Iran, US to Resume Nuclear Talks on Sunday After Postponement

Political

Commodity

Summary:

Trump's special envoy, Steve Witkoff, plans to attend the talks in Oman, a source familiar with the matter said on Friday.

Iran has agreed to hold a fourth round of nuclear talks with the United States on Sunday in Oman, Foreign Minister Abbas Araqchi said on Friday, adding that the negotiations were advancing.

U.S. President Donald Trump, who withdrew Washington from a 2015 deal between Tehran and world powers meant to curb its nuclear activity, has threatened to bomb Iran if no new deal is reached to resolve the long unresolved dispute.

Trump's special envoy, Steve Witkoff, plans to attend the talks in Oman, a source familiar with the matter said on Friday.

Western countries say Iran's nuclear programme, which Tehran accelerated after the U.S. walkout from the now moribund 2015 accord, is geared toward producing weapons, whereas Iran insists it is purely for civilian purposes.

"The negotiations are moving forward, and naturally, the further we go, the more consultations and reviews are needed," Araqchi said in remarks carried by Iranian state media.

"The delegations require more time to examine the issues that are raised. But what is important is that we are on a forward-moving path and gradually entering into the details."

Witkoff, in an interview with Breitbart News, said the Iranians had stated that they do not want a nuclear weapon and the United States will "take them at their word" on this point.

"If that’s how they feel, then their enrichment facilities have to be dismantled. They cannot have centrifuges. They have to downblend all of their fuel that they have there and send it to a faraway place — and they have to convert to a civil program if they want to run a civil program," he said.

The fourth round of indirect negotiations, initially scheduled for May 3 in Rome, was postponed, with mediator Oman citing "logistical reasons".

In a separate statement on Friday, Omani Foreign Minister Sayyid Badr Albusaidi said that after "coordination with both Iran and the U.S.", the fourth round of negotiations was set to take place on Sunday in Muscat.

Araqchi said his planned visit to Qatar and Saudi Arabia on Saturday was in line with "continuous consultations" with neighbouring countries to "address their concerns and mutual interests" about the nuclear issue.

Source: Reuters

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Manuel

Commodity

China–U.S. Trade War

Oil rose as algorithmic traders fled short positions amid renewed optimism about trade talks between the US and China this weekend.

West Texas Intermediate climbed 1.9% to settle near $61 a barrel, the highest in over a week, as the Trump administration weighs reducing levies on China to de-escalate tensions and temper the economic pain in both countries. The rally was limited by President Donald Trump’s comments that an 80% tariff on China “seems right.”

Meanwhile, commodity trading advisers, which tend to exacerbate price swings, liquidated short positions to sit at 91% short in both WTI and Brent on Friday, compared with 100% short on May 8, according to data from Bridgeton Research Group.

Crude has tumbled from a mid-January peak on concerns the trade war will dent economic growth, while OPEC+ is reviving idled production. Measured optimism on trade negotiations has helped prices recover some ground after starting the week near the lowest since 2021. Fuel markets have also provided positive signs, with one gauge of strength in gasoline reaching the strongest in about six months.

“WTI breaking back above $60 has likely triggered short-covering from newly established positions,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. “Optimism around potential progress with China is also providing support.”

Still, while Trump hailed the pact with the UK as historic, specifics of the deal indicated it fell short of the “full and comprehensive” agreement he had promised. And even though Trump said negotiations with China would result in tangible progress, Beijing reiterated on Thursday its call for the US to cancel tariffs ahead of talks.

The US, meanwhile, sanctioned a third so-called teapot refinery in China — along with port terminal operators, vessels and individuals — for allegedly facilitating the trade of Iranian crude. Hebei Xinhai Chemical Group was the main target of the action.

The UK also sanctioned senior executives in an oil trading network that it says has been helping key Russian oil exports flowing. The country also plans to target more than 100 oil tankers.

Source: Bloomberg

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Manuel

Cryptocurrency

Ethereum has experienced its most impressive rally in four years following the long-anticipated Pectra upgrade. This major protocol update has injected new life into the world’s second-largest cryptocurrency, reigniting investor enthusiasm and pushing ETH into a fresh upward trajectory.

The Pectra upgrade is the network’s biggest change since the Merge, enhancing staking efficiency, validator functions, and Layer 2 scalability. These technical enhancements not only bolster network performance but also reaffirm Ethereum’s commitment to overcoming past challenges and setting the stage for its next growth chapter.

ETH PRICE REPORT

After the upgrade was activated, Ethereum’s price jumped by 16%, showing a strong increase that indicates renewed confidence in the market. At the time of the rally, ETH’s price soared from earlier levels of around $1,900 to push above the $2,300 mark, increasing nearly 20% and setting off a wave of excitement across trading platforms.

Data from leading market trackers now reflects a fresh trading sentiment, with investors rushing to position themselves ahead of further gains. The boost in ETH’s price, driven by the technical revival from the upgrade, also indicates a broader shift in risk-on sentiment, as market participants see Ethereum as a key indicator of digital asset resilience in uncertain times.

LOOKING AHEAD: BROADER CRYPTO IMPLICATIONS

The Pectra upgrade not only marks a milestone for Ethereum but also carries major implications for the entire crypto ecosystem. With enhanced staking and smoother validator operations, Ethereum is now better positioned to support a new generation of decentralized applications and smart contracts.

This significant price rally, the most substantial in nearly four years, is fostering optimism about potential investments and innovative solutions emerging from the network. Industry experts now suggest that as Ethereum’s technological capabilities improve, it could lead to a revitalized wave of developments, attracting additional inflows from both retail and institutional investors.

As traders and enthusiasts continue to follow the unfolding story, the latest surge offers a glimpse into Ethereum’s transformative potential. All eyes remain on the network as it leverages heightened confidence and technical prowess to lead the crypto market into its next phase of growth.

Source: CryptoEconomy

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Bond

Economic

The cost of insuring exposure to U.S. government debt has climbed noticeably over the past month and remains stubbornly high, as jittery investors brace for a looming U.S. borrowing-limit political debate as well as overall policy uncertainty.

Spreads on U.S. credit default swaps (CDS) - market-based gauges of the risk of a sovereign default - widened to their highest since the debt ceiling crisis of 2023 in recent weeks. The size of the market and trading volumes have also increased recently, Barclays said in a note this week, in a sign that a product generally considered to be niche is garnering more investor attention.

While years ago buying protection for a U.S. default was an unpopular trade, things have changed recently because of policy uncertainty in Washington, said Greg Peters, co-chief investment officer of PGIM Fixed Income. "Now, with the debt ceiling and everything else going on, no one wants to be short that option," he said.

U.S. sovereign CDS spreads have increased not just for short-dated maturities but across the curve, with one-year and five-year spreads at their highest since May 2023, when the U.S. was on the verge of a default because of political brinkmanship over the debt ceiling.

On Friday, those spreads stood at 60 basis points and 56 basis points, respectively - a touch lower than in recent weeks but still significantly higher than in March, S&P Global Market Intelligence data showed.

The rise in the protection costs has gained momentum after April 2, when U.S. President Donald Trump announced sweeping tariffs, which in the following days sparked a sharp selloff in the Treasury market, the bedrock of the global financial system.

"What you've seen since April 2 is a real rise in that risk premium," said Peters.

After days of heavy selling, Treasuries rallied after Trump announced a 90-day tariff pause for most U.S. trading partners, a move likely prompted by the tariff-fueled selloff. Benchmark 10-year yields were last at 4.36%, about 20 basis points lower than the high they touched on April 11, the day tariffs were paused.

Still, another key measure of risk embedded in Treasury bonds, which captures the premium investors charge for policy uncertainty, has remained elevated in recent weeks, according to New York Fed data.

The U.S. government reached its statutory borrowing limit in January and began employing "extraordinary measures" to keep it from breaching the cap and risking a potential default.

Barclays analysts said in a note this week the so-called X-date, when the government will no longer be able to pay all its obligations, will likely fall in late August or early September, but that an economic slowdown could put pressure on the Treasury's cash position and pull that date forward.

Treasury Secretary Scott Bessent said earlier this week that the department was "at the warning track" in terms of exhausting remaining borrowing capacity under the federal debt ceiling, but vowed that the government would not default on its obligations.

Investors held about $3.9 billion worth of active credit insurance contracts on U.S. government debt as of May 2, Barclays said, citing data from the Depository Trust and Clearing Corporation, a financial market infrastructure company, up from $2.9 billion at the beginning of the year.

Over the past three months, credit insurance on U.S. government debt has been the 12th most-traded single-name CDS contract globally, with weekly trading averaging over $625 million, said Barclays.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

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Damon

Political

The explosions in Amritsar - the first heard in the three-day-old conflict between the nuclear-armed neighbours - could mark a further expansion in the hostilities that have alarmed world powers.

Projectiles and flashes were seen in the night sky above the Indian Kashmir city of Jammu that was plunged into a blackout in the second night of blasts in the region's winter capital, officials and a Reuters journalist said.

"Drones have been sighted ... They are being engaged," said an Indian military official who asked not to be named.

Ten blasts were heard near the airport in the Indian Kashmir city of Srinagar and there were explosions in a dozen other locations in the contested region, other security officials added.

There was no immediate comment from Pakistan which dismissed Indian accusations that it had launched attacks on the same area on Thursday night.

The old foes have been clashing since India struck several areas that it described as "terrorist infrastructure" in Pakistan on Wednesday in retaliation for a deadly attack on Hindu tourists in Indian Kashmir last month.

Pakistan dismissed Indian accusations that it was involved. Both countries have exchanged cross-border fire and shelling and sent drones and missiles into each other's airspace.

Around 48 people have been killed since Wednesday, according to casualty estimates on both sides of the border that have not been independently verified.

Tourists and villagers fled border zones, residents rushed to stockpile food and people were told to stay indoors in cities in Kashmir and beyond. India's cricket board on Friday suspended the IPL - the sport's richest tournament - and the Pakistan Super League postponed its remaining eight matches.

The relationship between India and Pakistan has been fraught with tension since they gained independence from colonial Britain in 1947. The countries have fought three wars, two of them over Kashmir, and clashed many times.

CLASHING ACCUSATIONS

Item 1 of 4 A man uses his mobile phone to film debris of shops damaged by cross-border shelling in Lagama village near the Line of Control (LoC) between India and Pakistan, in Indian Kashmir's Baramulla district, May 9, 2025. REUTERS/Stringer

[1/4]A man uses his mobile phone to film debris of shops damaged by cross-border shelling in Lagama village near the Line of Control (LoC) between India and Pakistan, in Indian Kashmir's Baramulla district, May 9, 2025. REUTERS/Stringer Purchase Licensing Rights, opens new tab

India's airforce earlier said Pakistan used Turkish drones to attack 36 locations on India's west and northwest, in Kashmir and further afield in states bordering Pakistan all the way to the edge of the Arabian Sea on Thursday night into Friday morning.

India responded with drones on targets in Pakistan and destroyed one air defence system, Indian Air Force officer Vyomika Singh told a media briefing.

Pakistan Information Minister Attaullah Tarar had dismissed earlier Indian accusations of Pakistani attacks as "baseless and misleading" and said Pakistan had not carried out any "offensive actions".

In Pakistani Kashmir, officials said heavy shelling from across the border killed five civilians, including an infant, and wounded 29 others in the early hours of Friday.

The fighting is the deadliest since a limited conflict between the two countries in Kashmir's Kargil region in 1999.

Sirens had blared for more than two hours earlier on Friday in in Amritsar, which houses the Golden Temple revered by Sikhs.

Tourists fled the city by road as the airport was closed.

"We really wanted to stay but the loud sounds, sirens, and blackouts are giving us sleepless nights. Our families back home are worried for us so we have booked a cab and are leaving," said a British national who did not want to be named.

Schools and coaching centres were closed in the Bikaner region of India's desert state of Rajasthan, and residents near the Pakistan border said they were asked to move further away and consider moving in with relatives or using accommodation arranged by the government.

Further south in Bhuj in Gujarat, authorities said tourist buses had been kept on standby in case they needed to evacuate people near the Pakistan border.

India's Directorate General of Shipping directed all ports, terminals and shipyards to increase security, amid "growing concerns regarding potential threats".

Indian shares fell for a second straight session on Friday, losing about $83 billion in market value, with both key stock indexes losing 1.1%.

Pakistan's benchmark share index (.KSE), opens new tab closed 3.52% higher with traders crediting a fall off in violence in Pakistani territory after Thursday's clashes.

Reporting by Aftab Ahmed in Jammu, Charlotte Greenfield, Gibran Naiyyar Peshimam and Asif Shahzad in Islamabad, Saurabh Sharma in Amritsar, Rupam Jain in New Delhi, Ariba Shahid in Karachi, Fayaz Bukhari in Srinagar,; Additional reporting by Nilutpal Timsina in Bengaluru; Writing by Sakshi Dayal and YP Rajesh; Editing by Jacqueline Wong, Raju Gopalakrishnan and Andrew Heavens

Source: Reuters

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Adam

Commodity

U.S. energy firms this week cut the number of oil and natural gas rigs operating to their lowest since January, energy services firm Baker Hughes said in its closely followed report on Friday.

The oil and gas rig count, an early indicator of future output, fell by six to 578 in the week to May 9.

Baker Hughes said this week's decline puts the total rig count down 25, or 4% below this time last year.

Baker Hughes said oil rigs fell by five to 474 this week, their lowest since January, while gas rigs were unchanged at 101.

The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.

Even though analysts forecast oil prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) this week projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025.

That increase in production, however, was lower than the EIA's outlook in April due to lower oil price forecasts as U.S. tariffs increase the chances of weaker global economic growth and oil demand.

On the gas side, the EIA projected an 88% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020. [NGAS/POLL]

The EIA projected gas output would rise to 104.9 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.

Oil and gas drilling permit applications in Texas, the top U.S. oil-producing state, hit a four-year low in April amid concerns that rising OPEC+ supplies and a trade war will continue to hit crude prices, consultancy Enverus said on Thursday.

Operators in Texas submitted 570 new drilling permit applications in April, down from 795 in March and the lowest number since February 2021, according to Enverus.

Shale producer Diamondback said on Monday it will drop three rigs in the second quarter, and could reduce activity further if oil prices fall more. Rival Coterra Energy is reducing its 2025 Permian activity by three rigs, while producer Matador Resources is dropping one drilling rig by the middle of 2025.

Source: Reuters

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Adam

Economic

U.S. President Donald Trump will touch down in the Persian Gulf region – or as he may soon be calling it, the Arabian Gulf – on May 13, for an official trip with stops in Saudi Arabia, Qatar and the United Arab Emirates.

The stakes are high, as the visits take place amid turbulent geopolitical tensions. On the agenda will be Israel-Gaza war ceasefire talks, oil, trade, investment deals, and the potential for new policy developments in the areas of advanced semiconductor exports and nuclear programs.

“We expect to see a lot of announcements. And I think in a broad spectrum of areas as well,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, told CNBC’s Dan Murphy on Friday. She noted the potential removal of Trump’s 10% tariffs on aluminum and steel, which would be a positive for the Gulf states as some of them export those metals to the U.S., though they make up only a small percentage of the countries’ GDPs.

Trump has long enjoyed a warm relationship with Gulf Arab states, in particular the UAE and Saudi Arabia, where his children have several business ventures and planned real estate projects. Those relationships could strengthen the countries’ hands when it comes to negotiating new trade deals – while also raising concerns among critics over potential conflicts of interest, accusations the Trump family rejects.

During the president’s initial term in office, his first overseas trip was to Saudi Arabia – a country now hosting the negotiations that Trump hopes will end the Russia-Ukraine war, making the kingdom ever more important to Washington. Qatar, meanwhile, has played a central role in negotiations between Israel and Hamas over ceasefires and hostage releases.

Wall Street and AI in the Gulf

The presidential visit is drawing several Wall Street and Silicon Valley titans to the Saudi kingdom. A Saudi-U.S. investment forum announced just this week and set to take place on May 13 in Riyadh will feature guests including BlackRock CEO Larry Fink, Palantir CEO Alex Karp, and CEOs of major firms like Citigroup, IBM, Qualcomm, Alphabet , and Franklin Templeton, among others. White House AI and crypto czar David Sacks will also be in attendance.

“We also expect to see a lot of investment deals being announced,” Malik said. “And both ways, we’ve already seen the UAE announce a number of investments in the U.S. in areas such as AI, energy, aluminum, but we also think that there will be opportunities for U.S. companies to increase investment.”

Both Saudi Arabia and the UAE have invested heavily in AI infrastructure with the goal of becoming global hubs for the technology. Therefore, likely top of mind for those leaders is the future of U.S. semiconductor exports, the most advanced of which they so far have not gained access to due to national security concerns. But that may soon be changing.

The Trump administration on Wednesday announced its plan to rescind a Biden era “AI diffusion rule,” which imposed strict export controls on advanced AI chips, even to U.S.-friendly nations. The rule will be replaced with “a much simpler rule that unleashes American innovation and ensures American AI dominance,” a U.S. Commerce Department spokesperson said Wednesday, though the details of the new rule have not yet been shared.

UAE-based AI firm G42 has made efforts to align with U.S. regulations, including divesting from Chinese companies and partnering with Microsoft, which last year invested $1.5 billion in G42.

Nuclear ambitions

The Trump administration has been actively engaged in talks with Iran over its nuclear program – talks that the UAE and Saudi Arabia have expressed support for. That enthusiasm marks a stark contrast to those countries’ attitudes toward any U.S. deals with Tehran during the Obama years.

At the same time, Saudi Arabia wants its own civilian nuclear program and has asked the U.S. for approvals and assistance in this direction. Any U.S. support for a Saudi nuclear program was previously contingent on Saudi Arabia normalizing diplomatic relations with U.S. ally Israel – but that could change during this visit, according to media reports citing sources with knowledge of the matter.

U.S. Energy Secretary Chris Wright, during a visit to the kingdom in April, said that Saudi Arabia and the U.S. were on a “pathway” to a civil nuclear agreement – but that any further announcements would come from Trump himself.

Israel-Gaza negotiations

Another major topic will be the future of Gaza. Trump has vowed to bring about an end to the war, while also controversially suggesting that the U.S. could take control of the war-ravaged Strip which he described as “important real estate,” comments that drew strong rebukes from Arab leaders.

The U.S. has continued to push for ceasefire deals, most recently floating a 21-day cessation of hostilities and release of some hostages, while Israel this week approved expanding fighting and territorial control in Gaza.

“We have yet to hear a comprehensive plan from the Arab world,” Greg Branch, founder of UAE-based Branch Global Capital Advisors, told CNBC on Friday while discussing Trump’s upcoming visit.

“If we’re going to see a response that’s going to be Arab-led, it’s probably now or never,” Branch said. “I think that will be handled very delicately behind the scenes … probably more of a long-term geopolitical risk than any immediate macro risk.”

Oil and financing

Branch suggested that lifting U.S. sanctions on Syria under its new government could also potentially be discussed. Meanwhile, reports that the Trump administration will announce a U.S. renaming of the Persian Gulf to the Arabian Gulf would be enthusiastically welcomed by Arab states, but could draw severe anger from Iran at a time of delicate nuclear negotiations with Tehran.

Oil prices will also be in focus; Trump has long pushed OPEC states, led by Saudi Arabia, to pump more oil to lower prices for American consumers. For a combination of reasons, Saudi Arabia is doing precisely that – but it may have to change course in the coming months if prices stay subdued, hurting the kingdom’s revenues.

In that vein, financing will be an important agenda item for the kingdom during Trump’s visit, according to ADCB’s Malik.

Saudi Arabia in November pledged to invest $600 billion in the U.S. over the course of Trump’s term — but it also has sky-high costs for its own Vision 2030 investment ambitions. Lower global oil prices and big-ticket public spending projects have brought about widening budget deficits for Riyadh.

“With oil prices where they are, Saudi will look at more financing support from America as well as they look to progress with their investment program,” Malik said.