WORLD
The die has been cast. US President Trump in a TV address from the White House announced what we expected. He decided on pulling the States out of the “defective” international 2015 Iran nuclear Deal (JCPOA). His decision sends oil prices soar. He will reimpose the highest level of economic sanctions against Iran, with immediate effect.
The US President ignored pleas by the European allies to preserve the deal and Iran warnings that US would regret its decision to exit the deal. Trump characterized Iranian regime “the leading state sponsor of terror”.
Statement on the Iran Nuclear Deal: https://t.co/O3SpryCKkc
— Donald J. Trump (@realDonaldTrump) May 8, 2018
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Iranian President Rouhani said the US failed to comply with its international commitments under JCPOA. He stressed that the agreement was a multilateral international agreement. He added that Iran intends to remain a part of the nuclear deal.
France, Germany and the United Kingdom expressed “regret and concern” over Trump’s decision. However, they intend to preserve the 2015 agreement and they invited Iran to continue implementing the deal.
On the part of Russia, its foreign ministry said the decision was “deeply disappointing”.
The 2015 agreement lifted sanctions on Iran in exchange for Tehran limiting its nuclear program. Right after Trump’s announcement Barack Obama, who helped to work out this agreement, released a statement calling Trump’s decision “a serious mistake”.
Syrian state media accused Israel of attacking Damascus shortly after U.S. announced leaving Iran deal. Israeli military said that they identified Iranian “irregular activity” in Syria.
The leaders of China, South Korea and Japan met in Tokyo on Wednesday highlighting unity. It was another effort to push North Korea to give up its nuclear weapons. The three-way summit was last held in Seoul in 2015 focusing on the following:
- the historic meeting between the two Koreas leaders,
- the upcoming summit between US Trump and North Korea Kim Jong Un, and
- the economic situation with a view to trade talks between China and US.
MARKETS: focus on oil prices
US Dollar is firmer, with US yields rising. The greenback rose to a six-day high against the yen, which edged near its three-month high of 110.05 yen. It was marginally higher against a basket of major currencies, following Trump’s decision on Iran Deal. US 10-year Treasury yield busts back above 3.0%.
Japanese Yen falls as Fed boosts global rates, while US Treasury yields rose over 3%.
The risk-sensitive Australian Dollar declined further, touching an 11-month low, due to increase of US yields. New Zealand Dollar was slightly changed.
EURO is still under pressure because of weak economic indicators amid concerns over Iran. The common currency fell to a new 2018 low after its decline for more than 4% in the past three weeks.
Sterling fell again on Wednesday ahead of BoE Monetary Policy Committee’s decision on interest rate policy later this week.
Gold fell as US dollar rally continues, recording thus losses for a 3rd consecutive week.
Oil prices jump more than 2%, to their highest since November 2014, as a result of Trump’s decision to reinstate sanctions against Tehran.
Sources: Reuters, BBC, CNN Politics
PLEASE NOTE The information above is not investment advice.