Trump blasts Fed for blowing US recovery; German business confidence slides – as it happened
Rolling coverage of the latest economic and financial news
- Trump attacks Federal Reserve
- IFO: German business confidence falters
- Oil hits three-week high as Iran tensions build
- Bitcoin rally pushes cryptocurrency over $11,000
9.04pm BST
And finally.... the US stock market had closed for the day. But there's not much excitement on Wall Street.
The Dow Jones ended the day up a meagre 11 points, or 0.04% (squint and you miss it), while the S&P 500 and the Nasdaq fell around 0.2% each.
8.56pm BST
Some experts are suggesting that America's new sanctions on Iran's supreme leader, Ayatollah Ali Khamenei, and eight senior military commanders are more symbolic than practical.
Here's Bloomberg's take:
The penalties won't have a significant impact on a country that's already in recession and facing heavy sanctions from the U.S. Still, the new restrictions serve as symbolic reprimand for the attacks, according to former Treasury officials.
"It will have an effect because it will annoy the Iranians and make negotiations hard to pull off if the supreme leader is sanctioned," said Brian O'Toole, a senior fellow at the Atlantic Council who previously worked in the U.S. Treasury Department's sanctions unit.
7.15pm BST
Donald Trump's attack on the "stubborn, childish" Federal Reserve is weighing on the US dollar.
The greenback has dropped by 0.2% against a basket of currencies, nudging the euro up to $1.139.
7.12pm BST
The oil price has dipped back in late trading - perhaps traders are relieved that America has only hit Iran with sanctions, not military action.
Brent crude (sourced from the North Sea) is down 0.9% at $64.64 per barrel). US crude is flat at $57.50 per barrel.
6.16pm BST
Here's the executive order against Iran's supreme leader, Ayatollah Ali Khamenei, and those in his office.
BREAKING: US Treasury Sanctions 8 #Iran IRGC Commanders after Trump order targeting Supreme Leader Khamenei + circle. Statement: pic.twitter.com/MOLZSoJT82
Pres signs and displays Executive Order for new financial sanctions targeting Supreme Leader & other officials in Iran. Says the Supreme Leader is the one "ultimately responsible for the hostile conduct" of Iran's regime. Pres calls sanction "a strong and proportionate response." pic.twitter.com/8x7kUaV1BB
5.38pm BST
Wall Street is taking the new Iranian sanctions in its stride.
The Dow is still positive, up 48 points at 26,767 points, as New York traders grab lunch.
5.19pm BST
President Trump has now signed an executive order in the Oval Office that he said will deny Iran's supreme leader and others access to financial instruments.
Trump told reporters:
"We do not seek conflict with Iran or any other country.
I can only tell you we cannot ever let Iran have a nuclear weapon.
"I think a lot of restraint has been shown by us but that doesn't mean we're going to show it in the future."
5.07pm BST
It's official: America is imposing new sanctions on Iran, which target Tehran's supreme leader, and top officials.
Mark Knoller of CBS has the details:
.@POTUS summons press pool to Oval Office as he signs order imposing new "hard hitting" sanction on Iran, to deny Supreme Leader and other Iranian officials access to financial instruments within US jurisdiction. Says US will continue to increase pressure on Iran regime.
Pres Trump reiterates he doesn't seek conflict with Iran, but remains determined that Iran never acquire nuclear weapons. "I think a lot of restraint has been shown by us but that doesn't mean we're going to show it in the future," Trump said, per pool reporter @jfritze.
Asked if the new sanctions on Iran were a response to the drone shootdown, he said "you could problaby add that into this" but added, "Ttis was something that was going to happen anyway." pic.twitter.com/WWOMXscbPm
4.51pm BST
In the City, the FTSE 100 index of top blue-chip shares has closed just 9 points higher at 7,416.
It was a largely subdued day, with the weak German business confidence data hitting sentiment.
4.49pm BST
More (sceptical) reaction:
There is no evidence whatsoever to suggest GDP would have gotten close to the 4s or 5s. Also the market rallied hard this month because the Fed signaled that it is likely to cut rates in July. https://t.co/V8lzY3qV8O
3.55pm BST
A quick recap:
President Donald Trump has fired another salvo of criticism at America's central bankers, claiming they have damaged stock prices and economic growth.
"Think of what it could have been if the Fed had gotten it right."
Related: US proposes tanker protection force in wake of Gulf attacks
3.39pm BST
Donald Trump's attack on the Federal Reserve today is just the "latest diatribe" in "long-running attack" against the central bank
He has over the past year called the central bank his "biggest threat" and said he was "not even a little bit happy" with chairman Jay Powell.
Earlier this month, he said the Fed was being "very, very disruptive" by raising interest rates too fast and giving China an edge in trade negotiations as a result.
Trump says Fed 'doesn't know what it is doing' https://t.co/uHNTc3S7F5 via @financialtimes
3.35pm BST
Britain and America's stock markets remain "blandly positive this Monday despite Trump's inflammatory remarks regarding both the Fed and the Strait of Hormuz", comments Connor Campbell of City firm SpreadEx.
3.09pm BST
Donald Trump has also won a legal battle over his steel tariffs, although it's not the end of the matter.
Supreme Court judges have turned down a challenge from US companies who said they were suffering higher prices and "ongoing harm" because of the tariff regime (which makes imports of steel more expensive).
The Supreme Court is rejecting an early challenge to President Donald Trump's authority to impose tariffs on imported steel based on national security concerns.
The justices did not comment on Monday in leaving in place a decision by the Court of International Trade that ruled against steel importers and other users of imported steel who challenged the 25% tariff on steel that Trump imposed in 2018.
2.54pm BST
Donald Trump is right about one thing, though - this has been a vintage month for the stock market.
The Dow Jones is up nearly 8% this month, which the president called "one of the best" June's in US history. It's actually the best in over 80 years, since June 1938, when the Dow surged by an astonishing 24.3%.
The rally for equities has been partly supported by the Fed, which concluded its Wednesday rate-setting meeting by signaling a willingness too trim rates as soon as the end of the July 30-31 gathering to curb the effects of tariff clashes between the U.S. and international trade partners, notably China, that have roiled global economies and threaten to disrupt global supply chains.
2.45pm BST
Ding ding! The New York stock market is open, and shares are rising despite geopolitical tensions in the Gulf.
Could we see all time highs today? $SPX pic.twitter.com/yujmjpp5Y6
2.35pm BST
Donald Trump's tweetstorm failed to address the fact that his trade dispute with China has been weighing on markets for some time.
Rupert Thompson, head of research at Kingswood, points out that investors are hoping for a breakthrough at the G20 meeting of world leaders on Friday and Saturday.
The meeting of Presidents Xi and Trump at the G20 gathering later this week will be critical.
Most likely, Trump will back away to some extent from the sharp increase in tariffs planned for early July. But a full-blown trade deal looks very unlikely. With equities riding high, the pressure on Trump to reach an early deal has been reduced.
2.26pm BST
One of the president's top advisors, Kellyanne Conway, has been discussing Iran at the White House:
At WH driveway gaggle, @KellyannePolls says new sanctiions against Iran are coming, yet @POTUS doesn't want war & wants Iran to come to the negotiating table. She says he won't allow Iran to engage in nuclear blackmail, disrupt global oil markets or terrorize its own people. pic.twitter.com/lebT6BnqVb
1.39pm BST
Donald Trump is now turning his attention to America's central bankers, accusing them of incompetence.
In another Twitter blast from the White House, Trump claims the Fed has hurt US growth by leaving interest rates too high.
Despite a Federal Reserve that doesn't know what it is doing - raised rates far to fast (very low inflation, other parts of world slowing, lowering & easing) & did large scale tightening, $50 Billion/month, we are on course to have one of the best Months of June in U.S. history..
....Think of what it could have been if the Fed had gotten it right. Thousands of points higher on the Dow, and GDP in the 4's or even 5's. Now they stick, like a stubborn child, when we need rates cuts, & easing, to make up for what other countries are doing against us. Blew it!
1.33pm BST
Does Donald Trump really want Chinese and Japanese warships cruising around the Persian Gulf? It's only recently they were engaged in cat-and-mouse manoeuvres around the Senkaku Islands.....
Doug Saunders of the Globe and Mail points out that Japan's navy isn't allowed to head off into international action anyway.
In which the US president asked China and Japan to establish a large-scale military presence in the Middle East, and Japan to turn its Maritime Defence Force, constitutionally limited to domestic defence since WWII, into a full-scale global navy again https://t.co/SxtswlMWsP
Trump calls for bigger and more aggressive Chinese Navy https://t.co/GJYD3OSccV
China gets about 1/3 of its oil from vessels that travel through the Strait of Hormuz, according to calculations based on US EIA and China customs data https://t.co/7faTdU0xjI
1.23pm BST
Newsflash: President Trump has tweeted that America could withdraw its military protection from the Strait of Hormuz (the area where several tankers have been attacked in recent weeks).
Trump wants China and Japan to step up and protect the ships passing through the Gulf, pointing out that they consume much of the oil.
China gets 91% of its Oil from the Straight, Japan 62%, & many other countries likewise. So why are we protecting the shipping lanes for other countries (many years) for zero compensation. All of these countries should be protecting their own ships on what has always been....
....a dangerous journey. We don't even need to be there in that the U.S. has just become (by far) the largest producer of Energy anywhere in the world! The U.S. request for Iran is very simple - No Nuclear Weapons and No Further Sponsoring of Terror!
1.16pm BST
Donald Trump's clampdown on Iranian oil seems to be having some success.
New figures show that Iran only exported 300,000 barrels per day this month, down from around 500,000 bpd in May. It had been shifting 2.5 million barrels per day last year, before the US sanctions kicked in.
Iran's Crude Oil Exports Fall To 300K B/D Or Less So Far In June Due To US Sanctions - RTRS Industry Sources #OOTT
12.45pm BST
European stock markets have subsided into the red, after a generally quiet morning.
The main indices are all down, as this morning's drop in German business confidence worries traders.
All the attention will be on Donald Trump and his Chinese counterpart Xi Jinping and whether they can dial down the mood music on trade which of late has been set at death metal levels.
"The outcome could help set the tone for the markets over the remainder of the summer.
12.08pm BST
Carsten Brzeski of ING has spotted that German business confidence has hit a four year low, according to this morning's IFO report.
Business expectations have slumped, with company bosses expecting turbulence in the months ahead due to trade conflicts and a slowdown in America's economy.
Fear of losing. This is the best summary of the current state of Germany's businesses. Germany's most prominent leading indicator, the Ifo index, just dropped for the third month in a row, falling to the lowest level in more than four years. The Ifo index stood at 97.4 in June, from 97.9 in May.
While the current assessment component actually increased, the expectations component fell back, close to its recent low at the beginning of the year. Once again, it is well-known uncertainties that are weighing on German business sentiment.
Germany's most prominent leading indicator is near the lowest level in more than four years. But @carstenbrzeski maintains his optimismhttps://t.co/f4VYJItMOs
11.59am BST
Losing one mayoral race is a misfortune. Losing the same one twice is positively careless.
That's where Turkish president Recep Tayyip ErdoAan finds himself this morning, after Turkey's opposition party dramatically won a rerun of the Istanbul mayoral election yesterday.
Turkish Lira and credit spreads rally following Istanbul's election acknowledgement.
This shows financial stress in #Turkey has not only been not matter of ability to grow, but willingness to provide clarity around democratic institutions.
A step in the right direction. pic.twitter.com/gwZS2zq36E
11.31am BST
Environmental news: health and beauty chain Boots is banning plastic bags at its UK stores.
Related: Boots to ban plastic bags and switch to brown paper carriers
11.15am BST
Bitcoin is still trading at its highest levels for 15 months, up nearly 1% today at $10,918.
Some crypto-currency experts are predicting that bitcoin could keep rallying, having already doubled in value in the last seven weeks.
"Despite this year's huge price rise, google searches for 'Bitcoin' are still a lot lower than they were during the last boom. This suggests the price has the potential to go far higher than its current level if the wider public becomes interested again. Though of course, it could be argued that lacking wider public involvement, the current price rise is simply down to blind optimism by the small crypto community who see it as their pain-free path to early retirement."
After the recent parabolic rise, many traders will be looking to take some profits off the table now, but it's worth remembering that last time Bitcoin's price broke through $10,000, it then hit it's all time high of nearly $20,000 just 16 days later."
This is a strong comeback, everyone has been waiting for this for a long time. From a price perspective, bitcoin has recovered more than 50% off its losses from its all-time high of $20,000. The strong resurgence in the bitcoin price is mainly due to the renewed mainstreaming interest in crypto currencies and the technology which underlines it. Projects like Facebook's Libra has provided much needed tailwind for this space.
I do think the next rally is going to be a lot more stronger than the previous one, one can call it a bubble, but this time the range could very well be between $60,000 to $100,000.
While some have lauded this move as a welcome attempt to disrupt the payments industry, having received the backing of Visa and Mastercard, there still remains the worry of what the company might do with users personal data, where Facebook has been on the receiving end of a backlash over how it uses the data it collects.
This does raise the inevitable concern that if you're reluctant to share your personal data with Facebook, why on earth would you trust it with your money?
10.54am BST
This slump in German business confidence reinforces concerns that the global economy is faltering.
This is spurring a rally in government bonds, as the markets anticipate lower growth and weaker inflation.
The collapse in bond yields since this spring has been stark, swift and global, prompting a rush to lock in low rates that few expected to see this deep into a decadelong economic expansion.
Take an early look at the front page of The Wall Street Journal https://t.co/ZTQ9xtmCjO pic.twitter.com/DLFR9JUjPL
Bond markets appear to be signaling an economic slowdown, while equities suggest growth will continue in a low-inflation, "Goldilocks" scenario.
These seemingly contradictory stories only make sense if the bond market is pricing preemptive Fed rate cuts and the equity market is pricing that this action will succeed in preventing a slowdown. Since 2009, the Fed has proven generally successful at pivoting the right way, but we are wary of positioning for perfection.
10.01am BST
Here's Associated Press' take on the decline in German business morale:
A closely watched survey is showing that German business confidence has fallen to a near five-year low as managers' expectations for the coming six months have deteriorated.
The Ifo institute said Monday that its monthly confidence index slipped to 97.4 points in June from 97.9 last month, in line with market expectations.
10.00am BST
#Germany: DIRE warning on the economy "it's heading for the doldrums". @ifo_Institut President Clemens Fuest tells us he does NOT see green shoots in the manufacturing sector; weakness spreading to logistics & construction as well $EUR @CNBCi
9.36am BST
IFO president Clemens Fuest is discussing today's German business confidence figures on Bloomberg TV now.
He says the US-China trade war, and the damage from the diesel emissions scandal, are both weighing on Germany's economy.
Trade war and uncertainty over tariffs are one burden on the economy.
It would help if there was an agreement [between the US and China], particularly on more reliable long-term rules on trade.
Germany should cut corporate and personal tax rates... I don't think monetary policy will save us.
9.35am BST
German business confidence has now fallen steadily since May, as this chart from IFO shows:
9.20am BST
Just in: German business morale has fallen, for the third month in a row.
IFO, the Munich-based research group, has reported that its business climate index has dropped to 97.4, from 97.9 in May.
"The German economy is heading for the doldrums"
Still bad news for German economy:
Business Expectations fall to 95.2 from previous 95.3, less than exp 94.6#Ifo Business Climate Index falls to 97.4 from previous 97.9 and as expected pic.twitter.com/lJ5NrTYw8D
Updates to Germany's IFO Business Climate survey came in as expected at 97.4.
This print may produce headwinds for the #Euro and put pressure on the European Central Bank to further insulate the monetary union. #ecb #eur # pic.twitter.com/KCBXFFNLLW
9.08am BST
However... Germany's stock market is underperforming the rest of Europe, down around 0.25%.
Carmakers are dragging the DAX index down, after Daimler (-3.7%) hit shareholders with a profits warning. Daimler expects earnings to be hundreds of millions of euros below forecasts, due to the long-running damage from the diesel emissions scandal.
It has been a difficult year for shareholders in Daimler which are down 14% on a year ago. https://t.co/vDBkVChKQj
8.56am BST
European stock markets are creeping higher in early trading, with US-Iranian tensions lingering.
The FTSE 100 is up 12 points, with insurance group Admiral (+3%) leading the risers after a broker upgrade. JD Sports (+2.9%) is also making the early running.
8.35am BST
Craig Erlam of trading firm OANDA also believes Facebook's Libra is giving bitcoin a boost:
The publicity that the [Libra] launch has once again brought to the space combined with the legitimacy is offers has understandably excited the community and we've seen before that you don't get a normal response when this happens.
Whether it actually endorses something like bitcoin or not is perhaps not that important right now, particularly to those that have never lost the faith. It late 2017 is anything to go by, the coming weeks could be a wild ride.
8.23am BST
#Bitcoin soars above $11,000 for the first time in 15 months - now up 170% for the year pic.twitter.com/jfiDyQkoD1
8.16am BST
Bitcoin clambered as high as $11,247 on the Bitstamp exchange in Luxembourg, before dipping back a little.
This surge is reminiscent of the 2017 bitcoin craze, which ended badly:
All that glitters is not gold. Bitcoin is sparkling again but beware...breakdown's coming up 'round the bend.
Bitcoin jumped above $11,000, taking it to its highest level since March 2018. Futures are back down to $10,855 around send time. Investors are ignoring what happened the last time we saw parabolic rises like this. Is it different this time? No, but people have short memories. Facebook's Libra white paper may have stoked renewed interest in cryptos at a time when the buzz had already returned.
8.03am BST
Cryptocurrency bitcoin has smashed through the $11,000 mark for the first time since early 2018 - as money flows back into digital currencies.
Bitcoin has now doubled in value since the start of May, profiting those who didn't lose faith in its prospects after its tumble in 2018 [when it fell from $20,000 to just over $3,000].
"The price surge is due to two major factors, one is an increasing consensus among the investment community that bitcoin is a legitimate store of value for the digital age, and two Facebook's Libra cryptocurrency launch has forced every CEO to take crypto seriously,"
7.54am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Iran cannot have Nuclear Weapons! Under the terrible Obama plan, they would have been on their way to Nuclear in a short number of years, and existing verification is not acceptable. We are putting major additional Sanctions on Iran on Monday. I look forward to the day that.....
....Sanctions come off Iran, and they become a productive and prosperous nation again - The sooner the better!
"Neither Iran nor any other hostile actor should mistake US prudence and discretion for weakness.
No one has granted them a hunting licence in the Middle East."
The geopolitical escalation in the Middle East is unquestionably a bullish short-term signal for oil markets, as even the thought of 20 % of the world oil supply being affected is enough to trigger significant tremors across oil markets.
Global mkts start week w/limited risk appetite as investors monitored geopol uncertainties & prepared for high-stakes meeting betw Presidents Trump & Xi. Oil climbed as US said it was planning new sanctions on Iran. Gold near 6y high on weak Dollar w/Euro $1.1383, Bitcoin $10.7k. pic.twitter.com/Rj3c1JDbcu
European Opening Calls:#FTSE 7392 -0.21%#DAX 12294 -0.37%#CAC 5524 -0.07%#MIB 21307 -0.38%#IBEX 9201 -0.29%
In the dearth of major economic news, the investors' attention shifts to the political agenda at the start of the week. Besides the Iranian tensions, the upcoming G20 meeting brings the trade war between the US and China back on the table.
While Trump and Xi are expected to meet at this week's summit in Osaka, the chances of a trade deal between the two countries remain slim.
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