Asia: Stocks down with eyes on Mideast, dollar hit by Trump Fed comment
[HONG KONG] Most stocks fell on Thursday and oil rose as traders kept a nervous eye on the Iran-Israel ceasefire, while the dollar dropped after Donald Trump said he had a handful of candidates to succeed Federal Reserve boss Jerome Powell, fuelling rate cut bets.
Uncertainty over the US president's trade war was also keeping sentiment subdued, with most countries still not reaching deals with Washington to avert the reimposition of steep tariffs ahead of a July 9 deadline.
With a shaky peace between Iran and Israel holding for now, Trump said he would hold nuclear talks with Tehran next week, even after insisting that US strikes had set its atomic programme back 'decades'.
'We may sign an agreement. I don't know,' he told reporters.
Iranian President Masoud Pezeshkian had said Tuesday his country was willing to return to negotiations but that it would continue to 'assert its legitimate rights' to the peaceful use of nuclear energy.
Crude prices, which tanked Monday and Tuesday after the ceasefire was announced, edged up for a second day, though gains were capped by the possibility that Opec and other key producers will lift output.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
'While the Israel-Iran conflict is now de-escalating, we still believe that geopolitical risks remain where the ceasefire could easily fall apart,' wrote Kai Wang, Asia equity market strategist at Morningstar.
'While this possibility remains elevated, we do not believe that there would be a restriction on oil supply even under a re-escalating scenario. Given that oil has retreated to preconflict price levels, we believe that any future increase in oil price is likely to be short-lived.'
Equity markets were mostly down, with Hong Kong, Shanghai, Sydney, Singapore, Seoul, Jakarta and Wellington in the red but Tokyo and Taipei in positive territory.
That came after a tepid lead from Wall Street, where the Nasdaq was the standout after chip titan Nvidia shot up more than four per cent to a record high, giving it a market valuation of around US$3.76 trillion. That makes it more valuable than Microsoft, Apple and other tech giants.
The dollar held losses after Trump's latest salvo against Powell and suggestion that he was already lining up his replacement.
Since returning to the White House the president has constantly hit out at the Fed boss for not cutting rates, questioning his intelligence and stoking worries about the bank's independence.
'I know within three or four people who I'm going to pick,' he told reporters after a Nato summit.
'I mean he goes out pretty soon fortunately because I think he's terrible,' Trump said of Powell, whose term ends in May next year.
Trump added that Powell was 'average mentally' and had 'low IQ for what he does'.
The Wall Street Journal reported that the Republican was considering making an announcement in September or October, with Treasury Secretary Scott Bessent, economic adviser Kevin Hassett and former Fed governor Kevin Warsh among the contenders.
Trump's remarks came days after Powell told lawmakers the bank needed to see the impact of the president's tariffs on the economy before making a move.
'Trump's nomination will amp up the pressure, to the point where we could have a shadow Fed chair before Powell steps down in May next year,' said National Australia Bank's Rodrigo Catril.
'We think it's fair to suggest that the pressure on Powell to cut rates will increase, and that's adding to selling pressure on the dollar.' AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
an hour ago
- Straits Times
France says it intercepted drones targeting Israel prior to Iran ceasefire
FILE PHOTO: French Defence Minister Sebastien Lecornu attends a press conference following talks with Armenian Defence Minister Suren Papikyanin in Yerevan, Armenia, February 23, 2024. Hayk Baghdasaryan/Photolure via REUTERS/File Photo PARIS - France's military took part in efforts to stop Iranian drones targeting Israel prior to this week's ceasefire, the country's defence minister Sebastien Lecornu said late on Wednesday. "I can confirm that the French army intercepted less than 10 drones in the last few days during the different military operations conducted by the Islamic Republic of Iran against Israel, either by ground-to-air systems or via our Rafale fighter jets," Lecornu said during a parliamentary debate on the situation in the Middle East. Lecornu said Iran had launched some 400 ballistic missiles and 1,000 drones towards Israel during the 12-day conflict. Israel started attacking Iran on June 13, saying it aimed to destroy its arch-enemy's nuclear capabilities. Its strikes wiped out a senior echelon of Iran's military command and killed several nuclear scientists. Iranian authorities said 610 people were killed and nearly 5,000 injured in the country. Tehran's retaliatory missiles killed at least 28 people in Israel and damaged hundreds of buildings, until a ceasefire came into effect on Tuesday. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
2 hours ago
- Business Times
Trump says US and Iran will talk next week, Middle East war over for now
[WASHINGTON] President Donald Trump said the US would hold a meeting with Iran next week but cast doubt on the need for a diplomatic agreement on the country's nuclear programme, citing the damage that American bombing had done to key sites. 'We're going to talk to them next week,' Trump said Wednesday at a press conference during the Nato summit at The Hague, without giving more details. 'We may sign an agreement. I don't know, to me, I don't think it's that necessary.' He reiterated that the US strikes on the Natanz, Isfahan and Fordow facilities had 'obliterated' them, again disputing an American intelligence assessment that said Teheran's nuclear programme had only been set back by a matter of months. The comments came on day two of a ceasefire between Israel and Iran, ending 12 days of conflict that threatened to escalate into a wider regional war and upend energy markets. As the missiles fell silent and oil prices plunged – wiping out most of their increase during the hostilities – focus has switched to a possible next stage of nuclear diplomacy. Trump said the conflict was effectively 'over' after the US bombing mission – though he also warned: 'Can it start again? I guess someday it can. It could maybe start soon.' Iran has been sending signals that it's ready to resume talks, which were underway with the US before Israel attacked. 'The logic of war has failed – return to the logic of diplomacy,' Iran's mission to the United Nations said on Wednesday. The mission didn't immediately respond to requests for comment on Trump's hint at new talks. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Before Israel's June 13 attack on Iran, Trump envoy Steve Witkoff had taken the lead in five rounds of talks with the Islamic Republic, seeking a deal to replace the 2015 nuclear agreement that Trump abandoned during his first term. 'We're hopeful for a comprehensive peace agreement,' Witkoff said on Wednesday on CNBC when asked what the next steps are for diplomacy with Iran. 'We were hopeful when we first started negotiations. It didn't quite work out that way, but today, we are hopeful. The signs are there.' Witkoff said the US has been 'having conversations with the Iranians' and that 'multiple interlocutors are reaching out to us,' adding that his 'strong sense' is that 'they're ready.' 'For Iran, a diplomatic track makes as much sense today as it did before the attack,' said Ray Takeyh, a senior fellow at the New York-based Council on Foreign Relations. 'It seems that the Iranian programme was not fully disabled. This may tempt Israel or the US to conduct additional strikes. A diplomatic process will obviate that possibility.' It's not clear what that would entail. The UN's nuclear watchdog has for decades been central to monitoring of Iranian nuclear activities. But Teheran is in no hurry to resume working with the agency, which it blames for failing to condemn the US and Israeli attacks. Iran's parliament has approved legislation that would suspend cooperation with the International Atomic Energy Agency until nuclear sites are secured, though any ultimate decision will be taken at higher levels of the state. The IAEA said Tuesday that inspections in Iran should resume 'as soon as possible' to determine what's happened to stocks of uranium enriched to 60 per cent levels, not far short of the 90 per cent required to build a bomb. The IAEA says it last verified those inventories a few days before Israel's June 13 attack and their whereabouts is now unknown, suggesting they may have been moved preemptively from sites targeted by US bombs. Trump said the US bunker-buster strikes had eliminated some key risks by burying the country's atomic materials under 'granite, concrete and steel.' 'We think everything nuclear is down there,' he said. 'They didn't take it out.' Pressed about the sources for such findings, he cited new intelligence assessments and also said 'we've also spoken to people who've seen the site,' without identifying them. The White House declined to specify to whom Trump was referring. Iran's nuclear installations were 'badly damaged' by US airstrikes, Foreign Ministry spokesperson Esmail Baghaei told Al Jazeera TV on Wednesday, in the first such comments from Teheran. The official didn't give further details and said authorities were still reviewing the situation on the ground. Trump cited that assessment during his Nato press conference, as well as a statement by Israel's nuclear agency that said the Fordow site had been rendered inoperable and Teheran's ability to make a nuclear weapon set back by 'many years.' Earlier this month, Trump had said Iran was 'weeks away' from having an atomic weapon, though some experts and US intelligence estimates said it could take months or years for the nation to develop a weapon. Iran maintains that its nuclear programme has purely civilian purposes, and that it's entitled to pursue that goal under international law. Witkoff said that 'enrichment is the red line' for the US with Iran, 'and beyond enrichment, weaponisation is the red line.' Israel's attacks on Iranian military and nuclear sites killed several top generals and atomic scientists. Iran countered by firing drones and ballistic missiles into Israel. Both have declared victory. Oil has slid back to around the levels it was trading at before the fighting began, posting a two-day decline of some 14 per cent. It rebounded slightly on Wednesday as Trump played down the prospect of near-term sanctions relief for Iran. Asked if his Tuesday comments approving Chinese purchases of Iranian oil undermined his strategy of maximum pressure on Iran, Trump said he is 'not giving up' on it. But he also indicated US financial penalties are doing little to stop Beijing from buying Teheran's supplies. 'If they're going to sell oil, they're going to sell oil,' Trump said. 'China is going to want to buy oil. They can buy it from us. They can buy it from other people.' Bank of Israel chief Amir Yaron told Bloomberg that the military campaign cost the government about 1 per cent of gross national product and would require revisions to this year's budget. He said gains on the country's financial markets suggest that they see the conflict resulting in 'a positive outcome for Israel.' Iran's civil aviation authority said 13 airports in the country's eastern regions have reopened for flights, though Teheran's airports remain closed until further notice, according to state media. Trump said both nations are 'tired, exhausted. They fought very, very hard and very viciously, very violently, and they were both satisfied to go home and get out.' BLOOMBERG
International Business Times
2 hours ago
- International Business Times
Israel Labels Iran's Central Bank as Terror Entity Amid Rising Tensions
Israel has officially labelled Iran's Central Bank a terrorist entity, citing its alleged role in financing militant operations across the Middle East. The Israeli government declared that no institution linked to terrorism will be spared, marking a strategic push to undermine Iran's financial networks. Israeli Defense Minister Yoav Gallant signed the directive that also blacklists two additional Iranian banks—Shahr Bank and Mellat Bank—along with an energy firm affiliated with the Islamic Revolutionary Guard Corps (IRGC). Top executives from Sepehr Energy Jahan Company (SEJ) have also been sanctioned. "The Central Bank of Iran isn't just a bank—it's a channel for terror financing," Gallant asserted. "We will strike where the regime feels it most." Backed by Mossad and Israel's National Economic Warfare unit, this move targets what officials call the backbone of Iran's terror infrastructure. Israeli sources claim SEJ's revenue stream aids the IRGC and its regional allies, including Hezbollah, Hamas, Houthi rebels, and Shiite groups in Iraq. Meanwhile, Iran executed three men it claims were working for Israeli intelligence. State media reported the accused were convicted of espionage and transporting gear used in targeted killings. While specifics remain unclear, the executions signal Tehran's intensified clampdown on suspected Israeli operatives. Nournews, an Iranian state-linked outlet, said around 700 people with alleged ties to Israel have also been detained recently. These developments follow a tentative U.S.-brokered ceasefire between Israel and Iran, ending nearly two weeks of hostilities triggered by Israeli concerns over Iran's nuclear advancements. Israeli and U.S. forces had struck nuclear facilities in Fordow, Natanz, and Isfahan, sparking global concerns. Though violations were alleged from both sides, former U.S. President Donald Trump, who helped mediate the truce, said it was still holding. "Israel will not attack Iran," he stated, noting Israeli jets had stood down as a sign of goodwill. Declaring the sanctions, Gallant emphasized that Israel will continue to disrupt what he termed "Iran's axis of terror" and will not allow impunity. This marks Israel's first designation of a sovereign nation's central bank as a terror body—deepening its economic warfare without open conflict.
