German chancellor criticises U.S. climate agreement exit
BERLIN, March 26 (Reuters) - Germany is disappointed that the United States plans to leave the Paris climate agreement also in view of the fact the U.S. has been the biggest greenhouse gas polluter in history, Chancellor Olaf Scholz said on Wednesday.
"I deeply regret that the USA wants to leave the agreement," Scholz said on the sidelines of the Petersberg climate conference in Berlin.
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Reuters
10 minutes ago
- Reuters
Explainer: What's behind Iran's long tussle with the United States?
June 12 (Reuters) - The United States has pulled some diplomatic staff and military families out of the Middle East, citing unspecified regional security risks. Its long-running rivalry with Iran may be part of the heightened tensions. This article shows what's behind the rivalry, how it has played out and why tensions are flaring again. Iran and the United States were friends for most of the 20th century. As the Cold War took hold in the 1950s, Washington relied on Iran's reigning Shah to help stem Soviet influence spreading in the oil-producing Middle East. The Shah was growing unpopular at home and in 1953 the CIA helped topple a populist Iranian prime minister, Mohammed Mossadegh, who had nationalised Iran's British-owned oil company and wanted a more neutral Cold War stance. When Iranians overthrew the Shah in 1979, the Islamic revolutionaries who took over accused the CIA of having trained the Shah's secret police and vowed to battle Western imperialism in the region, branding America "the Great Satan". Revolutionary students seized the American embassy and took dozens of diplomats and other staff hostage for more than a year, ending a strategic alliance that had shaped the region for decades. The new Iranian government wanted to export its Islamic Revolution to fellow Shi'ite Muslims and groups opposing Israel, which it saw as the chief avatar of a Western imperialist project oppressing Muslims in the Middle East. Iran's Islamic Revolutionary Guards Corps set up Hezbollah in Lebanon in the early 1980s and the United States accuses the group of bombing its embassy and marine barracks in Beirut in 1983, killing around 300 people, mostly Americans. Hezbollah, which went on to fight repeated wars with the main U.S. regional ally Israel, has said other groups were responsible. Iran had complaints too. Iraq invaded Iran in 1980 and started using chemical weapons against Iranian soldiers and border villages from 1982 but Washington lent diplomatic backing in the war to Baghdad. A U.S. warship also mistakenly shot down an Iranian passenger plane in 1988, killing 290 people. Tensions eased after 1990, as the U.S. focused on Iraq after Baghdad's invasion of Kuwait and as Iran in 1997 elected reformist President Mohammed Khatami, who sought better relations with the West. The rivalry heated up again in the early 2000s with U.S. President George W. Bush labelling Iran part of an "Axis of Evil" along with Iraq and North Korea, a tag that caused anger in Iran. Iran's secret nuclear programme was revealed in 2002, while the U.S.-led invasion of Iraq in 2003 put the two countries on opposite sides of a struggle for control in the Shi'ite majority country. The U.S.-Iranian rivalry has often played out at arm's length in conflicts and political struggles between each side's proxies and allies around the Middle East. Besides Hezbollah, Iran backs armed Shi'ite factions in Iraq that have attacked U.S. forces there, the Houthi group in Yemen that has attacked international shipping in the Red Sea and the Palestinian militant group Hamas. The United States is the main international backer of Israel, Iran's biggest regional foe. It is also a close ally of Sunni Gulf monarchies which for years pursued their own rivalry with the Islamic Republic, seeing it as their main regional threat. Although Saudi Arabia and other Sunni kingdoms have buried the hatchet with Tehran, they remain wary and fear that any U.S. strikes on Iran could prompt retaliation against them. The revelation that Iran was secretly enriching uranium - a process to generate fuel for an atomic power plant but that can also make more concentrated material needed for a bomb - put its nuclear programme in the U.S. crosshairs. Western countries ramped up pressure on Iran with sanctions as negotiations over its nuclear programme meandered for years. Iran says its programme is entirely civilian and that it has the right to enrich uranium. Washington and its allies say Iran has consistently hidden important elements of its programme and believe it wants to build a nuclear bomb. In 2015 Iran and six major powers including the United States agreed to curb Tehran's nuclear work in return for limited sanctions relief, but U.S. President Donald Trump ripped up the deal in 2018. The two sides are negotiating again but seem far apart and Trump has threatened to bomb if there is no new deal. Israel has often described Iran as its most dangerous enemy and has indicated it may strike the country's nuclear sites. Any such attack would likely need U.S. acquiescence, potentially dragging Washington into a conflict with Tehran. Israel is already widely seen as behind covert attacks on Iran's nuclear programme including the Stuxnet computer virus and assassinations of scientists. Israel has neither confirmed nor denied this. Tensions have increased since the Hamas attack on Israel on October 7, 2023 and as war raged in Gaza. Last year Israel defeated Tehran's main regional ally Hezbollah and struck Iranian military targets in Syria and Iraq. Iran's Houthi allies in Yemen targeted Israel with strikes. Iran and Israel twice exchanged direct fire with missiles and drones, underscoring the possibility of a full-blown war.
Reuters
15 minutes ago
- Reuters
Morning Bid: Oil pops, dollar drops
LONDON, June 12 (Reuters) - What matters in U.S. and global markets today I'm excited to announce that I'm now part of Reuters Open Interest (ROI), opens new tab, an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, opens new tab, and you can follow us on LinkedIn, opens new tab and X., opens new tab Intro Not for the first time this year, markets are being hit by multiple crosscurrents. Today it's an oil price surge driven by Middle East tensions alongside surprisingly benign U.S. inflation readings. I discuss this and the rest of today's market news below. In today's column, I explore a surprising twist in the global dollar debate that could reshape how investors think about currency risk. I'll be off tomorrow so Morning Bid will take a day's holiday, but back to regular programming on Monday. Today's Market Minute * U.S. President Donald Trump said on Wednesday U.S. personnel were being moved out of the Middle East because "it could be a dangerous place", adding that the United States would not allow Iran to have a nuclear weapon. * U.S. consumer prices increased less than expected in May as cheaper gasoline partially offset higher rents, but inflation is expected to accelerate in the coming months on the back of the Trump administration's import tariffs. *An Air India plane bound for London with 242 people on board crashed minutes after taking off from India's western city of Ahmedabad on Thursday, the airline and police said, and India's federal health minister said that "many people" were killed. * U.S. trade negotiations have transitioned from their tumultuous opening act into a new chapter: the Slow Grind. It may be less turbulent than this past spring's drama, but no less worrying for investors. * A proposed U.S. tax targeting foreign investors could hurt European energy giants that operate in America's booming oil and gas sector, undermining President Donald Trump's energy dominance agenda. Read the latest from ROI columnist Ron Bousso. Oil pops, dollar drops With investors trying to read the runes of this week's 'framework' trade agreement between the U.S. and China on Wednesday, worries surfaced about the state of play in the Middle East after the U.S. announced that it was moving personnel out of the region ahead of talks with Iran over the latter's nuclear-related activity. Crude oil prices promptly jumped 4% and hit their highest in two months before giving up some of those gains earlier today. European travel stocks and auto makers fell more than 2% on Thursday on the jitters. Gold , however, was only marginally higher, and the dollar (.DXY), opens new tab fell. While no specific reason was given for the U.S. personnel orders, the U.N. nuclear watchdog passed a resolution on Thursday formally declaring Iran in breach of its non-proliferation obligations for the first time in almost 20 years. Concern about Israeli threats to Iran's nuclear facilities inevitably ramped up. The prospect of higher energy prices at a time of tariff-related inflation concerns will certainly rankle. But so far at least, the Trump administration's import levies aren't putting much upward pressure on U.S. consumer prices, as May CPI came in below forecasts on Wednesday. Core annual producer price readings due out later today are expected to be steady. Despite this week's crude gains, year-on-year oil prices are still down more than 10%. And two-year U.S. 'breakeven' inflation rates in the inflation-protected Treasury market fell to their lowest of the year at 2.44%. Meanwhile, U.S. Treasury yields fell on a mix of soft inflation and robust demand at the 10-year auction on Wednesday. Some $22 billion of 30-year bonds are up for grabs later today, testing the recently shaky demand for long-duration debt. Federal Reserve expectations haven't shifted greatly, with two quarter-point interest rate cuts still priced by yearend. No move is expected before September, even though President Donald Trump once again called for an immediate full percentage point rate cut after the CPI report. The dollar remains under pressure however, raising more concern about the absence of its traditional 'safe haven' role at a time of rising geopolitical tensions. The dollar index (.DXY), opens new tab fell to its lowest level since April, with the euro surging above $1.15 to within a whisker of its best levels since 2021. Sterling was a standout loser against the euro, falling to its weakest against the single currency in a month after a surprisingly sharp drop in April UK GDP. Stocks were slightly shaken by the whole picture, with the S&P500 (.SPX), opens new tab ending in the red on the Middle East news on Wednesday and futures down almost half a percentage point ahead of Thursday's open. Chinese, Japanese and European bourses were all in the red on Thursday. Only South Korea's Kospi bucked the trend. The wider trade war picture remained uncertain despite the U.S.-China progress, with details still patchy as the negotiated deal in London awaited final approval. Trump on Wednesday said he was very happy with the trade deal, as it restored a fragile truce between the two biggest economies, claiming China agreed to free up rare earth supplies in exchange for the U.S. allowing Chinese students to attend U.S. colleges. But he also insisted: "We are getting a total of 55% tariffs, China is getting 10%." White House officials said the 55% represents the sum of a baseline 10% "reciprocal" tariff Trump has imposed on goods imported from nearly all U.S. trading partners, the 20% fentanyl-related tariffs, and pre-existing 25% levies on imports from China that were put in place during Trump's first term. Commerce Secretary Howard Lutnick said the 55% rate on Chinese imports is fixed and unalterable. Treasury Secretary Scott Bessent said the deal would not reduce U.S. export restrictions on high-end artificial intelligence chips. China on Thursday affirmed the trade deal, and a foreign ministry spokesperson said: "Now that a consensus has been reached, both sides should abide by it." But with less than four weeks to go before the expiration of the 90-day pause on U.S. tariffs worldwide, markets remain concerned about what will happen next month. Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks, but also said he did not believe that would be necessary, noting: "At a certain point, we're just going to send letters out ... saying, 'This is the deal. You can take it, or you can leave it.'" European Union talks, in particular, look unlikely to be concluded by then. Elsewhere, Boeing shares fell 6% pre-market after news that an Air India plane headed to London with 242 people on board crashed minutes after taking off from India's western city of Ahmedabad. Be sure to check out today's column, which looks at the weakening dollar and the debate about whether its decline is being driven by flight from U.S. assets at large or simply foreign investors hedging their dollar exposure. Chart of the day The UK may be seeing the downsides of publishing noisy monthly GDP readouts as opposed to quarterly updates. The April GDP report threw cold water on a relatively robust start to the year for the UK economy, showing a surprising 0.3% contraction during the month. However, it remains very unclear how much of the April loss will be durable through the second quarter. Either way, the data will put pressure on the Bank of England to step up monetary easing. Consequently, both sterling and UK government bond yields fell back after the GDP release. Today's events to watch * U.S. May producer price report (8:30 AM EDT), weekly jobless claims (8:30 AM EDT) * Federal Reserve issues Quarterly Financial Accounts of the United States (11:00 AM EDT) * U.S. Treasury auctions $22 billion of 30-year bonds * European Central Bank Vice President Luis de Guindos and ECB board member Isabel Schnabel both speak in Brussels * U.S. corporate earnings: Adobe Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias. Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here.
Reuters
16 minutes ago
- Reuters
UK foreign minister Lammy 'deeply saddened' by India plane crash
LONDON, June 12 (Reuters) - British foreign minister David Lammy said he was deeply saddened by news of a plane crash in India, and that Britain was now working with Indian authorities. "Deeply saddened by news of a devastating plane crash in Ahmedabad, India," Lammy said on X. "My thoughts are with all those affected. The UK is working with local authorities in India to urgently establish the facts and provide support." Speaking in parliament later on, Lammy said Britain had activated a crisis team in both India's capital, New Delhi, and in London.
