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UBS believes the sharp market reaction to the latest Middle East crisis is overdone, arguing that the geopolitical risk premium is inflated relative to the actual threat to global oil supply. The bank notes that Iran accounts for just 1.6% of global output.

Unlike past conflicts that triggered genuine supply shocks, UBS sees the current episode as unlikely to have lasting market impact. It advises investors to buy on dips, viewing any pullback as a buying opportunity rather than the start of a sustained downturn.

The bank maintains a bullish outlook on global equities, particularly in sectors such as defense and technology,

• sees gold rising to $3,500/oz by end-2025 as demand climbs for both strategic and inflation-hedging assets.

Bottom line: UBS sees the geopolitical fear as excessive and expects markets to remain underpinned by supportive policy, resilient wages, and AI-led productivity gains.

This article was written by Eamonn Sheridan at www.forexlive.com.

White House:

United States intends to create an annual quota of 100,000 vehicles for United Kingdom automotive imports at a 10 percent tariff rate

This article was written by Eamonn Sheridan at www.forexlive.com.

US President Donald Trump is expected to present Iran with a “last chance” offer, US and European officials told The Jerusaem Post on Monday.

• One official added that it might even be slightly better than the previous proposal the administration submitted to the Iranians about a week and a half ago.
• The expectation is that even if such a proposal is made, it will be based on the American principle of zero uranium enrichment.

Link here for more detail.

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Earlier:

• US is accelerating the deployment of additional aircraft carrier group to the Middle East
• Trump says on Iran that we will do something after leaving G7

This article was written by Eamonn Sheridan at www.forexlive.com.

The Pentagon is rushing the aircraft carrier USS Nimitz and its escorts from Asia to the Middle East, skipping a planned stop in Vietnam, so it can operate alongside the USS Carl Vinson.

• The overlap will leave two U.S. carrier strike groups in the region for at least several weeks as fighting between Israel and Iran escalates.
• At the same time, Navy destroyers equipped with ballistic-missile-defence systems are redeploying from Europe to reinforce the ships already shielding Israel and American forces, with more BMD-capable vessels expected to arrive in coming days

Info via NBC

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump speaking

• On the trade deal with the UK

Now on Iran:

• Deal likely or “something will happen” after G7

• Iran wants to make a deal
• Warns Iran would be “foolish” not to sign with Israel
• Trump on AUKUS: “We’re very long time partners, allies”
• Says US sanctions on Russia would be costly without a deal

This article was written by Eamonn Sheridan at www.forexlive.com.

Earlier:

• Pound shrugs off news that final UK-US trade deal near

This article was written by Eamonn Sheridan at www.forexlive.com.

Via Axios comes a heads up on what to watch that will trigger a US response against Iran:

• The Trump administration told several Middle Eastern allies on Sunday that it doesn’t plan to get actively involved in the war between Israel and Iran unless Iran targets Americans, two sources from countries that received that U.S. message tell Axios.
• The U.S. has helped Israel intercept missiles, but made clear Israel is acting alone in attacking Iran. The U.S. message is that if Iran attacks Americans in response, it will be crossing a red line.

Link to the report is here if you’d like more info.

Anyone from the US in the vicinity of the fighting would do well to be extra careful.

This article was written by Eamonn Sheridan at www.forexlive.com.

• June US Empire Fed manufacturing survey -16.0 vs -5.5 expected
• Trump: I’m sure we can work something out with Canada
• Canada’s LeBlanc says he’s confident in progress on deal with US
• Pound shrugs off news that final UK-US trade deal near
• Netanyahu: Killing Iran’s supreme leader would ‘end the conflict’
• French and German and British foreign ministers to hold phone call with Iran minister
• U.S. Treasury auctions off 13 million of 20 year bonds at a high yield of 4.942%
• A new batch of missiles are being launched from Iran toward Israel
• Iran preparing for largest missile attack on Israel
• Israel bombed Iranian state TV
• Iran asked Qatar, Saudi Arabia, and Oman to ask US to press Israel to agree to a ceasefire
• Iran signals it wants to de-escalate hostilities – report
• Canada May housing starts 279.5K vs 245K expected

Markets:

• Gold down $48 to $3384
• US 10-year yields up 2.8 bps to 4.45%
• WTI crude oil down $1.67 to $71.31
• S&P 500 up 0.9%
• NZD leads, JPY lags

This article was written by Adam Button at www.forexlive.com.

US stocks finished below the highs but still scored strong gains across the board:

Closing changes:

• S&P 500 +0.9%
• Nasdaq Comp +1.5%
• DJIA +1.1%
• Russell 2000 +1.2%
• Toronto TSX Comp +0.3%

The Nasdaq is within striking distance of the June high and the war in the Middle East has barely dissuaded the bulls.

Travel and semiconductor names were particularly strong today with AMD up 8.7%.

This article was written by Adam Button at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

This article was written by Eamonn Sheridan at www.forexlive.com.

USD/CAD has risen more than 30 pips from the lows of the day as the US dollar rebounds.

It’s part of a broader strengthening in the US dollar that’s also boosted USD/JPY to the highs of the day. It comes on higher US long-dated yields and uncertainty around outcomes from the war in the Middle East.

Republicans are also fighting over Trump’s budget bill and markets will be closely watching tomorrow’s US retail sales report for signs of consumer weakness.

Trump is in Alberta meeting with G7 leaders this week in his first foreign trip. So far signs of progress on trade have been minimal and Trump’s comments today suggest he remains enamoured with tariffs.

This article was written by Adam Button at www.forexlive.com.

• Says he is confident Canada is making progress on a deal with the US

There were hopes for a deal before the G7 but that hasn’t come to fruition. Obviously there are some snags but we’ll see if they can be sorted out.

This article was written by Adam Button at www.forexlive.com.