Netanyahu Sees Redemption In Iran War, But Gaza Looms Large

Political

Middle East Situation

Summary:

After months of political turmoil, war and plummeting popularity, Israel's powerful strike on Iran is likely to reframe Prime Minister Benjamin Netanyahu's legacy, allies and analysts say.

Key points:

● Netanyahu widely blamed for not preventing Hamas attack

● Apparent success of Iran strikes draws praise in Israel

● Continuous Gaza conflict still needs to be resolved

After months of political turmoil, war and plummeting popularity, Israel's powerful strike on Iran is likely to reframe Prime Minister Benjamin Netanyahu's legacy, allies and analysts say.

During a 12-day air assault ordered by Netanyahu, Israel bombed nuclear sites deep inside Iran, eliminated many of its arch foe's top military commanders and scientists, and targeted multiple missile facilities across the country.

Both nations agreed to a ceasefire on Tuesday, and although they accused each other of violating the deal in the hours after it was announced, Netanyahu was swift to claim total victory.

"The State of Israel has accomplished great historic achievements and positioned itself side-by-side with the world's superpowers," the government said.

The jubilant tone was a far cry from October 7, 2023, when a surprise attack by Hamas militants out of Gaza handed Israel the deadliest security failure in its history, dealing a devastating blow to Netanyahu's carefully crafted reputation as the nation's guardian and triggering a collapse in his public support.

Netanyahu's recent rhetoric has "completely erased October 7th. He's just talking about Iran," said Dr. Gayil Talshir, a political scientist at Hebrew University.

However, the war against Hamas in Gaza is still grinding on, a constant reminder of the 2023 blunders, and pressure is likely to build quickly on Netanyahu to reach a deal that will end the fighting and secure the release of all remaining hostages.

"A comprehensive agreement to return all the hostages is the call of the moment," said Einav Zangauker, whose son Matan is among the 20 hostages in Gaza still believed to be alive.

"The annals of history are being written now, one chapter is still missing, the chapter of October 7. Netanyahu, it's up to you," she wrote on X.

REDRAWING THE MIDDLE EAST

Despite the cloud of Gaza, the political benefits of the Iranian mission are already being felt.

A survey released last week said 83% of Jewish Israelis supported the assault on Iran and pollsters said they expected Netanyahu's Likud party, which had long been predicted to lose power in any national election, would now gain ground.

"I think there'll be less of a movement to punish him for October 7," said Mitchell Barak, an Israeli pollster who worked for Netanyahu in the 1990s. "He's definitely in a strong position."

The Iranian operation marks a dramatic change in Israel's regional position, which has been evolving at dizzying speed over the past 20 months.

During that time, Israeli forces have severely weakened its enemy Hezbollah in Lebanon, inflicted heavy losses on Hamas in Gaza, decimated air defences in Syria, and now struck directly at Iran – once considered too risky a move.

Netanyahu also managed to convince U.S. President Donald Trump to join the attack and hit Iranian nuclear sites with bunker-busting bombs that only the U.S. airforce possesses — a coup for the Israeli leader who had previously spent years fruitlessly trying to persuade Washington to strike Iran.

Trump gave the conflict added significance on Tuesday by calling it "The 12-day War" — recalling the Six Day War of 1967, when Israel launched a preemptive strike on neighbouring Arab states and captured the Sinai Peninsula, Gaza Strip, West Bank, East Jerusalem, and Golan Heights.

Some of Netanyahu's allies have been pushing a new narrative to recast the October 7 attack not as a failure, but as a necessary wake-up call, which finally jolted the nation into confronting its regional foes head-on, rather than contain them.

"October 7 saved the Israeli people," Aryeh Deri, a partner in the right-wing ruling coalition, told Channel 14 TV station.

POLITICAL RECKONING

Netanyahu will now face pressure to negotiate an end to the Gaza conflict, which has so far killed 56,000 Palestinians, according to local health authorities, most of them civilians.

Opponents have accused him of prolonging the fighting to avoid a political reckoning over who was to blame for the conflict. Procrastination is no longer acceptable, they say.

"Now Gaza," opposition leader Yair Lapid wrote on X on Tuesday. "It is the moment to close there as well. To bring back the captives, to end the war. Israel needs to start rebuilding."

Israel has become increasingly isolated over its actions in Gaza, where it cut off aid for weeks, shrugging off warnings of famine, and reduced much of the enclave to rubble.

Trump himself in recent weeks has called on Israel to wrap up the fighting, having promised during his election campaign last year to bring peace to the region.

However, inside Netanyahu's government, there appeared little willingness on Tuesday to compromise or negotiate.

"Now with all our strength to Gaza, to complete the work, to destroy Hamas and return our hostages," Finance Minister Bezalel Smotrich, a far-right coalition partner, wrote on X.

Smotrich and other cabinet hardliners are pushing for a long-term military occupation of Gaza, including the re-establishment of Jewish settlements — something Palestinians and Western nations would fiercely oppose.

Talshir described the coming talks over a ceasefire deal in Gaza as a competition between Smotrich and Donald Trump "over who has more leverage on Netanyahu," she said.

Some analysts say Netanyahu might try to capitalize on the Iran operation by calling elections a year early, though pollster Barak said expanding his coalition's slim parliamentary majority made more sense.

"Whenever you go to elections, it sounds great, (but) you go for a roll of the dice," he said.

Source: Reuters

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Adam

Forex

EUR/USD Technical Analysis

The Euro has rallied a bit during the early hours on Tuesday to test the 1.16 level, an area that, of course, is fairly important due to previous action. And now I think you have to ask the question, can we break out to the upside? This is most certainly an important level and the bullish engulfing candlestick from the Monday session could foretell a move to the upside, but I need to see this market stay above 1.16 for a daily close, preferably above 1.1650 to start buying.

USD/JPY Technical Analysis

The US dollar has plunged against the Japanese yen to fall to the 50-day EMA near the 145 yen level. The question now is, can we bounce? If we do, I’m a buyer. If we don’t, I’m probably buying this somewhere closer to the 143 yen level. The interest rate differential keeps me interested to begin with. And of course, we have to keep in mind that although the Federal Reserve will be cutting rates later this year, it is still a country mile the distance between interest rates in the United States and Japan.

AUD/USD Technical Analysis

The Australian dollar has rocketed higher as we have had right back to the same area of resistance that we have seen before. So, the question is, can we break above the 0.6550 level finally? And if we do, does it open up a move to the 0.6675 level? Short-term pullbacks offer the possibility of buying if you’re bullish still. However, if we get an exhaustion candle, that might not bode too well.

The Australian dollar has been very difficult to trade all year, really. It hasn’t had too many clean moves, and I don’t know that it’s about to change anytime soon. Again though, I’m watching 0.6550 because it is important.

Source: fxempire

Risk Warnings and Disclaimers

Add to Favorites

James Whitman

Middle East Situation

Commodity

President Donald Trump said China can continue to purchase oil from Iran, abruptly easing the “maximum pressure” the US had been applying to the Middle Eastern country’s economic lifeblood.

The shift comes mere hours after Trump declared that Iran and Israel had agreed on a ceasefire, which got off to a shaky start with early breaches of the deal by both sides. It follows massive US airstrikes on several of the Islamic Republic’s nuclear facilities on Sunday, an offensive aimed at stopping Tehran from obtaining an atomic weapon.

Oil prices extended losses after Trump’s comments, with West Texas Intermediate futures sinking about 5% to almost $65 a barrel as of 10 a.m. in New York. The market had already plunged as the threat to oil flows from the Israel-Iran conflict faded.

“China can now continue to purchase oil from Iran,” the president said in a post on Truth Social on Tuesday.

It’s a major reversal for a president who as recently as last month was insisting that all purchases of Iranian oil or petrochemical products “must stop, NOW!”. Buyers would be subject to secondary sanctions and prevented from engaging in any business with the US, he said.

That threat built on previous warnings from his administration. In February, Treasury Secretary Scott Bessent said that Washington intended to squeeze Iran’s oil exports to less than 10% of current levels, as it renewed the campaign of “maximum pressure” deployed during Trump’s first term.

The sanctions were intended to force Iran to voluntarily give up uranium enrichment so that it would never be in a position to obtain a nuclear weapon. While the US airstrikes over the weekend appear to have seriously damaged the country’s nuclear facilities, the International Atomic Energy Agency still does not know what happened to Tehran’s stockpiked of 409 kilograms (902 pounds) of highly-enriched uranium — potentially enough for 10 nuclear warheads.

The US has sanctioned hundreds of oil tankers for their role in handling Tehran’s petroleum and, absent an easing in those measures, some buyers may still take a more-cautious approach.

The White House has also targeted Chinese entities that bought Iranian oil, something that could make other buyers wary. Likewise, secondary sanctions on Iran’s sales remain in place at this time and its not clear where the president’s remarks will leave those.

Source: Bloomberg Europe

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

Middle East Situation

Federal Reserve Chair Jerome Powell will reiterate to lawmakers the central bank is in no rush to lower interest rates as officials wait for more clarity on the economic impact of President Donald Trump’s tariffs.

“The effects of tariffs will depend, among other things, on their ultimate level,” Powell said Tuesday in remarks prepared for delivery to Congress. “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.”

Powell’s testimony before the House Financial Services Committee comes on the heels of the Fed’s decision last week to leave interest rates unchanged in a range of 4.25%-4.5%.

The central bank’s on-hold position has angered Trump, who has consistently called for lower rates and argued the Fed is keeping borrowing costs for the US government high by holding rates steady.

Trump Comments

“‘Too Late’ Jerome Powell, of the Fed, will be in Congress today in order to explain, among other things, why he is refusing to lower the Rate,” Trump said on social media early Tuesday. “I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come.”

Powell and several other policymakers have pointed to increased economic uncertainty stemming from the Trump administration’s stepped up use of tariffs, and other policy changes, to justify leaving rates steady for now. Many forecasters expect the tariffs to put upward pressure on inflation and dent economic growth, although those estimates carry significant uncertainty.

Trump has frequently shifted on the specifics of his tariff policies, and the administration says it’s working on trade deals that could affect the nature and level of the duties.

“Expectations of that level, and thus of the related economic effects, reached a peak in April and have since declined,” Powell said in a statement that largely echoed remarks he delivered last week. “Even so, increases in tariffs this year are likely to push up prices and weigh on economic activity.”

Powell said the tariffs’ impact on inflation could be short-lived or possibly be more persistent.

Tariff Effect

Avoiding the latter outcome “will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices and, ultimately, on keeping longer-term inflation expectations well anchored,” he said.

Economic data so far has shown limited impact from tariffs. Fed Governors Christopher Waller and Michelle Bowman have pointed to that dynamic, among other factors, in arguing the Fed could cut as soon as its next meeting in July.

Meanwhile, Powell described the overall economy and labor market as solid. He said inflation had eased significantly from highs reached in mid-2022, but was somewhat elevated above the Fed’s 2% objective. He added that beyond the next year or so, most measures of longer-term expectations remain consistent with the Fed’s inflation goal.

Source: Bloomberg

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

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

China–U.S. Trade War

Blowback to President Donald Trump’s idea of tariffs on imported semiconductors is proving to be broad and deep, stretching from auto companies and boat makers to the technology industry and crypto enthusiasts, according to a review of more than 150 public comments on the proposal.

The possible levy of up to 25% has united rivals like Tesla Inc., General Motors Co. and Ford Motor Co. in voicing reservations. It’s brought together industry lobbies from the Crypto Council for Innovation to the National Marine Manufacturers Association. Even Taiwan and the People’s Republic of China are finding common cause, along with predictable parts of the tech sector including chipmakers and wireless providers.

The reason is that chips are now in almost everything: refrigerators and microwaves, tire pressure sensors and navigation systems, electronic bidets and sonar equipment and, of course, smartphones and computers. Tariffs threaten to snarl supply lines and jack up costs for consumers.

“There’s a large mismatch between the amount of chips we use in this country in various products and the supply created here in the US,” JoAnne Feeney, a partner and portfolio manager at Advisors Capital Management, said in an interview. “Putting a tax on those imports will simply raise the cost, and that’s not a good thing for consumers.”

Case in point is the marine association, which warns the impact would be felt by more than 1,300 manufacturers who face higher expenses for essentials like propulsion technology, engines and GPS systems.

“These systems are not optional luxuries — they are fundamental to safety, function and performance,” the association said. “Many components have no US equivalent or are only available from highly concentrated suppliers overseas.”

The boating sector’s concerns were among comments from 154 stakeholders submitted to a Commerce Department review of whether to slap tariffs on chips as part of Trump’s campaign to redraw global supply lines and boost domestic manufacturing. Predictable tech sources weighed in, including chipmakers Taiwan Semiconductor Manufacturing Co. and Intel Corp. But feedback also landed from a wide spectrum of sectors, along with trading partners like Japan and Brazil.

The companies, trade groups and individuals who commented on the chips investigation largely signaled support for the president’s vision of deepening the US manufacturing base and expanding the American workforce. Yet most expressed concern over the potential consequences and urged making any levies that emerge as targeted as possible.

Taken together, the filings point to unease across a range of industries about the economic fallout from targeting chips. Trump has so far brushed off many of those concerns and cited plans by a range of companies to invest in the US, including Taiwan-based TSMC’s decision to boost its commitment to building plants near Phoenix.

White House spokesman Kush Desai said Trump remains committed to reshoring manufacturing critical to US national security. “While the Commerce Department completes its Section 232 investigation, the administration is expanding domestic critical mineral production, slashing regulations, and pushing pro-growth policies,” Desai said in a statement. The Commerce Department didn’t respond to a request for comment.

In its submission, TSMC highlighted plans for six advanced semiconductor fabs and two packaging facilities along with a research center as part of a $165 billion investment in Arizona that’s expected to create thousands of jobs. Yet the company warned import levies would make it harder to deliver those projects on schedule, while slowing US efforts to expand domestic production of chips for 5G wireless, artificial intelligence and autonomous driving.

“Additional tariffs or other restrictive measures on semiconductors could reduce the profitability of leading US companies by limiting sourcing options, driving up production costs, and reducing product demand,” TSMC’s Arizona subsidiary wrote.

In its filing, Tesla urged coordination between government and industry to minimize uncertainty that could upset supply chains, citing its ties to Asia, Europe and Africa. “These partnerships allow us to focus on increasing US dominance in advanced manufacturing,” the company wrote. “Impacts to these inputs for which there is insufficient domestic availability will put a strain on resources during a key moment in the global artificial intelligence race.”

Chipmaker Intel cautioned that trading partners could respond with protective measures that exclude American products. Intel is seeking to reverse years of struggle by spending more than $100 billion to expand its domestic manufacturing, and the company called on the administration to spare US-made wafers as well as any chips made abroad using American technology.

A common concern aired by TSMC, Intel and others in the semiconductor industry centered on the risk that chipmaking equipment produced by foreign suppliers like ASML Holding NV would get hit with import taxes. A single extreme ultraviolet lithography machine from Netherlands-based ASML, the world’s sole provider of the most advanced chipmaking gear, can cost nearly $400 million. Adding tariffs would significantly boost the cost of equipping new US facilities.

ASML submitted feedback to the Commerce Department — but its filing was marked “business confidential” and unavailable for public review. In its comments, Intel urged exempting such machines, noting that “the primary cost driver for semiconductor fabs, accounting for two-thirds of total construction expenses, is equipment and machinery.”

Replacing semiconductors produced abroad with domestic output would be very difficult, Feeney said.

“It takes years to create the industrial infrastructure to make creating a semiconductor fabrication facility even possible,” she said. “At a time we’re trying to build up an AI infrastructure of data centers, the last thing you want to do is put a substantial tariff on the most important input into those data centers.”

Major US trading partners, already stung by Trump’s so-called reciprocal tariffs, objected to the idea of targeting chips, after seeing the auto sector along with steel and aluminum imports hit with levies. Taiwan, which produces nearly 90% of the world’s most advanced semiconductors, highlighted the complementary role of TSMC foundries that churn out wafers for leading American chip designers Nvidia Corp. and Advanced Micro Devices Inc.

Tariffs on semiconductors or related products from the island “would severely impair Taiwan’s ability to meet the demands of the US semiconductor industry in a timely manner,” the Taiwanese government said in its filing. “This would drive up costs for US companies, raise end-product prices, reduce profitability and revenue, and ultimately weaken the capacity of US firms to invest in R&D and innovation.”

Source: Bloomberg

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

Risk Warnings and Disclaimers

Add to Favorites

Damon

Economic

US consumer confidence unexpectedly declined in June on concerns about prospects for the economy, labour market and personal finances due to trade policy.

The Conference Board’s gauge of confidence decreased 5.4 points to 93, data showed Tuesday. The figure was below all estimates in a Bloomberg survey of economists.

A measure of consumer expectations for the next six months dropped 4.6 points to 69, while a gauge of present conditions fell 6.4 points to 129.1.

The retreat in confidence erased nearly half of the prior month’s rebound, underscoring lingering anxiety about the potential impacts on the economy from higher US import duties. While inflation over the past three months has been modest, some consumers have become more guarded about their spending.

“Consumers were less positive about current business conditions than May. Their appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labour market,” Stephanie Guichard, senior economist at The Conference Board, said in a statement.

The cutoff date for the Conference Board survey was June 18, five days after Israel launched a series of strikes on Iranian targets. References to geopolitics increased only slightly in write-in responses, according to the survey.

The share of consumers expecting higher interest rates in the year ahead increased to 57%, the highest since October 2023, the Conference Board data showed.

Source: Theedgemarkets

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

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Commodity

Russia’s crude exports slid to the lowest since mid-April as maintenance work interrupted loadings at a key Pacific port while flows from the Baltic also declined.

Seaborne crude shipments averaged 3.19 million barrels a day in the four weeks to June 22, a drop of 4% from the period to June 15. The more volatile weekly figure fell by 220,000 barrels a day for a second straight decline.

The lower cargoes may prove to be temporary. Loadings at Kozmino had returned to normal by the end of the week after a three-day gap in activity at the Pacific port. But a slowdown in shipments from the Baltic port of Primorsk is less easy to explain, with nothing to suggest similar work there.

The lower flows partly offset the biggest jump in four-week average prices since August 2023 to leave the gross value of Moscow’s crude exports up just 2%. Weekly average prices gained by almost $7 a barrel last week as Israel and Iran traded missile attacks, culminating in the US strikes on the country’s nuclear facilities at the weekend. But global prices have fallen back sharply this week after Iran, Israel and the US agreed a ceasefire.

Exports are also likely being eroded by rising refinery runs, with Russia’s processing plants completing seasonal maintenance. Crude-processing rates averaged 5.42 million barrels a day in the first 18 days of June, and will reach the highest level this year if they’re maintained at this level for the rest of the month.

A total of 28 tankers loaded 20.89 million barrels of Russian crude in the week to June 22, vessel-tracking data and port-agent reports show. The volume was down from 22.42 million barrels on 30 ships the previous week.

Crude flows in the period to June 22 stood at about 3.19 million barrels a day on a four-week average basis, down by 120,000 barrels a day from the period to June 15. Using more volatile weekly figures, they slumped by about 220,000 barrels to 2.98 million barrels a day.

The drop in flows was driven by lower shipments from the Baltic port of Primorsk and the Pacific outlet at Kozmino, where a three-day gap in loading operations suggests maintenance work closed the port. Those declines offset another surge in flows from the Arctic port of Murmansk.

There was one shipment of Kazakhstan’s KEBCO crude during the week from the Black Sea port of Novorossiysk and one from the Baltic port of Ust-Luga.

The gross value of Moscow’s exports rose by about $40 million, or 3%, to $1.38 billion in the week to June 22. The drop in flows partly offset higher average prices.

Weekly average export prices of Russian crude rose to their highest in five months in the seven days to June 22, driven up by the continued hostilities between Israel and Iran.

Urals crude from the Baltic and Black Sea rose by about $6.70-6.80 a barrel to average about $65 a barrel during the week, while the price of key Pacific grade ESPO rose by $6.20 to average $69.32 a barrel. Delivered prices in India were up by $6.50 at $74.95 a barrel, all according to numbers from Argus Media.

On a four-week average basis, the export price of Russia’s crude shipments rose for a fourth week, with Urals from both the Baltic and the Black Sea and Pacific ESPO all up by $3.10-3.30 a barrel.

Using this measure, the value of exports rose by 2% in the period to June 22 to average about $1.31 billion a week.

Observed shipments to Russia’s Asian customers, including those showing no final destination, slipped to 2.77 million barrels a day in the 28 days to June 22, down from 2.86 million barrels a day in the four weeks to June 15.

The figures include about 440,000 barrels a day on ships from Western ports showing their destination as Port Said or the Suez Canal, or those from Pacific ports with no clear delivery point and a further 30,000 barrels a day on tankers yet to signal a destination.

Flows to Turkey in the four weeks to June 22 averaged about 370,000 barrels a day, slipping back from their highest in almost five months. That propelled a similar drop of about 20,000 barrels a day in overall shipments to the eastern Mediterranean, where Moscow has also been supplying crude to Syria.