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By far the largest story yesterday was the reports from both sides that a deal is close that will reopen the Strait of Hormuz to shipping. Also of note was the report that Iran is considering allowing European nations to remove mines from the waterway. US Treasury Secretary Bessent told US news that he thought the deal could be closed "either today or tomorrow," while Qatar's foreign ministry spokesman Majed al-Ansari framed the objective as getting "back to the normal situat

The main news story from yesterday was the strong ISM Manufacturing data release, which came in at 55.6 — up 2.3 points from June, well above the 54.0 expected, and the strongest reading since May 2022. There were no real developments in the Middle East, and so markets were able to focus on the data release, which showed support for the US economy and went against the cooling narrative we had seen since the FOMC meeting last week. One of the most striking data points within t

Geopolitically, the weekend was entered into with significant uncertainty, which has not really changed as we come out of the weekend. There were no new strikes in Iran on Thursday or Friday by the US, which continued over the weekend. The fragility of the situation, however, was shown by news that an oil tanker was hit by an unknown projectile off the coast of Oman, with the attacker unclear. Additionally, in the wider region, Kuwait has claimed to have intercepted drones an

In terms of geopolitics, there is little new to report this morning, with the situation broadly unchanged. US strikes on Iran continued overnight into Wednesday, but reports of fresh Oman-brokered negotiations over the Strait of Hormuz have tempered things somewhat, and oil has settled into a flat-to-firm range as a result. For once, the Middle East is not the main story, because the last 24 hours have been dominated by central banks, earnings and a dramatic intervention in t

In terms of geopolitics, the renewed fighting I flagged yesterday has intensified and turned deadly. At least 20 people were killed in joint US and Saudi strikes on Iranian-backed forces in Iraq, while Jordan intercepted a fresh barrage of Iranian missiles. So this is no longer a brief flare-up but a genuine second escalation, one that is now drawing in Iraq and Jordan as well. The effect on oil is the important part, as crude has held onto its bid on the back of the fighting