Finance
Morning Bid: Now the ball is in Iran's court
Published by Global Banking & Finance Review®
Posted on June 23, 2025
3 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 23, 2025
3 min readLast updated: January 23, 2026
Iran's next move in the Middle East conflict could impact global markets, affecting oil prices and economic stability.
A look at the day ahead in European and global markets from Wayne Cole
As if there wasn't enough uncertainty in the world already, President Trump has to get the United States embroiled in another Middle East conflict. It's not often a president announces an attack on another country via social media, or that the word "bombs" is used in all caps.
The U.S. administration says it's not at war and it will not escalate if Iran makes peace. Then again, it also said it was not aiming at regime change in Iran, until Trump posted on social media about that very prospect.
For now the ball is in Tehran's court and it has not yet struck at any U.S. site, although its parliament was reported to have approved an attempt to close the Strait of Hormuz. Iranian media said such a move would need approval by the Supreme National Security Council.
Polymarket even makes a book on the chance of Iran managing to close the Strait, and that's currently at 47%. So, suddenly every market commentator is an expert on how to close shipping lanes, the efficacy of bunker busting bombs and the intricacies of enriching uranium.
The market position is to hope this U.S. intervention will not escalate, and perhaps might even make the region safer should Iran's nuclear ambitions really be set back by years.
Oil is up almost 2%, but well off early five-month peaks as analysts note OPEC has plenty of extra supply to add if they want.
Wall St share futures are down 0.3%, having started with losses of 1%, while European futures are off 0.4% or so. The dollar is marginally firmer on the euro and yen, reflecting the reliance of the EU and Japan on imported oil and LNG, and the U.S. status as a net exporter.
Treasury yields are up slightly, so not many safe-haven bids there, while Fed fund futures are down a tick, likely on the risk a sustained rise in energy costs could add to inflationary pressure just as tariffs are being felt in prices.
Fed Chair Jerome Powell is set for a grilling on all this when he faces Congress on Tuesday and Wednesday, along with queries on Trump's threats to fire him. It will also be interesting to see how Powell responds to Fed Governor Waller's sudden embrace of a July rate cut, when it seemed the FOMC choir had all been singing from the same cautious hymn sheet.
Markets imply still only a 16% chance of a July easing, preferring a 70% wager on a September move.
Key developments that could influence markets on Monday:
- EU and UK PMIs for June
- Introductory remarks by ECB President Christine Lagarde
- Appearances by Fed members Waller, Bowman, Goolsbee and Kugler
(By Wayne Cole; Editing by Edmund Klamann)
The U.S. administration claims it is not at war and will not escalate if Iran makes peace. However, tensions remain high as Iran's parliament has attempted to close the Strait of Hormuz.
Oil prices are up almost 2%, although they are well off early five-month peaks. Analysts note that OPEC has plenty of extra supply to add if needed.
Fed Chair Jerome Powell will face Congress soon, and markets imply only a 16% chance of a rate easing in July, with a 70% preference for a move in September.
Key developments include EU and UK PMIs for June and introductory remarks by ECB President Christine Lagarde, along with appearances by various Fed members.
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