ردیاب بحران ایران-خلیج فارس ۲۰۲۶
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strikeJul 10, 2026

Futures Flat As Traders Brace For Weekend Iran Escalation

Summary

Futures Flat As Traders Brace For Weekend Iran Escalation US equity futures are flat on the final trading session of the week, with Tech lagging, as traders hold off on big bets ahead of the weekend, with the fragile truce in the Middle East keeping geopolitical risk front of mind. Overnight, the US said Iran talks will continue, a positive step amid the recent escalation near the Strait of Hormuz (then again the market never reacted negatively to the latest strikes in the first place). As of 7:45am ET, S&P futures are flat and Nasdaq futures are down 0.2%; pre-market, Mag 7 stocks are mixed: META +1.8%, MSFT +0.9%, while NVDA and AAPL are down 0.6% and 0.4%, respectively. Notably, META has been outperforming since the announcement of its Muse Spark AI model and its strategy for the cloud business. SemiAnalysis, whose "unbiased", often wrong but never in doubt, views at some point be investigated by a regulator, also struck a positive note on META’s AI development (here). Bond yields are 1–2 bp lower, and USD is mostly unchanged. Commodities are mixed: WTI is down 0.2%; base metals are higher, while precious metals are mostly lower. The US economic data calendar empty for the session. Next week includes June CPI, PPI data. Fed calendar empty for the session.  In premarket trading, Magnificent 7 stocks are mixed with Meta rising 3% after research firm SemiAnalysis posted a positive report on the social media giant’s AI compute business (Microsoft +0.4%, Amazon unchanged, Alphabet +0.1%, Apple -0.4%, Tesla unchanged, Nvidia -0.4%). CCC Intelligent Solutions (CCC) jumps 9% after Reuters reports that the insurance software company is exploring a sale. Circle Internet Group (CRCL) gains 13% after the stablecoin issuer received approval from the US Comptroller of the Currency to establish “First National Digital Currency Bank, N.A.,” a national trust bank that will offer digital asset services. Delta Air Lines (DAL) slips 2.8% after the airline posted second quarter results. EquipmentShare.com (EQPT) gains 13% after the company announced a $500 million share buyback. Fermi (FRMI ) down -17% after offering $350 million in convertible senior notes Twilio (TWLO) climbs 2% as Stifel upgrades to buy on the company’s potential to capitalize on the current AI cycle. WD-40 (WDFC) rises 14% after the lubricant spray maker boosted its net sales forecast for the full year. In other AI news, JPMorgan has built an array of AI-powered investing agents that beat 60/40 portfolio in back-tests. OpenAI and Google confirmed they have been supplying AI services to Singapore-based subsidiaries of Alibaba, Baidu and Tencent, the Financial Times reports. Netflix is said to be considering steps to deal with signs of declining subscriber engagement, according to the WSJ.  Bayer sold a minority stake in its contraceptives business to Apollo for €3 billion ($3.4 billion) and will use the funds raised to help cover its ballooning litigation costs tied to the herbicide Roundup. Polymarket is seeking regulatory approval to offer margin trading in the US, which would let users bet on events with less capital upfront. We end a week characterized by thematic rotations, signs of a summer trading lull and low volatility at the index level. Brent crude traded near $76.50 a barrel, swinging between small gains and losses after a volatile stretch. Talks between the US and Iran are continuing despite days of fighting that drove a steep drop in traffic through the Strait of Hormuz. The risk of further escalation is expected to keep investors cautious as they close out the week. “Over the weekend, discussions between the US and Iran are expected to continue,” said David Manso, chief investment officer at CaixaBank AM. “Oil prices could provide a useful gauge of investor sentiment and expectations regarding the evolution of the situation.” Yet away from geopolitics, things are about to get busier soon, with Tuesday’s blitz of five major US bank results heralding the start of the earnings season. And speaking of rotation, Lilian Chovin at Coutts in London, notes that the firm has moved a bit underweight US equities. “Other regions are probably better placed right now to navigate the coming few months. Obviously by reducing our US exposure, we have reduced our exposure to tech mega cap.”  The Coutts team remains positive on the AI theme, he explains. “It’s more nuanced than people selling tech to go into defensive sectors. We’ve seen a rotation within tech, caused by some noise around semiconductors.”  After an unprecedented rally in chipmakers and other AI buildout stocks helped markets shrug off higher oil prices and elevated bond yields, the bar is now high for companies to justify their lofty valuations. For hyperscalers, the onus is on proving that the spending can generate strong returns. “What remains to be confirmed is whether growth can hold up despite that pressure, with the AI capex cycle continuing to support investment, revenues and earnings,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “Expectations are high, but the real test is whether earnings can keep validating the expansion story.” This morning another company capitalized on the chip bubble when SK Hynix raised $26.5 billion in its ADR offering, the largest ever US first-time share sale by a foreign company. The company sold 177.9 million ADRs for $149 apiece, each equivalent to a 10th of a Seoul-traded common share. Hynix’s US debut is set to spur a wave of leveraged ETF product launches.  Analysts have upgraded S&P 500 earnings estimates ahead of the second-quarter reporting season, setting the bar high in “an atypical move,” according to HSBC strategists. The Street now expect profits to rise 22% from a year earlier, the highest in the post-pandemic period. Meanwhile, with Q2 reports due shortly, an interesting set-up is emerging between earnings season expectations and headline risk, notes Bloomberg’s equity derivatives specialist Christian Dass. Persistently low implied correlation leaves the VIX vulnerable to a sharp repricing if markets become increasingly driven by macro headlines rather than stock specific fundamentals. In politics, Trump fired two Democratic members of the US Election Assistance Commission, while the Republican member resigned. Graham Platner’s exit from the Maine Senate race has set off a scramble to find a replacement to take on Republican incumbent Senator Susan Collins, with at least six Democrats entering the field. In other assets, carry trades are seeing the most compelling backdrop in more than two decades, according to Goldman Sachs, while an unprecedented divergence in the oil-market crack spread gauge are prompting Vanguard to buy insurance against stickier-than-expected US inflation.  Trade during the European session has been indecisive and non-committal alongside a particularly slow news cycle. The Stoxx 600 has oscillated around the unchanged mark: tech and energy sectors are the worst performers, while telecoms and miners are the biggest gainers. Here are some of the biggest movers on Friday: EasyJet shares jump as much as 15% after the budget airline received a fresh bid from private equity firm Apollo that beats a rival proposal from Castlelake. The shares remain below both offer prices. Vodafone shares soar as much as 14% after its biggest shareholder Emirates Telecommunications Group agreed to sell its entire 16% stake in the firm to a vehicle controlled by billionaire Xavier Niel. Voestalpine, Salzgitter and ArcelorMittal rose after JPMorgan upgraded the steel producers. The bank says it expects 2Q reporting to focus on the impact of cuts to EU steel imports and import tariffs effective from July, which have the potential to transfer demand to EU steel producers. EMS-Chemie shares gain as much as 3.5% after it reported better-than-expected first-half sales and profit and raised its net sales forecast for the year. Hays shares rise as much as 13% after the recruitment company reported stronger-than-expected fourth-quarter fees and forecast full 2026 profit to be at top end of the consensus range. St James’s Place shares fall as much as 7% after Financial News reported that one of the wealth manager’s largest advice firms has decided to exit the group, spotlighting ongoing retention troubles. Duerr shares fall as much as 4% as Berenberg downgrades the German stock to hold from buy and slashes its price target almost in half, citing dependency to automotive original equipment manufacturers. Glenveagh Properties drops as much as 5.1% after being downgraded at Deutsche Bank, as analysts believe the Irish housebuilder is fairly valued following recent gains. Troax shares fall as much as 6.6% after Berenberg downgraded the Swedish maker of machinery parts and warehouse fittings to hold from buy, citing a tough automotive end-market and the likelihood of a slow margin recovery. The mood in Asia was more upbeat with the MSCI APAC index up 0.8%, boosted by a rally in tech shares. Asian stocks climbed, boosted by a rally in tech shares amid optimism ahead of the US listing by South Korean chipmaker SK Hynix. The MSCI Asia Pacific Index jumped as much as 1.7%, the most in a week. Shares of Samsung Electronics and SK Hynix were the top contributors to the benchmark’s advance and led a 5% surge in the Kospi. Japan’s Nikkei 225 was up almost 2%. SK Hynix raised $26.5 billion in its American depositary receipt offering, powering through recent volatility in global semiconductor stocks. Meanwhile, Samsung Electronics’ Executive Chairman Jay Lee is seeking to meet with Nvidia’s Jensen Huang in the US late July to discuss the former’s investment plans in South Korea’s southwest area, according to a media report. Elsewhere, trading in Taiwan was halted as a strong typhoon approached the island. Japan called on its pension funds, which include one of the world’s largest, to invest in domestic assets. Here Are the Most Notable Movers Shares of Japanese wafer maker Sumco rallied as much as 15% to hit their upper daily limit after Micron’s plan to invest in Taiwan’s GlobalWafers was seen as a sign of rising demand in the sector. Lenovo’ shares rise as much as 9.2% after Morgan Stanley upgrades the Chinese device maker and more than doubles the price target, citing its ability to pass through higher component costs amid AI-driven demand. Zhipu shares drop as much as 9.7% in Hong Kong, paring a sharp three-day rally, after Goldman initiated coverage at neutral, saying their valuation fairly reflects the competitiveness of the company’s AI models. Mitsubishi Motors shares climbed as much as 17%, the most since December 2024, after the vehicle maker announced a tie-up to produce humanoid robots with a Tokyo-based startup. Fast Retailing shares slipped as much as 3.7%, the most since May 12, after the Uniqlo owner’s 3Q earnings beat was seen as priced in In FX, the dollar dipped 0.1% in a third straight day of losses. Bonds extended a rebound, with the yield on 10-year Treasuries falling two basis point to 4.54%. The yen outperformed major currencies, rising 0.4% after Japanese Finance Minister Satsuki Katayama said the government wants pension funds to increase investment in domestic assets. In rates, treasuries are slightly richer across the curve following similar price action across European bonds with oil prices steady. US yields are 1bp-2bp lower with curve spreads within a basis point of Thursday’s close, 10-year near 4.535% with bunds and gilts in the sector also about 1.5bp richer on the day. During Asia session, yen and JGBs advanced after Japan’s Finance Minister Satsuki Katayama called on pension funds, including the GPIF, to invest in domestic assets. Long-end JGB yields ended more than 10bp lower. US session has no major scheduled events.  IG dollar issuance slate empty so far. Four borrowers priced $2.25b in new US investment-grade bonds Thursday, pushing weekly volume through $51b and more than double forecasts. Issuers paid about 2bps in new issue concessions on deals that were 4.2 times covered. In commodities, Brent crude futures are down 0.5% and around the $76/bbl mark with traders awaiting further directional clues from events in the Middle East. WTI crude oil futures little changed as US and Iran continue talks despite a flare-up in fighting. Precious metals are on the back foot with spot gold and silver down 0.6% and 0.8% respectively. Bitcoin is higher by 1.5%.  The US economic data calendar empty for the session. Next week includes June CPI, PPI data. Fed calendar empty for the session. Next week Federal Reserve Chairman Warsh testifies before the House Financial Services and Senate Banking Committees on its Semi-Annual Monetary Policy Report. Market Snapshot Top Overnight News US-Iran negotiations on a permanent peace deal are continuing, according to an American official, despite two days of clashes that threatened to unravel the ceasefire. BBG Israel shared new intelligence with the U.S. that it said indicated a fresh Iranian plan to kill President Trump, people familiar with the matter said, a finding that would mark an escalation in the war between Washington and Iran. This news that comes just 24 hours after Trump unexpectedly switched back to the old Air Force One for his return flight from the NATO summit in Turkey as a “security precaution” (the New Air Force One doesn’t have the same security features as the old one). Iran for years has vowed openly to retaliate against Trump for the assassination of Qassem Soleimani, who was a top general in the Islamic Revolutionary Guard Corps, in the president’s first term. WSJ  The UAE boosted crude production to an all-time high last month, pumping 4.1 million b/d on average in June. IEA  Global diesel market faces a significant supply crunch as Russia bans exports due to domestic shortages following Ukraine strikes. FT Japan’s Finance Minister, Satsuki Katayama, sparked a jump in the yen on Friday when she said the government would pursue policies to encourage pension funds to buy more Japanese assets. Japan’s biggest public pension fund will likely ignore the call to boost domestic investment, at least in the short run, because of strict rules governing asset allocation and its public mandate. BBG Japan’s producer prices picked up in June to the fastest pace since early 2023, reinforcing the case for the BOJ to keep hiking rates. BBG Taiwan halted trading on its stock exchange and closed schools as Typhoon Bavi approached the island. TSMC postponed its monthly sales disclosure to Monday. BBG South African economic growth is on an upswing as efforts to improve governance and critical infrastructure are lifting bottlenecks that have held it back for years, according to Standard Bank’s chief economist. BBG SemiAnalysis thinks Meta should be talked about alongside OpenAI and Anthropic as the top three frontier AI labs in the world (of the hyperscalers, SemiAnalysis thinks Meta, not Google, has the best chance of catching up with Anthropic and OpenAI). SemiAnalysis, which may or may not have a conflict of interest Trump fired two Democratic members of the US Election Assistance Commission, while the Republican member resigned. Graham Platner’s exit from the Maine Senate race has set off a scramble to find a replacement to take on Republican incumbent Senator Susan Collins, with at least six Democrats entering the field: BBG A more detailed look at global markets courtesy of Newsqauwk Asia-Pac stocks traded entirely in the green, as they followed the tech-led gains seen stateside. Military strikes continued on Thursday, but energy prices and equity markets seemed to have brushed it aside and instead took a stronger liking to President Trump’s comments, in which he said Iran had reached out to the US and wanted to make a deal, easing concerns over a further escalation that could threaten energy infrastructure. To note, the Taiwan markets were closed due to the typhoon, and worries of the typhoon hitting China and Japan. ASX 200 initially opened with modest losses but has since reversed and printed modest gains. Metals & Mining topped the sector pile, cutting 4 consecutive days of losses, while Health Care was the sector laggard. Nikkei 225 gained, with SUMCO leading the way as it benefited from the semiconductor strength stateside. On the earnings front, Seven & I and Fast Retailing both posted strong earnings and raised their FY guidance; however, shares traded lower after highlighting the effects of a weaker yen. KOSPI surged, helped by gains in Samsung Electronics while SK Hynix shares traded choppy ahead of its US ADR listing. The choppiness in SK Hynix comes as investors position themselves for the ADR, with analysts stating that the US ADR may be preferred over its domestic listing, due to US ADRs commonly trading at a premium (typically at a 5-15% premium). Shanghai Comp. and Hang Seng were firmer, with another set of IPOs in Hong Kong, resulting in 15 listings this week. Today, markets were focused on Nexchip Semiconductor. The IPO price was set at HKD 32.30/shr, and shares rose at the open and briefly topped HKD 36/shr but have since come off. Top Asian News Japanese Finance Minister Katayama said they are to pursue steps to promote investment in Japanese assets by GPIF and others. Japanese Finance Minister Katayama does not comment on specific bond yield levels; specific monetary tools are up to the BoJ, closely monitoring economic indicators and market situations. Important that the government position secures market confidence. Will ensure fiscal sustainability to gain market trust. BoJ can adjust monetary policy regardless of what the government said. Predicts gradual increases in interest rates as the government is engaged in a proactive fiscal policy. Want to speed up discussions on expansion of JGB products targeting households. Japan's GPIF spokesperson said they are aware of Finance Minister Katayama's comments but declines to comment. Japan's Economy Minister Kiuchi said the government has consistently communicated its stance of taking policy that heeds to fiscal sustainability. European bourses (STOXX 600 -0.1%) began the session on a weaker footing despite APAC optimism ahead of SK Hynix’s US debut (KOSPI +2.5% at close). Geopolitical newsflow quietened overnight, as such energy benchmarks are off best levels with Brent around USD 75/bbl. IBEX continues to outperform after it slumped earlier in the week (also has more defensive composition), while tech heavy AEX is the worst performer as top constituent ASML looks to SK’s ADR debut. European sectors opened with a positive bias and continue this way. Comms and Travel/Leisure outperform, Tech and Energy are the laggards for the above factors. In terms of individual movers, Infineon (-2.7%) said it is raising prices in some segments; EasyJet (+14%) agreed to a GBP 5.7bln takeover by Apollo at 715p/shr; Vodafone (+11%) French telecom tycoon Niel acquired E&’s stake for a GBP 0.15/shr premium. Top European News UK Chancellor Reeves is to announce a new City "skills compact" that will commit financial firms to retraining thousands of workers for the AI revolution, The Guardian reported. FX G10s are mixed against the Buck. JPY leads after FinMin Katayama touted measures to promote domestic inflows, Kiwi continues to eek gains post-RBNZ as markets look to price a cumulative 50bps tightening by year end and NOK is the worst performer after broadly cool inflation data. USD a touch weaker as JPY firms alongside the tempered recent Gulf updates. Geopolitical newsflow quietened overnight, with energy benchmarks off best levels with Brent around USD 75/bbl, about 5 Bucks off the week’s highs. DXY slipped throughout APAC as the JPY firmed, but found buyers below 21DMA at 100.85 which has proven support in recent sessions. JPY digests updates from FinMin Katayama who said she was to pursue steps to promote investment in Japanese assets by GPIF and others. This, on the face of it, would be a textbook tactic to encourage domestic investment and passively limit outflows, especially with a large composition (50%) of pension funds allocated to foreign investments. Several strategists note this is a positive sign in attempts to shore up the currency; though CapEco said “Much of its domestic bond portfolio is invested passively, and shifting more assets into domestic bonds would come at a sizeable fiscal cost if it requires selling equities”, and others highlight Katayama is not in a position to direct changes, it would be under the jurisdiction of the Labour Ministry. USD/JPY gradually trundled lower from a 162.50 peak, to mark a trough below 161.30 (session low 161.28), with a modest kneejerk lower on not-too-surprising BoJ sources. ING notes the JPY-funded carry keeps risks to the upside for the pair. NOK is the clear underperformer vs. both the USD and SEK after the soft inflation data series. Most metrics cooled beneath expectations, core Y/Y the sole figure rising above consensus, albeit unch. from May. CPI-ATE, the Norges Bank’s preferred gauge of inflation fell was 2.9%, well below the Bank’s estimate of 3.3%, will likely provide conviction for doves with the bank likely to remain on hold in the August meeting; then tighten in September should the next (August) CPI metrics not provide a dovish surprise. NOK/SEK fell from a 0.9940 peak to mark a trough at 0.9882. 8th July low at 0.9861 is the next level below. South Korean Forex Authority said USD/KRW market remains misaligned with economic fundamentals. Fixed Income Overall, fixed benchmarks are firmer in reaction to the modest but increasing pullback seen in the energy space overnight and as JGBs lead on domestic updates. JGBs got to a high of 127.76 in the European morning, continuing the overnight rally after comments from Japanese Finance Minister Katayama, who said that pension funds should be encouraged to invest more in the domestic market. Commentary that underpinned Japanese assets across the board, and sent the 10yr yield lower by around 16bps on the day, down to 2.71% and now essentially flat on the month, reversing from the 2.89% YTD high. Commentary that also lifted peers at the time. While the shift would be a positive for the Japanese market generally, there are a few unknowns, most pertinently being whether Katayama can make such an announcement as the GPIF is under the Labour Ministry, not the Finance Ministry. As such, for FX in particular, there is an argument that Katayama’s commentary is conducting another form of jawboning, and therefore the move may well fade in the days/weeks ahead, unless a relevant official to the GPIF (i.e. Ueno, or PM Takaichi) backs the shift publicly. USTs got to a 109-12 peak in the early morning, as energy hit a low and the JGB-driven move topped out. Since, newsflow has been particularly light with the market essentially waiting for a resumption of negotiations or strikes, though as is often the case we might not get clarity on the next step until the weekend. Bunds followed suit, peaking at 125.74 with gains of around 35 ticks. Specifics limited. Continued focus on the EU funding plans, and the lack of agreement on the next 7yr plan is arguably supporting EGBs for net-contributing nations, as no agreement would see the current EUR 1.4tln figure continue as opposed to the planned uplift to EUR 2tln. Gilts opened lower by a few ticks, before then swiftly moving above the 88.00 mark to a 88.07 peak, in-fitting with the above. Action that leaves it just above Wednesday’s high but someway shy of the 88.93 opening level at the start of the week. Last night the first tally was done for the Labour nominations, and while the count theoretically leaves space for a challenger it is not realistic and therefore Burnham is now formally, for all intents and purposes, the incoming UK PM. Italy sold EUR 7.5bln vs exp. 6.0-7.5bln 3.00% 2029, 3.35% 2033 & 3.95% 2041 BTPs. China's MOF sold 2-year and 3-year bonds. 2-year sold at 1.2305%. 3-year sold at 1.2629%. Australia sold AUD 900mln 1.75% 2032 AGBs: b/c 3.16x (prev. 4.10x), average yield 4.6189% (prev. 4.1987%). Commodities The geopolitical situation appears to have calmed down this morning, with no fresh reports of strikes on Iran/regional neighbours. However, the situation remains tense given some of yesterday’s actions. Iran reported a couple of strikes at two military bases, but US officials denied any involvement of this. Despite the earlier reports, some Iranian officials denied any explosions taking place. Despite the recent flare-up, a US official stated that the US remains committed to a resolution with Iran and technical discussions are ongoing. This, alongside the lack of new strikes overnight has led to a bearish bias in crude benchmarks this morning. Brent Sep’26 (-0.2%) is only mildly lower and trades at the towards the mid-point of a USD 75.36-76.95/bbl range. Some mild downticks were seen in the benchmark after the release of the IEA Oil Market Report. It cut 2026 oil demand, noted that the UAE is upping its supply and oil transits are passing through the Hormuz. Spot gold (-0.6%) trades lower this morning, hovering on either side of the USD 4.1k/oz mark; currently within a USD 4,094-4,134/oz band. The range today is very thin, amidst the lack of pertinent newsflow and fairly steady USD. Elsewhere, base metals hold a negative bias. 3M LME Copper trades within a USD 13,455-13,562/t range. For aluminium, analysts at Morgan Stanley recently stated that they see a smaller supply deficit in 2026, and likely to move into a surplus from 2027. Oman has set its OSP at USD 69.29/bbl for September delivery. IEA OMR: forecasts global oil demand in 2026 to fall by 1.05mln BPD (prev. exp. 1.12mln); global oil demand recovery is under way. Global oil demand estimated at 103.46mln bpd for 2026 and is expected to grow by 2mln BPD in 2027 and reach 105.47mln BPD. Oil supply may expand 7.5mln BPD in 2027 if transits improve. A fire broke out at two oil product storage facilities due to a UAV attack in the Rostov region, according to the governor; fires are being pushed out in Taganrog's Seaport, reported no injuries. Krasnodar task force said a fire has broken out at the Ilsky oil refinery due to the fall of a drone's debris, Interfax reported. QatarEnergy set August Marine Crude OSP at Oman/Dubai -USD 5/bbl; Land Crude OSP at -USD 4.50/bbl, according to a pricing document. China National Summer grain output reached 150.7mln tonnes, +0.7% Y/Y. Trade/Tariffs China's MOFCOM announces a temporary ban on helium exports. US White House announces the adjustment of imports of commercial aircraft, jet engines, and aircraft and engine parts into the US; no immediate tariffs be imposed under section 232 to address the threatened impairment to the national security. Central Banks BoJ reportedly to keep rates unchanged in July but maintain policy guidance and also raise growth outlook, according to sources. PBoC injected CNY 20bln via 7-day reverse repos with rate maintained at 1.40%. PBoC set USD/CNY mid-point at 6.7989 vs exp. 6.7931 (prev. 6.8036); strongest midpoint since February 2023. NBP's Wnorowski said signal about possible motion to cut interest rates in September is premature; do not see space for more than one cut this year. Geopolitics: Middle-East Qatar, Pakistan and other regional mediators are trying to de-escalate tensions between the US and Iran and revive negotiations on a nuclear deal, Axios reported citing sources. A member of the National Security Commission of Iran's parliament said the UAE will pay the price for cooperating with America. A US official said talks with Iran will continue, Fox's Hasnie reported; The administration is still committed to finding a resolution so technical talks continue to prevent Iran from having a nuclear weapon. Iran's attacks on ships in the streets are acts of terrorism. The MoU is performance-based, and Iran's actions constitute failed performance at an unacceptable level. Israel reportedly shared new intelligence with the US that indicated a new Iranian plan to kill US President Trump, WSJ reported citing sources. A US official said the US remains committed to a resolution with Iran and technical discussions are ongoing. Turkey has decided it will not join the Canadian Defence Bank initiative at this point, sources suggest. The Israeli army said "we will continue our operations to eliminate any threat and will not allow Hezbollah to harm us", Al Jazeera reported. Al Jazeera reported that Israeli forces are conducting extensive demolitions in southern Lebanon. Krasnodar task force said a fire has broken out at the Ilsky oil refinery due to the fall of a drone's debris, Interfax reported. Pakistan has begun mediating between Libya's rival eastern and western data centres with the backing of the US and Saudi Arabia, Nikkei reported citing sources. Lebanese media reported of new Israeli drone strikes in southern Lebanon, Tasnim reported. Four Japanese-linked vessels remain in the Persian Gulf, Kyodo reported. Konarak Governor said this area was targeted by enemy fighter jets in two stages on Thursday evening. Geopolitics: Ukraine Ilsky (138k BPD), Russia oil refinery fire has now been extinguished. US Event Calenadar The US economic data calendar empty for the session DB's Jim Reid concludes the overnight wrap I was hoping that by now the latest on the Iranian conflict wouldn’t be the lead story but it has of course returned to the top of the headlines this week. The latest is that Bloomberg reports overnight indicate that “technical talks” continue between US and Iranian officials despite the clashes this week. There were also Bloomberg reports that President Trump and PM Netanyahu spoke Thursday according to the PM’s office. To be fair sentiment turned back more positively late Wednesday night when Trump suggested that the Iranians were desperate for a deal. So markets have generally been more positive since. So for now we can go back to trying to guess whether we’ll wake up to the KOSPI being up or down more than 5%. If you guessed in the positive side this morning you’d be correct as it’s surging +5.11% as I type, after officially entering bear-market territory yesterday. The rally has of course been driven by strong gains in semiconductor stocks with the record-breaking $26.5 billion listing by chipmaker SK Hynix helping to reinforce confidence that the AI investment cycle remains intact. Elsewhere in the region, Hong Kong’s Hang Seng Index (+1.85%) has climbed to its highest level since June 17, while Japan’s Nikkei 225 (+1.77%) is also posting strong gains. The CSI 300 (+0.49%), Shanghai Composite (+0.75%), and S&P/ASX 200 (+0.51%) are also up. US and European futures are down between a tenth and two tenths of a percent though. 10yr USTs are -1.2bps lower trading at 4.54% and oil is fairly flat.   In Japan, long-dated government bond yields are falling and the yen strengthening after Finance Minister Satsuki Katayama indicated that the government intends to encourage pension funds, including the Government Pension Investment Fund (GPIF), to increase allocations to domestic financial assets. The 20-year JGB yield is down -7.8bps at 3.78%, while the 10-year is -8.7bps lower at 2.778%. The Japanese yen (+0.51%) is rallying for a second consecutive session, trading at 161.54 against dollar as we go to print. There is some scepticism here internally as to whether it'll be easy to encourage domestic pension funds to automatically buy more JGBs. The view is that asset allocations decisions are more slow moving and might actually favour equities first. However for now the move is being seen as a sign that action is being considered.   Ahead of all that, markets saw a bit of a relief rally yesterday, thanks to easing geopolitical fears, decent tech headlines, and a respectable batch of data. So collectively, that helped to power bonds and equities on both sides of the Atlantic, particularly as falling oil prices reassured concerns about a fresh surge of inflation. So by the close, that meant the S&P 500 (+0.81%) and Europe’s STOXX 600 (+0.78%) both advanced, whilst yields on 10yr Treasuries (-4.2bps) and bunds (-0.8bps) also fell back.   Those oil price declines followed headlines suggesting that the escalation between the US and Iran might not prove as serious as initially feared. Most notably, sentiment was supported by comments from President Trump late on Wednesday night, that we mentioned yesterday, saying that Iran wanted “to make a deal so badly”. So when US and European markets reopened yesterday, they were buoyed by the fact that Trump was still talking about some kind of agreement. So that supported oil prices lower, with Brent crude down -2.20% on the day to $76.30/bbl. And in turn, that eased fears around inflation, with the 1yr Euro inflation swap (-9.0bps) falling to 2.05%, after rising 27bps on Wednesday. This backdrop meant that investors dialled back their expectations for imminent rate hikes again, particularly in Europe. For instance, the amount of ECB rate hikes priced by December came down -8.5bps on the day to 31bps. And over at the Fed, the probability of a hike at the upcoming July meeting fell back from 31% to 24%. So that provided a decent tailwind for sovereign bonds in turn, with yields on 10yr bunds (-0.8bps), OATs (-7.2bps) and BTPs (-7.0bps) all coming down. Whilst lower oil prices helped sentiment, markets got another boost yesterday from the latest tech headlines, which saw the Philly semiconductor index (+3.06%) post its best daily performance in 3 weeks. That included a very strong gain for Micron (+4.52%), who raised their planned spending on new US plants to $250bn by 2035, which was $50bn on top of previously announced commitments. The rally also saw the SK Hynix ADR officially became the largest foreign company offering as the South Korean chipmaker raised $26.5bn – greater than expected and just ahead of the $25bn previously raised by Alibaba. So that chip rally helped to lift US equities more broadly, with the S&P 500 (+0.81%) recovering after back-to-back declines on Tuesday and Wednesday. The rally was fueled by investors rotating from defensives industries back into growth and cyclical names. Autos (+2.91%), Tech Hardware (+1.99%), Semis, +(1.90%), and Banks (+1.61%) were the best performing S&P 500 industry groups, while Consumer Staples (-2.04%), Food & Bev (-1.77%), and Household Products (-1.58%) lagged. And in Europe, the STOXX 600 (+0.78%) advanced for the first time this week with a similar rotation from defensives into cyclicals. Speaking of tech, there was an interesting acknowledgement of AI-driven inflation from New York Fed President Williams. He spoke about the potential for demand driven by AI to raise inflation, and said if it “creates a sustained impulse to demand relative to supply in inflation, I do think that’s the kind of situation where you don’t look through this”. Meanwhile on inflation more generally, he said that if core PCE were at “two-tenths a month in the second half of this year, that would be consistent with my view of a disinflationary process that’s continuing”. But he also said if it were higher, “ that would be a sign of inflation a bit more persistent.” The other Fed news from yesterday was the release of the leadership teams of the five task forces that Chair Warsh announced to examine the Fed’s current approach and processes. The areas that the Fed are examining are the communications strategy, the use of the balance sheet, the quality and reliance on existing data sources, productivity and jobs, and inflation framework. The teams are mix of former policy makers, academics, and corporate leaders.  Staying on central banks, yesterday also brought the minutes of last month’s ECB meeting, where they hiked rates for the first time since 2023. It spoke of inflation pressures, and said how “Further indirect effects were in the pipeline, pointing to more broadening of inflationary pressures across the economy”. Moreover, there was an acknowledgment that “memories of the 2022 high-inflation episode could make households and firms react more quickly than in the past, increasing the risk that price-setting and wage-bargaining behaviour would adjust.” Interestingly, there was also a discussion about what happened in 2011, when the ECB hiked rates before reversing course shortly after as the sovereign debt crisis became more severe. But the view was there were key differences with that period, including the lack of financial stress. Finally, the latest US data yesterday offered fresh reassurance on the labour market, with the weekly initial jobless claims coming in at 215k in the week ending July 4 (vs. 217k expected). So that took the 4-week moving average down to 218.75k, and so far at least, claims remain well beneath their summer peaks in 2023, 2024 and 2025. However, existing home sales unexpectedly fell in June, falling back to an annualised rate of 4.09m (vs. 4.20m expected). Looking at the day ahead now, and data releases include Italy’s industrial production for May, and Canada’s employment for June. Otherwise, central bank speakers include the ECB’s Vujcic and Stournaras. Tyler Durden Fri, 07/10/2026 - 08:07

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    Futures Flat As Traders Brace For Weekend Iran Escalation US equity futures are flat on the final trading session of the week, with Tech lagging, as traders hold off on big bets ahead of the weekend, with the fragile truce in the Middle East keeping geopolitical risk

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Over the weekend, after exchanges where the US hit bridges and a desalination plant in Iran (reportedly repaired very quickly) and Iran’s response included hitting a much more important desalination and power plant in Kuwait and pounding important US operations in Jordan, the US attacks fell way back one night and CENTCOM and even Trump were quiet.

Some speculated that more Gulf states were denying the US the use of their airspace and the US was having to make a major regrouping. However, the US resumed strikes last night, with the pretext that the US had suffered two more military deaths on top of two just reported.

1 Trump had promised intensified strikes beginning more or less today if Iran did not return to negotiations, as in capitulate. And as many noted, the US had escalated last week, albeit not to the level of attacks during the initial phase of the war, not just with the number of strikes but also the targeting: the aforementioned desalination plant, bridges, too close for comfort to the Bushehr nuclear plant2 and to a nuclear site under development at Darkhovin.

Many have argued that the latest round of strikes look like shaping attacks in preparation for a ground operation, which pretty much everyone with even a modicum of military knowledge sees as insane.3 Daniel Davis has also mentioned in passing that despite all the noise about using ground forces and other signs of a buildup, such as more refueling tankers flying to Jordan, that Trump was shaken by the near-disaster at Isfahan, where a supposed rescue of a downed pilot resulted in the loss of more air assets than in any single engagement since Vietnam.

Many experts have contended that that was an actual operation, a botched attempt to remove some of Iran’s “nuclear dust.” However, Scott Ritter may have squared that circle. See his brief clip starting at 11:55: From a lightly-edited machine transcript: Jawaid: Scott Ritter thinks that Israeli lap dog Trump will soon launch a ground invasion of Iran, but he will fail miserably.

Also, this is something Iran has been wanting Trump to commit to for a long time. Ritter: There’s a a mission called a raid. Um, and I, you know, we already had US troops fighting on the ground. We did a raid to rescue a pilot. We were in limited ground combat operations there.

I think there’s a high potential that the US will conduct a raid here and there because that’s a that’s a a very specific task. A raid is is the only military mission where we plan to retreat. You know, every other military mission there’s no plan. You commit and you go, but a raid is in and out.

So maybe we can do a raid, but the idea that we’re going to land in seize territory, there’s zero chance that will happen because there’s zero chance of success. Now admittedly, if pilot rescue came about as the result of the botched operation in Isfahan, that would be debatable as a raid.

Even though the intent again was to retreat, the US would have had to stage equipment for the removal and transport of nuclear material, so there would be a short-lived occupation of terrain and not just a fast snatch and grab, as with Maduro. Nevertheless, the US military may not be totally suicidal, so the plan may be for a fast landing to inflict some sort of concrete form of damage that cannot be well inflicted from the air and then to decamp.

This segment also includes a very informative explanation of how important the operations in Jordan are to the US, and how the Iran intend is destroy bases so that the US has to retreat to Israel and then Iran will proceed forcefully against the remaining assets there.

We’ll soon turn to updates, but to start with some bigger picture considerations: it is disconcerting to see how many commentators resort to the trope that neither side can prevail on the battlefield, that they will in the end negotiate an outcome. As we pointed out, a study of modern wars found that more than half did not.

The distrust between the two sides, which has now reached the level of mutual loathing as a result of the fast breakdown of the already likely to fail Memorandum of Understanding (MOU), means any “deal” is vanishingly unlikely. Iran knew even before it entered into talks that the US and Israel intended to execute a “mowing the lawn” strategy, of keeping crippling sanctions in place and beating up on Iran every so often to weaken it and hopefully create severe internal divisions that would trigger an overthrow or balkanization.

Even if Iran’s 47 year record of taking severe punishment and surviving says this plot would probably fail, Iran had been preparing since the Iraq War for the US and Israel to launch a major campaign. After the illegal launch, the assassination of a major part of Iran’s leadership, as well as war crimes exemplified by the massacre of school children in Minab, the nation is highly unified around inflicting a decisive defeat on the US, so that it won’t even think about military action against Iran for at least a decade.

We were far from alone in making that case early in the war and Iran’s resolve has only stiffened as it can see how it has weakened the US while Iran has learned from combat and claims to have even bigger inventories of key weapons than it had at the start of the war.

Critically, Iranian leaders have said, bluntly, that negotiating with the US is not just pointless but also demeaning. Consider the germane parts of a recent statement by the Supreme Leader Mojtaba Khamenei,4 as summarized at PressTV: - Leader said the United States had once again violated the memorandum of understanding signed between the presidents of Iran and the US, proving that the signature of the American president is worthless and unreliable.

- He said bullying, hegemonic ambition, and savagery are inseparable characteristics of the United States and that Washington had once again revealed its true, unmasked face to the world. - He described the latest developments – US attacks against southern Iran, mainly targeting the civilian infrastructure – as further evidence of America’s deceitfulness, irrationality, unreliability, and wickedness.

- Leader said the United States is seeking to ignite further war despite facing heavier costs and greater disgrace. - He warned that the Iranian nation and the Resistance Front have unforgettable lessons for the United States, adding that the bravery of Islamic resistance fighters and the courageous people of southern Iran have already demonstrated examples of those lessons.

However, Araghchi subsequently gave an interview which can be read as pushing back against the Supreme Leader:5 Iran’s Foreign Minister Abbas Araghchi says that negotiations with the U.S. should be pursued even if the chances of success are only 10 percent, further highlighting disagreements between Iran’s political and military echelons.

“I am the Foreign Minister for the interests of… pic.twitter.com/uW1DzcfRhG — Ariel Oseran أريئل أوسيران (@ariel_oseran) July 19, 2026 Keep in mind also that China is still bleating about the need to settle the conflict and Pakistan and Qatar (among others) are also pressing for a resumption of the talks, so Araghchi as Foreign Minister has to keep the idea in play, irrespective of whether he privately places much stock in the idea.

6 And there is another way to read Araghchi’s talk: So they wanted to manufacture a clean record of “we exhausted every diplomatic option." Once that record existed, the hardliners with Mojtaba could shut the process down without looking like the ones who refused talks.

Moderates who pushed the channel now own the failure, and… https://t.co/Y63yYJVaEZ — Vonbury Research (@VonburyResearch) July 19, 2026 Kinetic action seems likely to continue to dominate: ADVISOR TO IRANIAN SUPREME LEADER, MOHSEN REZAEI, SAYING: “I declare it is over.

Both negotiation and war are over. If in the next two or three days the Americans continue the war, we will enter a phase of complete offense and destruction.”#Iran #IranWar pic.twitter.com/1M3A1pboH9 — Iran Now – WANA (@WANA_Iran) July 18, 2026 Robert Pape also seems confident that US escalation will continue7.

I found this discussion noteworthy because Andrew Neil strongly resisted the idea that there would be no negotiated ending and also found it inconceivable that Iran could become, as Pape has argued, the fourth world power. In other words, Neil seems to epitomize a set of normally pretty smart people who find it hard to see where the direction of travel is going because those outcomes so conflict with their priors: From a lightly cleaned up machine transcript: Pape: This is not what’s coming in the next few weeks likely.

What’s much more likely is he’s [Trump’s] going to do the close blockade and if he can then use the southern corridor with that close blockade to reopen the Strait, he’ll he’ll be probably satisfied with that. Very unlikely that’s going to work and that’s why you’ve got the 82nd Airborne and the Marines there to push back further.

Now, I’m not saying this is going to work, Andrew…. Neil: So, I’ve got to ask you some questions in this because I’m unclear. Do you think that the of the limited options President Trump now has, that escalation as you describe it is the most likely?

Pape: Yes. Neil: And that escalation will begin with a much more aggressive, more comprehensive a naval blockade of the Strait of Hormuz with the possibility of ground incursion on the northern side of the straight in Iranian territory? Pape: Yes. Yes, and it’s our and and the first part has already started this week.

So, so you’re already seeing in fact last week was the beginning of the air suppression campaign for this week. And as President Trump laid out the bombing schedule last night, the reason he will, if he if this keeps going forward, okay, just keep saying that if, he’s going to want to take out things like electric power and bridges is because he’s going to want to try to suppress as much of Iran’s military defenses as he can as he goes forward here.

And the military is giving him the plans for doing that. One place where I differ with Pape is that he posits that Congress might get out of bed in six months and Do Something to check Trump then. To again invoke Stein’s Law, if something cannot continue, it will stop.

The US and Israel can of course carry on with terrorism within Iran, such as assassinations and cyber attacks. But the level of weapons depletion and on current trajectories, shortly-arriving fuel shortages, seems very likely to put a choke chain on US aggression soon.

From Larry Johnson in The US Faces a Strategic Crisis with Iran…The Rapid Depletion of US Battlefield Missiles:8 The tables below are based on the most recent publicly available analyses from CSIS, the Payne Institute, and major media outlets (as of mid-2026), and provide a current (overly optimistic in my opinon) estimate for US inventory levels of these key weapons systems.

Please note that actual inventories are classified; these are informed estimates derived from DOD budget documents, procurement records, and reported expenditures during Operation Epic Fury (the US-Israeli war with Iran). Air Defense Missiles Anti-Radiation / SEAD Long-Range Strike (Ground & Sea-Launched) Missiles These are not just the numbers currently in the hands of US CENTCOM (i.

e., the US military command in charge of the war against Iran), these are the total numbers available to all of the US military commands. If these missiles are allocated evenly to the other two critical commands — i.e., EUCOM (European Command) and PACOM (Pacific Command) — then you begin to understand the gravity of this deficit.

Let’s take the case of the Tomahawk missile. Let’s assume there are 3,000 left (I believe that is a generous over estimate) and the remaining number are divided evenly among CENTCOM, EUCOM and PACOM… That means each command gets 1,000. Does anyone want to argue that in the event of a hot war with Russia or China that EUCOM and PACOM respectively would be able to sustain combat operations for more than four weeks?

Hell, CENTCOM fired 850 of them during the first four weeks of EPIC FURY. Here’s another major problem: All eight missile systems rely on rare earth elements — there are no exceptions among modern US precision-guided weapons. The dependence is nearly universal because rare earth permanent magnets are irreplaceable for the high-performance actuators, guidance motors, and seeker gimbals that make these weapons accurate.

And who controls the supply chain of these rare earth minerals? China!… The supply chain isn’t just about mining — it’s about processing, separation, and magnet manufacturing, which China controls: - Mining: China ~60% of global rare earth oxide production - Refining/Separation: China ~91% - Sintered NdFeB Magnet Manufacturing: China **~94%** Now to updates.

From Aljazeera’s live feed: - A vessel is on fire in the Strait of Hormuz after being hit by a projectile, forcing the crew to abandon ship. They were later rescued by a tugboat. - One person has been killed and several others wounded after the US military attacked the Iranian city of Tabriz in northwestern Iran.

The entries in the feed include ones describing how Mr. Market is taking cheer from the Iran Foreign Ministry admitting they are getting communiques from intermediaries and reviewing them as if they originated from the US. Recall that the negotiators have often developed ideas and tried to sell both sides on them.

Bloomberg’s Javier Blas, who has been a consistent seller of lower oil prices, is refreshingly precise about Iran not saying either way as to whether the missives were from the US or just the negotiators operating on their own: Iran has received “some proposals” from unspecified mediators regarding the war with the US, Iranian Foreign Ministry Spokesman Esmail Baghaei says in press conference, without elaborating.

— Javier Blas (@JavierBlas) July 20, 2026 Contrast that with the Aljazeera account: Oil prices ease after Iran says US contacts continuing through mediators Oil prices have scaled back their gains after hitting their highest in a month after Iran said diplomatic exchanges with the US are ongoing via mediators despite renewed conflict in the Middle East.

Grr. Another Aljazeera live feed entry: Iran ‘counting down the minutes’ for US ground invasion [Today’s Iran war post launched more or less complete. I will be off duty for a while. If there are any updates, they will come in the comment section later] Foreign Ministry spokesperson Esmaeil Baghaei says the United States will face “consequences of any adventure” to seize Kharg Island in southern Iran.

He added there are people in Iran’s leadership “counting down the minutes to welcome” US forces in any ground invasion. Kharg is the heart of Iran’s oil industry. It sits 55km (34 miles) off Iran’s coast in Bushehr province. President Trump has repeatedly threatened to seize the territory during the war.

A raid on Kharg could fit Ritter’s raid scenario, with the US busting things up and then leaving.9 But experts have pointed out that Iran has at least four other export routes. Kharg is the most efficient but losing it while being repaired would be inconvenient as opposed to a fatal blow.

From Bloomberg’s landing page: From US Bombs Iran for Ninth Day as Standoff Over Hormuz Deepens: The US conducted a ninth straight day of airstrikes on Iran, trying to force the Islamic Republic to stop shipping attacks and reopen the Strait of Hormuz.

The American military bombed military targets and communications networks in a three-hour operation ending around 5:30 a.m. Iranian time on Monday. Iran continued to attack US bases in the likes of Kuwait, Jordan, Bahrain and Iraq. The standoff shows no sign of easing, with Iran refusing to relent over Hormuz and insisting it has a right to manage traffic through the waterway.

Energy prices have jumped on the worsening hostilities. Brent crude oil rose to above $90 a barrel for the first time in more than five weeks in early trading on Monday. US gasoline prices climbed back over the $4-a-gallon mark, potentially hurting President Donald Trump and his Republican party ahead of midterm elections in November… Hormuz Shipping Traffic Slumps as US-Iran Hostilities Worsen The tit-for-tat attacks are getting deadlier….

Shipping volumes have slumped and the number of tankers and other vessels going through Hormuz is roughly down to the same level from the height of the conflict in March and early April… US President Donald Trump warned Iran last week he’d escalate airstrikes and widen the scope of targets until it backed down… Kuwait continues to experience some of the worst attacks from Iran.

Over the weekend, Kuwait’s main state energy company said an unspecified site sustained “significant material losses,” causing its evacuation and a number of injuries, while two power and desalination plants have been hit in recent days. And from Hormuz Traffic Near Standstill as US-Iran Hostilities Escalate: - Visible traffic through the Strait of Hormuz appeared at a near standstill Monday after Iran targeted vessels in the narrow waterway.

- A Marshall Islands-flagged bulk carrier and a liquefied petroleum gas carrier appeared to approach the strait, with the bulk carrier turning off its transponder while approaching. - The targeting of vessels will likely raise fresh concerns over the safety of ships transiting Hormuz, which could deepen disruptions to energy flows from the Persian Gulf to global customers.

Indirectly importance of US operations in Jordan, the lead story in the Wall Street Journal is Jordan Becomes New Flashpoint in U.S.-Iran War as Troop Deaths Rise. But it fails to set forth any of the juicy details that Janta Ka presents. This is the thin strategic gruel offered: For years, Jordan sought to play down its close military and intelligence cooperation with the U.

S. The U.S. aircraft that carried out strikes on Islamic State from a base in Jordan during the American war with the militants didn’t advertise the country they were operating from. But Jordan’s role is now becoming too prominent to obscure. Jordan has become an attractive location for U.

S. armed forces since it is among the most permissive in the Arab world when it comes to allowing the U.S. to operate from its bases. A bit more on Jordan: The view from Tehran. “The increased focus on Jordan may serve as part of Iran’s preparation and testing of operational concepts for more intense and precise strikes against Israel in later stages of the conflict.

Qatar and Saudi Arabia—have at times sought to impose limits… — Policy Tensor (@policytensor) July 20, 2026 By contrast, the House of Saud published a remarkably revealing document (hat tip Eugene Linden), Iran Struck Prince Sultan and No One Was Required to Say So: Iranian ballistic missiles struck Prince Sultan Air Base in Al-Kharj on July 18, wounding twelve US service members — two critically — and hitting KC-135 Stratotankers on the flight line while a second rotation was still climbing out.

Saudi Arabia’s Civil Defense Authority cleared the sirens six minutes later without naming the weapon, the origin, or the damage, and neither Riyadh nor Washington has issued an official statement since. The strike was the first direct Iranian attack on Saudi territory in approximately four months, a gap during which the IRGC struck Kuwait, Bahrain, Jordan, Qatar, and the UAE while conspicuously sparing the Kingdom.

Its return to PSAB — confirmed by a US official to Axios, corroborated by satellite imagery, and detailed by Air & Space Forces Magazine — ended whatever territorial immunity Saudi Arabia believed it still possessed. But the more consequential development is not the strike itself.

It is the silence that followed, and the institutional architecture that sustains it: a three-party managed ambiguity in which Iran, Saudi Arabia, and CENTCOM each benefit from leaving the damage question unanswered, because answering it would force a public reckoning with a PAC-3 reserve that is approaching a ceiling none of them can afford to name.

The strike was confirmed by a US official cited by Axios as “the first time the Islamic Republic has directly attacked the kingdom in four months” — a description that the State Department, the Pentagon, and the Saudi Ministry of Defence have each declined to repeat on the record.

Air & Space Forces Magazine, drawing on multiple US military sources, reported at least twelve wounded and multiple Stratotankers damaged on the tarmac. Open-source satellite imagery corroborated the impact site within the base perimeter. Iran’s state broadcaster supplied what no government would.

The missiles were launched “moments after American refueling planes took off,” a detail that only makes sense if the IRGC had real-time ISR coverage of PSAB’s tanker rotation schedule. The aircraft hit were those that remained on the flight line after the airborne pair departed — the timing was deliberate, and the targeting message was not about maximising destruction but about demonstrating that PSAB’s daily operational patterns are watched, clocked, and within reach….

Riyadh cannot confirm the strike without confronting two questions it has spent the war avoiding. The first is defensive: if Iranian missiles hit PSAB and wounded US personnel, the Sakhir Declaration — the mutual defence framework Saudi Arabia negotiated with Washington — becomes the operative instrument, and invoking it requires publicly admitting what the Arab Center DC described as the core strategic dilemma: “the PAC-3 architecture is functionally exhausted.

” The second is economic. Aramco’s August Arab Light OSP already dropped $11 month-on-month to $1.50 per barrel below Oman/Dubai, the largest such cut in over two decades and the lowest since June 2020. Confirming that Iranian ballistic missiles are landing on military installations 77 kilometres south of the capital forces a sovereign-risk reassessment that Riyadh’s fiscal position — a Q1 deficit of SAR 125.

7 billion, with Aramco’s free cash flow at 0.85 times its quarterly dividend — is not structured to absorb…. Washington faces a different but parallel constraint. Confirming the strike means confirming that 2,300 US service members at PSAB are taking casualties at a base where 43 US warplanes have been grounded since Saudi Arabia’s Operation Project Freedom in May 2026.

CENTCOM cannot describe a defensive engagement at PSAB without also describing the legal anomaly: the 1977 USMTM memorandum governing US presence is not a Status of Forces Agreement, and Project Freedom severed the operational relationship between American air power and Saudi host-nation authority.

An official statement would invite the Congressional question that the Pentagon’s communications strategy is built to defer: why are American troops still at a base where their aircraft have been grounded by the host nation, absorbing Iranian fire under a legal framework that was designed for peacetime advisory missions?

Please read this article in full. It contains remarkable operational detail. It is over my pay grade as to why it was published, but it seems to suggest considerable unhappiness at Riyadh. Due to the length of this post, we have skipped over the fact that Ansar Allah seems just about to threaten or actually close the Bab el-Mandeb strait: 🚨 BREAKING 🇾🇪 YEMEN’S HOUTHI FORCES WILL MAKE A “HUGE” ANNOUNCEMENT TODAY AT 8:30 AM ET.

REPORTS EXPECT THEM TO ANNOUNCE A BLOCKADE OF THE BAB EL-MANDEB STRAIT. TOGETHER WITH THE STRAIT OF HORMUZ, THESE TWO CHOKEPOINTS HANDLE OVER 25% OF GLOBAL SEABORNE OIL TRADE. IF TRUE,… pic.twitter.com/yjavHpPKOi — Wimar.X (@DefiWimar) July 20, 2026 This does not look terribly negotiation-receptive.

And some additional sightings from Twitter: Israelis have never felt less secure. 64% are unhappy with how the endless wars have been run. 73% are upset at how there has been no real investigation of October 7. 73% of the public also feel the government has not dealt well with the rise in crime.

No one wins from these… https://t.co/4OjhLUD14O — Shaiel Ben-Ephraim (@academic_la) July 19, 2026 These remarks would seem to negate happy thinking about negotiations: ⚡️⭕️ Iran's Foreign Ministry spokesperson Esmaeil Baghaei says Tehran is determined to exercise sovereignty over the Strait of Hormuz through measures already taken, and states the US failed to fulfill its commitments under a memorandum of understanding, so Iran will not fulfill… — Middle East Observer (@ME_Observer_) July 20, 2026 The average price for a gallon of gas hit $4, the second time it has reached that benchmark since the war in Iran disrupted global oil supplies https://t.

co/Cg8rE3XnJ7 pic.twitter.com/3UqHfwU4sc — CNN (@CNN) July 20, 2026 Done for today! See you tomorrow! ____ 1 What kind of admission of weakness is this? Part of the job description of a service member is that they may wind up dying for their country.

Admittedly, the US is widely suspected of suffering a much higher body count and covering that up. But this show of extreme sensitivity to losses again shows the US has a glass jaw. 2 Nima also discusses at some length at the top of a new talk with Larry Johnson why they look misguided.

He knows Bandar Abbas well, which is where the US has been hitting bridges so as to isolate it. Nima explains and even shows pictures that the bridges exist only to cope with seasonal floods for a few months a year. Those sluices are dry now, so Bandar Abbas is easily accessible by all sorts of routes.

3 🚨 BREAKING: Russia has evacuated 198 of its personnel from the Bushehr Nuclear Power Plant in Iran. It is believed that the plant could be targeted again. pic.twitter.com/lPoQB05qgo — GBC (@GBC_Press) July 17, 2026 4 A new trope in the US-backing commentary community is to depict the new Supreme Leader as a figurehead, which is easy to make stick given his lack of public appearances (I suspect that among other things, he is having facial reconstruction; that can take an extremely long time since procedures are done serially with healing time in between).

I believe it was on a recent Dialogue Works talk where Professor Marandi debunked one popular claim, that he IRGC was operating on its own authority. Professor Marandi described the governing structure and said the military (both the regular forces and the Guards) needed approval of the Supreme Leader for its operations.

Having said that, I have commented that Iran seems to have a Japanese-style decision-making structure, as in more bottoms-up than the West. That results in more time to make decisions but much more internal cohesion when they are reached, since those at lower levels would be able to voice concerns and make suggestions.

Upon reflection, this would make sense given that Iran adopted its “mosaic” structure of extreme decentralization so as to allow it to function well even when the leadership was killed or incommunicado, as we saw at the onset of the current conflict.

In the Japanese model, decisions are effectively made at the senior-middle level ranks, which does tend result in the board and CEO being ceremonial. But the top level can and does say no, or effectively does so by asking probing questions and sending the matter back down the chain for further study and perhaps some revision.

I have been involved in decisions in Japan where the board and CEO were highly engaged, and these were ones that were of critical strategic importance. 5 DropSite has a longer recap of Araghchi’s remarks: ⭕️ Iran FM Araghchi: Wars End Either Through Total Victory or Negotiations… Foreign Minister Abbas Araghchi: 🔹 A war must be ended precisely at the point when you hold the upper hand on the battlefield.

Ending a war is possible either through total military victory or… pic.twitter.com/kHeYhShsXC — Drop Site (@DropSiteNews) July 20, 2026 IMHO his analysis is wrong-headed. As indicated above, a bit over half the modern wars do not end with a negotiated settlement.

And it is a false dichotomy to say that to win, Iran must conquer the US and Israel. FFS, please explain Vietnam. Bad logistics and depleting weapons mean that ex nukes, the US cannot win against Iran. The question is how long it takes and how much damage is done not just to Iran but also the world economy.

Keep in mind the intermediaries are still busy but motion is not progress: #Iran's Foreign Ministry Spokesperson has confirmed that Tehran has received "ideas and proposals" from mediators. He declined to provide any further details regarding the specifics of the mediation efforts.

pic.twitter.com/8Pzs25eauc — Iran Nuances (@IranNuances) July 20, 2026 6 A memorable scene in the Daniel Ellsberg memoir Secrets is when Ellsberg, widely seen as the top US expert on Vietnam, briefed McNamara in a helicopter about how badly things were going.

McNamara said, “Just as I suspected,” and then upon landing updated the press on the great progress the US was making. 7 It has taken me too long to see why Pape often acts as if he is speaking to children or the stoopid. Making this his normal manner of presentation means that when he actually is having to speak to someone who is being stoopid, they won’t take offense.

8 However, to quibble with Johnson on another matter: he has been saying, as he does in the talk linked in Footnote 2 above, that the Iran attacks on a former US base in Syria, Al Tanf, were pointless because the base had been vacated for years. Vanessa Beeley, who has spent a lot of time on the ground in Syria and still has contacts there, begs to differ.

She says the base was recently restored to service. From Why did Iran target the US Occupation base at Al Tanf, Syria? On Friday 17th July, Iran carried out an extensive attack on the US occupation base at Al Tanf in Syria. A drone and missile strike targeted a US Special Operations Command base in south-eastern Syria..

the first strike on Syrian territory since the toppling of the former government in December 2024. In a statement, the IRGC said its aerospace forces conducted what it described as the 11th phase of “Operation Nasr-2,” targeting the strategically located base near Syria’s borders with Iraq and Jordan.

The IRGC further claimed the attack destroyed a radar installation and several U.S. military helicopters, while alleging that many American personnel were killed. This strike occurred as the build up of both Turkish and HTS military forces increases inside Syria, along the border with Lebanon and in the coastal region to the north of Lebanon.

I have been reporting on this here and here. Syrian sources provided more detail on the attack: Despite previous reports of an almost total evacuation of the Al Tanf base, located on the borders of Syria, Iraq and Jordan, almost 5 months ago – the intensity of the strikes suggested a shift in the site’s operational status.

This was not an empty base, in fact, according to sources, the IRGC’s tracking systems and human intelligence in the region detected U.S. forces airdropping “Special Forces” units into the base approximately two weeks before the attack. Analysis would suggest that the purpose of these drops might be to prepare for a ground incursion across Iraqi territory (Sulaymaniyah Axis) in coordination with the local Kurdish separatist factions in Iraq.

One military analyst told me: The attack reflects the operator’s ability to breach the secrecy surrounding U.S. movements and to convert radio and visual data into precise target coordinates. According to reports from inside Syria, the strikes inflicted direct damage on the base’s newly constructed infrastructure, neutralised the US elite combat force and derailed the Iraq-Axis operation against Iran.

Of course, US media will not report on the planned operations or on the number of casualties – such a critical security breach and the significant scale of damage, as reported, will not be revealed. 9 Maybe mines?

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- Vessel traffic through the Strait of Hormuz has slumped since U.S. President Donald Trump's blockade took effect last week. - Crossings through the Strait have fallen sharply across multiple shipping datasets with renewed U.S. strikes on Iran. Vessel traffic through the Strait of Hormuz has slumped since U.

S. President Donald Trump's blockade took effect last week, with shipowners increasingly avoiding one of the world's most important energy corridors as fighting between the U.S. and Iran intensifies. Crossings through the Strait have fallen sharply across multiple shipping datasets with renewed U.

S. strikes on Iran, Tehran's declaration of a blanket ban on maritime traffic and fresh attacks on commercial vessels has prompted operators to reassess the risks of entering the Gulf. Lloyd's List Intelligence recorded just 53 vessel transits in the week through July 20, down 66% from 157 the previous week.

Tanker and gas carrier movements, which are the ships responsible for transporting most Gulf crude oil and liquefied natural gas, dropped to 30 crossings from 90. Kpler data similarly show activity deteriorating almost immediately after the blockade began.

Daily crossings, which had averaged more than 20 vessels before July 15, fell to 16 that day before dropping to single digits on July 16. Traffic remained subdued through the rest of the week, with only sporadic recoveries. The latest slowdown reverses weeks of gradual normalization after the mid-June ceasefire had encouraged some shipowners to resume Gulf voyages.

Instead, the renewed fighting has once again nearly emptied the strategic waterway that carries roughly a fifth of global oil consumption. "Things have slowed down significantly since tensions reignited," said Bridget Diakun, senior risk and compliance analyst at Lloyd's List Intelligence.

"That's not surprising - people pull back and reassess, as you'd expect." Traffic has not disappeared altogether, however. "Every single person has a different risk appetite," Diakun said. "We're still seeing tankers crossing in and out, it hasn't ground to a complete halt.

" Rather than recovering steadily, vessel movements are likely to continue coming "in ebbs and flows" as shipowners seize brief windows of perceived safety before pulling back again whenever tensions escalate, she said. S&P Global data painted a similar picture.

Just 40 vessels transited the strait between July 17 and July 19, averaging roughly 13 crossings a day, while weekly traffic through July 19 fell almost 50% from the previous week. Commercial ships still accounted for more than 70% of traffic over the period, although only about one-third were assessed as compliant with maritime restrictions.

Iran-linked and sanctioned vessels continued to dominate many movements, suggesting mainstream international shipowners remain reluctant to return. "The latest escalation shows how expectations of a rapid opening of the Strait were premature," said Saul Kavonic, head of energy research at MST Marquee.

"The hostilities and reimposed blockade set the conflict back on an escalatory trajectory," he said, adding that flows through Hormuz had dropped to around 15% of pre-war levels. Oil could retest $100 a barrel if the current intensity of fighting persists for several weeks or if regional energy infrastructure comes under attack, he told CNBC via email.

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The UK Maritime Trade Operations center reported that a tanker was struck by an unknown projectile in the Strait of Hormuz early Tuesday. Two additional vessels were reported attacked in the area within the past day, with Iran's Revolutionary Guard claiming responsibility for those incidents.

The United States military stated it conducted strikes targeting Iranian capabilities used against commercial shipping in the strait.

Location: Strait of Hormuz
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The US and Israel conducted strikes on Iranian targets beginning in February, after which Iran closed the Strait of Hormuz and carried out strikes on sites across the region, including Dubai. Following the collapse of a short-term ceasefire, US strikes on Iranian sites continued for at least nine days.

The UK Foreign, Commonwealth and Development Office has not altered its guidance for the UAE since removing the "all but essential travel" advisory on 18 June and states that the situation remains unpredictable.

Location: Dubai