IRAN: Foreign Min-US 'Shares Responsibility' For Any Israeli Strikes
The Iranian Foreign Ministry has published a letter from Foreign Minister Abbas Araghchi addressed to UN Secretary General Antonio Guterres and International Atomic Energy Agency Director General Rafael Grossi regarding the protection of Iran's nuclear facilities. In the letter, Araghchi warned Israel against attacking Iran's nuclear sites, saying that Tehran "will take all necessary measures" to protect its interests. It also says that "the US gov't shares the legal responsibility for it", hinting that the US will be viewed as culpable for any Israeli strike.
- Earlier, spokesman of the Islamic Revolutionary Guards Corps (IRGC), General Ali Mohammad Naeini, said that Israel "will receive a devastating and decisive response inside its small geography" to any strike on Iran.
- Earlier, Araghchi said that no deal would be possible until the issue of nuclear enrichment had been resolved. Speaking to Al Sharq, Araghchi said “On many issues, we have achieved a better understanding of each other ... However, disagreements remain in some areas, particularly over uranium enrichment. Until that is resolved, I don’t think we can reach an agreement,"
- Earlier this week in a Senate hearing, US Secretary of State Marco Rubio said that "It is our view that they want enrichment as a deterrent, they believe that it makes them a threshold nuclear power, and as a result, becomes untouchable," He added that there is the prospect of a civil nuclear energy programme for Iran, but with no enrichment.
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US TSYS: J.P.Morgan Unwilling To Fade Curve Steepening
J.P.Morgan note that “while the curve is clearly stretched to the steep side right now (based on empirical studies of fundamental drivers), trade and now potentially monetary policy uncertainty justifies more term premium and steeper curves, and we do not feel like we can rely on these valuation frameworks in the current environment.”
- As a result, they note that this while this divergence “would usually signal that the curve could tactically flatten here, or that markets need to price a more dovish Fed reaction function or higher inflation, we are hesitant to fade this steepening trend, even on a tactical basis”.
US TSY FUTURES: BLOCK: Jun'25 5Y Buy
- +6,500 FVM5 108-07.25, buy through 108-07 post time offer at 0714:53ET, DV01 $416,000. The 5Y contract trades 108-07.25 last (-4.25)
FOREX: Latest Analyst Views on US Dollar
- *CIBC highlight that concerns over the Fed’s independence, Trump tariffs, and heightened uncertainty into earnings season has the market withdrawing capital from the US. They point out the DXY no longer sees haven demand which they believe can persist for some time. CIBC remain sellers of any near-term appreciation in the greenback with their favourite trades being long EUR/USD on dips towards the 1.14 level, and being short USD/JPY on rallies towards 142.
- *MUFG note the triple selling of the US dollar, US bonds and US equities highlights the further undermining of investor confidence in US assets. It fits with their view that the risk premium that has been priced into the USD since the announcement of reciprocal tariff plans is unlikely to diminish over the near-term. The topic of Fed independence under Trump’s presidency is not new but his comments last week were the clearest yet on how unhappy Trump is, leaving the greenback vulnerable to further S-T weakness.
- *SocGen say it’s hard to avoid the conclusion that imposing draconian import tariffs on goods which have no easy domestic substitutes in the US, will be inflationary (and ultimately, bad for growth). Added to political influence over the Fed and unsustainably vast international investment imbalances, and we have a recipe for a significant dollar fall, according to SG.
- Positioning, speed of movement, the lack of attraction of most of the alternative currencies means it won’t happen in a straight line. However, SG highlight this is the biggest USD short against the euro and yen, and suggest the dollar should be sold on rallies.
