Geopolitics continue ramping up while US markets were closed - Newsquawk Asia-Pac Market Open

US cash markets were closed for closed for Juneteenth Holiday.
US President Trump posted on Truth Social that “Too Late” Jerome Powell was costing the country hundreds of billions of dollars. He called Powell “truly one of the dumbest, and most destructive, people in Government,” and said the Fed Board was complicit.
The BoE held rates at 4.25%, as expected, in a 6–3 vote (vs exp. 7–2). Dhingra, Taylor, and Ramsden voted for a rate cut. Norges Bank unexpectedly cut rates by 25bps to 4.25%. The SNB cut its policy rate by 25bps to 0.00%, as expected.
There were reports of Israeli strikes in the Lavizan area of Tehran, where Iranian Supreme Leader Khamenei was reportedly hiding in a bunker, according to i24 journalist Stein.
Looking ahead, highlights include UK GfK Consumer Confidence, Japanese CPI, BoJ Minutes, Chinese LPR, Supply from Australia.

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SNAPSHOT

US TRADE - Closed for Juneteenth Holiday

NOTABLE HEADLINES

US President Trump posted on Truth Social that “Too Late” Jerome Powell was costing the country hundreds of billions of dollars. He called Powell “truly one of the dumbest, and most destructive, people in Government,” and said the Fed Board was complicit,

TRADE/TARIFFS

EU is mulling a UK-style trade deal with the US, according to the FT; "Brussels is pushing for an agreement that could leave some tariffs in place." Officials cited say early discussions of retaliatory levies if US President Trump does not lift all measures against EU nations, have diminished.
EU Economy Commissioner Dombrovskis said the EU was ready to take measures with the US if a solution could not be found, but noted that progress was being made in trade talks with Washington, according to Reuters.
Canadian Prime Minister Carney said Canada would introduce a series of countermeasures to help it respond to Trump-era tariffs. He stated that Canada would adjust its existing counter-tariffs on US steel and aluminium products on 21 July. The level of Canadian counter-tariffs would depend on the progress of talks with the US on a new economic deal. He added that only Canadian producers and producers from trading partners offering Canada tariff-free reciprocal access would be eligible to compete for federal government procurement of steel and aluminium. Canada would adopt additional tariff measures to address risks associated with persistent global overcapacity and unfair trade in the steel and aluminium sectors. He also announced that Canada would establish new tariff rate quotas at 100% of 2024 levels on imports of steel products from non-free trade agreement partners, according to Reuters.
European officials increasingly resigned to a 10% baseline rate on reciprocal tariffs in any US-EU trade deal, according to Reuters sources.
China is to reportedly cooperate with the US on drug control and illegal immigrants, according to Xinhua.
EU leaders set to have separate meetings with Chinese President XI and Premier Li during July 24-25th EU-China summit, according to Reuters citing an EU source. EU set to focus on better Chinese rare earth access at July EU-China summit.

CENTRAL BANKS

The BoE held rates at 4.25%, as expected, in a 6–3 vote (vs exp. 7–2). Dhingra, Taylor, and Ramsden voted for a rate cut. The Bank retained its "gradual, careful" language. Following the decision, BoE Governor Bailey said the statement that rates were expected to move gradually downwards was not a prediction for August.
Norges Bank unexpectedly cut rates by 25bps to 4.25% (prev. 4.50%). It stated, “The economic outlook is uncertain, but if the economy evolves broadly as currently projected, the policy rate will be reduced further in the course of 2025.” Rate path projections: Q3-2025: 4.21% (prev. 4.38%), Q4-2025: 3.98% (prev. 4.21%), Q1-2026: 3.81% (prev. 3.99%), Q2-2026: 3.62% (prev. 3.77%), At the press conference, Norges Bank Governor Bache said the central bank planned one or two more rate cuts this year and did not expect a significant drop in rates going forward.
The SNB cut its policy rate by 25bps to 0.00%, as expected. It reiterated that it "remained willing to be active in the foreign exchange market as necessary." At the press conference, SNB Chairman Schlegel said the decision on negative rates was not taken lightly and that no measure, including negative rates, could be excluded. He emphasised that the interest rate differential was important and, if necessary, the SNB remained ready to intervene in FX markets.
The CBRT held its weekly repo rate at 46.0%, as expected. The overnight lending rate was also unexpectedly held at 49.0%.

GEOPOLITICAL

There were reports of Israeli strikes in the Lavizan area of Tehran, where Iranian Supreme Leader Khamenei was reportedly hiding in a bunker, according to i24 journalist Stein.
A senior IRGC official said that before the Israeli airstrikes, all enriched uranium had been transferred from the nuclear sites to secret hiding locations, according to i24 journalist Stein.
The Norwegian Foreign Ministry said an explosion had occurred on Thursday evening in Tel Aviv at the residence of the Norwegian ambassador to Israel, according to Reuters.
The Jordanian army said an explosives-laden drone had fallen in the Azraq area after it “fell short of its range,” according to Al Hadath.
Over the next 10 to 14 days, there were expected to be two aircraft carriers in the Middle East and a third operating in the Mediterranean Sea, according to ABC.
The White House said, “message directly from the President – based on the fact that there is a significant chance of negotiations with Iran in the near future – I will make a decision on whether to launch [an attack] in the next two weeks.” President Trump still believed diplomacy was an option with Iran. The administration noted that there is a great opportunity for negotiations that might or might not be held soon. US Envoy Witkoff has been in contact with Iran, and correspondence has continued. When asked what a deal with Iran would need to look like, the White House Press Secretary said it would require “no enrichment of uranium.” She added, “If there was a chance for diplomacy, [President Trump] was going to grab it.” On oil prices, the Press Secretary said Trump was weighing various factors and monitoring the situation, according to Reuters.
The White House Press Secretary said they would see how the EU meeting with the Iranians went tomorrow, according to Reuters.
A White House official told Fox's Heinrich that the US military had no doubt about the efficacy of bunker busters in eliminating the site at Fordow, and also denied that any options—including tactical nuclear weapons—had been taken off the table.
The White House said Iran was able to produce a nuclear bomb within "a couple of weeks".
US President Trump is scheduled to receive intelligence briefings with the National Security Council on Friday, Saturday, and Sunday, according to the White House, Reuters reported.
Israel anticipated attacks from Iran’s proxies across the Middle East, according to Israel Channel 14.
An Israeli official said Iran could likely sustain the current rate of missile fire at Israel for up to five months, provided their missile launchers were not destroyed, according to NBC.
US officials said no date had been set for a meeting between US and Iranian officials yet, according to Axios.
Broadcasting Authority, citing an Israeli source, reported that the US had asked Israel to defer its attack on the Fordow nuclear facility.
The White House Press Secretary said there were no signs that China was getting involved militarily in Iran, according to Reuters.
An Israeli military spokesman said Israel had attacked the special forces headquarters of the internal security apparatus in Tehran within the last 24 hours, according to Reuters.
Iraq’s Hezbollah threatened to target US bases and close the Strait of Hormuz if Washington joined strikes on Iran, according to Al Hadath.
Kann News reported that there was a "possible attack at Fordow": according to sources, the US had asked Israel to wait until negotiations with Iran had been exhausted.
Britain, France, and Germany are to hold talks with Iran’s Foreign Minister on Friday in a last-ditch effort to avert an escalation of conflict in the Middle East and a possible US intervention, according to FT. The talks in Geneva, due to be attended by the foreign ministers of the three European countries, come in the shadow of warnings from US President Trump that he could join Israel’s offensive against Iran.
Iran's Foreign Minister had reached out to European foreign ministers, requesting a meeting with them on Friday, Jerusalem Post reported. Alongside Iran’s message expressing a willingness to negotiate, they also issued a warning: they would withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) if the attacks continued.
An Israeli intelligence official said the imminent collapse of the Iranian regime was far from the truth, according to NBC.
Journalist Horowitz said on X that opposition sources were circulating "unconfirmed" reports claiming that the head of Iran's military, Abdolrahim Mousavi, had been killed in an Israeli strike.
Israeli PM Netanyahu, in response to a question about the possibility of assassinating Khamenei, said his instructions are that there is no immunity for any figure in Iran, according to Reuters.
Israel still expected that US President Trump would join the strikes against Iran’s nuclear programme, an Israeli official told The Times of Israel, adding they would know in the next 24–48 hours. “The expectation was that they join, but no one was pushing them,” said the official. “They had to make their own decision.”

US President Trump had been briefed on both the risks and benefits of bombing Fordow and his mindset was that disabling it was necessary due to the risk of weapons being produced in a relatively short period of time, according to CBS.

Iran had held direct talks with the US amid the intensifying conflict with Israel, according to Reuters citing diplomats. Trump’s envoy and Iran's Foreign Minister had held several phone calls. Iran stated it would only return to talks if Israel halted its attacks. President Trump said Iran must end uranium enrichment on its soil. A regional diplomat close to Tehran said the Iranian Foreign Minister had told Witkoff that Tehran “could show flexibility on the nuclear issue” if Washington pressured Israel to end the war.

CNN, quoting an informed source, said US Special Envoy to the Middle East Whitkoff was expected to attend the meeting of the US and British foreign ministers at the White House on Thursday.
The US was providing significant assistance in the conflict with Iran, according to Al Jazeera citing CNN on comments from Netanyahu.
The Kremlin said President Putin had held a conversation with China's President Xi and that the two leaders would meet again in China in August.

EU/UK