IRAN: FM Spox-Nuclear Sites "Badly Damaged" In US Strikes
John Gambrell at AP posts on X: "Iran's Foreign Ministry spokesperson says its nuclear installations 'badly damaged' by American strikes." The scale of the damage to Iran's nuclear sites, notably its uranium enrichment centres at Natanz, Fordow, and Isfahan, have been the subject of significant speculation. A NYT report earlier today suggested that the damage to the sites would only set Iran's nuclear programme back months rather than years. This was denied by US President Donald Trump, Secretary of Defense Pete Hegseth, and Secretary of State Marco Rubio, all of whom talked of the "obliteration" of the sites (see '[SECURITY] Trump Speaks On NATO & Iran-Israel Ceasefire', 09:39BST).
- For the Iranians, talking up the damage to the sites may be a tactic intended to avoid secondary attacks. While losing face somewhat, if Iran were to tout that the locations remain intact, Trump could order follow-up strikes (earlier he replied in the affirmative when asked if this scenario was a possibility).
- Israel has said that it is "too early to determine" the scale of damage to Iran's nuclear sites, although IDF Spox Brig. Gen. Effie Defrin also claimed that the Iranian nuclear programme had been set back "years".
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US TSY FUTURES: CFTC Shows Asset Managers Covering Some Of Long Position
The latest CFTC CoT report points to asset managers reducing their curve-wide net long by ~$12mln DV01, with the cohort only extending net longs in WN futures.
- Meanwhile, leveraged funds added to net shorts in TY & WN futures, while they trimmed net shorts across the rest of the curve. They still extended their curve-wide net short position by ~$1.5mln, with the size of the net short build in WN futures (~$4.7mn) dominating.
- Broader non-commercial net positioning saw a mix of net short setting and cover (detailed in the table below). The cohort remain net short across the curve.
Source: MNI - Market News/CFTC/Bloomberg
ECB: ECB Speak Wrap (May 20 – May 26)
For the full publication, see here: 250526 - Weekly ECB Speak Wrap.pdf
ECB officials haven’t had enough time to react to US President Trump’s shock announcement of 50% tariffs on EU goods last Friday, let alone yesterday evening’s delay to July 9 (from June 1 originally). However, the current backdrop can still be regarded as more dovish than a week ago, particularly when taken alongside last week’s weaker-than-expected May flash PMIs and Q1 negotiated wages data.
- As such, the MNI Policy Team’s May 22 sources piece still appears to appropriately characterise the ECB’s rate outlook: “The likelihood that the European Central Bank will need to cut interest rates below 2% is increasing as the Governing Council becomes more convinced that inflationary risks are firmly to the downside amid extreme uncertainty around trade and the global economy, Eurosystem officials told MNI”
- The most notable piece of ECBspeak since our last update likely came from Stournaras, usually considered one of the most dovish Governing Council members. While he still sees a rate cut in June, he then expects a pause in July. Such a move would be broadly consistent with current market pricing, with OIS butterfly spreads assigning a higher rate cut premium to projection meetings (June, September, December) compared to non-projection counterparts.
- Elsewhere, Simkus, Rehn, Kazaks and Wunsch reiterated prior rhetoric, while Centeno provided a familiarly dovish view.
