IRAN: Foreign Min-'Serious & Heavy Damage' At Fordow
Speaking to CBS News, Foreign Minister Abbas Araghchi says that Iran's nuclear enrichment facility at Fordow suffered "serious and heavy damage" in the US airstrikes on the location in late June. Araghchi: "No one exactly knows what has transpired in Fordow. That being said, what we know so far is that the facilities have been seriously and heavily damaged," adding that "The Atomic Energy Organization... is currently undertaking evaluation and assessment,."
- Araghchi's comments come after a WaPo article over the weekend claimed that an intercepted call from Iranian officials gained by US intelligence "included Iranian government officials speculating as to why the strikes directed by President Donald Trump were not as destructive and extensive as they had anticipated,".
- The scale of damage at the Fordow, Natanz and Isfahan nuclear facilities has been the subject of intense speculation. US Secretary of Defense Pete Hegseth launched into a furious broadside at reporters at a Pentagon briefing, criticising the media for supposedly downplaying the actions of US service personnel and not waiting for all intelligence on the situation to come to light.
- Araghchi's comments could be seen as an effort to overplay the damage done at Fordow in an effort to avoid any further strikes (albeit this looking increasingly unlikely at present).
- State media have confirmed President Masoud Pezeshkian's approval of a law suspending Iran's cooperation with the UN's International Atomic Energy Agency (IAEA). IAEA Director General Rafael Grossi warned that Iran could begin enrichment "within months" without his agency's oversight.
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GILTS: J.P.Morgan Recommend Tactical 10s30s Steepeners
J.P.Morgan have recommended entering tactical 10s30s gilt steepeners, as they see “potential for further bouts of uncertainty over long end demand dynamics globally against a backdrop of ongoing focus on the limited fiscal headroom in the UK”.
- They note that “the 10s/30s gilt curve has exhibited similar behaviour to the 2s/10s curve over the past couple of weeks and is back at the flat end of the range seen since early April”.
- On their metrics, “the 10s/30s gilt curve is now back to fair value vs. the level of front end yields, 30Y gilt yields and adjusting for the 10s/30s U.S. Tsy curve, having screened too steep a couple of weeks ago”.
- J.P.Morgan also flag that “this curve has exhibited only weak positive directionality with the level of front-end yields, albeit with a shifting beta post the April tariff announcement, and we expect that this relatively limited positive directionality will persist”.
- Finally, they believe that that recent long end issuance cut is already fully priced into the curve.
UK DATA: Upward UK Manufacturing PMI Revision, But Details Weak
The UK May manufacturing PMI saw a notable upward revision to 46.4 (vs 45.1 cons and prior), but the details of the report remain weak. The index has been in contraction since September 2024.
Key notes from the release:
- “There were some tentative signs that the sector may have turned a corner, however. Survey indices monitoring trends in output and new business rose for the second month in a row, signalling an easing in their respective downturns”.
- “Manufacturing production contracted for the seventh consecutive month in May, as companies scaled back production in response to reduced intakes of new work from both domestic and overseas clients”.
- “Weak global market conditions, trade uncertainty, low customer confidence and cost pressures resulting from recent increases to UK employer NICs and minimum wages also contributed to clients' reluctance to spend”.
- “Tariff uncertainty, government policy and global market turbulence were all mentioned by panellists as factors underlying a further decrease in new export orders during May”.
- “Lacklustre conditions at present combined with an increasingly uncertain outlook fixed manufacturers on a cost-conscious course during May. Employment, purchasing activity, input stocks and finished goods inventories were all lowered, as companies acted to protect margins and offset the impact of rising cost burdens from employer NICs”.
MNI: UK MAY FINAL MANUFACTURING PMI 46.4 (45.1 FLASH, 45.4 APRIL)
- UK MAY FINAL MANUFACTURING PMI 46.4 (45.1 FLASH, 45.4 APRIL)
