Morning Bid: Now the ball is in Iran's court

A look at the day ahead in European and global markets from Wayne Cole
As if there wasn't enough uncertainty in the world already, President Trump has to get the United States embroiled in another Middle East conflict. It's not often a president announces an attack on another country via social media, or that the word "bombs" is used in all caps.
The U.S. administration says it's not at war and it will not escalate if Iran makes peace. Then again, it also said it was not aiming at regime change in Iran, until Trump posted on social media about that very prospect.
For now the ball is in Tehran's court and it has not yet struck at any U.S. site, although its parliament was reported to have approved an attempt to close the Strait of Hormuz. Iranian media said such a move would need approval by the Supreme National Security Council.
Polymarket even makes a book on the chance of Iran managing to close the Strait, and that's currently at 47%. So, suddenly every market commentator is an expert on how to close shipping lanes, the efficacy of bunker busting bombs and the intricacies of enriching uranium.
The market position is to hope this U.S. intervention will not escalate, and perhaps might even make the region safer should Iran's nuclear ambitions really be set back by years.
Oil is up almost 2%, but well off early five-month peaks as analysts note OPEC has plenty of extra supply to add if they want.
Wall St share futures are down 0.3%, having started with losses of 1%, while European futures are off 0.4% or so. The dollar is marginally firmer on the euro and yen, reflecting the reliance of the EU and Japan on imported oil and LNG, and the U.S. status as a net exporter.
Treasury yields are up slightly, so not many safe-haven bids there, while Fed fund futures are down a tick, likely on the risk a sustained rise in energy costs could add to inflationary pressure just as tariffs are being felt in prices.
Fed Chair Jerome Powell is set for a grilling on all this when he faces Congress on Tuesday and Wednesday, along with queries on Trump's threats to fire him. It will also be interesting to see how Powell responds to Fed Governor Waller's sudden embrace of a July rate cut, when it seemed the FOMC choir had all been singing from the same cautious hymn sheet.
Markets imply still only a 16% chance of a July easing, preferring a 70% wager on a September move.
Key developments that could influence markets on Monday:
- EU and UK PMIs for June
- Introductory remarks by ECB President Christine Lagarde
- Appearances by Fed members Waller, Bowman, Goolsbee and Kugler

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Reuters

27 minutes ago

• Reuters

Gulf stock markets advance despite regional conflict

June 23 (Reuters) - Major stock markets in the Gulf advanced in early trade on Monday amid rising oil prices, as investors anxiously waited to see if Iran would retaliate against U.S. attacks on its nuclear sites. Oil prices jumped to their highest since January as the United States' weekend move to join Israel in attacking Iran's nuclear facilities stoked supply concerns. Market participants expect further price gains amid mounting fears that an Iranian retaliation may include closing the Strait of Hormuz, through which roughly a fifth of global crude supply flows. Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.7%, with Al Rajhi Bank ( opens new tab rising 0.6% and Saudi Arabian Mining Company ( opens new tab putting on 2%. Regional stock markets were recovering to a certain extent as investors could see U.S. intervention potentially forcing Iran into peace talks, said Hani Abuagla, senior market analyst at XTB MENA. Dubai's main share index (.DFMGI), opens new tab advanced 1%, led by a 2.4% jump in blue-chip developer Emaar Properties ( opens new tab and a 1.7% increase in sharia-compliant lender Dubai Islamic Bank ( opens new tab. Gulf states, home to multiple U.S. military bases, were on high alert on Sunday, with their leaders calling on all parties to exercise maximum restraint following U.S. strikes on Iran that raised the possibility of a wider conflict. Nuclear authorities in Saudi Arabia and the UAE said they had not detected signs of nuclear contamination following the strikes in Iran. The Abu Dhabi index (.FTFADGI), opens new tab added 0.2%. According to Abuagla, most markets have already recorded a significant selloff, while some investors might have priced in a worst-case outcome. As a result, the market could see a normalization if current conditions did not change too much. In Qatar, the index (.QSI), opens new tab climbed 1.3%, with the Gulf's biggest lender Qatar National Bank ( opens new tab rising 0.8% and Qatar International Islamic Bank ( opens new tab leaping 3.6%.

STV News

34 minutes ago

• STV News

Trump says he is open to regime change in Iran

President Donald Trump has called into question the future of Iran's ruling theocracy, seemingly contradicting his administration's earlier calls to resume negotiations and avoid an escalation in fighting. 'It's not politically correct to use the term, 'Regime Change,' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change???' Trump posted on social media. 'MIGA!!!' The posting on Truth Social marked something of a reversal from defence secretary Pete Hegseth's Sunday morning news conference that detailed the aerial bombing on three of the country's nuclear sites. 'This mission was not and has not been about regime change,' Hegseth said. "The damage to the Nuclear sites in Iran is said to be 'monumental.' The hits were hard and accurate. Great skill was shown by our military. Thank you!" –President Donald J. Trump — The White House (@WhiteHouse) June 22, 2025 Secretary of state Marco Rubio warned on Fox News that any retaliation against the US or a rush toward building a nuclear weapon would 'put the regime at risk'. Trump's warning to Iran's leadership comes as the US has demanded that Iran not respond to the bombardment of the heart of a nuclear programme it spent decades developing. The Trump administration has made a series of intimidating statements even as it has simultaneously called to restart negotiations, making it hard to get a complete read on whether the president is simply taunting an adversary or using inflammatory words that could further widen the war between Israel and Iran that began earlier this month. Up until the president's post on Sunday afternoon, the coordinated messaging by Trump's vice president, Pentagon chief, top military adviser and secretary of state suggested a confidence that any fallout would be manageable and that Iran's lack of military capabilities would ultimately force it back to the bargaining table. Hegseth had said that America 'does not seek war' with Iran, while Vice President JD Vance said the strikes have given Tehran the possibility of returning to negotiate with Washington. But the unfolding situation is not entirely under Washington's control, as Tehran has a series of levers to respond to the aerial bombings, which could intensify the conflict in the Middle East with possible global repercussions. PA Media Defence Secretary Pete Hegseth speaks during a news conference at the Pentagon on Sunday (Alex Brandon/AP). Iran can block oil being shipped through the Strait of Hormuz, attack US bases in the region, engage in cyber attacks or double down on a nuclear programme might seem like more of a necessity after the US strike. Trump, who had addressed the nation from the White House on Saturday night, returned to social media on Sunday to lambast Republican Congress member Thomas Massie, who had objected to the president taking military action without specific congressional approval. 'We had a spectacular military success yesterday, taking the 'bomb' right out of their hands (and they would use it if they could!)' Mr Trump said as part of the post on Truth Social. At their joint Pentagon briefing, Hegseth and Air Force General Dan Caine, chairman of the Joint Chiefs of Staff, said 'Operation Midnight Hammer' involved decoys and deception, and met with no Iranian resistance. General Caine indicated that the goal of the operation — destroying nuclear sites in Fordo, Natanz and Isfahan — had been achieved. 'Final battle damage will take some time, but initial battle damage assessments indicate that all three sites sustained extremely severe damage and destruction,' he said. PA Media An electronic billboard beams an image of president Donald Trump alongside the message 'Thank you, Mr. President' referring to the US involvement in the war between Israel and Iran (Bernat Armangue/AP). Trump asserted on his Truth Social platform that Iran's nuclear sites sustained 'monumental damage' in the American attack, although a US assessment on the strikes is still underway and Iran has not said how much damage was done in the attack. 'The biggest damage took place far below ground level. Bullseye!!!' he wrote. Israeli army spokesman Effie Defrin said: 'the damage is deep,' but an assessment with the US continued. 'We are very close to achieving our goals' in removing Iran's nuclear and missile threats, Israeli Prime Minister Benjamin Netanyahu said late on Sunday. The Israeli military confirmed other attacks late on Sunday, which included strikes on Hamedan and Kermanshah in western Iran, as well as strikes in Tehran, Iran's capital. Israel also hit what its military described as a missile production site in Shahroud. Iranian state media reported air defence systems were firing in Tehran early on Monday, while explosions could be heard in the nearby city of Karaj. A social media account associated with Iran's supreme leader, Ayatollah Ali Khamenei, published a propaganda post on Monday portraying missile strikes on a darkened city with a giant skull bearing the Star of David on it. 'The punishment continues,' the poster read. PA Media Protesters carry signs during a protest in New York on Sunday against US strikes on Iran (Olga Fedorova/AP). Israeli strikes on Iran have killed at least 950 people and wounded 3,450 others, according to the Washington-based group Human Rights Activists. The group said of those dead, it identified 380 civilians and 253 security force personnel. In Israel, at least 24 people have been killed and more than 1,000 wounded. While US officials urged caution and stressed that only nuclear sites were targeted by Washington, Iran criticised the actions as a violation of its sovereignty and international law. Iran's foreign minister Abbas Araghchi said Washington was 'fully responsible' for whatever actions Tehran may take in response. 'They crossed a very big red line by attacking nuclear facilities,' he said at a news conference in Turkey. 'I don't know how much room is left for diplomacy.' China and Russia, where Araghchi was heading for talks with President Vladimir Putin, condemned the US military action. The attacks were 'a gross violation of international law,' said Russia's Foreign Ministry, which also advocated 'returning the situation to a political and diplomatic course.' A Turkish Foreign Ministry statement warned about the risk of the conflict spreading to 'a global level'. British Prime Minister Keir Starmer said the United Kingdom was moving military equipment into the area to protect its interests, people and allies. His office said he talked on Sunday with Trump about the need for Tehran to resume negotiations, but Mr Trump would have posted his remarks about regime change after their conversation. The leaders of Italy, Canada, Germany and France agreed on the need for 'a rapid resumption of negotiations.' France's Emmanuel Macron held talks with the Saudi Crown Prince and the Sultan of Oman. Australian foreign minister Penny Wong told Channel Nine news that her government endorsed the strikes, but said 'ultimately we want to see de-escalation and diplomacy'. Get all the latest news from around the country Follow STV News Scan the QR code on your mobile device for all the latest news from around the country

Daily Mirror

35 minutes ago

• Daily Mirror

WW3 fears explained and if world is safer or more dangerous after US bombs Iran

Iranian foreign minister Abbas Aranghchi warned the Donald Trump-ordered bombing campaign would "have everlasting consequences" amid fears Tehran will carry out a strong retaliation to avoid regime collapse Donald Trump's call to bomb key nuclear sites in Iran has sparked fears Tehran could retaliate - with mounting concerns that instability in the region could spark World War Three. Over the weekend the US attacked three nuclear sites in Iran, including the deep underground Fordow facility, with President Trump claiming they had been "completely and fully obliterated." The US President ordered the strikes - dubbed Operation Midnight Hammer - after Israel carried out attacks against the country's nuclear, energy and military infrastructure last week. ‌ Israeli Prime Minister Benjamin Netanyahu warned Iran had been wanting to develop a nuclear weapon to threaten the Jewish-majority state, and said the strikes were to damage its nuclear programme. The International Atomic Energy Agency also found the Fordow site had enriched uranium to 83.7 per cent, which was close to the 90 per cent required to develop nuclear weapons. ‌ But Mr Netanyahu has warned of an imminent threat from Iran for decades, including him using a drawing of a bomb at a 2012 session at the United Nations to warn "by next spring" Iran would have moved onto the final stage of its enrichment programme. The Israeli leader has also called for regime change in Iran without explaining how this would take place and what the impacts of instability in the region could have. The attacks have split the American electorate, who are grappling with President Trump's move to go against his campaign promise of no more wars in the Middle East. They also have the possibility of splitting the US and its allies over what the next steps in the Middle East, with defence analyst Michael Clarke warning it could be the mark the "real end" of the Transatlantic relationship. What are the risks facing the world following the Iran bombing campaign? Cyber attacks 'likely' The US Department of Homeland Security warned on Sunday that cyber attacks against networks in the country were a distinct possibility. In an advisory shared on its national terrorism advisory system website, a Homeland Security expert said: "The ongoing Iran conflict is causing a heightened threat environment in the United States. ‌ "Low-level cyber attacks against US networks by pro-Iranian hacktivists are likely, and cyber actors affiliated with the Iranian government may conduct attacks against US networks." The department also revealed that both hacktivists and the Iranian government have previously targeted "poorly secured" US networks and internet-connected devices as part of their cyber attacks in the past. Iran out for revenge Iranian government officials primarily blame the US over the death of its general Qasem Soleimani who was killed in a drone strike near Baghdad in January, 2020. US security officials warned Iran's government held a long-standing commitment "to target" US government officials in retaliation for the attack. ‌ In a statement shared over the weekend, a Homeland Security advisory warned: "The likelihood of violent extremists in the Homeland independently mobilizing to violence in response to the conflict would likely increase if Iranian leadership issued a religious ruling calling for retaliatory violence against targets in the Homeland. "Multiple recent Homeland terrorist attacks have been motivated by anti-Semitic or anti-Israel sentiment, and the ongoing Israel-Iran conflict could contribute to US-based individuals plotting additional attacks." End of Transatlantic relationship ‌ Defence analyst Michael Clarke told The Mirror that the attacks on the nuclear facilities could spell the "real end" of the Transatlantic relationship. He added: "The politics of this will be impossible to smooth over and the lack of the common values that the Transatlantic Relationship has always been based on will from now on become very evident. "This week's NATO Summit will be the real breaking point - whatever the very short communique says." Iran's warning ‌ Following the American bombing of its nuclear sites, Iran's president Masoud Pezeshkian warned: "The Americans must receive a response to their aggression." His warning was joined by the country's foreign minister Abbas Aragchi stating the strikes would have "everlasting consequences." While Iran's capabilities to coordinate terror attacks across the Middle East has been severely dented after Israel carried out devastating strikes against its terror proxies Hamas, in Gaza, and Hezbollah, in southern Lebanon, there remains concerns its networks could inflict some significant damage on the US and its allies. Middle East 'regime change' ‌ Mr Trump's strikes have opened the door on further American involvement in the Middle East, just months after he vowed to put an end to the country's militaristic involvement in the region. The Republican even made mention of an increasingly loathed phrase in the US, namely "regime change" which invokes doomed projects to establish flourishing democracies in Afghanistan and Iraq following the 9/11 attacks. In a post shared to his social media platform TruthSocial, Mr Trump said: "It's not politically correct to use the term, 'Regime Change' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change??? MIGA!!" The post reflects a change in tone from Mr Trump, who previously slammed both Democrats and Republicans over their support for regime change rhetoric over Iraq, Iran and Afghanistan. ‌ Military bases on red alert British forces stationed across the Middle East are now on red alert for potential drone strikes from Iran, Defence Secretary John Healey warned. He added protection of UK Armed Forces was now at its "highest level" following the bombing campaign. In a column in The Telegraph, he said: "The safety of UK personnel and bases is my top priority. Force protection is at its highest level, and we deployed additional jets this week." ‌ Strait closure risks 'economic suicide' Iran has warned it could shut down a vital Middle East oil "choke point" that could send oil prices spiking across the globe. The US has warned any closure of the Strait of Hormuz would be a "terrible mistake." US Secretary of State Marco Rubio warned on Fox News: "I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil. "If they do that, it will be another terrible mistake. It's economic suicide for them if they do it. And we retain options to deal with that, but other countries should be looking at that as well. It would hurt other countries' economies a lot worse than ours."