The US Treasury announces that it's revoking an Iran-related licence. The moves unwinds the sanctions removal from June 21.
An official cited by Reuters says that US negotiators continue to work in good fath but also that Iran's actions in the Strait of Hormuz were wholly unacceptable and will be met with consequences.
Are these all the consequences or will there be more?
WTI is now up more than 3% and extended gains by 20 cents on this announcement. It has continued to climb afterwards and is up $3.50 to $72.04 after trading as low as $68.58 earlier.
The market is fearing this could flare up the war and lead to more inflation pressure. US 10-year yields are up 6.2 bps to 4.54% while 2-year yields are up 5.7 bps to 4.18%.
The equity market has mostly taken it in stride with the S&P 500 down 0.5%, around where it was pre-announcement. Stocks are mostly focused on AI and the chip trade instead.
Gold and silver are losers though, as they have been since the war started. Gold is down $52 to $4111 just as it started to look this week like it could start to stage a recovery. Silver is down 3.2% today.
The peace between the US and Iran has resulted in many flare ups and progress on negotiating and end to the war has been slow. Iran repeatedly highlights that it's impossible to trust the US and Israel's Netanyahu today said he had doubts about any peace. The drop in oil prices since the peak of the war is also potential problem as it may give Trump the idea that he can restart fighting. In turn, Iran may also want to press its luck with ships still largely excluded from Hormuz and many unwilling to make the return trip and risk been stranded once again.
