Closing post
Time for a recap.
Donald Trump has turned up the temperature in his trade war, by criticizing the European Union and claiming Japan was being “tough” in negotiations.
Trump claimed that the EU was failing to offer the US a favourable deal, telling reporters:
“We’re talking, but I don’t feel that they’re offering a fair deal yet.
They’re either going to make a good deal, or they’ll just pay whatever we say they have to pay.”
Speaking after leading the G7 leaders’ meeting early, Trump also indicated talks with Tokyo were challenging, saying:
“They’re tough, the Japanese are tough, but ultimately you have to understand we’re just going to send a letter saying ‘this is what you’re going to pay, otherwise you don’t have to do business with us’. But there’s a chance.”
The White House has until 8 July to reach trade deals before its 90-day tariff pause ends.
Trade data from Ireland has shown how pharmaceuticals exports surged this year, in an attempt to front-run new tariffs.
While US retail sales fell in May.
Rachel Reeves has argued that the UK is an “oasis of stability” at a time of global political and economic turmoil.
“In the age of insecurity we live in today, I hope that people are increasingly looking at Britain and seeing an oasis of stability where we have a sustainable politics, a stable economy and also tough, robust fiscal rules.”
She was speaking just hours after Keir Starmer and president Trump signed off a UK-US trade deal at the G7 summit in Canada.
The Israel-Iran crisis has gripped markets again today.
Shares fell across Europe, and on Wall Street, while the oil price is now up almost 3% today.
The cost of shipping oil from the Middle East to Asia has jumped in recent days….
…as has the cost of insuring shipping in the region.
Raphael Olszyna-Marzys, international economist at J. Safra Sarasin Sustainable Asset Management, says:
The Israel-Iran military conflict has pushed oil prices higher, though markets doubt that it will spark a global economic shock. The main risk for the world economy lies in a potential oil supply disruption that could drive prices sharply higher.
Yet the oil market is currently not tight. A severe escalation, such as Iran targeting Gulf infrastructure or blocking the Strait of Hormuz, remains unlikely at this stage. Still, geopolitical uncertainty is likely to keep a risk premium embedded in oil prices, particularly as Israel appears set on inflicting long-lasting damage on Iran’s nuclear programme, a move that may not be feasible without America’s backing.
And.. the UK government will not be recommended to turn water companies into not-for-profit companies under its “root and branch review” of the sector, review author Sir Jon Cunliffe has said, disappointing campaigners.
Updated
It was also a day of losses on other European exchange.
Germany’s DAX fell by 1%, France’s CAC lost 0.75%, Italy’s FTSE MIB shed 1.36% and Spain’s IBEX closed 1.4% lower.
The Israel-Iran conflict continues to occupy investors’ minds, but hasn’t (yet) provoked a severe reaction.
City consultancy Capital Economics say:
Despite the further escalation in the Israel-Iran conflict over the weekend, the impact on major financial markets has remained relatively limited. Unless there is actual (not just feared) disruption to energy export infrastructure, the economic and financial impact of the conflict globally will probably remain limited.
