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Business Recorder
22-05-2025
- Business
- Business Recorder
Market's red flag
Notice Mr Market's reaction to the sudden spike in geopolitical risk premium as war clouds gather over Iran once again; especially in traditional safe havens. Brent crude jumped 1.5 percent (weekly high) when CNN revealed a US intel leak about an imminent Israeli attack on Iran's nuclear facilities, and investors rushed to rock solid safe havens like the Swiss franc and Japanese yen. Gold also rallied and reclaimed $3,300. But, once again, Big Money didn't turn to the dollar in a time of turmoil. That's one more chip of US economic/financial credibility falling away after Trump's tariff madness triggered a historic loss of confidence in the reserve currency. 'The US dollar has of course lost its lustre as the undisputed safe reserve asset,' the FX strategy head at Westpac Banking Corp told Bloomberg. 'These periodic flareups are going to show up more forcefully in alternatives'. It's hard to imagine a more destabilising global scenario than an all-out Israel-Iran war right now, except perhaps an all-out war in the subcontinent. But could it be that this perfect political/financial storm is building largely because a disgruntled and increasingly isolated Bibi Netanyahu was jolted when deal-making, Houthi-taming, Indo-Pak-war-ending Donald Trump waltzed through the region, let the money do the talking, and didn't even stop to say hello? And also because Netanyahu needs to throw more wood into the fire that keeps his extremist, radical coalition alive? Already, his plans to occupy Gaza have gone down badly in and out of Israel. Yet he'll do it, or his government will break and he'll go to prison. The UK government has suspended free trade talks and threatened sanctions against some individuals. The EU, Israel's largest trading partner, is calling for a review of political and commercial relationship. And the US completely ignored it in the Houthi talks, the Hamas talks, the Iran talks, and in dropping the Abraham Accords from the Saudi talks. Yet even has he skates on thin ice, he has good reason to be optimistic about provoking a war that he hopes will gut US-Iran talks and force Washington to its side. One, he's never had to pay for his defiance and disobedience before. That's probably because, two, he's always delivered good results for himself and his friends. After all, he has bombed away Palestinian resistance for a generation, ruined Gaza, debilitated Hamas, destroyed Hezbollah and killed the iconic Hasan Nasrallah, enabled the fall of Syria's Assad regime before destroying its entire military arsenal and left Iran more defanged than at any point in decades. But that was because the US backed it. Thomas Friedman says Joe Biden's rebuke went about as far as 'I love you Bibi, but I disagree with you' and then Netanyahu would go back to doing what he was doing. Trump's expressed a lot of love for him too, but now he's moved to sidelining him at a time when he's openly shocking and offending friends and foes alike. Recent market trauma has only aptly reflected the pangs of a shifting world. Another war in Europe, the decline of Nato, a whole new calculus in the Middle East, the inevitable US-China confrontation getting closer and closer and the global economy choked by the kind of tariffs not seen in a century. Besides, Pakistan and India finally openly engaged in the kind of exchange whose endgame could well be a mushroom cloud over south Asia. CNN doesn't leak CIA information just to break news. Once before the (Sleepy Joe's) White House was forced to intervene when news was leaked of Israeli war plans against Iran, in the thick of the Gaza war, no doubt to draw America into the fight. For one reason or another, this news is out. And it's serious enough to grab Mr Market's attention. Sharp inflows into safe havens like gold, yen and swissie, as dollar trauma deepens, isn't just the market pricing in the new risk-off environment. It's also raising a red flag that this time the threat of an Israel-Iran war is very real, and the US has already suffered unprecedented loss of credibility in the financial world. Will Trump now give into Netanyahu's tantrums, as always, and take responsibility for further erosion of America's political/diplomatic credibility as well? CNN should tell soon enough. Meantime, listen to Mr Market. And buy gold. Copyright Business Recorder, 2025
Yahoo
21-05-2025
- Business
- Yahoo
Oil prices rise on reports of Israel potentially attacking Iran
Oil prices surged on Wednesday after a report by CNN suggested that Israel could launch an attack on Iranian nuclear facilities, according to new US intelligence. US crude oil jumped 1.1% on Wednesday morning to $62.7 per barrel, whereas Brent crude oil advanced 1% to $66 per barrel. However, CNN emphasised that it wasn't clear as yet whether a confirmed decision about the possible attack had been made. Oil markets have been volatile for the last few days, mainly because of anticipation around the next round of Iran-US nuclear talks, due to be held this weekend. These talks are also expected to help increase global oil supply. However, any strike against Iran by Israel is likely to negatively impact these negotiations, which in turn, could further fuel Middle Eastern tensions and significantly affect oil markets. Although Israel has not been shy about its intentions to target Iran, several Iranian nuclear facilities may already be capable of defending themselves against the majority of strikes. Robert Rennie, head of commodity and carbon research for Westpac Banking Corp, said, as reported by Bloomberg: 'This is the clearest sign yet of how high the stakes are in the US-Iran nuclear talks and the lengths Israel may go to if Iran insists on maintaining its commercial nuclear capabilities.' He added: 'Crude will maintain a risk premium as long as the current talks appear to be going nowhere.' Traditional forex safe havens such as the Japanese yen and the Swiss franc also saw a slight boost following the release of the CNN report. In talks on the nuclear issue, Iranian officials have warned they could pursue a nuclear weapon with their stockpile of uranium enriched to near weapons-grade levels. US President Donald Trump has repeatedly threatened to unleash airstrikes targeting Iran's program if a deal isn't reached. US special envoy Steve Witkoff said in an ABC News interview on Sunday, as reported by the BBC: "We cannot allow even 1% of an enrichment capability. We've delivered a proposal to the Iranians that we think addresses some of this without disrespecting them. We want to get to a solution here. And we think that will be able to." He added: "But everything begins from our standpoint with a deal that does not include enrichment. We cannot have that. Because enrichment enables weaponisation, and we will not allow a bomb to get here." Earlier this week, Iran's Supreme Leader Ali Khamenei revealed that he did not believe that the latest round of talks between Iran and the US would be successful. Despite rising sanctions from the US and some of its allies such as Europe and the UK, Iran has been able to continue exporting crude oil and has also increased its supply in the last few months. Ongoing Middle Eastern conflicts such as the Israel-Hamas war and Houthi Red Sea attacks have gone a long way in souring relations between Israel and Iran in the last several months. As such, any new attack, especially on Iran's nuclear facilities may significantly affect the wider Middle Eastern region and further delay any hope of stability in the area.
Euronews
21-05-2025
- Business
- Euronews
Oil prices rise on reports of Israel potentially attacking Iran
Oil prices surged on Wednesday after a report by CNN suggested that Israel could launch an attack on Iranian nuclear facilities, according to new US intelligence. US crude oil jumped 1.1% on Wednesday morning to $62.7 per barrel, whereas Brent crude oil advanced 1% to $66 per barrel. However, CNN emphasised that it wasn't clear as yet whether a confirmed decision about the possible attack had been made. Oil markets have been volatile for the last few days, mainly because of anticipation around the next round of Iran-US nuclear talks, due to be held this weekend. These talks are also expected to help increase global oil supply. However, any strike against Iran by Israel is likely to negatively impact these negotiations, which in turn, could further fuel Middle Eastern tensions and significantly affect oil markets. Although Israel has not been shy about its intentions to target Iran, several Iranian nuclear facilities may already be capable of defending themselves against the majority of strikes. Robert Rennie, head of commodity and carbon research for Westpac Banking Corp, said, as reported by Bloomberg: 'This is the clearest sign yet of how high the stakes are in the US-Iran nuclear talks and the lengths Israel may go to if Iran insists on maintaining its commercial nuclear capabilities.' He added: 'Crude will maintain a risk premium as long as the current talks appear to be going nowhere.' Traditional forex safe havens such as the Japanese yen and the Swiss franc also saw a slight boost following the release of the CNN report. In talks on the nuclear issue, Iranian officials have warned they could pursue a nuclear weapon with their stockpile of uranium enriched to near weapons-grade levels. US President Donald Trump has repeatedly threatened to unleash airstrikes targeting Iran's program if a deal isn't reached. US special envoy Steve Witkoff said in an ABC News interview on Sunday, as reported by the BBC: "We cannot allow even 1% of an enrichment capability. We've delivered a proposal to the Iranians that we think addresses some of this without disrespecting them. We want to get to a solution here. And we think that will be able to." He added: "But everything begins from our standpoint with a deal that does not include enrichment. We cannot have that. Because enrichment enables weaponisation, and we will not allow a bomb to get here." Earlier this week, Iran's Supreme Leader Ali Khamenei revealed that he did not believe that the latest round of talks between Iran and the US would be successful. Despite rising sanctions from the US and some of its allies such as Europe and the UK, Iran has been able to continue exporting crude oil and has also increased its supply in the last few months. Ongoing Middle Eastern conflicts such as the Israel-Hamas war and Houthi Red Sea attacks have gone a long way in souring relations between Israel and Iran in the last several months. As such, any new attack, especially on Iran's nuclear facilities may significantly affect the wider Middle Eastern region and further delay any hope of stability in the area.
Observer
21-05-2025
- Business
- Observer
Oil prices jump on report of Israel prepping Iran strike
Hong Kong - Crude prices surged Wednesday following a report that US intelligence suggested Israel was planning a strike on Iranian nuclear facilities, which would send geopolitical tensions into overdrive and fuel regional conflict fears. While safe-haven gold pushed almost two percent higher, the news from CNN appeared to be having little detrimental effect on Asian equities in early trade, with most extending the previous day's rally. Still, investors are keeping tabs on China-US relations after Beijing hit out at Washington's "bullying" over chip export controls, just over a week after the two sides dialled down trade tensions by temporarily slashing eye-watering tit-for-tat tariffs. Both main crude contracts jumped almost two percent after CNN reported multiple US officials as saying the government had received intelligence indicating Israel was preparing to target Iranian atomic facilities. There are fears that such a sharp escalation could tip the Middle East into a war, with tensions already high over Israel's strikes on Gaza. "This is the clearest sign yet of how high the stakes are in the US Iran nuclear talks and the lengths Israel may go to if Iran insists on maintaining its commercial nuclear capabilities," Robert Rennie, at Westpac Banking Corp, said. "Crude will maintain a risk premium as long as the current talks appear to be going nowhere." Crude prices have risen around 15 percent since the start of the month on softening worries about the economic outlook as tariff tensions grow relatively calmer. Equities mostly built on Monday's gains on trade talk hopes. Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei and Manila all outshone Tokyo and Singapore. But the recent detente between China and the United States suffered a jolt Wednesday when Beijing slammed Washington's "bullying" chip export controls. It also warned it would take steps against measures aimed at restricting Chinese access to high-tech semiconductors and supply chains. The remarks came after US officials unveiled guidelines warning firms that using Chinese-made high-tech AI semiconductors, most notably tech giant Huawei's Ascend chips, would put them at risk of violating US export controls. Several Federal Reserve members appeared to dampen hopes that they would cut US interest rates anytime soon as they warned about the effects of Trump's tariffs on the economy and inflation. St. Louis Fed chief Alberto Musalem warned the measures would likely hurt growth and jobs, even as countries look to dial down the blistering tariffs the president proposed. "Even after the de-escalation of May 12 (with China), they seem likely to have a significant impact on the near-term economic outlook," Musalem said. "On balance, tariffs are likely to dampen economic activity and lead to some further softening of the labour market."
The Sun
21-05-2025
- Business
- The Sun
Oil prices jump on report of Israel prepping Iran strike
HONG KONG: Crude prices rallied Wednesday following a report that US intelligence suggested Israel was planning a strike on Iranian nuclear facilities, which would send geopolitical tensions into overdrive and fuel regional conflict fears. While safe haven gold pushed almost two percent higher, the news from CNN appeared to be having little detrimental effect on Asian equities, with most extending the previous day's rally. Still, investors are keeping tabs on China-US relations after Beijing hit out at Washington's 'bullying' over chip export controls, just over a week after the two sides dialled down trade tensions by temporarily slashing eye-watering tit-for-tat tariffs. Both main crude contracts jumped more than one percent after CNN reported multiple US officials as saying the government had received intelligence indicating Israel was preparing to target Iranian atomic facilities. There are fears that such a sharp escalation could tip the Middle East into a war, with tensions already high over Israel's strikes on Gaza. US President Donald Trump said last week that 'I think we're getting close to maybe doing a deal' on Tehran's nuclear programme and then a day later called on the Islamic republic to 'move quickly or something bad is going to happen'. But Iran's supreme leader Ayatollah Ali Khamenei warned Tuesday that nuclear talks with Washington were unlikely to yield any results after four rounds of Omani-mediated nuclear talks with the United States since April 12. 'This is the clearest sign yet of how high the stakes are in the US Iran nuclear talks and the lengths Israel may go to if Iran insists on maintaining its commercial nuclear capabilities,' Robert Rennie, at Westpac Banking Corp, said. 'Crude will maintain a risk premium as long as the current talks appear to be going nowhere.' Crude prices have risen around 15 percent since the start of the month on softening worries about the economic outlook as tariff tensions grow relatively calmer. Equities mostly built on Monday's gains in Asia on trade talk hopes. Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei and Manila, Mumbai and Bangkok all outshone Tokyo and Singapore. But London dipped and the pound strengthened against the dollar after UK inflation data come in well above forecasts in April. The dollar also lost pace against the euro and yen ahead of an upcoming G7 finance ministers meeting this week, with speculation growing that Trump is open to a weaker greenback to help US exporters. Paris and Frankfurt also fell. The recent detente between China and the United States suffered a jolt Wednesday when Beijing slammed Washington's 'bullying' chip export controls. It also warned it would take steps against measures aimed at restricting Chinese access to high-tech semiconductors and supply chains. The remarks came after US officials last week unveiled guidelines warning firms that using Chinese-made high-tech AI semiconductors, most notably tech giant Huawei's Ascend chips, would put them at risk of violating US export controls. Several Federal Reserve members appeared to dampen hopes they will cut US interest rates anytime soon as they warned over the effects of Trump's tariffs on the economy and inflation. St. Louis Fed chief Alberto Musalem warned the measures would likely hurt growth and jobs, even as countries look to dial down the blistering tariffs the president proposed. 'Even after the de-escalation of May 12 (with China), they seem likely to have a significant impact on the near-term economic outlook,' Musalem said. 'On balance, tariffs are likely to dampen economic activity and lead to some further softening of the labour market.' He added that 'committing now to ignoring higher inflation from tariffs, or to easing policy, runs the risk of underestimating the level and persistence of inflation'. Atlanta Fed chief Raphael Bostic said Moody's ratings cut and Trump's proposed tax cuts could compound uncertainty and force officials to keep rates elevated.
