Risk mood sours after Trump walks on Iran deal, threatens to cut trade ties with Spain
It was never going to be that simple and straightforward. However, this week was supposed to be a calmer one where both the US and Iran take a step back to regather their composure ahead of another round of negotiations next week. Instead, the deal/memorandum of understanding that was struck in late June is now dead in the water.
This essentially means that both sides have hit the reset button and we're back to how things were before. So much for hopeful optimism, eh?
Oil prices have now surged higher on the headlines, with WTI crude posting 6% gains now at $74.90. That marks the highest level in the commodity for over two weeks, since the deal was struck.
As that is unfolding, we're seeing 10-year Treasury yields also surge higher by 5 bps to 4.58% now. That is a test of the June high with bond sellers threatening a break to see yields push up to the highest since May.
And looking to precious metals, gold and silver have erased early gains to fall by 1.3% to $4,052 and 2.9% to $58.25 respectively.
All the worries about the Strait of Hormuz is returning. Well, it's not to say that the strait was seeing much meaningful progress in terms of reopening anyway. But yeah, Trump's call here basically means that even the theatrics and play to the optics is over.
At the same time, Trump is also lambasting NATO and his latest target is Spain. He is not happy with Madrid's defense spending. He called them a "terrible partner" to NATO and is unhappy about Spain's lack of intention to help on the Middle East situation. As such, he says that he has instructed Washington to cut trade ties with Madrid.
So far, Spain has responded in saying that they just take Trump's words as just a threat and that he doesn't really mean it. That said, I wouldn't discount Trump and his propensity to take rash action. So, we'll see. And if Spain is under the microscope, the rest of Europe will be too.
European stocks are now being hammered down by over 2% across the board. Meanwhile, US futures are also sagging now with S&P 500 futures down 1% and Nasdaq futures down 1.5% on the day.
And now that he is proclaiming that it is a waste of time in dealing with Iran, he has set his sights on Greenland. His fixation over wanting to own Greenland has now returned with a vengeance at the NATO summit in Ankara.
This article was written by Justin Low at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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