Market News

There isn't anything here likely to swing around financial markets too much upon release.

This article was written by Eamonn Sheridan at investinglive.com.

• ISM manufacturing rises to the highest since 2022
• Iran cuts off talks, says there won't be negotiations with aggression in Lebanon - report
• Trump: Hezbollah agreed that all shooting will stop, talks with Iran continue
• Trump to CNBC:If Iranian's try to have a nuclear weapon,I will "blow them to kingdom come"
• Netanyahu: The IDF will continue to operate as planned in Southern Lebanon
• Sam Altman: I think this is the most-fair criticism of Ai right now
• Trump: "I think we have been talking too much. Going silent would be very good"
• Hezbollah ready for full ceasefire with Israel - report
• Iran eases passage for Japan ships in Strait of Hormuz amid tensions/negotiations

Markets:

• Gold down $52 to $4481
• WTI crude oil up $5.16 to $92.52
• US 10-year yields flat…

There were positive comments from Trump today and some positive signs from Hezbollah but I don't think this is what Iran wants to hear before making peace.

From Netanyahu:

• I spoke with Trump earlier and told him that if Hezbollah does not stop attacking our cities and citizens, Israel will attack targets in Beirut
• The IDF will continue to operate as planned in Southern Lebanon

So what he wants is to be able to continuing attacking Lebanon but if anyone in Lebanon attacks back, he will escalate? I don't see how that's going to lead to a positive outcome.

I guess now we'll find out if Iran meant what it said about blockading the Red Sea.

This article was written by Adam Button at investinglive.com.

Sam Altman appears to be more concerned about AI capex waste than the market does.

The Nasdaq is at fresh records today and up 0.7% but he spoke with CNBC and touched on a point that many critics have highlighted: wasteful spending. AI capex right now is at astronomical levels and the spending among the US hyperscalers this year will be roughly equivalent to total German government spending this year. About $1 of every $20 generated in the US economy this year is going to AI capex.

Speaking alongside the Stargate Michigan announcement — a one-gigawatt campus carrying a price tag north of $45 billion that OpenAI says it's "very confident" will pay off on demand signals — the man who anchors the entire buildout volunteered the case against it:

<p…

Eamonn Jaffers from CNBC spoke with Trump. Some comments:

• I don't care if negotiations are over with Iran. I really don't care. If they are over they are over.
• He thinks Iranians have been "tapping us along"
• Oil will be dropping like a rock
• if Iranians try to have a nuclear weapon, I will blow them to kingdom come.
• Americans will tolerate higher gas prices as long as they know what the goal is
• Pres. Trump said that he had talked with Netanyahu but he was going to (and indeed he has). He was going to ask him what's going on with Lebanon
• On what is the end game., he said he thinks NATO should come in and help the US out. We don't use the Strait.
• We do not need NATO. They are very weak and sad.

This article was…

Trump just now:

I had a very productive call with Prime Minister Bibi Netanyahu, of Israel, and there will be no Troops going to Beirut, and any Troops that are on their way, have already been turned back. Likewise, through highly placed Representatives, I had a very good call with Hezbollah, and they agreed that all shooting will stop — That Israel will not attack them, and they will not attack Israel. President DONALD J. TRUMP

This is a good sign and it's led to a further bounce in risk assets.

Throughout the day, there are all kinds of talks about Israel plotting to strike Beirut. One report said Israel pitched the idea to Trump as a way to get leverage with Iran.

Separately, there are some positive comments on negotiations. Asharq…

Pres. Trump on NBC is saying:

• He has not heard from Iran on reports there suspending talks.
• I think we've been talking too much.
• If you want to know the truth, I think going silent would be very good

I couldn't agree more.

Meanwhile, it is reported that Trump is speaking with Israel PM Netanyahu currently.

It is being reported that Israeli bombing in Lebanon was at the request of the US as a way to pressure Iran to toward an agreement.

This article was written by Greg Michalowski at investinglive.com.

A Lebanese official tells Axios that Hezbollah is ready for a full ceasefire. There are bids in equities and selling in oil on the headline. We're also seeing some weakness in the US dollar.

The report from Barak Ravid cites The speaker of the Lebanese parliament, Nabih Berri.

It says he told the Trump administration on Sunday that Hezbollah is ready for a full and immediate ceasefire with Israel and pledged to guarantee the implementation.

That's interesting timing and suggests that Iran might be playing a communication game around it's latest 'escalation' if it can be seen to have halted the fighting.

The report says Berri is one of the most powerful Shia politicians in Lebanon and has close links to Hezbollah. The report also says that…

• Prior 52.7
• Highest reading since May 2022
• New orders 56.8 vs 54.1 prior
• Production 54.3 vs 53.4 prior
• Employment 48.6 vs 46.4 prior
• Prices paid 82.1 vs 84.6 prior
• New export orders 50.6 vs 47.9 prior — back in expansion

This is a strong headline number and it's the fifth straight month of expansion, but I'd be careful about taking the victory lap at face value.

The internals are genuinely good. New orders accelerating to 56.8 is the part that matters most — that's the forward-looking piece, and it's running well clear of the contraction lows from earlier in the cycle. Export orders clawing back above 50 and customers' inventories sitting at a 'too low' 42.7 both point to a production tailwind into the summer. This is exactly the shape of report…

Report from Tasnim:

• Iran stops message exchange with the US in protest against Zionist crimes
• Threatens more aggression in Hormuz
• Will take action in Bab el-Mandeb Strait

Isreal today announced it's encroaching further into Lebanon. Iran says that the ceasefire has been violated on all fronts and that halting aggression in Lebanon was a condition of the ceasefire.

This report has markets moving. Oil is bid on it and S&P 500 futures have turned (slightly) negative. There has been a quick move into US dollar across FX as it's starting to look like the ceasefire is slipping away. Here is a look at AUD/USD:

Here is the full message on Tasnim's Telegram (translated):

Urgent / Iran to Halt Message Exchanges with the U.S. in Protest of Zionist…

Reports are that Iran will allow Japan ships to pass through the Strait of Hormuz with greater ease. Iran Pres Pezeshkian in a call with Japanese PM Sanae Takaichi said that

• Iran has full readiness to facilitate marine traffic through the Strait
• They will try to make the passage of Japanese ships easier.

Earlier Justin posted that Iran said that 15 vessels, including four oil tankers, transited the Strait of Hormuz over the past 24 hours after receiving permission from Tehran. However, there is considerable uncertainty over the claim, as many of the ships may be part of so-called "shadow fleets" that operate with limited transparency and often disable tracking systems.

Even if the reported traffic is accurate, it remains far below…

Headlines:

• Iran chief negotiator continues to pinpoint violations of existing ceasefire agreement
• Iran navy claims that 15 vessels passed through Strait of Hormuz in the past 24 hours
• Back from the weekend and still no closer to a US-Iran deal
• US president Trump says to "sit back and relax, it will all work out well in the end"
• Gold erases gains as hopes for an imminent US-Iran deal fade. What's next?
• Long-term consumer inflation expectations remained stable in April according to ECB survey
• Euro area manufacturing activity loses steam as stockpiling surge fades in May
• UK May final manufacturing PMI 53.9 vs 53.7 prelim
• German retail sales struggle in April as Middle East conflict continues to weigh

Markets:

• WTI crude up 3.6% to $90.55
• European indices…