvantage because of lack of access to model.
(source: Reuters)